Retrospective excise rule amendments can validly increase licence fee on surplus stock held before licence expiry.

Delegated legislation may operate retrospectively where the parent statute authorises rules to take effect from a specified date, and that principle was applied to uphold an amendment enhancing excise licence fee. The construction of the phrase "balance of stocks" covered surplus foreign liquor held immediately before expiry of the earlier licence and retained for the renewed licence, so the enhanced fee applied to stock in hand on the relevant date. On that reading of the excise rules and licence conditions, the retrospective amendment was valid and the demand on the surplus stock was sustained.

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Issues: Whether the State Government could validly give retrospective effect to the amendment enhancing licence fee under the excise rules; and whether the balance stock of foreign liquor held by the licensee on the eve of expiry of the old licence was liable to the enhanced fee under the amended rules.

Analysis: The enabling provisions in the Madhya Pradesh Excise Act, 1915 authorised the State Government to make rules regulating licence fees and, by virtue of the publication-and-effect clause, to specify the date from which such rules would operate. That authority was sufficient to sustain retrospective operation of the amendment. The general licence conditions dealing with disposal of surplus intoxicants on expiry of a licence, together with the rule extending enhanced or reduced duty treatment to balance stock, showed that the expression "balance of stocks" referred to surplus stock held immediately before expiry of the earlier licence and retained for the new licence. On that construction, the amended fee applied to the stock in hand on 31 March 1964.

Conclusion: The retrospective amendment was valid and the enhanced licence fee was payable on the balance stock held by the licensee.

Final Conclusion: The appeal succeeded and the demand for enhanced licence fee on the surplus stock was upheld.

Ratio Decidendi: Where the parent statute authorises rules to take effect from a specified date, delegated legislation may operate retrospectively; and surplus stock held immediately before expiry of a licence may be subjected to an enhanced licence fee when the governing rules so provide.

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