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Andhra Pradesh High Court
Judges : M.N.RAO, P.VENKATRAMA REDDY
Deluxe Bar - Appellant
Versus
Excise Superintendent - Respondent
W.P.No.13963/90 etc.
Decided On : 03-06-92
Advocates Appeared :
Mr. V.V.S. Rao,Mr. B. Prakash Rao,Mr. G. Bikshapathy
Held: The enhancement in licence fee brought about by the impugned G.O. does not suffer from the vice of unreasonableness or arbitrariness. If the State Government deemed it fit to enhance the licence fee after a time gap of 3 to 5 years, keeping in view the need to mobilise the additional resources and the desirability of limiting the number of licences in certain categories as per the recommendation of the Commissioner of Excise, there is nothing arbitrary or unreasonable in it, especially having regard to the best possible consideration for parting with its exclusive right to deal in intoxicants. The quantum of fee to be charged from a licensee in consideration of parting with the exclusive privilage of the State is essentially within the discretion of the State and so long as such discretion is exercised in furtherance of public interest and the State does not make any irrational classification or hostile discrimination there is hardly any scope for invalidating the same. The mere fact that the increase in the licence fee makes an erosion of profits to the r licensee or makes their business less lucrative is not a ground to strike down the law as unreasonable offending Art.14 of the Constitution.
Decision in W.P.No.16972/88 etc, dt.20-11-89 held per incuriam.
It would not have been the intention of the Legislature or the rule making authority that the licence fee once fixed initially at the stage of granting licence should remain static for five long years. The form of licence issued has to be read along with the counterpart - agreement clause (iv) of the agreement clearly contemplates that the licence fee could be enhanced during the currency of the agreement i.e., during the five year period. The licensee binds himself to pay the enhanced licence fee from time to time. The enhanced licence - fee introduced by the impugned G.O. will only be operative after the end of the excise year i.e., after 30-9-1990 and for the excise year begining from 1st October, 1990 the licensees have to pay the increased licence fee ten days before the commencement of the excise year(1990-91) as enjoined by rule 25. The increased licence fee will also be applicable to the licences issued on or before 1-4-1990 i.e., the date on which the impugned G.O. has come into force.
W.Ps. Partly Allowed.
( 1 ) THE increase in the licence-fee for various categories of liquor licences by g. O. Ms. No. 160 Revenue (Ex. III) dated 3-3-1990 has led to the filing of this batch of writ petitions.
( 2 ) THE petitioners herein, by and large, are holders of wholesale licence (FL 15), retail licence (FL 24), bar licence (FL 17) and storage licence for godo wns (FL 19 ). A few of them are having distributor s licence (FL 27 ). The grant of these licences is governed by the provisions of the Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 issued under the Andhra Pradesh Excise Act, 1968, hereinafter referred to as the Rules and the Act respectively.
( 3 ) SECTION 15 of the Act enjoins that no person shall sell or buy any intoxicant except under the authority and in accordance with the terms and conditions of a licence granted in this behalf. Under Sec. 17 of the Act, the Government may, subject to such conditions as they may deem fit to impose, grant for a fixed period to any person at any place a lease or licence or both either jointly or severally for the exclusive privilege of manufacturing and/or of supplying any liquor or intoxicant by wholesale or selling by wholesale or by retail. Under sub-section (2) thereof, the Government may confer on any officer the power to grant a lease or licence. Section 17 is subject to the provisions of Section 28 and the Rules made thereunder. Sec. 28 lays down that every licence granted under the Act lays down that every licence granted under the Act shall be subject to payment of such fees, for such period, subject to such restrictions and conditions and shall be in such form as may be prescribed. Section 31 deals with the power to cancel or suspend the licence. Inter alia, it says, if any duty or fee payable by the holder thereof is not duly paid, the licence may be cancelled or suspended. Section 72 confers the rule-making power on the Government. The Government may make rules for carrying out all or any of the purposes of the Act. In particular, the Government may make Rules regulating the time, place and manner of payment of any duty or fee and the taking of security for the due payment of any duty or fee (Vide Clause (g) of Sec. 72 (2) ). Under Clause (h) the Government is empowered to prescribe the authority by which, the form in which and the terms and conditions on and subject to which any licence or permit shall be granted or issued and may, by such rules among other matters prescribe the scales of fees or the manner of fixing the fees payable in respect of any lease, licence or permit or the storing of any excisable article. Sub-section (3) of Section 72 enables the Government to make the Rules retrospectively as well. The sub-section also says that when such a rule is made, the reasons for making the rule shall be specified in a statement to be laid before the Legislature. Every rule made under the Act is required to be laid before the House of the state Legislature within the stipulated time.
( 4 ) IN exercise of the powers conferred by Sec. 72 read with Sec. 28 and other sections, the A. P. Foreign Liquor and Indian Liquors Rules were framed in the year 1970. indian liquor includes wines and beer, but does not include arrack. foreign liquor is defnined by Section 2 (16) of the Excise Act as including every liquor imported into India other than Indian liquor and arrack. The expression excise year is defined as a period of 12 months commencing on the 1 st day of october of the year and ending with the 30th day of September of the following year (Vide Rule 3 (c) ). Rule 23 specifies various categories of licences that have to be obtained for the sale of foreign liquor and Indian liquor. Rule 23 then prescribes the Forms of licences, the quantity of liquor and the manner in which it is to be sold under each of the licences. Rule 24 lays down that every licence other than the occasional licence in Form FL 22 or Special licence, shall be valid for
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