2008 Supreme(SC) 1388

2008(7) Supreme 119
SUPREME COURT OF INDIA
S.H. Kapadia and B. Sudershan Reddy, JJ.
State of M.P. & Ors. — Appellants
versus
Lalit Jaggi — Respondent
Civil Appeal No. 5751 of 2008
(Arising out of S.L.P.(C) No.14286/2006)
Decided on : 17-09-08

IMPORTANT POINT
When the High Court strikes down any Policy/Circular as ultra vires, it is expected of High Court to give detailed reasons for saying so.

Headnote:M.P. Excise Act, 1915 – Section 25 – Constitution of India, 1950 – Article 14 – Issuance of a Notification by State Government framing a Liquor Policy for the year 2005-2006 – Writ Petition challenging Clause 13.3 and Clause 13.4 of the Policy – Clauses 13.3 and 13.4 were declared to be ultra vires Article 14 of the Constitution by High Court by impugned judgment relying upon two judgments in case of State of Madhya Pradesh Vs. Firm Gappulal & Ors., and Bimal Chandra Banerjee Vs. State of M.P. – Appeal – Two judgments relied upon by High Court held to have no application for the simple reason that there is a basic difference between excise duty and licence fee – Both the judgments dealt with levy of excise duty on undrawn liquor – The concepts of advance licence fee and excise duty are entirely different and this had been very succinctly brought out in two judgments of this Court in State of Orissa & Ors. Vs. Narain Prasad & Ors., and Asstt. Excise Commissioner & Ors. Vs. Issac Peter & Ors. – Despite exhaustive exposition of law by this Court on nature of payment of licence fee by auction purchaser, High Court in its impugned judgment had not considered any of the said judgments while striking down relevant clauses of Policy and Circular- Moreover, the reasoning given in the judgment was cryptic – When the High Court strikes down the Policy/Circular as ultra vires, it is expected of High Court to give detailed reasons for saying so – However no reasons were given in the impugned judgment – Entire controversy arose in the contractual field – The Sale Memo signed by the auction purchaser was nothing but the contract – High Court had not even considered General Licence Conditions stipulated in the Rules under the Act 1915 which stands incorporated in the Sale Memo and which, inter alia, dealt with payment of annual licnece fee in instalments – None of the above facts had been considered by Division Bench of the High Court while proceeding to set aside Circular/Policy as ultra vires Section 25 of the M.P. Excise Act, 1915 – Impugned judgment of High Court being unsustainable, set aside – Appeals allowed. (Paras 8 to 15)

       Facts of the Case :

        1. A Notification was issued by State Government herein in the instant case framing a Liquor Policy for the year 2005-2006. On Writ Petition challenging Clause 13.3 and Clause 13.4 of the Policy, said clause were declared to be ultra vires Article 14 of the Constitution by High Court.

        2. Present appeals have been filed challenging impugned judgment of High Court.

       Findings of the Court :

        The concepts of advance licence fee and excise duty are entirely different and this had been very succinctly brought out in two judgments of this Court in State of Orissa & Ors. Vs. Narain Prasad & Ors., and Asstt. Excise Commissioner & Ors. Vs. Issac Peter & Ors. Despite exhaustive exposition of law by this Court on nature of payment of licence fee by auction purchaser, High Court in its impugned judgment had not considered any of the said judgments while striking down relevant clauses of Policy and Circular. Moreover, the reasoning given in the judgment was cryptic. When the High Court strikes down the Policy/Circular as ultra vires, it is expected of High Court to give detailed reasons for saying so. However no reasons were given in the impugned judgment. Entire controversy arose in the contractual field. The Sale Memo signed by the auction purchaser was nothing but the contract. High Court had not even considered General Licence Conditions stipulated in the Rules under the Act 1915 which stands incorporated in the Sale Memo and which, inter alia, dealt with payment of annual licnece fee in instalments.None of the above facts had been considered by Division Bench of the High Court while proceeding to set aside Circular/Policy as ultra vires Section 25 of the M.P. Excise Act, 1915.Impugned judgment of High Court being unsustainable, was held liable to be set aside.

       Result : Appeals allowed.