STATE OF MADHYA PRADESH & ORS. versus TIKAM DAS

Citation: [1975] SUPP. 1 S.C.R. 234 · Decided: 22-04-1975 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Appeal(s) allowed

Judgment (excerpt)

234 
A 
B 
c 
D 
E 
STATE OF MADHYA PRADESH & ORS. 
v. 
TJKAM DAS 
April 22, 1975 
[V. R. KRISHNA IYER, R. S. SARKAR!A AND A. C. GUPTA, JJ.] 
Madhya Pradesh Excise Act (2 of 1915)-General conditions of licence 
1nade u11der the Act, r. 26 and Foreign Liquor Rules n1ade u11der the Act, 
r. 4-Balance of stock 011 expiry of licence-Enhanc~nzent of licence fee for 
next year-If bafance of stock liable to enhanced fee. 
Delegated legislation-When rule can be n1ade retrospective. 
The respondent had a licence for sale of foreign liquor is..'!tted under the 
J;orcign Liquor Rules made under the Madhya Pradesh Excise Act, 1915. On 
the date of the expiry of the licence (Jlvlarch 31, 1964), he had a large quan-
tity of unsold foreign liquor, \Vhich had to be surrendered by him to the autho-
rities. 
As the Government was conten1plating enhancing the licence fee. he 
gave an undertaking to pay the difference and he \\'as allowed to keep the execs.; 
stock. 
He also obtained a fresh licence for one year comn1encing on A::iril 
1, 1964. 
On April 25, 1964, the Foreign Liquor Rules were amended. 
The scale 
of licence fees i,.vas enhanced \Vith retrospective effect from April 1, 1964; 
and r. IV wa~ amended providing that the licensee shall be liabl~ to pay the 
difference in the event of the enhancement of the scale of fees on the balance of 
stocks during the currency or on the expiry of the licence. 
But the State's demand for the difference was successfully challenged by 
the' respondent, in the High Court, on the ground that the balance of stocks on 
f\iarch 31, 1964, was covered by the licence fee already p<iid and conld not 
be subjected to enhanced levy. 
F 
Allowing the appeal to this Court, 
HELD : (1) Subordinate legislation made by a delegate cannot have re-
trospective effect unless the rule-making power in the concerned statute expressly 
er by necessary implication confers power in this behalf. 
But s. 63 of ~he 
Act does contemplate not merely the po\ver to make rules but to bring th~:n1 
into force from any previous date. It states that all rules made under the 1\ct 
shall have effect from the date of publication in the official gazette or frtJln 
.n1ch other date as may be specified in that behalf. Therefore, the enhanced 
G 
levy of licence fees operates from April I, 1964. [236F, H 237AJ 
(2) Rule XXVI of the General Licence Conditions provides that if there 
is enhancement of duty, the licensee shaJI pay the difference of duty on the 
'balance of stocks' as on the date preceding the expiry of the licence. The rule 
tilso provides for refund by the State if there is a reduction of duty. -Reading 
this rule with the amended r. IV of the Foreign Liquor Rules, the 'balance 
of stocks' is the surplus stock· held by the licensee immediately before the expiry 
cf his licence. Therefore the quantity held over on March ,31, 1964, became 
H 
liable to the enhanced licence fee on April l, 1964. 
[238E-F] 
(3) (a) If the respondent's contention is accepted l?ersons \Vho ~1.ve huge 
stocks Jeft over will not have to pay the enhanced licence fee while fre:o;h 
licensees would be so liable i and [238-G] 
(b) If the respondent had surrendered his stock as he should have but for 
his undertaking he would have had to pay the enhanced rate for such left-over 
stock. [238HJ 
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M.P. STATE v. TIJ!:AM DAS (Krishna lyer, J.) 
235 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 668 of 1968. 
A 
From the Judgment and Order dated 2nd March 1965 of the 
Madhya Pradesh High Court in Misc. Petition No. 348 of 1964. 
Ram Panjwani, l. N. Shroff and H. S. Parithar, for the appellants. 
B. N. Lokur and A. G. Ratnaparkhi, for the respondent. 
The Judgment of the Court was delivered by 
B 
. KRISHNA IYER, l-The claim of the appellant, the 
State 
of 
Madhya Pradesh, to leavy enhanced license fee on the spill-over stock 
C 
of intoxicating liquor held as on April 1, 1964 by the respondent who 
runs a bar, was successfully challenged in the High Court. So the State 
has come up in appeal, by certificate, under Art. 133 and disputes the 
correctness of the view accepted by the High Court. 
As is obvious, the facts are brief and beyond dispute, the issue of 
law straight and simple and our decision, on a careful study of the 
alternative constructions of the relevant provision, is that the State is 
entitled to collect the fee on the revised scale. The respondent runs a 
cafe at Indore and a foreign liquor bar booth

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