Judgment

KRISHNA IYER, J.:- The claim of the appellant, "the State of Madhya Pradesh, to levy enhanced license fee on the spill-over stock 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.

2. 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 boosts expensive sales and attracts affluent addicts. Naturally, as a profitable proposition the respondent obtained a licence for the sale of foreign liquor (in Form F.L.3) issued under the Foreign Liquor Rules framed under the Excise Act, 1915 *. The licence which he held was for one year from April 1, 1963 to March 31, 1964. At that time, under the extant rules the fee payable was 37 paise per quart bottle of malt liquor and different rates for other kinds of foreign liquor. On the date of expiry of the licence, viz, 31st March 1964, the respondent had with him a large quantity of unsold liquor which was already in the licensed premises, having , been brought earlier. He obtained a fresh licence for a further period of one year commencing from April 1, 1964. Meanwhile Government was entertaining the idea of enhancing the scales of licence fee for the various kinds of foreign liquor. The balance quantity left over with the respondent at the end of the licensed period, viz., March 31, 1964 was checked by the concerned Excise . Officials and a panchnama prepared in that behalf. Ordinarily, the surplus stock has to be surrendered by the licensee but, on an undertaking to pay the difference in the event of an enhancement of the, rates, the bar owner was permitted to keep on his , premises the balance quantity so ascertained. Apparently the State Government had decided on the increased rate because we find from Annexure B a demand being made by the Excise Inspector on the licensee to pay the difference of fees consequent on the enhancement of the scale of fees, as worked out on the stock which remained in hand with the owner of the bar on the night of March 31, 1964. Despite the undertaking given to comply with such enhanced demand, the hotelier resisted it and took up the stand that the balance stock had already been subjected to license fee when it was brought in and that the subsequent raising of the rate of license fee could not be applied validly to such stocks. Since the State insisted on levying at the larger rate even on the balance stock held on March 31, 1964 the respondent moved the High Court for the issuance of a writ quashing the demand as illegal. The legality of the levy depends on the applicability of the enhanced scales of license fee to the balance of foreign liquor stock held by the licensee on the mid-night of 31/3-1/4/1964.

* Madhya Pradesh Excise Act.1915 (Act II of 1951 )

3. The facts being thus plain, we will straight go to the law relied on by the State in support of its claim. The Excise Act and the Foreign Liquor Rules made thereunder govern sales of these intoxicants and Form F.L. 3 applies to bars which sell foreign liquor for consumption on the premises.

4. On April 25, 1964 the Government, by virtue of its powers under the Act, amended in certain respects the Foreign Liquor Rules, One such amendment concerns the scale of fees in respect of licence in Form F.L. 3 an upward revision having been effected. The rule itself, although promulgated on April 25. 1964, was given effect retrospectively from April 1, 1964. Apart from raising the rates. Rule IV was also amended by the addition of the following provision at the end of it:

"The licensee shall be liable to pay the difference of fees per b