JUDGMENT

Ashok Bhushan, J.

These appeals have been filed by the State of Madhya Pradesh against the judgment and order dated 04.05.2000 of the High Court by which judgment the writ petition filed by the Respondents has been allowed and demand of Rs. 13,24,189.50, claiming to be excess expenditure incurred on State Government establishment on Distillery of respondents has been set-aside.

2. Brief facts of the case are:

The Respondent Kedia Great Galeon Ltd. & Anr. held a licence under Madhya Pradesh Distillery Rules, 1995 (hereinafter referred to as Rules 1995) for manufacturing of Liquor/Spirit. A notice dated 23rd March, 1999 was issued to Respondent No. 1 by the District Excise Officer, demanding an amount of Rs. 13,24,189.50 as excess expenditure on the establishment of officers and employees as per Rule 4(41) of Madhya Pradesh Distillery Rules, 1995 pertaining to year 1995-96, 1996-97 and 1997-98.

3. The Respondents aggrieved by the above notice filed a writ petition in the High Court of Madhya Pradesh, Bench at Indore being Writ Petition No. 589 of 1999. The Respondent in its