Excise levy, delegated rate-setting and State tax on its own sales were upheld under the governing statutes.

Excise duty was treated as attachable when arrack left an authorised Government depot, so levy on liquor issued to the licensee was upheld rather than confined to the distillery stage. The power under section 22 to let the executive fix excise rates was also sustained because the Act preserved legislative control through a supervisory rule-making framework and did not amount to abdication of essential legislative function. Section 19 permitting the State to collect tax on its own sales was likewise upheld as a valid exercise of sales-tax power within legislative competence.

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Issues: (i) Whether excise duty could be levied on arrack issued from Government depots to the licensee under the Mysore Excise Act, 1965; (ii) Whether the power conferred on the Government to fix the rate of excise duty under section 22 of the Mysore Excise Act, 1965 amounted to excessive delegation; (iii) Whether section 19 of the Karnataka Sales Tax Act, 1957 authorising the Government to collect tax on sales made by it was beyond legislative competence.

Issue (i): Whether excise duty could be levied on arrack issued from Government depots to the licensee under the Mysore Excise Act, 1965.

Analysis: The scheme of sections 16, 22 and 23 of the Act, read with the relevant excise rules, showed that excise duty attached when liquor was issued from a warehouse or other authorised place of storage. A Government depot from which arrack was issued stood within that statutory arrangement, and the duty could properly be collected from the licensee receiving the liquor. The Act did not confine levy to a distillery stage alone.

Conclusion: The levy of excise duty on arrack issued from Government depots to the licensee was valid and the contention failed.

Issue (ii): Whether the power conferred on the Government to fix the rate of excise duty under section 22 of the Mysore Excise Act, 1965 amounted to excessive delegation.

Analysis: The Act disclosed a revenue-raising and liquor-control policy, and section 71 supplied an important supervisory mechanism because rules were required to be laid before the Legislature and remained subject to modification or annulment. The legislative power to fix rates of duty could validly be entrusted to the executive where the Act retained effective control and did not amount to an abdication of essential legislative function.

Conclusion: Section 22 of the Mysore Excise Act, 1965 was constitutionally valid and the delegation challenge was rejected.

Issue (iii): Whether section 19 of the Karnataka Sales Tax Act, 1957 authorising the Government to collect tax on sales made by it was beyond legislative competence.

Analysis: Section 19 expressly enabled the Government, notwithstanding other provisions of the Act, to collect on its sales the same amount of tax that a registered dealer could collect. The provision created a statutory right in the State and a corresponding liability in the purchaser, and such taxation on the sale of goods fell within the State's competence under the relevant legislative entry.

Conclusion: Section 19 of the Karnataka Sales Tax Act, 1957 was intra vires and the challenge to the sales tax levy failed.

Final Conclusion: The statutory levies and the challenged delegation provisions were upheld, and the appellants obtained no relief in the appeals.

Ratio Decidendi: A taxing statute may validly authorise executive fixation of rates where the legislature retains effective control through statutory safeguards, and a provision empowering the State to collect tax on its own sales is valid if it falls within the State's legislative competence.

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