Full Judgment Text
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PETITIONER:
EXCISE COMMISSIONER. U.P., ALLAHABAD
Vs.
RESPONDENT:
RAM KUMAR
DATE OF JUDGMENT05/05/1976
BENCH:
SINGH, JASWANT
BENCH:
SINGH, JASWANT
RAY, A.N. (CJ)
SARKARIA, RANJIT SINGH
SHINGAL, P.N.
CITATION:
1976 AIR 2237 1976 SCR 535
1976 SCC (3) 540
CITATOR INFO :
R 1977 SC1691 (7)
R 1977 SC2149 (13)
RF 1979 SC 621 (29,30)
F 1980 SC1285 (12,27,30,31,33,34,44,53)
RF 1980 SC2018 (21)
D 1981 SC1374 (6)
D 1987 SC 993 (12,13)
RF 1991 SC 735 (22)
R 1992 SC1393 (8,9)
R 1992 SC2169 (19)
ACT:
Evidence Act-Estoppel against Government in exercise of
legislative, sovereign or executive powers-U.P. Excise Act
1910-Sec. 24. 28, 31, 33, 40 and 41- Whether excise duty can
be levied on unlifted stock of liquor.
U.P. Sales Tax Act 1948, sec. 3A and 4-Whether
exemption from payment of sales tax can be withdrawn-
Estoppel.
HEADNOTE:
The State of Uttar Pradesh has under the U.P. Excise
Act, 1910. the exclusive right or privilege of manufacturing
and selling liquor in that State. Section ’’4 of the Act
provides that subject to the provisions of s. 31 the Excise
Commissioner may grant to any person a licence for the
exclusive privilege of manufacturing or of supplying any
country liquor etc. Section 31 provides for the conditions
for the grant of licence. Section 33 invests the authority
granting a licence to require the grantee to execute a
counterpart agreement in conformity with the tenor of the
licence. Section 28 authorises imposition of an excise duty
or a countervailing duty by The local Government on any
excisable article. Sections 40 and 41 of the Act empower the
State Government and the Excise Commissioner subject to the
previous sanction of the Government to make rules. Para 38
of the Excise Manual which contains the rules made under the
Act shows that there are 4 licence fee systems in vogue. One
of such systems is the auction fee system under which the
amount of licence fee is determined by competition amongst
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bidders at an auction. The respondents were the highest
bidders at various auctions. Before holding the auctions,
the rates of excise duty and prices of different varieties
of country liquor and also the conditions of licence were
announced. No announcement was made as to whether the
exemption from sales tax in respect of sale of country
liquor granted by the notification dated 6-4-1959 was or was
not likely to be withdrawn. one of the conditions of the
licences was that the licensee shall lift each month certain
quota of liquor and on the failure to lift the monthly quota
the licensee shall be liable to pay compensation to the
state Government calculated at the rate of duty per litre on
the unlifted quota. On the day following the day when the
licences were granted, the Government of U.P. issued a
notification under s. 3A and 4 of the U.P. Sales Tax Act,
1948, superseding the earlier notification exempting the
payment of sales tax and imposing sales tax on the turnover
in respect of country spirit at the rate of 10 P. per rupee.
The respondents having failed to lift and sell the minimum
quotas of liquor the appellant called upon them to pay by
way of compensation the amount; of excise duty on the
shortfalls.
Aggrieved by the demand, the respondents moved the High
Court under Art. 226 of the Constitution for issue of
appropriate writ or direction restraining the appellants
from recovering the aforesaid amounts. The respondents in
special appeals also challenged the notification issued
under the sales Tax Act on the ground that the State
Government did not announce at the time of the action that
the earlier notification was likely to be withdrawn and that
the appellant informed the respondents at the time of the
auction that there was no sales tax on the sale of country
liquor. The appellants were, therefore, estopped from making
the demand in respect of the sales tax and recovering the
same from them. The High Court allowed all the petitions in
toto.
On appeal by special leave,
533
^
HELD: (1) Neither s. 28 nor s. 29 nor any other
provisions of the Act authorise the levy of the amounts
sought to be recovered from the respondents. The demand made
by the appellant though disguised as compensation is in
reality a demand for excise duty on unlifted quantity of
liquor which is not authorised by the provisions of the Act.
[538-A-C]
Bimal Chandra Banerjee v. Stale of Madhya Pradesh,
[1971] 1 S.C.R. 844, followed.
Panna Lal and Ors. etc. v. State of Rajasthan and
others, [1976] I S.C.R. 219. distinguished.
Appeal dismissed.
(2) Sections 3A and 4 of the U.P. Sales Tax Act clearly
authorise the State Government to impose sales tax. The fact
that sales of country liquors had been exempted from sales
tax by the earlier notification could not operate as
estoppel against the State Government and preclude it from
subjecting the sales to tax if it felt impelled to do so in
the interest of the revenues of the State. There can be no
question of estoppel against the Government in exercise of
its legislative sovereign or executive powers (case law
reviewed). The Government cannot divest itself of the right
incidental to its office by conduct which in the case of a
private person would amount to estoppel. The six appeals
therefore, are partly allowed
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JUDGMENT:
CIVIL APPELLATE JURISDICTION: CIVIL APPEALS Nos: 276-395 AND
397-404 OF 1975
Appeals by Special Leave from the Judgments and orders dated
21.2.72., 8.3.72., 2].2.72., 10.3.72., 21.3.72., 16.]2.71.,
24.3.72., 21.3.72.. 21.3.72., 22.3.72., 25.2.72., 8.3.72.,
21.2.72., 10.3.72., 8.3.72. 10.3.72 10.3.72., 18.2.72.,
16.l2.71. 9.3.73., 8.3.72.,25.2.72., 16.12.71., 25.3.72.,
15.3.72., 25.3.72., 25.2.72., 25.3.72., 25.2.72., 14.3.72.,
.14.3.72., 21.3. 2.,14.3.72., 14.3.72. 21.3.72.,21.3.72.,
14.3.72., 25.3.72., 25.372., 21.3.72., 21.3.72., 21.3.72,
21.3.72., 24.3.72, 24.3.72., 24.3.72., 24.3.72., 25.3.72.,
21.3.72., 3.4.72., 21.3.72., 3.4.70. 24.3.72., 24.3.72
24.3.72., 24.3.72., 24.3.72., 24.3.72, 25.372., 25.3.72.,
25.3.72 25.372., 25.372., 3.4.72., 3.4.72., 3.4.72.,
3.4.72., 3.4.72., 14-3.72. 3.9.71., 3.9.71., 16.7.71.,
14.3.71., 29.3.72., 14.3.72., 14.3.72., 14.3.72, 5.4.72.,
5.4.72., 5.1.72., 5.4.72., 18-2-72., 23.2.72., 10.3.72.,
20.1.72., 9.1.72., 31.1.72.. 31.1.72., 31.1.72., 31.1.72.,
8.3.72., 2.2.72 3.2.72., 25.2.72., 2.2.72., 10.3.72.,
4.2.72., 25.9.72., 25.9.72, 6.10.72., 1.2.73., 13.2.73.,
30.1.73., 9.4.73., 13.2.73., 14.2.72., 13.3.72., 13.3.72.,
24.3.72., 18.7.72., 4.9.73.. 25.2.72, 17.5.71., 21.3.72.,
3.4.72., 21.3.72., 16.7.71., 5.4.72., In Special Appeal Nos.
616, 643, 617, 644/74 and Civil Misc Writ Nos
2268,448,2280,2254,2255/69 and Special Appeal Nos 730 752,
647,615,611,648,645605,610/71 and Civil Misc. Writ No.
149/68 and Special Appeal No.86, 796.775/71 and W.P No. 450
69 and Writ No 451, 218, 5706 2915/69,S. A. No..690/71 C.
Misc Writ No.3037/69 and S.A. No.613/71 and C. Misc Writ
No.2090/69 and Civil Misc. Writ Nos 2094, 2119, 2122, 2172,
2188 2189 -92, 2180 2182, 2187,2256, 2273, 2274,2276-2279,
2282-2284.2334 2347, 2576,2608-2611,2649 2690,2742-2743,
2759,2760,2811,2850, 2916,2918,2919,3075,3400/69 and 543-
546, 786,1039,1246, 1248, 2169,3881,
4035,4428,4563,4821,211,250, 256, 7253, 607, 614,
618.628,7655.691-694, 729. 732. 751, 776, 787, 799. 805171
and Civil Misc. Writ No.1525,1529,3387.7051,7253, 7588,
7575, 7980 and Special Appeal Nos.6,102, 115, 166,309/72 and
1902/73 and Special Appeal No.774171 and Civil Misc. Writ
No. 2121/69,2194/69 70,3375/69 and writ Petition
No.3627/70,260/71 respectively.
534
B. Sen and o. P. Rana for the Appellant.
Yogeswar Prasad, S. K. Bagga and (Mrs.) S. Bagga, for
the Respondent in CA 399/75 and 400-405/75.
(Miss) Kamlesh Bansal, for Respondent in CAs. 310, 312,
238,403,357,and 313/75
L. C. Goyal, for Respondent in CA No. 396/75.
The Judgment of the Court was delivered by
JASWANT SINGH, J.-This batch of 127 appeals by special
leave which are directed against various judgments rendered
by the High Court of Judicature at Allahabad in writ
petitions and special appeals and relate to enforcement of
certain obligations of licensees for retail vend of country
liquor shall be disposed of by this judgment.
The facts leading to these appeals are The State of
Uttar Pradesh has,, under the U.P. Excise Act 1910 (Act No.
IV of 1910) (herein after referred to as ’the Act’) which
contains provisions relating to all aspects and
manifestations of intoxicating liquors and intoxicating
drugs, that is to say, their import, export, transport,
manufacture, sale and possession, the exclusive right or
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privilege of manufacturing and selling liquor in that State.
Section 24 of the Act lays down that subject to the
provisions of section 31, the Excise Commissioner may grant
to any person a licence for the exclusive privilege-
(1) of manufacturing or of supplying by
wholesale, or of both, or
(2) of selling by wholesale or by retail, or
(3) of manufacturing or of supplying by
wholesale, or of both and or selling by
retail any country liquor or intoxicating
drug within any local area.
Section 31 provides that every licence, permit or pass
granted under the Act shall be granted-
(a) on payment of Such fee (if any);
(b) subject to such restrictions and on such
conditions;
(c) shall be in such form and contain such
particulars, as the Excise Commissioner may
direct either generally or in any particular
instance in this behalf; and
(d) shall be granted for such period as the State
Government may, in like manner, direct.
Section 33 of The Act invests the authority granting a
licence under the Act to require the grantee to execute a
counterpart a agreement in conformity with the tenor of his
licence and to give such security for the performance of
such agreement or to make such deposit in lieu of security
as such authority may think fit.
Section 28 of the Act which deals with imposition of
excise duty or countervailing duty reads:-
"28. (1) Duty on excisable article.-An excise duty
or a countervailing duty as the case may be at such
rate or rates as
535
the Local Government shall direct, may be imposed,
either A generally or for specified local area, on any
excisable article-
(a) imported in accordance with the provisions of
section 12 (1); or
(b) exported in accordance with the provisions of
section 13; or
(c) transported; or
(d) manufactured, cultivated or collected under-
any licence granted under section 17; or
(e) manufactured in any distillery established, or
any distillery or brewery licensed, under
section 18 ...."
Section 29 of the Act lays down the manner in which the
duty may be levied. One of the ways provided in the section
for levy of the duty is by payment upon issue for sale from
a warehouse established or licensed under section 18(d) of
the Act.
Sections 40 and 41 of the Act empower the State
Government and the Excise Commissioner (subject to the
previous sanction of the Government) to make rules for the
purposes set out therein. These rules are contain in the
Excise Manual, Uttar Pradesh (Volume I).
Paragraph 38 of the Excise Manual shows that there are
four licence-fee systems in vogue in the State of Uttar
Pradesh. One of such systems is ’The auction fee system’
under which the amount of licence fees inter alia for the
retail sale of’ country spirit under the distillery system
and for the manufacture and retail sale of country spirit
under the outstill system is determined by competition among
bidders. According to paragraph 332 licences for the
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wholesale and retail vend of intoxicants are usually granted
for the excise year which commences from April 1 and lasts
upto March 31.
In accordance with the requirements of the auction
system, auctions were held throughout Uttar Pradesh during
the months of February and March, 1969 on various dates and
at various places for the grant of licences to sell country
spirit by retail at the specified shops during the excise
year 1969-70.
Before holding The auctions, rates of‘ excise duty and
prices of different varieties of country liquor as also the
conditions of’ licences for sale of county spirit for 1969-
7() were announced. No announcement was, however, made as to
whether the exemption from sales tax in respect of sale of
country liquor granted vide Notification No. ST 1149/X-
802(33)-51 dated April 6,, 1959. issued under section 4 of
the U.P. Sales Tax Act, 1948 was or was not likely to be
withdrawn. The respondents herein participated in the
aforesaid auctions and being the highest bidders were
granted licences for retail sale of country spirit for the
period beginning from April t, 1969 to the end of March.,
1970.
536
Each one of these licences contained infer alia the
following condition:-
"3. (a) The licensee shall lift each month the
proportionate quota for the month, if any, fixed for
his vend and deposit still head duty realisable
thereon. On his failure to lift the monthly
proportionate quota in any month, he shall be liable to
pay compensation to the State Government at the rate
equal to the rate of still-head duty per litre of
spiced spirit and still head duty per litre of plain
spirit as may be in the area in which the shop is
situated on the quantity falling short of such monthly
proportionate quota and such com pensation shall be
paid by the 7th of the month following the month to
which such shortfall relaters.
(b) He shall be bound to sell the whole quantity
of country spirit obtained for the shop from the
warehouse on his failure to do so, he shall be liable
to pay to the State Government compensation at the rate
equal to the rate of stillhead duty per litre of spiced
spirit and stillhead duty per litre of plain spirit as
may be in force in the area in which the shop is
situated on the unsold quantity of country spirit
during the period of the contract to which the licence
relates.
(c) In the event of the licensee being required to
pay compensation to State Government under the
aforesaid condition due to the short lifting of the
quota or non-deposit of such compensation, the amount
of said compensation may be realised from the amount of
security deposited by him. The resultant deficiency in
the amount of security shall be made good by the
licensee within seven days of such adjustment. Tn case
the short lifting of proportionate monthly quota or
short deposit of compensation continues for two
consecutive months or the license fails to make up the
deficiency in the amount of security within the
prescribed period of seven days his licence may be
cancelled in addition to the recovery of the deficiency
in payment of compensation as arrears of land revenue."
On the day following the commencement of the aforesaid
licences i.e. on April 2, 1969, the Government of Uttar
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Pradesh issued Notification No. ST-1603/X-900 (12)/67 under
section 3-A and 4 of the U.P. sales Tas Act, 1948,
superseding the earlier Notification No. ST 1149/X-802 (33)-
51 dated April 6, 1959, issued under section 4 of the U. P.
Sales Tax Act, 1948, and imposing sales tax on the turnover
in respect of the country spirit at the rate of ten paise
per rupee at the point of retail sale with immediate effect.
The respondents herein having failed to lift and sell
the minimum quotas of liquor prescribed in their licences
were required by the excise authorities of the State to pay,
by way of compensation, the amounts of excise duty leviable
on the short-falls. Aggrieved by this demand, the
respondents moved the High Court under Articles 226
537
Of the Constitution for issue of appropriate writ or
directions retraining the appellants herein from recovering
the aforesaid amounts contending inter alia that the
condition of their licences on the basis of which the demand
was made was invalid, unconstitutional and unenforceable.
The respondents in six appeals Nos. 399 to 404 of 1975 also
challenged Notification No. ST-1608/X-900(12)/67 (dated
April 2, 1969) (supra) which superseded the earlier
Notification No. ST 1149/X-802(33)51 dated April 6, 1959 and
imposed sales tax on the turnover in respect of the country.
liquor at the rate of ten paise per rupee at the point of
retail sale by the vendor with effect from April 2, 1969 on
the ground that since the state Government did not announce
at the time of the aforesaid auction that Notification No.
ST 1149/X-802(33)51 dated April 6, 1959, was likely to be
withdrawn and the sales of country. liquor were likely to be
subjected to the levy of sales tax during the excise year
and in reply to the query made by them at the time of the
auction they were told by the authorities that there was no
sales tax of the sale of country liquor. the appellants
herein were estopped from making the demand in respect of
sales tax and recovering the same from them. The High Court
allowed all these petitions in toto. Having failed to secure
certificates of fitness from the High Court, the appellants
applied for and obtained special leave to appeal from this
Court.
The common question of law that arises for
determination in all these appeals is whether the condition
incorporated in the licences of the respondents that they
would lift the fixed minimum quantity of liquor and sell the
same at their allotted shops and in case of their default or
failure to d(h so, they would be liable to pay compensation
equal to the amount of excise duty leviable on the unlifted
quantity is valid and enforceable. This point is no longer
res integra. In Bimal Chandra Banerjee v. State of Madhya
Pradesh(1) this Court held that:
"No tax can be imposed by any bye-law or rule or
regulation unlegs the statute under which the
subordinate legislation is made specially authorises
the imposition. In the present case, the legislature
has levied excise duty or countervailing duty on the
excisablc articles which have been either imported.
exported. transported, manufactured. cultivated or
collected under any licence granted under section 13?
or manufactured in any distillery or brewery
established or licensed number the. Act; and the State
Government has not been empowered to - levy any duty on
liquor which the contractors failed to lift. Therefore,
the State Government was exercising a power which it
did not possess and hence the rule imposing the
condition in the licences and the demand notices are
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invalid."
Thus the aforesaid question arising for determination
by us stands already settled by the ratio of the decision of
this Court in Bimal Chandra Banerjees case (supra.)
(1) [1971] 1 S.C.R. 844.
538
It will also be noticed that neither section 28 nor
section 29 nor any other provision of the Act authorises the
levy of the amounts sought to be recovered from the
respondents.
The decision of this Court is Panna Lal and Ors. etc.
etc. v. State of Rajasthan and ors.(1) which is sought to be
relied upon on behalf of the appellants is clearly
distinguishable. In that case, the contractual obligation of
the appellants to pay the guaranteed sum or the stipulate(d
sum mentioned in the licences was not dependent on the
quantum on liquor sold by them and no excise duty was
charged or chargeable on undrawn liquor under the licences.
The excise duty there was collected only in relation to the
quantity and quality of the country liquor which was drawn.
We have, therefore, not the lightest hesitation in
holding that the demand made by the appellants though
disguised as compensation, is in reality a demand for excise
duty on the unlifted quantity of liquor which is not
authorised by the provisions of the Act. This being the sole
point involved in appeals other than Appeals Nos. 399 to 404
of 1975 the former Appeals cannot succeed. In the result
they are dismissed with costs.
Appeals Nos. 399 to 404 of 1975 which raise another
point as well viz. the validity of the appellants’ demand
from the respondents in respect of sales tax at the rate of
ten paise per rupee on the retail sales of country spirit
made by the latter with effect from April 2, 1969 stand on a
slightly different footing. Section 3-A and 4 of the U.P.
Sales Tax Act, 1948 clearly authorise the State Government
to impose sales tax. The fact that sales of country liquor
had been exempted from sales tax vide Notification No. ST
1149/X-802(33)-51 dated April 6 1959 could not operate as an
estoppel against the State Government and preclude it from
subjecting the sales to tax if it felt impelled to do so in
the interest of the Revenues of the State which are required
for execution of the plans designed to meet the ever
increasing pressing needs of the developing society. It is
now well settled by a catena of decision that there can be
on question of estoppel against the Government in the
exercise of its legislative, sovereign or executive powers.
While speaking for the Court in M. Ramanathan Pillai v.
State of Kerala(2) the learned Chief justice quoted with
approval the following statement contained in American
Jurisprudence 2d. at page 783 paragraph 123:-
"In American Jurisprudence 2d at page 783
paragraph 123 it is stated ’’Generally. a state is not
subject to an estoppel to the same extent as an
individual or a private corporation." otherwise, it
might be rendered helpless to assert its powers in
government. Therefore as a general rule the doctrine of
estoppel will not be applied against the State in its
governmental public or sovereign capacity."
(1) [1976] t S.C.R. 219
(2) [1973] 2 S.C.C. 650.
539
In State of Kerala and Anr. v. The Cawalior Rayon Silk
Manufacturing (Wvg.) Co. Ltd. Ltd.(l) where the respondent
company established itself in the State of Kerala for
production of rayon cloth pulp on an understanding that the
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Government would bind itself to supply raw material and
later the Government on finding that it was not able to
supply the material undertook not to legislate for the
acquisition of the private forests for a period of 60 years
if the company purchased forest lands for the purpose of its
supply of raw material and accordingly, the company did
purchase 30,00 acres of private forests from an estate for
Rs. 75 lakhs for the aforesaid purpose but the Government
enacted Act 26 of 1971 expropriating vast forest areas
without paying compensation as a measure of agrarian reform
whereupon the respondent company sought to invoke the
doctrine of equitable estoppel against the Government,
Palekar, J. delivering the majority judgment observed:-
"We do not see how an agreement of the Government
can preclude legislation on the subject. The High Court
’has rightly pointed out that the surrender by the
Government of its legislative powers to be used for
public good cannot avail the company or operate against
the Government as equitable estoppel."
Approving the decision of the House of Lords in Howell
v. Falmouth Boat Construction Co. Ltd. ( ’) where the
observations of Lord Denning in Robertson v. Minister of
Pensions (8) that the action of the War office which was an
agent of the Crown in assuming authority over the matter and
assuring the appellant who had been serving on the army that
his disability had been accepted as attributable to military
service bound the Crown and through the Crown the Minister
of Pensions, who while administering the Royal warrant
issued by the Crown has to honour all assurances given by or
on behalf of the Crown were unequivocally disapproved by
observing that the character or an act done by an officer of
a Government, however high or low in the hierarchy in face
of a statutory prohibition, is not affected by the fact that
it had been induced by a misleading assumption of authority
and neither a Minister. nor any subordinate officer of the
Crown can, by conduct or representation, bar the Crown from
enforcing a statutory prohibition. It was held by Bench of
this Court ill Assistant Custodian Exacuee Property and ors.
v. Brij Kishore Agarwala and Ors(4) that the Evacuee
Department was not bound by the reply given by the Assistant
Custodian to the first respondent’s enquiry that the
property in question was not an evacuee property.
Following the above decision. the High Court of Jammu &
Kashmir has in Malhotra and Sons and Ors. v. Union of India
and ors (5). rightly held that .-
"The courts will only bind the Government by its
promises to prevent manifest injustice or fraud and
will not make the Government a slave of its policy for
all times to come when
(1) [1973] 2 s.c.c. 713.
(2) [1951] A.C. 837
(3) [1949] 1 K.B. 227
(4) [1975] 1 S.C C. 21.
(5) A.I.R. 1976 J. & K. 41.
540
the Government acts in its Governmental, public or
sovereign capacity."
We may as well refer here to the celebrated decision Of
the Supreme Court of the United States in Federal Crop
Insurance Corporation v. Morrill(1). In that case where the
agents of the petitioner a wholly Government owned
Corporation, created by the Federal Crop Insurance Act to
insure producers of wheat against loss in yields due to
unavoidable causes including drought, advised the
respondents in ignorance of and contrary to the duly
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promulgated controlling regulation which expressly precluded
insurance coverage of spring, wheat re-seeded on winter
wheat acreage that their entire 460 acres spring wheat crop
including the spring wheat which had been reseated on winter
wheat acreage in the 1945 crop year was insurable by the
Corporation and recommended to the Corporation ranch office
acceptance of the respondents formal application which,
however, did not disclose that any part of the insured Crop
was reseeded and the Corporation accepted the application
and a few months later, most of the respondents’ crop was
destroyed by drought, and the Corporation on the loss being
notified to them refused to pay the loss on the ground that
the wheat crop insurance regulations expressly prohibited
the insurance of spring wheat which was re-seeded on winter
wheat acreage, the Court by majority held that though a
private insurance Corporation would be bound on similar
facts. the same was not true of a Government Corporation
engaged in the insurance field and the latter was not
estopped from repudiating the liability.
The following observations made by the court in Federal
Crop Insurance Corporation v. Merrill (supra) are worth
quoting:-
"It is too late in the day to urge that the
Government is just another private litigant, for
purposes of charging it with liability, whenever it
takes over a business therefore conducted by private
enterprise or engages in competition with private
ventures.. Whatever the form in which the Government
functions, anyone entering into an arrangement with the
Government takes the risk of having accurately
ascertained that he who purports to act for the
Government stays within the bounds of his authority.
And this is so even though, as here, the agent himself
may have been unaware of the limitations upon his
authority...."Men must turn square corners when they
deal with the Government", does not reflect a callous
outlook. It merely expresses the duty of all courts to
observe, the conditions defined by Congress for
charging the public treasury."
In his Treatise on the Law of Estoppel, Melville M.
Bigelow has stated that in State v. Williams,(2) State v.
Bevars,(2) and Wallace v. Maxwell(4) it has been held that
estoppel does not operate against the Government or its
assignee.
(1) 332 U.S. 380-92 L cd. 10.
(2) 94 N.Car. 891.
(3) 86 N. Car. 588.
(4) 10 Ird. 110.
541
The High Court was, therefore, clearly in error in
ignoring that the Government cannot divest itself of the
right incidental to its office by conduct which, in the case
or a private person, would amount to estoppel and in
characterizing the demand for sales tax made by the
appellants as illegal. Accordingly Appeals Nos. 399 to 404
of 1975 are partly allowed, and it is held that the demand
made by the appellants from the respondents in these appeals
in respect of sales tax on the turnover of sales of’ country
spirit made by them between April B, 2, 1969 and March 31,
1970 was valid and could not be struck down. The parties in
these six appeals shall pay and bear their own costs.
P.H.P. Appeals partly allowed.
542
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