The court established that the challenge based on Article 14 and Article 19(1)(g) was misplaced, and allowed the recovery of arrears of excise duty with interest.

JUDGMENT - H.L. GOKHALE, J.:---The 1st petitioner herein is a company engaged in the manufacture of country liquor. The 2nd petitioner is its Managing Director. The 1st petitioner company at the relevant time was engaged in the manufacture of country liquor from flowers which are known as Mhowra flowers. The petition seeks to challenge the notification issued by the 1st respondent-State of Maharashtra under section 105 of the Bombay Prohibition Act, 1949 on 17th July, 1987 whereby the excise duty on the country liquor manufactured from Mhowra flowers amongst others came to be revised from Rs. 13/- per proof litre to Rs. 26/- per proof litre. The 2nd respondent to the petition is a Trade Union which has intervened in this matter and got added itself as a party respondent. The 2nd respondent Union is supporting the cause of the petitioners. The challenge to this notification is on the basis of Articles 14 and 19(1)(g) of the Constitution.

2. The 2nd respondent-State of Maharashtra has opposed the prayers by filing affidavits from time to time. The petitioners have also filed a rejoinder thereafter. The 2nd respondent Union, which is supporting the cause of the petitioners, is relying upon the affidavit filed at the time when a chamber summons was moved to join the proceedings as a respondent.

3. Mr. J.J. Bhat with Mr. P.A. Sawant, has appeared for the petitioners. Mr. C.J. Sawant and Mr. R.M. Sawant, A.G.P., have appeared for respondent No. 1. Mr. A.K. Abhyankar has appeared for respondent No. 2.

4. Before we proceed further with the averments made in the petition as also the statements made in the replies and the rejoinder, it is necessary to note that initially when the petition was admitted, an ad interim order in terms of prayer Clause (c) came to be granted by a learned Single Judge on this petition on 12th August, 1987. At that time, such matters were heard by a Single Judge under the then prevalent rules of business of the High Court (Original Side). The learned Single Judge granted that ad interim relief with a rider that the petitioners will give a personal bond for differential amount of excise duty, i.e. Rs. 13/- per proof litre. A statement was also made by the Counsel for the petitioners that the distillery, where the manufacturing process was being carried on, was neither mortgaged nor hypothecated nor in any way encumbered and that it shall not be mortgaged or encumbered. When the matter subsequently came up before the learned Single Judge for confirmation of the ad interim order on 24th August, 1987, the learned Counsel appearing for the State Government made a statement that the impugned notification dated 17th July, 1987 shall not be given effect to and/or implemented so far as the petitioners are concerned pending the final hearing and disposal of the writ petition. Much later on, the State Government was relieved of this statement when the matter was heard by a Division Bench consisting of P.D. Desai, C.J., (as he then was) and Kapadia, J., on 15th June, 1992. As far as the effect of that order is concerned, it is relevant to note that when the matter was carried to the Apex Court, in the order passed on 24th July, 1992 in S.L.P. No. 8316 of 1992, the Apex Court observed:--

“...........It must be noted that the order of 24-8-1987 does not say that the ad interim will continue presumably because of the assurance given by Counsel.........”

The Apex Court also directed that the interim relief be heard at the earliest. In any event, what is relevant to note is that thereafter there was no interim protective order and in fact the petitioners discontinued the production of the country liquor from Mhowra flowers from 1st July, 1992.

5. Mr. Bhat, learned Counsel for the petitioners, submitted that the cost of production of the country liquor from Mhowra flowers was much more than the liquor manufactured with molasses as a base and this aspect had not been taken into consideration by the State Government while issuing

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