Accrued excise liability survives omission of a rule; uniform short-lifting levy upheld, with quantification left open.

Omission of a subordinate rule does not extinguish liabilities accrued while the rule was in force, so recovery for short-lifting under Rule 14(2) remained enforceable for the relevant past periods. The levy was treated as a compensatory fiscal charge or liquidated damages, not a penal consequence requiring prosecution-style safeguards, and the later deletion of the rule did not remove the authority's power to quantify and recover the amount. A challenge based on prior hearing and arbitrariness also failed: the uniform rate per bulk litre was treated as a legislative measure, while objections were left open only on arithmetical computation of the demand.

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Issues: (i) Whether the omission of Rule 14(2) of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 barred recovery of penalty or fiscal liability for short-lifting of liquor for periods when the rule was in force; (ii) whether the demand could be quashed for want of prior hearing or on the ground that the measure of levy was arbitrary.

Issue (i): Whether the omission of Rule 14(2) of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 barred recovery of penalty or fiscal liability for short-lifting of liquor for periods when the rule was in force.

Analysis: The omission of a rule was treated as a repeal for the purpose of saving accrued liabilities. The liability under Rule 14(2) arose during the period when the rule was operative, and the levy was characterised as a compensatory fiscal liability or liquidated damages for short lifting, not as a penal consequence requiring prosecution-style safeguards. The later deletion of the rule did not divest the Excise Department of power to quantify and recover amounts attributable to the period when the rule remained on the statute book.

Conclusion: The omission of Rule 14(2) did not wipe out liability already incurred under it, and recovery for the relevant past periods was held to be valid.

Issue (ii): Whether the demand could be quashed for want of prior hearing or on the ground that the measure of levy was arbitrary.

Analysis: The Court held that the petitioners had not raised objections or explained the short lifting before the authority and had not approached the Court with complete candour. In the circumstances, a challenge based on natural justice was not sufficient to invalidate the levy itself. The Court also held that the statutory measure fixing the amount at a uniform rate per bulk litre was a legislative choice and could not be struck down merely because different liquor varieties had different market values. However, the petitioners were entitled to contest the arithmetical computation of the demand and were permitted to file objections confined to quantification.

Conclusion: The demand was not liable to be set aside on grounds of want of hearing or arbitrariness, though objections on computation were left open.

Final Conclusion: The levy under Rule 14(2) was upheld for the periods when the rule was in force, and only the determination of quantum was left open for fresh speaking orders.

Ratio Decidendi: Omission of a subordinate legislative provision does not extinguish liabilities accrued during its operation, and a compensatory statutory levy for past defaults remains enforceable under the general saving principle unless the repealing framework shows a contrary intention.

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