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Allahbad High Court
G.C.MATHUR
State of U.P. - Appellant
Versus
K.P. Sui - Respondent
Decided On : 03/22/1976
U. P. Excise Act, 1910 - S. 41 (e) (v) - Interpretation and Scope - Closure of Licensed Premises on Tuesdays - Validity of Rule 13-B - Conditions of Licence - Estoppel.
Fact of the Case:
The U. P. Excise Act, 1910, empowers the Excise Commissioner to make rules for the purpose of carrying out the provisions of the Act. S. 41 (e) (v) of the Act empowers the Excise Commissioner to make rules, fixing the days and hours during which any licensed premises may or may not be kept open and the closure of such premises on special occasions. In exercise of this power, the Excise Commissioner made Rule 13-B, which required all excise shops to remain closed on Independence Day, Mahatma Gandhi's birthday, Mahatma Gandhi's death day, and on all Tuesdays. A number of writ petitions were filed in the High Court challenging the validity of Rule 13-B. A Division Bench of the High Court referred three questions to a third Judge for opinion: (1) the true interpretation and scope of S. 41 (e) (v) of the Act; (2) whether the Excise Commissioner could make Rule 13-B in exercise of his powers under the Act; and (3) whether the closure of the licensed premises on Tuesdays as a condition in the licence of the petitioner became a binding term of the contract and the licensee could not be allowed to avoid it through a petition under Art. 226 of the Constitution.
Finding of the Court:
1. S. 41 (e) (v) of the Act empowers the Excise Commissioner to make a rule fixing the days as well as the hours during which licensed premises may be kept open or kept closed. R. 13-B could validly be made under this provision. 2. The Excise Commissioner could make R. 13-B in exercise of his powers under the main part of cl. (e) of S. 41 also but he could not make the rule in exercise of his powers either under cl. (a) of S. 41 or under S. 31. 3. If R. 13-B, in so far as it relates to the closure of licensed premises on Tuesdays, is ultra vires and void, its incorporation in the contract of the licensees will not make it a binding term of contract and the licensees will be entitled to avoid it through a petition under Art. 226 of the Constitution.
Issues: 1. Interpretation and scope of S. 41 (e) (v) of the U. P. Excise Act, 1910. 2. Power of the Excise Commissioner to make Rule 13-B under the Act. 3. Validity of the condition in the licence requiring the closure of licensed premises on Tuesdays.
Ratio Decidendi: 1. The language of S. 41 (e) (v) of the Act is unambiguous and clearly empowers the Excise Commissioner to make rules, fixing the days as well as the hours during which licensed premises may be kept open or kept closed. 2. The main part of cl. (e) of S. 41 empowers the Excise Commissioner to make rules, prescribing the restrictions under and the conditions on which any licence, permit or pass may be granted. This power includes the power to make provisions for the matters enumerated in sub-cls. (i) to (viii). The power to make rules fixing days on which the licensed premises may be closed is not included in sub-cl. (v) or in any of the other sub-clauses. Therefore, it is included in the main part of cl. (e). 3. S. 31 of the Act does not confer any power on the Excise Commissioner to give a direction that a licence shall be granted subject to the condition that the licensed premises shall remain closed on all Tuesdays.
Final Decision: The Excise Commissioner could validly make Rule 13-B under the main part of cl. (e) of S. 41 of the Act. The condition in the licence requiring the closure of licensed premises on Tuesdays is valid.
G. C. MATHUR, J. :- (On difference of opinion between the Judges constituting the Division Bench before the Special Appeal came for hearing):
Consequent upon a difference of opinion between the learned Judges constituting the Bench hearing the Special Appeal and the writ petitions the following three questions have been referred to me for opinion :-
1. What is the true interpretation and scope of S. 41 (e) (v) of the U. P. Excise Act?
2. Whether the Excise Commissioner can make R. 13-B in exercise of his powers under the U. P. Excise Act?
3. Whether the closure of the licensed premises on Tuesdays as a condition in the licence of the petitioner became a binding term of the contract and the licensee could not be allowed to avoid it through a petition under Art. 226 of the Constitution?
2. The U. P. Excise Act, 1910, makes provisions relating to the import, export, transport, manufacture, sale and possession of intoxicating liquors and intoxicating drugs. S. 3 of the Act defines in sub-ss. (11) and (12) "liquor" and intoxicating drugs. Sub-s. (13) defines "intoxicant" to mean any liquor or intoxicating drug as defined in the Act. S. 21 provides that no intoxicants shall be sold without a licence from the Collector. S. 31 deals with the form and condition of licences. S. 10 confers powers on the State Government to make rules for the purpose of carrying out the provisions of the Act or other law for the time being in force relating to excise revenue. S. 41 empowers the Excise Commissioner to make rules with the previous sanction of the State Government. The relevant part of this Section reads as follows:
"41. The Excise Commissioner, subject to the previous sanction of the State Government may make rules-
(a) Regulating the manufacture, supply, storage or sale of intoxicants including -
. . . . . . . . . . . . . . . . . .
(e) Prescribing the restrictions under and the conditions on which any licence, permit or pass may be granted, including provision for the following matters :
(i) . . . . . . . . . . . . . . . . .
(v) the fixing of the days and hours during which any licensed premises may or may not be kept open and the closure of such premises on special occasions.
(vi) . . . . . . . . . . . . . . . . . .
3. Under the Act as it stood before its amendment in 1923, the power to make rules under S. 41 was conferred on the Chief Revenue Authority. Under this power the Board of Revenue framed the U. P. Excise Rules, 1910. By a notification dated January 2, 1971, the Excise Commissioner in exercise of the power under S. 41 (e) (v) of the Act made the U. P. Excise (Amendment) Rules, 1970. These Amendment Rules introduced the following Rules 13-A and 13-B:-
"13-A. Every shop licensed for the sale of-
1. Country spirit.
2. Tari.
3. Foreign liquor for consumption on and off the premises.
shall be kept closed on the day following the burning of Holi and on the principal Diwali day.
Exception - This condition does not apply to railway refreshment rooms, dining cars and such hotels and restaurants which are licensed for the sale of foreign liquor to foreign tourists.
"13-B. All excise shops including foreign liquor, country spirit, hemp drugs, opium, tari and outstill shops shall remain closed on Independence day (August 15), Mahatma Gandhi Birthday (Oct. 2) and on the day of Mahatma Gandhis tragic death (Jan. 30) every year and also on all Tuesdays:
Provided that the Excise Commissioner may in consultation with the Collector of the District concerned waive the condition of keeping on excise shop closed on Tuesday for such specified period as he may think fit, in the case of hotels possessing a licence in Form F. L. 6 for the sale of foreign liquor for the benefit of such foreign tourists as may hold a valid permit under the All India Liquor permit Scheme of the Government of India."
As a consequence of the making of R. 13-B a condition was added in licences for the retail sale of liquo
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