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2019 (9) TMI 1728 - HIMACHAL PRADESH HIGH COURTChallenge to Excise Policy Announcements - levy of additional fee and penalty, for producing and/or selling, less than the quota allotted to each licensee - Condition No. 10.28(A), but with specific focus on Condition No. 10.28(A)(8) of the Excise Policy for 2014-2015 - Condition No. 4.3 of the Excise Policy announced in respect of four consecutive years namely, 2013-14, 2014-15, 2015-16 and 2016-17 - HELD THAT:- The obligation to lift the minimum guaranteed quota, as fixed by the concerned Authority year after year, is imposed by Rule 35-A(22) of the H.P. Liquor License Rules, 1986 itself. The consequences that would fall upon the licensees in the event of their failure to fulfill this obligation, are also spelt out in Rule 35-A(22) itself. Therefore, what is left by Rule 35-A(22) to the executive is only the determination of the minimum guaranteed quota every year. Rule 35-A(22) occupies the field in respect of issues (i) and (iii). It leaves issue (ii) alone to be determined by the executive, year after year, depending upon the average annual consumption in the State, district-wise. Therefore, what is left unoccupied by the statutory Rules, where the executive can have a play in the joints, is the fixation of minimum guaranteed quota every year. Since the other two issues fall in the occupied field, the respondents cannot issue Annual Policy Announcements, without amending the Rules. Just as a Statute cannot override the Constitution and just as a Rule cannot override a Statute, an executive instruction cannot override a Rule. Fixing a rate of additional fee and a rate of penalty, by ignoring the rate of additional fee stipulated in Rule 35-A(22), would tantamount to executive instructions overriding the statutory Rules. Therefore, condition No. 4.3 of the Excise Policy announced in respect of the years 2013-14, 2014-15, 2015-16 and 2016-17, is ultra vires Rule 35-A(22) and hence, all the writ petitions of the retailers challenging condition No. 4.3, deserve to be allowed - it is pointed out that the respondents are entitled to collect the additional fee at the rate and in the manner prescribed in Rule 35-A(22), for all these years in question, including the years from which and during which, the Rule had been in force. But since what is sought to be collected by way of additional fee and penalty, is as per the terms of the contract, they can be tested in terms of the provisions of the Contract Act. When so done, it is found that the wholesalers and manufacturers are imposed with a financial burden, not for their own failure to fulfill the contractual obligations, but for the failure of third parties namely retailers to fulfill their obligations - For one act of failure on the part of one of the three parties, which results in the loss of revenue in the form of duty of excise to the extent of a particular amount, it is unreasonable to impose a burden upon all the three categories of persons resulting in the collection of more amount than what was lost by way of duty of excise. Therefore, condition Nos. 10.28(A) (8) and 10.29 of the policy conditions for the year 2014-15, insofar as manufacturers and wholesalers are concerned, are liable to be set aside. The writ petitions filed by the manufacturers and wholesalers are allowed and condition Nos. 10.28(A)(8) and 10.29, insofar as they impose the burden of additional duty and penalty for failure to lift the minimum guaranteed quota are set aside, however with a rider that they shall pay the license fee for the entire minimum guaranteed quota - the writ petitions filed by the retailers are partly allowed and condition No. 4.3 of the policy announcements for all the 4 years namely 2013-14 to 2016-17 are set aside, with a rider that the retailers will be liable to pay the license fee for the entire minimum guaranteed quota together with the additional fee as stipulated in Rule 35-A(22) of the Himachal Pradesh Liquor License Rules, 1986 for all the years during which the said rule is in operation.
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