1965 Supreme(SC) 1

SURPEME COURT OF INDIA
M. R. PATEL.
Versus
State of Bihar
Decided on August 14, 1969

The Board of Revenue has the power to revise the orders of the Excise Commissioner under S. 8 of the Bihar and Orissa Excise Act, 1915, even if the Excise Commissioner has passed the order in exercise of his general powers of control over the Collector and the Excise Department under Sections 8 and 7 (2) (a) read with S. 2 (7) of the Act.

Headnote:

EXCISE - Security deposit - Increase - Power of Board of Revenue to revise order of Excise Commissioner - S. 8 (3) of the Bihar and Orissa Excise Act, 1915.

Fact of the Case:

The appellant held yearly licenses for the retail sale of country spirit in respect of six shops in Jamshedpur working under the sliding scale system under the Bihar and Orissa Excise Act, 1915. A total sum of Rs. 11,099.00 was demanded and paid as security in respect of all the licenses. The Board of Revenue Bihar directed that the security deposit of an Excise shop working under the sliding scale system is hereby fixed as equivalent to two months average license fees of the shop. The Excise Commissioner directed the Deputy Commissioner, Singhbhum to realise from the appellant the deficit in the security deposits of his shops. The appellant filed a petition before the Board of Revenue, praying for a revision of the order of the Excise Commissioner. The Board of Revenue held that the merits of the appellant's case need not be examined at that stage, and observed that the order of the Excise Commissioner would constitute no bar to the appellant moving the Commissioner for considering the special circumstances, if any, of his case on merits. Subsequently, the appellant moved the Excise Commissioner for reconsideration and setting aside of his previous order. The Commissioner of Excise, in supersession of his previous order, directed that in the special circumstances of the case, the security deposit in respect of the appellant's shops need not be increased and the appellant could continue to manage the shops on the existing total security of Rs. 11,099.00 only. The Board of Revenue, in exercise of its powers of revision under S. 8 of the Act, set aside, the order of the Commissioner of Excise dated 5/03/1958, with the direction that until the expiry of the current licenses on 31/03/1960 there would be no change in the amount of security, but the proper security in terms of the general directions issued by the Board should be demanded from the licensee at the time of the renewal of the licenses, with effect from the next licensing year.

Finding of the Court:

The Board of Revenue had ample power to revise the orders of the Excise Commissioner under S. 8. The Board, in exercise of its powers under S. 38 read with S. 91, could from time to time issue general directions with regard to the conditions of any license granted under the Act including the amount of the security to be deposited by the license. The Board was entitled to direct that the general directions issued by it under Sections 38 and 91 should be observed and carried out by the licensing authority and the proper security in accordance with those directions should be demanded if and when the licenses were next renewed.

Issues: 1. Whether the Board of Revenue could revise the order of the Excise Commissioner under S. 8 of the Act in view of S. 35 of the Act? 2. Whether the Board of Revenue could alter the amount of the security fixed by the authority granting the license and the corresponding condition in the license for the deposit of the amount? 3. Whether the direction for the increase of the security at the time of the renewal of the licenses is contrary to the instruction No. 101 (10) of the Board of Revenue? 4. Whether the power of revision under S. 8 (3) of the Act could be exercised by the Board of Revenue only on an application by an aggrieved party? 5. Whether the proceedings in revision in the instant case were barred by limitation?

Ratio Decidendi: 1. S. 8 (3) provides that the Board may revise any order passed by the Excise Commissioner. S. 35 provides that the Excise Commissioner may, on a consideration of the list, objections and opinions sent to him by the Collector under S. 34, modify or annul any order passed or any license granted by the Collector, and notwithstanding anything contained in S. 8, his orders shall be final. The Excise Commissioner did not pass the order dated 5/03/1958 in exercise of his powers under S. 35, on a consideration of the list, objections and opinions sent to him under S. 34. He passed the order in exercise of his general powers of control over the Collector and the Excise Department under Sections 8 and 7 (2) (a) read with S. 2 (7) of the Act. 2. By the order dated 4/10/1959, the Board expressly directed that there would be no change in the amount of the security during the currency of the license. The licenses were due to expire on 31/03/1960. The Board directed that if and when the licenses were renewed with effect from the next licensing year, the proper security should be demanded from the licensee as a condition of the renewal. 3. Instruction No. 101 (10) read with the Board's circular letter No. 8624, dated 9/09/1956 did not prevent increase of the security at the time of the renewal of the licenses. 4. The Board of Revenue may exercise its powers of revision under S. 8 (3) suo motu. 5. No period of limitation is prescribed by the Act for exercise of the power of revision under S. 8 (3 ).

Final Decision: Appeal dismissed with costs.