No tax, which includes the nature of demands under challenge, can be imposed under executive fiat without any legislative sanction.

Gopi chand Bharuka, J.

1. All these writ applications involve a common question of law and as such they are being disposed of by a common judgment.

2. The petitioners are whole-sale dealers of foreign liquor. They also have bonded warehouses. For this purpose they have been granted licenses in Form No. 1 and 1-A as required under the provisions of Bihar and Orissa Excise Act, 1915 (hereinafter referred to as the Act) and the Rules framed there under.

3. In all these five writ applications the prayer is for quashing a letter of demand as contained in Annexure 1 to the respective writ applications dated 14th March, 1983 issued by the respondents Assistant Commissioner of Excise. By this communication, the petitioners have been directed to deposit Rs. 60,826.80 Paise 60,826.80 Paise 60,826.80 Paise, 38,016.75 Paise, 30,413.40 Paise respectively on account of establishment charges of Excise Officers.

4. It has been submitted by Mr. Granga Prasad Bimal, learned Counsel appearing for the petitioners, that the demand in question is unenforceable and fit to be quashed since it has not been made pursuant to any statutory provision. His assertion is that neither the Act nor the Rules framed there under or even the conditions of the license authorise the respondent No. 2 to make any demand on account of establishment charges. Submission is that the impugned demands have been made under the executive fiat without any legislative sanction and as such it is volatile under Article 265 of the Coast function India.

5. On the other hand learned Advocate-General and the Additional. Advocate-General No. 1, appearing for the respondent State and its officers, have submitted that since the trade in liquor is a privilege accorded to the petitioners under a license granted to them by the State, they are bound to abide by the directions of the respondents even in respect of the payment of establishment charges. According to the respondents, the grant of license to the petitioners is in the nature of a contract within the State and the petitioners having acted and derived benefit on the basis of such license are now stopped from challenging the impugned directions issued by the excise authorities.

6. In support of the aforesaid submission, the learned Advocate-General placed reliance on the case of Har Shanker and Ors. V/s. The Deputy Excise and Taxation Commissioner and Ors. reported in AIR 1975 SC 1121, wherein it has been held that "since rights in regard to intoxicants belong to the State, it is open to the Government to part with those rights for a consideration. Accepting this to be the law of the land till date, it is an admitted position that in the State of Bihar the legislature has laid down a complete Code for parting with these rights by the State under the Act and Rules framed there under. Therefore, according to me, the considerations for which the State can part with its right of dealing in intoxicants has to be ascertained from within the frame work of the statutory provisions. The excise authorities, may be the Excise Commissioner or his subordinates, must lay hand on some statutory provisions for exercise of their powers. They are not competent to make any demand, which is not authorised by the statutory provisions. The excise authorities are themselves not the State. The State has manifested its intention with regard to parting of its rights through the legislative Act.

7. Keeping in view the aforesaid legal aspects and limitations of the Excise authorities, the learned Advocate General referred to various provisions under the Act, the Rules and conditions of the license. He first referred to Section 7(2)(1)(a) of the Act which, inter alia, provides that the State Government may by notification appoint an officer who shall, subject to such control as the State Government may direct, have the control of administration of the Excise Department and the collection of the excise-revenue. The Government has appointed the Excise Com