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PETITIONER: STATE OF KARNATAKA AND ORS.

       Vs.

RESPONDENT: V.S. NARAYANA SWAMY

DATE OF JUDGMENT21/08/1991

BENCH: MISRA, RANGNATH (CJ) BENCH: MISRA, RANGNATH (CJ) KANIA, M.H. KULDIP SINGH (J)

CITATION:  1992 AIR  151            1991 SCR  (3) 700  1991 SCC  (4) 268        JT 1991 (3)   523  1991 SCALE  (2)383

ACT:    Mysore Excise Act, 1965/Karnataka Excise (Sale of Indian    &  Foreign  Liquors) Rules, 1968: Section  23(d)/Rule  8(1):    Manufacture  and  sale of excisable  articles-Imposition  of    licence       fee  thereof  under the Act--Licence  fee  for  the    authorised shop--Imposition of under the Rules--The relevant    rule--Whether supported by the Act and had the authority  of law.

HEADNOTE: The  Respondent, a licencee under floe Karnataka Excise  Act for  selling liquor at an approved shop, flied a Writ  Peti- tion before the High Court challenging the  vires of Section 23(d) of the Mysore Excise Act,    1965 and Rule 8(1) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968  as  being  beyond the legislative  competence  of  the State.     The High Court negatived the contention of the  Respond- ent  in  respect of Section 23(d) of the Act but  held  that Rule  8(1) authorising tihe levy of licence fee  for  retail shop was without authority of law and dircted refund of  the levy collected for three years prior to the filing of tiWrit Petition.     Aggrieved  by the High Court’s decision, the  appellant- State has preferred the present appeal by special leave. Dismissing the appeal, this Court,     HELD:  The High Court rightly did not accept  the  chal- lenge to Section 23(d) of the Mysore Excise Act, 1965.  What is authorised under Section 23(d) is imposition of a fee  of licence  in respect of manufacture or sale of any  excisable articles. Rule 8(1) of the Karnataka Excise (Sale of  Iadion & Foreign Liquors) Rules, 1968 has obviously gone beyond the enabling provision in the section by requiring a licence fee to  be  paid  for the premises where the  licensed  shop  is located.  Such a fee would not have the support  of  Section 23(d). It is unnecessary to refer to precedents for  support for this conclusion. It may be possible for the Legisla- 701 ture to make a statutory provision for a liicence fee of the type  contemplated under the Rules but without authority  of the statute a rule of this  type should not have been  made.

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[702E-F]

JUDGMENT:

   CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 1801  of 1974.     From  the  Judgment and Order ,dated  20.3.1974  of  the Karnataka High Court in W.P. No. 1956 of 1971.     R.N. Narasimhmurthy, Novin Singh and M. Veerappa for the Appellants. The Judgment of the Court was delivered by     RANGANATH  MISRA.  CJ. The appeal is by  special  leave. Challenge  is to the Judgment.,of the Karnataka .High  Court declaring Rule 8(1) of the Karnataka Excise (Sale of  Indian &  Foreign Liquors) Rules, 1968 in so far as it  relates  to levy  of licence fee for retail vending of authorised  India and  foreign liquors and directing refund of such levy  col- lected  within  three  years prior 2.8.1971  when  the  Writ Petition was filed. .  . Respondent,  an excise contractor, had taken in auction  the exclusive privilege tosell liquors in retail at an  approved shop premises. ’He was issued the appropriate licence  under the provisions of the law on payment of licence fee in terms of  Item 2 of Rule 8(1) of the aforesaid  Rules.  Respondent filed a writ petition before the Karnataka High Court  chal- lenging the vires of s. 23(d) of the Mysore Excise Act, 1965 (hereafter  ’Act’ for short) and Rule 8(1.) as being  beyond the  legislative  competence of,the State  Legislature.  The High  Court did not accept the contention of the  respondent in ’regard to s. 23 but held that Rule 8(1)-authorising  the ’levy  of a licence fee for the retail off shop was  without authority of law.               Section 23(d), as far as relevant, provides:               "23. Ways of levying such duties--               Subject  to  such Rules regulating  the  time,               place and manner, as may be prescribed, excise               duty and countervailing duty under section  22               shall be levied in one or more of the  follow-               ing ways, as may be prescribed, namely:               702               (a) .............               (aa) ......................               (b) ..........................               (c)............................                         (d)by fees on licences in respect of               manufacture   or   sale   of   any   excisable               articles."                   Rule 8 made the rule making powers,  under               the Act, interalia, provides:               "8. Fee to be paid--                     (1)  The  licence fee  for  the  several               kinds of licences shall be as follows, namely:               (1) ..............................               (2)..........................               (3) ...................... The  High Court rightly did not accept the challenge  to  s. 23(d)  of  the  Act. What is authorised under  s.  23(d)  is imposition  of  a fee of  licence in respect of  manufacture or  sale of any excisable articles. Rule 8(1) has  obviously gone beyond the enabling provision in the section by requir- ing  a  licence fee to be paid for the  premises  where  the licence  shop  is  located. Such a fee would  not  have  the support  of s. 23(d). It is unnecessary to refer  to  prece-

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dents  for support for this  conclusion. It may be  possible for  the  Legislature to make a statutory  provision  for  a licence  fee of the type contemplated under the  Rules   but without authority of the statute a rule of the type impugned should  not have been made. We find no merit in this  appeal and it is, therefore, diismissed. fore, dismissed.     Respondent  did not appear inspite of service of  appeal notice. We make no of for costs. G.N.                                       Appeal dismissed. 703