2021 (9) TMI 1011

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....nt, in not replenishing the security in a timely manner, the state issued a show cause notice on 23-07-1993 eliciting a response as to why action should not be taken. Later, alleging that the licensee failed to replenish the security amount, the license was cancelled by an order dated 19-08-1993, of the state. The licensed shops were put up for re-auction on seven different dates. However, the reauction was unsuccessful as there were no bidders. As a consequence, the shops were managed by the Department of Excise in terms of the Abkari Shops Departmental Management Rules, 1972 (hereafter "the Management Rules"). A sum of Rs. 14,94,570 was collected as departmental management fee and Rs. 16,50,971/- was collected as duty on rectified spirit for the period 13-09-1993 to 31-03-1994. The state argued that had the licensee continued operating the shop, it would have gained revenues to the tune of Rs. 1,09,87,989/-. It accordingly demanded dues, from the licensee. 3. The licensee preferred a writ petition for a declaration that the cancellation of the licensee for sale of country liquor for the period 01-04-1993 to 31-03-1994 was illegal and void and that its liability with respect to....

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....e had in fact not replenished the security; the security that he originally deposited was adjusted towards the amounts due for the three months payable after the auction. Thus, in August, the security had not been replenished and in these circumstances, having regard to the express terminology of the old rule, there was no question of giving any credit to the licensee. It was argued that rather the entire liability sought to be recovered, was justifiably so. In the case of the licensee it worked out to over Rs. 77,65,189/- with interest @ 18 per cent per annum. 6. Mr Roy Abraham, learned counsel appearing for the licensee urged this court not to interfere with the findings and order of the High Court. He relied upon the circumstance that the contract in the present case was entered into on 01-04-1993. It was submitted that, therefore, the question of the new rule (which came into force on 23-12-1993) applying to deny the adjustment of the amounts which were directly recovered by the Department as management fees from the overall liability, did not arise. It was emphasised that importantly, the rules were brought into force after the termination of the license, which occurred on ....

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....-1993 (when the State took over the possession) to 31-03-1994 the state collected Rs. 14,94,570/- as Departmental Management Fee and Rs. 16,59,771/- as Excise Duty on rectified spirit. The state contended, that had the licensee continued, it would have obtained Rs. 1,09,87,989/- 9. The state's case is that the licensee had deposited Rs.18,00,000/- as security and Rs. 7,16,324/- by way of Excise Duty and Rs. 6,39,800/- as kist dues for April (total amount of Rs. 31,56,124/-). The relevant rule before its amendment, is extracted below: "13. Departmental Management fee to be given credit of - The amount collected as Departmental Management fee may be given credit towards the dues from the original contractor provided he had completed the security and such credit shall be given only upto the date of confirmation of the resale, if any. In the case of resale purchasers, the Departmental Management fee collected from the date of confirmation of the resale may be given credit towards the dues from the resale purchaser, if he completes the security. The departmental management fee that may be given credit to the Original, contractor shall be forfeited if he had not completed the....

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....ops Departmental Management Rules, shows that due to the cancellation of the contract of the licensees any losses suffered by the revenue loss has to be reimbursed by the licensees. While calculating the loss amount obtained by the departmental management also should be taken into account and given credit as to that amount was received by the government and only after deducting the same actual loss can be found out. The words "at the risk" shows that only the actual loss suffered can be recovered from the licensees. This is apart from imposing any damages by the Government, according to law or passing a discretionary or order by the excess commissioner regarding the future of departmental fee for valid reasons after issuing show cause notice at the time when licences cancelled." The Division Bench also held that: "With regard to Abkari contracts entered in 1992-93, there is not a question for dispute at all, as the contract period was over on 31. 3. 1993, before the amendment of rules and admittedly amended rules are not applicable and if no damages by way of kist ordered at the time of cancellation on the basis of amended Rule 13, no recovery steps can be issued with l....

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.... introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 32. The obvious basis of the principle against retrospectivity is the principle of 'fairness', which must be the basis of every legal rule as was observed in the decision reported in L'Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co.Ltd[4]. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later." 15. Another equally important principle applies: in the absence of express statutory autho....

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....50% of the amount it claimed as payable to the government, in terms of a subsequent amnesty scheme, framed in 2011. By the order dated 08-12-2008 this court clarified the previous order dated 29-03-2011, regarding deposit of amounts under the amnesty scheme: "we accordingly direct in the light of the fact that amnesty scheme has been extended up to 31 March 2011, that the petitioner may deposit 50% of the amount due within one week from today, and the balance into monthly instalments in court." 19. According to the respondent, the reduced arrears are Rs. 40,51,288 in terms of amnesty scheme issued on 26-05-2008. The licensee respondent had applied under the scheme; however, the appellant state refused to process it on the ground that since the license was cancelled due to non-replenishment of security, the departmental management fee collected could not be adjusted. 20. This court had noticed that the Division Bench in Lucka f.no.1, correctly reasoned that the amended Rule 13 was inapplicable to contracts previously awarded or entered into. The sequitur is that departmental management fee collected by the state, for the period the vend (or outlet) was in its direct management....