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1999 Supreme(MP) 483
IN THE HIGH COURT OF MADHYA PRADESH
A.K. Mathur, C.J. and S.K. Kulshrestha, JJ.
Appellants: State of M.P. and others
Vs.
Respondent: Swami Traders
L.P.A. Nos. 262 and 313 of 1997
Decided On: 23.07.1999
For Appellant/Petitioner/Plaintiff: R.S. Jha, Dy. A.G.
For Respondents/Defendant: Abhay Sapre with Ashok Agarwal
The principle of promissory estoppel, fairness, or reasonableness cannot be invoked to compel public bodies or the Government to carry out any promise made by them which is contrary and beyond their statutory authority or power.
Headnote:
EXCISE - LIQUOR CONTRACT - ADJUSTMENT OF EXCISE DUTY AND PERMIT FEE - POLICY STATEMENT - PROMISSORY ESTOPPEL - GENERAL LICENCE CONDITIONS - STATUTORY RULES - DISCRIMINATION - RETAILOR AND WHOLESALER - SALE MEMO.
Fact of the Case:
Petitioners, who were successful bidders in an auction for retail sale of country liquor and Indian Made Foreign Liquor (IMFL) for various shops in a township, claimed adjustment of excise duty and permit fee in their new licenses for the stock purchased from the outgoing licensees. The State Government issued a circular de hors the new policy, directing that no adjustment in the license fee be given to the new licensees on the balance stock of liquor purchased by them from the outgoing licensees.
Finding of the Court:
The Court held that the State Government was not bound by the principle of promissory estoppel, fairness, or reasonableness to give rebate or adjustment of the stock purchased by the incoming licensee from the outgoing licensee. The General Licence Conditions framed under Section 62 of the M.P. Excise Act 1915 were statutory conditions binding on both the State Government and the licensees. The policy statements or oral assurances made by the State authorities could not bind the State in the face of the statutory rules. The Excise Commissioner's order clarifying that excise duty and permit fee for the left-over stock on 31st March 1996 would not be adjusted against the license for 1996-97 was not contrary to the rules and could not be quashed. The Court also held that there was no discrimination between retailers and wholesalers as they were not similarly situated. The retailor and wholeseller stood on different footings.
Issues: 1. Whether the State Government was bound by the principle of promissory estoppel, fairness, or reasonableness to give rebate or adjustment of the stock purchased by the incoming licensee from the outgoing licensee? 2. Whether the General Licence Conditions framed under Section 62 of the M.P. Excise Act 1915 were statutory conditions binding on both the State Government and the licensees? 3. Whether the policy statements or oral assurances made by the State authorities could bind the State in the face of the statutory rules? 4. Whether the Excise Commissioner's order clarifying that excise duty and permit fee for the left-over stock on 31st March 1996 would not be adjusted against the license for 1996-97 was contrary to the rules and could be quashed? 5. Whether there was discrimination between retailers and wholesalers?
Ratio Decidendi: 1. The principle of promissory estoppel, fairness, or reasonableness cannot be invoked to compel public bodies or the Government to carry out any promise made by them which is contrary and beyond their statutory authority or power. 2. The General Licence Conditions framed under Section 62 of the M.P. Excise Act 1915 were statutory conditions binding on both the State Government and the licensees. 3. Policy statements or oral assurances made by the State authorities cannot bind the State in the face of the statutory rules. 4. The Excise Commissioner's order clarifying that excise duty and permit fee for the left-over stock on 31st March 1996 would not be adjusted against the license for 1996-97 was not contrary to the rules and could not be quashed. 5. There was no discrimination between retailers and wholesalers as they were not similarly situated.
Final Decision: The Court allowed the appeals filed by the State Government and set aside the judgment of the learned single Judge dated 9-5-1997. The petitions filed by the petitioners were dismissed. There was no order as to costs.
A.K. Mathur, C.J.
1. Both these appeals arise out of order dated 9-5-1997 passed by the learned single Judge who disposed of a batch of writ petitions by this common order. However, learned single Judge, for disposal of all the writ petitions took the facts given in W.P. No. 1687 of 1996 (M/s Swami Traders vs. State of M.P. and others. into consideration.
2. Common question involved in the batch of writ petitions was that the petitioners had taken contract for retail sale of country liquor and/or Indian Made Foreign Liquor (IMFL) for various shops of the township. As per condition of Sale Memo, incoming licencee has to compulsorily purchase all the balance stock of liquor of outgoing licensee. The stock left by the outgoing licensee on 31st March has to be purchased by the incoming licensee which includes the cost of the liquor, excise duty and permit fee. Hence, the incoming licensees claimed that they should be given rebate/adjustment of excise duty and permit fee in their new licences.
3. Petitioner/respondent M/s Swami Traders by filing a writ petition prayed that Annexure.P3 order of Excise Commissioner dated 30th March 1996 may be quashed and a mandamus be issued directing the respondents (appellants herein) to adhere to the conditions of the new excise policy and directing them to give adjustment of the duty and permit fee paid towards the monthly licence fees payable by them of the stock purchased from the outgoing licensee. The Petitioner/respondent also prayed for grant of adjustment of Rs. 3,60,538.00 relating to T.T. Nagar Foreign Liquor Shop in the monthly licence fee and that amount should not be recovered from them.
4. The petitioner being a registered partnership firm took a contract for retail sale of country liquor for the Bhopal City group of shops by virtue of being the highest bidder in an open auction held in the first week of March 1996 at Bhopal. Before auction could by held, the State Government published terms and conditions of auction and also the system to be adopted for the year 1996-97. It is alleged that as per Condition No. 56 of the sale memo and Condition No. XXV of the General Licence Conditions, new contractor was to compulsorily purchase the balance stock of the outgoing licensee on 31st March 1996. The incoming licensee had no choice but to purchase the balance stock of outgoing licensee and he had to pay excise duty plus permit fee and the cost of the liquor to the outgoing licensee. The same was done by the petitioner and the sale memo for 1996-97 has been placed on record as Exh. P1.
5. It is alleged that the State of M.P for the year 1996-97 decided to frame a new Excise Policy and a proposal was put before the Cabinet Sub-Committee and after approval of the Cabinet Sub-Committee in February 1996, the new Excise Policy was issued which has been placed on record as Exh. P2. It is alleged that Condition No. 8 was incorporated in the Policy decision issued by the State Government. It was contended that this was a specific policy approved by the Cabinet Sub-Committee. Thereafter, the Excise Commissioner (Madhya Pradesh) issued a circular dated 30th March 1996 (Exh. P3) de hors the new policy issued by the State and by this order/circular, the Excise Commissioner directed all the Collectors of the districts of Madhya Pradesh that no adjustment in the licence fee has to be given to the new licensees on the balance stock of liquor purchased by them from the outgoing licensees and the monthly licence fees has to be calculated only on the stock purchased after 1-4-1996. The petitioner could not get adjustment of the licence fee and the excise duty and permit fee paid on the old stock purchased by them from the outgoing licensees and they were driven to file this petition praying that the communication/order issued by the Excise Commissioner dated 31-3-1996 should be quashed and the petitioner may be given adjustment of the amount of excise duty and fee paid on the balance liquor purchased by th
