TMI Blog1976 (5) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... rizing the demand for sales tax made by the appellants as illegal. Accordingly Appeals are partly allowed, and it is held that the demand made by the appellants from the respondents in these appeals in respect of sales tax on the turnover of sales of' country spirit made by them between April B, 2, 1969 and March 31, 1970 was valid and could not be struck down. The parties in these six appeals shall pay and bear their own costs. P.H.P. Appeals partly allowed. - C.A. 276 OF 1975 - - - Dated:- 5-5-1976 - A.N. RAY, RANJIT SINGH SARKARIA, P.N. SHINGAL AND JASWANT SINGH, JJ. JUDGMENT This batch of 127 appeals by special leave which are directed against various judgments rendered by the High Court of Judicature at Allahabad in writ petitions and special appeals and relate to enforcement of certain obligations of licensees for retail vend of country liquor shall be disposed of by this judgment. The facts leading to these appeals are The State of Uttar Pradesh has,, under the U.P. Excise Act 1910 (Act No. IV of 1910) (herein after referred to as 'the Act') which contains provisions relating to all aspects and manifestations of intoxicating liquors and intoxicating d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment and the Excise Commissioner (subject to the previous sanction of the Government) to make rules for the purposes set out therein. These rules are contain in the Excise Manual, Uttar Pradesh (Volume I). Paragraph 38 of the Excise Manual shows that there are four licence-fee systems in vogue in the State of Uttar Pradesh. One of such systems is 'The auction fee system' under which the amount of licence fees inter alia for the retail sale of' country spirit under the distillery system and for the manufacture and retail sale of country spirit under the outstill system is determined by competition among bidders. According to paragraph 332 licences for the wholesale and retail vend of intoxicants are usually granted for the excise year which commences from April 1 and lasts upto March 31. In accordance with the requirements of the auction system, auctions were held throughout Uttar Pradesh during the months of February and March, 1969 on various dates and at various places for the grant of licences to sell country spirit by retail at the specified shops during the excise year 1969-70. Before holding The auctions, rates of` excise duty and prices of different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make up the deficiency in the amount of security within the prescribed period of seven days his licence may be cancelled in addition to the recovery of the deficiency in payment of compensation as arrears of land revenue. On the day following the commencement of the aforesaid licences i.e. on April 2, 1969, the Government of Uttar Pradesh issued Notification No. ST-1603/X-900 (12)/67 under section 3-A and 4 of the U.P. sales Tas Act, 1948, superseding the earlier Notification No. ST 1149/X-802 (33)- 51 dated April 6, 1959, issued under section 4 of the U. P. Sales Tax Act, 1948, and imposing sales tax on the turnover in respect of the country spirit at the rate of ten paise per rupee at the point of retail sale with immediate effect. The respondents herein having failed to lift and sell the minimum quotas of liquor prescribed in their licences were required by the excise authorities of the State to pay, by way of compensation, the amounts of excise duty leviable on the short-falls. Aggrieved by this demand, the respondents moved the High Court under Articles 226 of the Constitution for issue of appropriate writ or directions retraining the appellants herein from recovering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icensed number the. Act; and the State Government has not been empowered to - levy any duty on liquor which the contractors failed to lift. Therefore, the State Government was exercising a power which it did not possess and hence the rule imposing the condition in the licences and the demand notices are invalid. Thus the aforesaid question arising for determination by us stands already settled by the ratio of the decision of this Court in Bimal Chandra Banerjees case (supra.) ([1971] 1 S.C.R. 844). It will also be noticed that neither section 28 nor section 29 nor any other provision of the Act authorises the levy of the amounts sought to be recovered from the respondents. The decision of this Court is Panna Lal and Ors. etc. etc. v. State of Rajasthan and ors.( [1976] t S.C.R. 219) which is sought to be relied upon on behalf of the appellants is clearly distinguishable. In that case, the contractual obligation of the appellants to pay the guaranteed sum or the stipulate(d sum mentioned in the licences was not dependent on the quantum on liquor sold by them and no excise duty was charged or chargeable on undrawn liquor under the licences. The excise duty there was collect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for production of rayon cloth pulp on an understanding that the Government would bind itself to supply raw material and later the Government on finding that it was not able to supply the material undertook not to legislate for the acquisition of the private forests for a period of 60 years if the company purchased forest lands for the purpose of its supply of raw material and accordingly, the company did purchase 30,00 acres of private forests from an estate for ₹ 75 lakhs for the aforesaid purpose but the Government enacted Act 26 of 1971 expropriating vast forest areas without paying compensation as a measure of agrarian reform whereupon the respondent company sought to invoke the doctrine of equitable estoppel against the Government, Palekar, J. delivering the majority judgment observed:- We do not see how an agreement of the Government can preclude legislation on the subject. The High Court 'has rightly pointed out that the surrender by the Government of its legislative powers to be used for public good cannot avail the company or operate against the Government as equitable estoppel. Approving the decision of the House of Lords in Howell v. Falmouth Boat Const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated on winter wheat acreage in the 1945 crop year was insurable by the Corporation and recommended to the Corporation ranch office acceptance of the respondents formal application which, however, did not disclose that any part of the insured Crop was reseeded and the Corporation accepted the application and a few months later, most of the respondents' crop was destroyed by drought, and the Corporation on the loss being notified to them refused to pay the loss on the ground that the wheat crop insurance regulations expressly prohibited the insurance of spring wheat which was re-seeded on winter wheat acreage, the Court by majority held that though a private insurance Corporation would be bound on similar facts. the same was not true of a Government Corporation engaged in the insurance field and the latter was not estopped from repudiating the liability. The following observations made by the court in Federal Crop Insurance Corporation v. Merrill (supra) are worth quoting:- It is too late in the day to urge that the Government is just another private litigant, for purposes of charging it with liability, whenever it takes over a business therefore conducted by private ent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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