P. Naveen Rao, J.

1. This group of appeals arises from the common judgment of learned single judge dated 21.11.2008. The competent authorities of the state are in appeal. The point for consideration in this group of writ appeals is, whether the State, through Excise Department, entitled to demand differential license fee from the Form IL-24 licensee (liquor retail outlet) on the ground that the location of licensed shop falls within the 5 KMs radius of the concerned Municipal Corporation, as a consequence to upgradation of existing municipality into Municipal Corporation during the subsistence of license. Parties are referred to as arrayed in the writ petitions.

2. The petitioners were granted/extended IL-24 licenses for the excise year 2004-05. The grant of IL-24 license and license fee was regulated by the Andhra Pradesh Excise Act, 1968 (the Act) and “The Andhra Pradesh Indian Liquor and Foreign Liquor Rules, 1970 (Rules, 1970)” made there under. The IL-24 license fee is structured into five slabs depending on the population of the area where the liquor retail outlet (shop) is located. However, if a shop is located within the radius of 2 KMs of municipality or within the radius of 5 KMs of a Municipal Corporation, irrespective of the population of the place where the shop is located, the license fee applicable to that Municipality or Municipal Corporation as the case may be is required to be paid by the licensee. The license fee payable by the petitioners was determined based on the location of their shops outside the 2 KMs radius of adjoining Municipality. During the subsistence of their licenses, the concerned municipalities were upgraded as Municipal Corporations. In view of the upgradation of adjoining Municipalities into Municipal Corporations, the shops of petitioners were coming within the 5kms radius of the adjoining Municipal Corporations. As a consequence to establishment of Municipal Corporations, the competent authority of the Excise Department demanded petitioners to pay differential amount of license fee.

3. To appreciate the facts in issue, the facts in W.P.No.9629 of 2005 (against which W.A.No.73 of 2009 arises) are noted. The retail outlets of petitioners were located in revenue villages of Eluru and Peddapadu Mandals of West Godavari District. At the time of granting licenses to petitioners, Eluru was a Municipality and their shops were located outside the 2 KMs radius. Eluru Municipality was upgraded and Municipal Corporation was established w.e.f. 07.04.2005. As a consequence to Eluru becoming a Municipal Corporation, the places where petitioners’ shops were located were coming within the 5 KMs radius (in excise language - belt area) of Eluru Municipal Corporation. The prohibition and Excise Superintendent, Eluru issued notice dated 16.04.2005 informing the petitioners that license fee for municipal corporation is Rs.8,25,000/- which is higher than what was paid by them and demanded petitioners to pay differential license fee. Similarly, Kadapa, Nellore and Karimnagar Municipalities were made into Municipal Corporations. The shops of all petitioners were coming within the 5km radius of Kadapa, Eluru, Nellore and Karimnagar Municipal Corporations. Similar such notices were issued to all the petitioners in the batch of writ petitions. The revised license fee applicable to respective shops was Rs.8,25,000/- except Nellore Municipal Corporation, where license fee was Rs.10,35,000/-.

4. The challenge to the demand for payment of differential license fee is on the ground that once license fee was determined and license was awarded it is not open to revise the license fee on the ground that the place where shops were established fall within the 5 KMs belt area of the newly formed Municipal Corporation. The learned single Judge upheld the challenge and declared such demand as illegal, unauthorized and without