Statutory liability and deferred collection: revised supervision charges and duty on warehouse shortages remained enforceable.

Under the Bombay Prohibition Act, revised supervision charges were recoverable where the statutory liability to bear supervisory staff cost already existed; the quarterly licence payment was only an administrative mode of advance collection, so a later increase in staff cost could be demanded and promissory estoppel did not apply. The court also held that excise or countervailing duty attached when the taxable event occurred on import or other chargeable act, and deferred collection at the warehouse stage did not extinguish the liability. Accordingly, duty remained recoverable on breakages and shortages in transit or in a bonded warehouse before sale, and the challenges to both demands failed.

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Issues: (i) Whether the demand for increased supervision charges under Section 58A of the Bombay Prohibition Act, 1949 could be recovered with effect from an earlier date when the statutory liability to bear the cost of supervisory staff already existed. (ii) Whether excise duty or countervailing duty could be levied on breakages and shortages occurring during transit or storage in a bonded warehouse before issue for sale.

Issue (i): Whether the demand for increased supervision charges under Section 58A of the Bombay Prohibition Act, 1949 could be recovered with effect from an earlier date when the statutory liability to bear the cost of supervisory staff already existed.

Analysis: The liability under Section 58A and the relevant rules was to bear the cost of the supervisory staff appointed for the licensed premises. The quarterly payment condition in the licence was only a mode of advance recovery for administrative convenience and did not amount to a representation that no further amount could be demanded if the cost later increased. Since the statute contained no restriction tying recovery to the date of payment or preventing recovery of revised staff cost when the cost itself was enhanced retrospectively in service law terms, the demand was treated as recovery of an existing statutory liability and not as impermissible retrospective legislation. The plea of promissory estoppel also failed because there was no assurance that the entire cost would never increase.

Conclusion: The demand for revised supervision charges was valid and was rightly upheld against the petitioners.

Issue (ii): Whether excise duty or countervailing duty could be levied on breakages and shortages occurring during transit or storage in a bonded warehouse before issue for sale.

Analysis: Sections 105 and 106 of the Bombay Prohibition Act, 1949 impose the duty on import, transport, possession, manufacture or sale, while permitting collection either at import or on issue for sale from a licensed warehouse as a matter of deferred collection. The charge attaches to the taxable event and the warehouse stage merely postpones payment for administrative convenience. Once the goods had been imported into the State, later loss by breakage or shortage could not destroy the duty liability that had already arisen. The contrary view based on the U.P. Excise Act was held inapplicable because the Bombay enactment and the governing rules operate on a different statutory scheme.

Conclusion: Duty was recoverable on breakages and shortages, and the impugned circulars were upheld.

Final Conclusion: The challenges to both the revised supervision charges and the levy of duty on breakages and shortages failed, leaving the statutory demands undisturbed.

Ratio Decidendi: Where a statute imposes an existing liability to bear supervisory cost or duty and permits deferred collection, a later upward revision of the cost or a later realization of duty remains enforceable, and subsequent loss or administrative advance payment does not extinguish the liability once the taxable event has occurred.

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