JUDGMENT

JASWANT SINGH, J. :— These two Civil Appeals Nos. 1418 of 1970 and 582 of 1971, the first by certificate of fitness granted under Article 133 (1) (a) of the Constitution by the Punjab and Haryana High Court and the second by special leave granted by this Court which are directed against the judgments and orders of the said High Court dated December 4, 1969, and July 29, 1970, rendered in Civil Writ Petitions No. 342 of 1969 and No. 2376 of 1970 respectively shall be disposed of by this judgment as they arise out of identical proceedings and raise common questions of law.

2. The appellant, a public limited company incorporated under the India Companies Act, which carried on the business inter alia of manufacture, storage and sale of various kinds of Indian made foreign liquors and had its plants for manufacture and production of bear and distillation and production of the said liquors at Solan (in Himachal Pradesh), at Mohan Nagar (in Uttar Pradesh), at Lucknow (in Uttar Pradesh) and at Kasauli (in Himachal Pradesh) held in the years 1967, 1968 and 1969 a licence in form P.W. H. 2 under Section 22 of the Punjab Excise Act (1 of 1914) (hereinafter referred to as the Act) read with Rule 2 of the Punjab Bonded Warehouse Rules, 1957 (hereinafter referred to as the 1957 Rules) which were framed by the Financial Commissioner under Section 59 read with Section 22 of the Act, permitting it to run on conditions specified therein a Bonded Warehouse at Chandigarh for storage of bottled and bulk liquor and issue thereof under bond or on payment of duty to the licensee of Punjab, Haryana. Himachal Pradesh etc. One of these conditions required the appellant to observe the provisions of the Act as also the Rules framed and instructions issued thereunder from time to time.

3. Rules 7 to 10 of the 1957 Rules governing the appellants licence run thus :

"7. No liquor shall be received in the bonded warehouse unless accompanied by a pass from the Officer-incharge of the distillery or bonded warehouse from which it has been imported or transported.

Immediately on arrival of a consignment at the bounded warehouse the officer-in-charge shall be informed and the consignment shall not be opened until the same has been examined and verified with the pass by the Officer-in-charge who shall also note the results in the register maintained for the purpose and also on the pass covering the consignment. One copy of the pass with entries of receipt shall be immediately returned to the Officer, who issued the pass and the other copy with entries thereon, shall be kept in the Ware-house.

8. A wastage allowance not exceeding 1 per cent shall be made for the actual loss in transit by leakage or breakage of vessels or bottles containing liquor. The allowance shall be determined by deducting from the quantity despatched the quantity received at the destination, both quantities being stated in terms of proof litres of spirit contents or in case of beer in bulk litres.

9. If the report of the Officer-in-charge shows that the wastage exceeds the prescribed limit, the licensee shall be liable to pay duty at the prescribed rate as if the wastage in excess of the prescribed limit had actually been removed from the Warehouse.

Provided that each case of excessive wastage shall be reported to the Financial Commissioner for orders, who may in his discretion, on good cause being shown, remit it whole or a part of the duty leviable on such wastage.

10. Liquor shall be imported/transported under bond in accordance with the Punjab Liquor Permit and Pass Rules at the sole risk and responsibility of the licensee. The bond in form L. 37 shall be discharged, after liquor has been duly checked and proved by the Officer-in-charge and deposited in the Ware-house."

4. Between June, 1967 and April, 1969, the appellant transported, for the purpose of bottling, various quantities of Indian made foreign liquors from its aforesaid distilleries in Uttar Pradesh and Himachal Pradesh to its Bo