TRADE LINKS LTD., NEW DELHI AND ANR. ETC. ETC. versus STATE OF UTTAR PRADESH AND ANR. ETC. ETC.

Citation: [1982] 3 S.C.R. 755 · Decided: 07-05-1982 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed

Judgment (excerpt)

'{ 
~ 
y 
~ 
/' 
/, 
_._ 
• 
... 
" --~ ...._ 
; 
... 
755 
' 
TRADE LINKS LTD., NBW DELHI AND ANR. ETC. ETC. 
v. 
STATE OF UTTAR PRADESH ~ND ANR. ETC. ETC. 
May 7, 1982 
[Y.V. CHANDRACHUD C.J., V.0. TULZAPURKAR.,. 
0.A. DESAI, 0. CHJNNAPPA REDDY AND 
BAHARUL !SLAM, JJ.) 
Uttar Pradesh Excis• ( Amendm1nt) Act 13of1979, constitutional validity 
of-Whether violatiVI of Artic/11 14, 19 and 31 of the constitution. 
Utiar Pradesh Excise Act, 1910, Section 30(2), Proviso to clau•i ( c) and 
Explanation.I and llto ClauH (c) of Section 41 as amended by (Amendment/ Act 
l!J of 1919, whether ultra vire• the constitution. 
In exercise of .the power conferred upon hiin under the amended clause 
(c) of section ·41;the Excise_ Commissioner_ with the previou~ sanction· of the 
State Go'(.trnment framed Rules called tho U.P. Excise (Wholesal~and Retail 
Vend of Foreign Liquor (2nd Amendment) Rules, 1976 by issuing the 'Notific,..,. 
tion No. 27/Licence-3 dated 14th April 1976, which were brought into force 
with effect rrom the date of.publication in the Gazette, namely, 14th April W16; 
by thia Notification the existing Rules 639, 641 and 642 as appearing in Ex~ 
Manual Vol. (1962 Edn.) were amended; Rule. 639(2) as amended provides that 
"Licences in form FL·2 shall he settled by tho public avction" while Rule 641 as 
amended provides that "the foefor a licence in form FL-2 shall be the amount 
of money acc•pted at the auction of the licence a.r 'fixed /et' tog1ther with an 
"a.ru1Hd !••" chart•d on the ba.riu of thuca/eJ of surcharg• fe• prescr/lnd . in 
Rule 642. 
By tho very notification dated 14th of April, 1976 tho Excise Com· 
missioner added one 111ore condition. in tho form of a proviso ·to the terms and 
conditions ofFL;2 Licence· and the said addition made after condition No. 1{c), 
runs thus:-
. 
"Provided that the assessment fee on the sales made on the · 
licence in Ille prescribed manner ai such scales of surchar~e fee as 
. may be prescribed by the Government and announced at the . time 
of the auction, shall also be payable by tho licenceo." 
Relying. upon, the amlndmonts made in the U.P. Excise Act, 1910 by Act S of 
1976 and the amended Rules 639, 641 and 642 and the insertion of the new 
condition in FL-2 licence, the respondents introduced the auctioli system for tho 
grant of licence in form FL-2 for wholesale vend of beer and Indian Malk 
• 
A 
8 
c 
D' 
',{ 
B 
F 
G 
H 
A 
B 
c 
D 
. G 
H 
7s6 
[1982) ~ s.c.it. 
Foreign Liquor and started levying and recovering the "assessed fee" in addition 
to the "fixed fee" (auction money) from the gratltces of the licences. 
The Pe.titiooers who were succes.Sful bidders and who had acquired vending 
rightS in Indian Made Foreign Liquor for the financial years '1976-77, 1977-78, 
1978-79 and 1979~80 challenged the levy nf "assessed fee", in addition to ,the 
"fixed fee" on the following grounds : (i) U0der Section 30(2) of the Principal 
Act or 1910 prior to its amendment by U.P. Ordinance No. 4 or 1979 and U.P. 
Act 13 of 1979 it WlS open to the respondents to adopt either ooe or the other 
method or granting FL-2 licences and determine the licence fee payable by the 
grantee accordingly, that is to -say, the resporidents could grant the licence 
"either by' auctio'n or by caI!ing tenders" 8.nd once 'a particUJar mode was 
adopted it was incumbent upon ~hem to apply tl\e saine f.or the purpo$C of 
determining the sum payable by the grantee; in other words it was not opens them 
to adopt a combination of two or more methods and claim "assessed fee''· in 
-addition to "''fixed fee" ~d·this would be illegal and without authority of law. 
A combination of twQ (!l:f more methods became available to the respondents only 
I . 
. 
under Section 30(2) as amended by U.P. Ordinance No. 4.of 1979 and by U.P. 
·Act 13 of 1979; (ii) In asmuch as the petitioners were not informed that any 
"assessed fee" had been fixed by the State Government, which would be payable 
by the successful bidder, the respondent's attempt to tevy and recover the 
""-"''assessed· fee" over and above the "fixed fee" (aUction · money) was unwarranted 
and ilJegal in as much as the_ respondents could not enhance the petitioners' 
contrac'tual liability which was limited to tbc payment of auction money and 
(iii) as per the newly inserted cOnditions in FL~2 Licence the "assessed fee" was 
required to be ''pre.scribed by ihe Government and <!DQounced at the time Of 
auction" but in the instant case such ''assess

Excerpt shown. Read the full judgment & AI analysis in Lexace.