( 1 ) IN this batch of writ petitions, the petitioners have challenged the validity of the notification No. Fd 10 phs 95 (ii), dated 31-5-1995 (Annexure-D) issued by the state government under Section 71 (1) of the Karnataka Excise Act, 1965 (in short 'the act'), whereby by amending Rule 7 of the Karnataka excise (distillery and warehouse) rules, 1968 (in short 'the rules'), it has enhanced the licence fee and has also inserted a new rule 7-a prescribing an additional licence fee.

( 2 ) THE petitioners herein are all distillers. They have obtained licences under the Provisions of the rules. They broadly fall in the following three categories, namely. " (I) distillers manufacturing both non-potable spirits, as well as, Indian liquor; (ii) distillers engaged in manufacturing of Indian liquor only; and (iii) distillers manufacturing only non-potable spirits".

( 3 ) RULE 7 (1) of the rules, before its substitution by the impugned notification dated 31-5-1995 (Annexure-D) read as under:"7. Licence fee, fee for the grant or renewal of a licence under these rules shall be. (i) rupees two lakhs and fifty thousand in the case of distilleries which distill spirit out of molasses; (ii) rupees two lakhs and fifty thousand in the case of distilleries which distill spirit out of tapioca/sweet potato; (iii) rupees seventy-five thousand in the case of distilleries which distill spirit out of toddy, cashew, pineapple and apple and use such spirit for manufacture of Indian liquor; (iv) rupees seventy-five thousand in the case of distilleries which distill spirit out of grapes or malt and also use such spirits; (v) rupees two lakhs and fifty thousand in the case of distilleries which use spirit distilled out of molasses, tapioca, sweet potato, grape or malt, for manufacture of Indian liquor".

( 4 ) THE said Rule after substitution by the impugned notification (Annexure-D), now provides thus. "7. Licence fee. (1) fee for grant or renewal of a licence under these rules shall be. (i) rupees five lakhs in the case of distilleries which distill spirit out of molasses; (ii) rupees five lakhs in the case of distilleries which distill spirit out of tapioca/sweet potato; (iii) rupees one lakh and fifty thousand in the case of distilleries which distill spirit out of toddy, cashew, pineapple and apple and use such spirit for manufacture of Indian liquor; (iv) rupees one lakh in the case of distilleries which distill spirit out of grapes or malt and also use such spirits; (v) rupees five lakhs in the case of distilleries which use spirit distilled out of molasses, tapioca, sweet potato, grape or malt, for manufacture of Indian liquor".

( 5 ) THE newly substituted Rule 7-a, reads thus:"7-A. Additional licence fee. In respect of the licences granted under these rules, within Bangalore city planning areas as declared under Section 4-a of the Karnataka town and country planning Act, 1961, an additional licence fee equivalent to fifteen per cent of the licence fee levied in respect of each kind of distillery licence under Rule 7 shall be levied towards Bangalore mass rapid transit system".

( 6 ) FROM the above it is clear that licence fee payable by the petitioners for their activities of distillation and manufacturing have been increased by 100%, apart from making them further liable to pay additional licence fee under Rule 7-A, for the development of Bangalore mass rapid transit system. The petitioners have impugned the said enhancements and the new levy on the ground of absence of quid pro quo, as also the lack of compete nce on the part of the state government to do so as a delegated authority on the ground that such exercise is in excess of the Rule making power conferred on the state government under Section 71 of the act.

( 7 ) I have heard the learned counsel for the petitioners as also the learned Advocate general appearing on behalf of the state.

( 8 ) AS required by me, in order to have the authoritative expert opinion regarding true