Full Judgment Text
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PETITIONER:
STATE OF KARNATAKA AND ORS.
Vs.
RESPONDENT:
V.S. NARAYANA SWAMY
DATE OF JUDGMENT21/08/1991
BENCH:
MISRA, RANGNATH (CJ)
BENCH:
MISRA, RANGNATH (CJ)
KANIA, M.H.
KULDIP SINGH (J)
CITATION:
1992 AIR 151 1991 SCR (3) 700
1991 SCC (4) 268 JT 1991 (3) 523
1991 SCALE (2)383
ACT:
Mysore Excise Act, 1965/Karnataka Excise (Sale of Indian
& Foreign Liquors) Rules, 1968: Section 23(d)/Rule 8(1):
Manufacture and sale of excisable articles-Imposition of
licence fee thereof under the Act--Licence fee for the
authorised shop--Imposition of under the Rules--The relevant
rule--Whether supported by the Act and had the authority of
law.
HEADNOTE:
The Respondent, a licencee under floe Karnataka Excise Act
for selling liquor at an approved shop, flied a Writ Peti-
tion before the High Court challenging the vires of Section
23(d) of the Mysore Excise Act, 1965 and Rule 8(1) of the
Karnataka Excise (Sale of Indian and Foreign Liquors) Rules,
1968 as being beyond the legislative competence of the
State.
The High Court negatived the contention of the Respond-
ent in respect of Section 23(d) of the Act but held that
Rule 8(1) authorising tihe levy of licence fee for retail
shop was without authority of law and dircted refund of the
levy collected for three years prior to the filing of tiWrit
Petition.
Aggrieved by the High Court’s decision, the appellant-
State has preferred the present appeal by special leave.
Dismissing the appeal, this Court,
HELD: The High Court rightly did not accept the chal-
lenge to Section 23(d) of the Mysore Excise Act, 1965. What
is authorised under Section 23(d) is imposition of a fee of
licence in respect of manufacture or sale of any excisable
articles. Rule 8(1) of the Karnataka Excise (Sale of Iadion
& Foreign Liquors) Rules, 1968 has obviously gone beyond the
enabling provision in the section by requiring a licence fee
to be paid for the premises where the licensed shop is
located. Such a fee would not have the support of Section
23(d). It is unnecessary to refer to precedents for support
for this conclusion. It may be possible for the Legisla-
701
ture to make a statutory provision for a liicence fee of the
type contemplated under the Rules but without authority of
the statute a rule of this type should not have been made.
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[702E-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1801 of
1974.
From the Judgment and Order ,dated 20.3.1974 of the
Karnataka High Court in W.P. No. 1956 of 1971.
R.N. Narasimhmurthy, Novin Singh and M. Veerappa for the
Appellants.
The Judgment of the Court was delivered by
RANGANATH MISRA. CJ. The appeal is by special leave.
Challenge is to the Judgment.,of the Karnataka .High Court
declaring Rule 8(1) of the Karnataka Excise (Sale of Indian
& Foreign Liquors) Rules, 1968 in so far as it relates to
levy of licence fee for retail vending of authorised India
and foreign liquors and directing refund of such levy col-
lected within three years prior 2.8.1971 when the Writ
Petition was filed.
. .
Respondent, an excise contractor, had taken in auction the
exclusive privilege tosell liquors in retail at an approved
shop premises. ’He was issued the appropriate licence under
the provisions of the law on payment of licence fee in terms
of Item 2 of Rule 8(1) of the aforesaid Rules. Respondent
filed a writ petition before the Karnataka High Court chal-
lenging the vires of s. 23(d) of the Mysore Excise Act, 1965
(hereafter ’Act’ for short) and Rule 8(1.) as being beyond
the legislative competence of,the State Legislature. The
High Court did not accept the contention of the respondent
in ’regard to s. 23 but held that Rule 8(1)-authorising the
’levy of a licence fee for the retail off shop was without
authority of law.
Section 23(d), as far as relevant, provides:
"23. Ways of levying such duties--
Subject to such Rules regulating the time,
place and manner, as may be prescribed, excise
duty and countervailing duty under section 22
shall be levied in one or more of the follow-
ing ways, as may be prescribed, namely:
702
(a) .............
(aa) ......................
(b) ..........................
(c)............................
(d)by fees on licences in respect of
manufacture or sale of any excisable
articles."
Rule 8 made the rule making powers, under
the Act, interalia, provides:
"8. Fee to be paid--
(1) The licence fee for the several
kinds of licences shall be as follows, namely:
(1) ..............................
(2)..........................
(3) ......................
The High Court rightly did not accept the challenge to s.
23(d) of the Act. What is authorised under s. 23(d) is
imposition of a fee of licence in respect of manufacture
or sale of any excisable articles. Rule 8(1) has obviously
gone beyond the enabling provision in the section by requir-
ing a licence fee to be paid for the premises where the
licence shop is located. Such a fee would not have the
support of s. 23(d). It is unnecessary to refer to prece-
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dents for support for this conclusion. It may be possible
for the Legislature to make a statutory provision for a
licence fee of the type contemplated under the Rules but
without authority of the statute a rule of the type impugned
should not have been made. We find no merit in this appeal
and it is, therefore, diismissed. fore, dismissed.
Respondent did not appear inspite of service of appeal
notice. We make no of for costs.
G.N. Appeal dismissed.
703