Gappu Lal Munni Lal v. State of Uttar Pradesh — 1971 DIGILAW 278 (ALL)

JUDGMENT A. K. Kirty, J. - These petitions under Article 226 of the Constitution have been filed by five groups of persons who have described themselves as "excise licensees holding licence for the sale of country liquor". The points for consideration are the same in all the cases. 2. The U.P. Excise Act, 1910 (Act, No. IV of 1910), hereinafter to be referred to as the Act, governs the import, export, transport, manufacture, sale and possession of intoxicating liquors and intoxicating drugs in Uttar Pradesh. The Act was passed by the Lieutenant Governor of the United Provinces in Council and was assented to by the Governor General on February 24, 1910. 3. By sub sec. (2) of Section 10 of the Act, the State Government is empowered to appoint an "Excise Commissioner" who shall, subject to the orders of the State Government, have control of the administration of the Excise Department. Under Sub-sec. (1) thereof, the administration of the Department in a district shall, unless otherwise directed by the State Government, be under the charge of the Collector of that district. Sec. 21 prohibits the sale of any "intoxicant" (which, under Section 3 (13), means any liquor or intoxicating drug as defined by the Act) without a licence from the Collector. "Liquor" under Section 3 (11) means intoxicating liquor and includes all liquids consisting of or containing alcohol. Under Section 5 power has been given to the State Government to declare any substance to be "liquor" for the purposes of the Act and also to declare what shall be deemed to be "country liquor" and "foreign liquor". Sec. 6 (1) confers powers on the State Government to declare what quantity of any intoxicant shall be the limit of sale by retail. The sale of any quantity in excess of such limit is to be deemed to be sale by wholesale under Section 6 (2) . Sec. 24 provides that subject to Section 31 the Excise Commissioner may grant to any person a licence for the, exclusive privilege (1) of manufacturing ...... ; or (2) or selling by wholesale or by retail; or (3) of manufacturing ........ and of selling by retail; any country liquor ...... within any local area. Sec. 31 provides that every license ........ ; or (2) or selling by wholesale or by retail; or (3) of manufacturing ........ and of selling by retail; any country liquor ...... within any local area. Sec. 31 provides that every license ........ granted under the Act shall be granted :- (a) on payment of such fees (if any) ; (b) subject to such restrictions and on such conditions; (c) shall be in such form and contain such particulars, as the Excise Commissioner may direct either generally or in any particular instance in this behalf; and (d) shall be granted for such periods as the State Government may, in like manner, direct. Sec. 33 empowers the authority granting the licence to require the grantee to execute a counterpart agreement in conformity with the tenor of his licence and to give security for the performance of the contract or to deposit in cash such sum as may be decided upon. 4. Rule making powers have been conferred on the State Government and the Excise Commissioner under Sections 40 and 41 respectively; the latter's powers are subject to the previous sanction of the State Government. The excise Manual (hereinafter referred to as the Manual) contains the rules made under Secs. 40 and 41, various orders, declarations and notifications made or issued under the provisions of the Act, and also executive instructions. The manual contains rules and orders made under several other Acts as well. 5. Sec. III of the manual mentions and deals with "Systems of Supply" and Sec. IV with "Systems of Taxation". Paragraph 35 mentions the "factors determining the retail price of an intoxicant........" which are:- (a) supplier's price .......... ; (b) the excise duty, if any, levied on the article..........; (c) the licence fee levied by the State Government from the vendor in return for the grant of the right to sell the article; and (d) the vendor's profit. Paragraph 38 mentions the various "licence fee systems" which are applicable in Uttar Pradesh. They are: (1) the graduated surcharge fee system; (2) the uniform surcharge fee system; (3) the fixed fee system and (4) the auction fee system. Under the last mentioned system the amount of licence fee is determined by competition among bidders for the right to sell. Paragraph 38 mentions the various "licence fee systems" which are applicable in Uttar Pradesh. They are: (1) the graduated surcharge fee system; (2) the uniform surcharge fee system; (3) the fixed fee system and (4) the auction fee system. Under the last mentioned system the amount of licence fee is determined by competition among bidders for the right to sell. This system applies to fees for the retail sale of country spirit under the distillery system and fees for the manufacture and retail sale of country spirit under the Outstill system. 6. Chapter VI of the Manual relates to "retail shops and licences." The distribution and general location of shops is determined by the Collector subject to the control of the State Government and the Excise Commissioner. Paragraph 332 provides that licences for the wholesale and retail vend of intoxicants shall be granted usually for the excise year (1st April to 31st March next) . Paragraphs 368 to 376 relate to the "auction system" Settlements are ordinarily to be made between such dates as may be published by the Excise Commissioner in the sale proclamation which will announce the dates of sales for all districts concerned. Under paragraph 371 the Collectors are directed to give effective and timely publicity to the dates of sales. Paragraph 372 requires lists of licences to be disposed of to be prepared and exhibited, both at the time of the auction and for some time before, at the Collector's office. In paragraph 373 the general conditions applicable to all sales under the auction system are mentioned. They are to be inserted at the foot of the sale proclamation, if issued by the Excise Commissioner. Paragraph 376 contains the general rules for conducting sales; rule (4) whereof provides that before the sales for the day commence the general conditions governing retail vend and special conditions governing each class of licence shall also be read out to the public. It directs that information should be freely given in all matters affecting the value of contracts about to be sold. 7. Paragraph 415 of the Manual mentions two systems of supply of country liquor (spirit) - contract supply system, and outstill system (in outlying areas only) . It directs that information should be freely given in all matters affecting the value of contracts about to be sold. 7. Paragraph 415 of the Manual mentions two systems of supply of country liquor (spirit) - contract supply system, and outstill system (in outlying areas only) . According to paragraph 416, under the former system the exclusive privilege of supplying country spirit at a fixed price to a particular tract is granted for a certain period to a particular firm of distillers. The grantee or the contractor is bound, under paragraph 418, to sell spirit to licenced vendors at all the bounded warehouses and wholesale depots, if any, in his contract area at the price fixed per gallon, of spirit of specified strength. The selling price does not include the duty, which the Government is at liberty to vary at any time during the contract. Under paragraph 466 a licensed vendor is entitled, on payment of the Government duty and contract price of spirit, to be supplied promptly with a reasonable quantity of spirit. Paragraph 497 requires licensed vendors to deposit by means of challans the price of the spirit and the duty in the Treasury for obtaining supply of spirit from the Contractor. It is only when necessary deposit has been so made that a licensed vendor can obtain supply from the bonded warehouse concerned. 8. For the excise year 1969-70, the rates of duty and the contract price of country spirit, as approved by the Government, were sent to all District Officers (Collectors) by the Excise Commissioner by letter dated February 8, 1969, with the direction to announce the same at the time of the auctions. During the months of February and March, auctions were held on various dates and at various places for grant of licences to sell country liquor (spirit) by retail in various shops throughout Uttar Pradesh. The petitioners took part as bidders at some of the auctions and having made highest bids and having been found to be otherwise qualified were granted licences in that behalf for the period 1-4-1969 to 31-3-1970. 9. In all the petitions, it is admitted that prior to the holding of the auctions the rates of excise duty on and the prices of different varieties of country liquor for 1969-70 were announced. 9. In all the petitions, it is admitted that prior to the holding of the auctions the rates of excise duty on and the prices of different varieties of country liquor for 1969-70 were announced. All the petitioners, however, have asserted that no announcement was made that sale of country liquor, which had been exempted from sales tax by Notification No. ST-1149/X-802 (33) -51 dated April 6, 1959 issued under Section 4 of the U.P. Sales Tax Act, 1948, would be or was likely to be subjected to levy of sales tax again in 1969-70. Some petitioners have even asserted that at the time of the auction, on enquiry being made by them, it was given out that there was no sales tax on the sale of country liquor. One of the main grievances of the petitioners is that after the commencement of their licence, the State Government on 2-4-1969 issued Notification No. ST. 1608/X-900(12)/67 under Secs. 3-A and 4 of the U.P. Sales Tax Act, 1948 superseding the aforesaid notification and imposing sales tax on turnovers in respect of country spirit at the rate of ten paise per rupee at the point of retail sale by the vendor with effect from 2-4-1969. The petitioners have challenged the validity of this imposition and the right of the State Government to realise sales tax from them under the notification or otherwise. 10. As licencees for retail vend of country liquor, the petitioners became liable to pay the auction monies which they had bid at the auctions and which having been accepted by the Excise Administration they were granted the respective licences. The petitioners have repudiated their liability to pay the said sums. 11. Under the terms and conditions of the licences granted to the petitioners, a fixed minimum quantity of country liquor is required to be lifted and sold by the grantee or grantees of each licence within the licence-period at the allotted shop or shops. In case of default or failure by a licensee to lift the entire quantity of the fixed minimum quota from the bounded warehouse, the licencee concerned is required to pay by way of compensation an amount equal to the amount of the excise duty leviable on the unlifted quantity. The petitioners have repudiated their liability to pay any amount on this score. 12. The petitioners have repudiated their liability to pay any amount on this score. 12. The respondents to the petitions are the State Government, the Excise Commissioner, the Collectors and Sales Tax Officers concerned. In some petitions the Sales Tax Commissioner has also been made a respondent. A number of counter affidavits have been filed, and by way of rejoinder the petitioners have filed several affidavits. There is, however, not much controversy in regard to material facts. 13. The petitioners disown their liability to pay sales tax under the aforesaid impugned notification dated 2-4-1969 or otherwise on these grounds : 1- That Sec. 3-A of the U.P. Sales Tax Act, 1948 infringes Article 14 of the Constitution of India and also suffers from the vice of excessive delegation of legislative power and is, therefore, constitutionally invalid; 2- That in spite of the provisions of U.P. Ordinance 2 of 1970 and U.P. Act 2 of 1970 amending the said Sec. 3-A with retrospective effect and validating all notifications issued previously, the Section remains invalid; 3- That country liquor not being an article undergoing multiple sales, it was not legally competent for the State Government to issue or enforce the impugned notification under Sec. 3-A, the effect of withdrawal of the exemption would be that tax can be levied under the general charging Sec. 3; 4- That the State Government is estopped from levying any sales tax on the petitioners for the year 1969-70. 14. In Writ Petitions Nos. 1733, 1744 and 1751 of 1970, we have, in our judgment just pronounced, held that only the clause "and such declaration maybe made notwithstanding that the goods or class of goods are not capable of being sold, or according to prevalent commercial practice are not ordinarily sold at more than one point" added in Sec. 3-A (1) of the U.P. Sales Tax Act by Act 2 of 1970, is invalid; the rest of Sec. 3-A (1) is severable and is valid. In the said petitions the first two grounds noted above directly arose and, at their request, the present petitioners and the respondents were also fully heard. In those cases ground number 2 above was also canvassed and it was submitted that Sub-sec. In the said petitions the first two grounds noted above directly arose and, at their request, the present petitioners and the respondents were also fully heard. In those cases ground number 2 above was also canvassed and it was submitted that Sub-sec. (2) of the said Sec. 3-A is also constitutionally invalid, because it confers unguided and uncontrolled power on the State Government to fix the rate or rates of tax within the maximum limit of ten paise per rupee. This question was not decided as being unnecessary. In the present petitions also, it need not be decided because, as will be presently shown, the petitioners have substantiated aforesaid ground number 4 and are entitled to get the relief sought in regard to sales tax liability on that ground alone. Ground number 3 above also need not, therefore, be decided. 15. In Writ Petition No. 2253 of 1969 the petitioners made certain averments in paragraphs 47 to 58 on the basis of which the plea of estoppel has been raised. It was stated therein that for about ten years prior to 1959-60 sales tax at the rate of one anna per rupee was levied on the turnover of country liquor under Sec. 3-A of the Sales Tax Act. This caused harassment and hardship to the vendors of country liquor, and the Sales Tax Department found great difficulty in realising tax. The problem was discussed at top level between the Sales Tax and the Excise Authorities; comprehensive notes were prepared and it was recommended that, in the best interest of the revenue of the State, country liquor be exempted from Sales Tax and in lieu thereof Excise Duty be increased. A joint note prepared by the Officers of the two Departments concerned was sent to the Government along with letter No. 26254/XV 50 C dated 3rd December, 1958. In paragraph 52 it was stated that the Excise Commissioner issued the following circular dated February 20, 1959 to all District Officers and Assistant Excise Commissioner of U.P. :- "Government approves exemption of country spirit from levy of sales tax and increase in excise duty on it by 10%. Announce at Auctions." It was stated in paragraph 51 that by notification No. ST-1149/8/902 (33) -51 dated 6-4-1959 the State Government ordered that with effect from 1-4-1959 no tax shall be payable on the sales of country spirit. Announce at Auctions." It was stated in paragraph 51 that by notification No. ST-1149/8/902 (33) -51 dated 6-4-1959 the State Government ordered that with effect from 1-4-1959 no tax shall be payable on the sales of country spirit. This notification was issued under Section 4 of the U.P. Sales Tax Act. During all the subsequent years prior to 1969-70 no sales tax was accordingly levied but excise duty was enhanced from time to time. 16. In the said petition No. 2253 of 1969 two counter affidavits have been filed; one by Sri S.P. Singh, Superintendent in the Finance (Audit and Sales Tax) Department of the State Government, and the other by Sri V. V. Sharma, Assistant Excise Commissioner (Excise Intelligence Bureau U.P. at Allahabad). In the first counter affidavit filed on behalf of the State Government, the allegations made in paragraphs 47 to 52 of the petition have not been controverted. On the contrary, they are practically admitted in toto. In paragraph 9 of that counter affidavit it is stated that in order to make good the deficiency in the State revenue on account of the exemption from sales tax of the sale of country spirit, the State Government decided to and did enhance Excise duty thereon. In paragraph 10 thereof it has been stated that "while considering the question of finding additional resources for the implementation of the 4th Five Year Plan, the State cabinet, in its meeting held on April 1, 1969, decided that sales tax at the rate of 10 per cent at a single point be imposed on the sale of country liquor with immediate effect". The impugned notification dated 2-4-1969 was issued in pursuance of that decision. 17. In the second counter affidavit also, the material factual allegations of the petitioners have not been denied. The impugned notification dated 2-4-1969 was issued in pursuance of that decision. 17. In the second counter affidavit also, the material factual allegations of the petitioners have not been denied. In paragraph 30 (b) of this counter affidavit it has been stated that "the increase in excise duty with effect from 1-4-1959 was made with a view to make good the deficiency in the State revenue on account of the exemption granted to the sale of country spirit from sales tax, as is clear from the counter affidavit filed on behalf of the State Government." In paragraph 31 it is stated that the terms upon which an auction for a particular shop is to be held are mentioned in the Sale proclamation issued by the Excise Commissioner and the officer holding the auction sale orally indicates to the intending bidders such conditions, subject to which the auction is to be made, which pertain to the Excise Act and the Rules framed thereunder. The rate of excise duty leviable for the year for which the auction is held is predetermined and is given out; but the question of any announcement by the officer conducting the sale about the levy of any tax upon country liquor hardly arises, inasmuch as, such officer has obviously no concern with or knowledge about any other tax to be imposed upon country liquor by the State Government under any other Act. In these circumstances, there is no occasion for any assurance being given to the intending bidders about any tax upon country liquor during the year for which auction is held. In paragraph 32 it is stated : "That in reply to the assertions made in paragraphs 55, 56, 57 and 58 of the Writ Petition it is stated that no assurance was nor possibly could be given to the intending bidders about the imposition or otherwise of sales tax upon the sale of country liquor with effect from 2-4-1969 when the auctions were held in the months of February and March 1969. Till then the State Government had not withdrawn the exemption of sales of country liquor from sales tax nor had it imposed sales tax upon such sales. The information to be given under Rules 374 (4) of the Excise Rules is about matters contemplated by the U.P. Excise Act and the Rules framed thereunder. Till then the State Government had not withdrawn the exemption of sales of country liquor from sales tax nor had it imposed sales tax upon such sales. The information to be given under Rules 374 (4) of the Excise Rules is about matters contemplated by the U.P. Excise Act and the Rules framed thereunder. All such information was actually given to the intending bidders." 18. From what has been stated above, it is clearly established that after due deliberation and top level inter-departmental parleys, the State Government in exercise of its power under Section 4 of the U.P. Sales Tax Act decided to exempt sale of country liquor from levy of sales tax and to recoup the consequential loss of revenue by enhancing the rate of excise duty thereon. It is also established that even before the actual issue of the relevant notification, the Excise Commissioner directed the said decision to be announced at the auctions by written circulars and by telegrams. This must necessarily have been done with the sanction and concurrence of the State Government itself. This was done obviously to produce larger yield from the bids at the auctions as it constitutes an important "matter affecting the value of contracts about to be sold." 19. The petitioners contend that for ten years auctions were held on the said basis and it was one of the implicit and integral terms of the annual auctions and sales. If that term was to be withdrawn or varied it had to be done by a public announcement before or at the annual auction for the particular year so that the bidders might know the additional liability or burden which they would have to discharge and, accordingly, adjust their bids. This not having, been done, the State Government must be held to be bound by its previous declaration, which was operative on the dates of the auctions and also at the time when licences were granted to the petitioners. The State Government, in the circumstances, had no right to impose an additional burden on them or to do any thing so as to place them in a disadvantageous position. The petitioners lay stress on the fact that instead of reducing the rate of excise duty and thereby justifying the withdrawal of exemption under Section 4 of the Sales Tax Act, the rate of excise duty had been enhanced. The petitioners lay stress on the fact that instead of reducing the rate of excise duty and thereby justifying the withdrawal of exemption under Section 4 of the Sales Tax Act, the rate of excise duty had been enhanced. In place of the rate of one anna per rupee which obtained prior to the exemption notification dated 6-4-1959, even the rate of sales tax under the impugned notification has been enhanced to ten paise per rupee. Having imposed enhanced rates of excise duty and having realised higher amounts in the shape of licence fees at the auctions, the State Government is estopped from imposing on or realising from the petitioners any sales tax on the retail sale of country liquor. 20. In reply to the petitioners' above noted submissions, the learned counsel for the State submitted that no estoppel can be pleaded against law and its enforcement, much less in the matter of taxation. As a broad general proposition this contention is correct and has not also been disputed by the learned counsel for the petitioners. In the circumstances of the case, however, such proposition cannot bar or repel the petitioners' plea. They have not pleaded any estoppel against the exercise of the legislative power by the Legislature nor against any statutory provision which operates spontaneously by its own force nor against the exercise by the State of its exclusive executive function. The plea is against the exercise of subordinate powers by the delegate of the Legislature-in the instant case the State Government-on whom large discretionary powers have been conferred to grant exemption from taxation as also to impose tax at enhanced rates within the prescribed ceiling. The powers delegated are not plenary nor in law could be plenary. The legislature may provide the State Government with several sources of revenue from different taxes under different taxing statutes and may further delegate to it certain discretionary powers in regard to the extent and manner of exploiting the legislative measures for purposes of revenue. The powers delegated are not plenary nor in law could be plenary. The legislature may provide the State Government with several sources of revenue from different taxes under different taxing statutes and may further delegate to it certain discretionary powers in regard to the extent and manner of exploiting the legislative measures for purposes of revenue. The State Government in exercise of such powers delegated to it under different taxing statutes may, for administrative reasons or in the interest of revenue, consider it expedient and decide to exempt a taxpayer or a class of tax-payers, liable to be taxed simultaneously under more than one statute, from tax liability under one Act and to subject such tax-payer or class of tax payers to taxation at a higher rate under another Act in lieu thereof. If the State Government makes such announcement and gives effect to the same, thereby realising tax at enhanced rates under the Act selected by it and inducing the persons concerned also to pay larger sums on some other but collateral-head of revenue, it cannot be held that even though the State Government subsequently seeks to levy tax also under that Act under which exemption was granted, no plea of estoppel can be raised against it by the person or persons adversely affected. The plea of estoppel raised by the petitioners is well founded and also supported by highest authority. 21. In Union of India v. Anglo Afgan Agencies, A.I.R. 1968 S.C. 718, Shah, J. speaking for the Court observed :- "This case (I.L.R. 29 Bombay 580), is in our judgment, a clear authority that even though the case does not fall within the terms of Section 115 of the Evidence Act, it is still open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the form of a formal contract as required by the Constitution." (Paragraph 20) . The learned Judge in paragraph 23 further observed : "Under our jurisdprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor can claim to be the Judge of its own to the citizen on an ex parte appraisement of the circumstances in which the obligation has arisen." 22. The petitioners' plea is further supported by the decision of the Supreme Court in Century Spinning and Manufacturing Company Ltd. v. The Ulhasnagar Municipal Council, 1970 Vol. Supreme Court Cases 582. 23. The learned counsel for the State urged on the strength of Bhau Ram N. Baij Nath Singh, A.I.R. 1961 S.C. 1327 and Beepathuma v. Shankaranaraijana, A.I.R. 1965 S.C. 241, that the petitioners who have derived benefit under the licences granted to them cannot repudiate their obligations thereunder while taking benefit therefrom. The licences granted to the petitioners, however, cannot be equated with an equitable conditional order passed by a Court or an instrument or deed under which an onerous or conditional grant or devise is made. In the circumstances of the case, no question of election on the part of the petitioners can appropriately arise, nor can their plea of estoppel be held to be barred by any law or by their own conduct. 24. It may, however, be made clear that simply because the State Government had exempted the sale of some goods or class of goods from sales tax in exercise of its powers under Section 4 of the Act, it would not be precluded from withdrawing such exemption in future. Were it not estoppel as noted above, the notification in question could not have been questioned in so far as it withdrew the exemption. The estoppel operated during the year 1969-70; but presumably it ceased to be operative thereafter. 25. The petitioners' plea that they are not nor were under any legal liability to pay "licence fee" for grant of licence for retail vend of country liquor may now be examined. The petitioners contend that it is not fee and has none of the essential legal attributes of fee. According to them it is an impost which is neither valid as a tax nor as excise duty. The petitioners contend that it is not fee and has none of the essential legal attributes of fee. According to them it is an impost which is neither valid as a tax nor as excise duty. Apart from the question whether, as urged by learned counsel for the respondents, the petitioners are estoppel from raising this plea and whether they can or should be given any discretionary relief, the plea is without substance. 26. The legal position is now settled that no one has any inherent or absolute right to carry on the business of manufacture and sale of intoxicants. The State can control and regulate it completely, it may undertake to carry on the activity of manufacture, export, import, transport, sale directly. It may in its discretion permit the carrying on of any such activity to the extent and subject to such conditions and on such terms as it may consider appropriate. The matter has been considered by the Supreme Court in several cases. In Cooverjee v. Excise Commissioner, Ajmer, A.I.R. 1954 S.C. 110, it was observed :- "Elimination and exclusion from business is inherent in the nature of liquor business and it will hardly be proper to apply to such a business principles applicable to trades which all can carry ...................." In that case one of the reliefs sought was for a direction to respondent "not to levy any duty or fee for the purpose of raising revenues for the benefit of the State by holding auction sales." The Supreme Court observed :- "Under the rules every member of the public who wishes to carry on trade in liquor is invited to make bids. This is the only method by which carrying on liquor trade can be regulated ....................." "The next contention that the charge of fee by public auction is excessive and is not in nature of fee but a tax ignores the fact that that licence fee described as a licence fee is more in the nature of a tax than a fee. One of the purposes of the regulation is to raise revenue. But the provisions of Section 24, duties can be imposed on the manufacture, import, export and transport of liquor and other excisable articles. Revenue is also collected by the grant of contracts to carry on trade in liquors and these contracts are sold by auction. One of the purposes of the regulation is to raise revenue. But the provisions of Section 24, duties can be imposed on the manufacture, import, export and transport of liquor and other excisable articles. Revenue is also collected by the grant of contracts to carry on trade in liquors and these contracts are sold by auction. The grantee is given a licence on payment of the auction price. The regulation specifically authorises this." 27. In State of Assam v. Commissioner of Hills Division, A.I.R. 1957 S.C. 414, and Nagendra Nath v. Commissioner of Hills Division, A.I.R. 1958 S.C. 398 it was held that there is no inherent right to sell liquor or to settlement of liquor shops. 28. Section 24 of the Act provides for grant of licence for exclusive privilege for manufacture and or sale of country liquor subject to the provisions of Sec. 31. The former Section occurs in Chapter IV which relates to manufacture, possession and sale of intoxicants, and the latter in Chapter VI which relates to licences, permits and passes. Chapter V deals with duties and fees. Sec. 30 occurring in this Chapter provides :- "Instead of or in addition to any duty leviable under this Chapter the Excise Commissioner may accept payment of a sum in consideration of the grant of a licence for any exclusive privilege under Sec. 24." Sec. 31 provides that every licence, permit or pass granted under the Act shall be granted on payment of such fees (if any) and subject to such restriction and on such conditions as the Excise Commissioner may direct. Thus, the Act itself provides for and specifically authorises, the acceptance of a sum in consideration only of the grant of a licence for any exclusive privilege. Such sum may, it is true, be realised instead of or in addition to any duty leviable under Chapter V, but it has neither been contended nor shown that in the instant cases the auction monies were to be paid in lieu of any duty. 29. The consideration for grant of a licence for any exclusive privilege under Section 24 of the Act may partake the nature of a tax in certain respects but is not actually a tax. The obligation to pay and the right to receive or realise the same are essentially contractual in nature. 29. The consideration for grant of a licence for any exclusive privilege under Section 24 of the Act may partake the nature of a tax in certain respects but is not actually a tax. The obligation to pay and the right to receive or realise the same are essentially contractual in nature. Therefore, there is little room for the invocation of the provisions of Article 265 or Article 277 of the Constitution by the petitioners. 30. Under the Act, the State Government has the power to exclusively undertake the activity of manufacture and sale of alcoholic liquors. It instead of undertaking such an activity it grants permission to a person or persons to manufacture or sell any intoxicant, it in essence parts with its exclusive right. It can while doing so decide what consideration should be paid by the person or persons to whom such right is to be given. The conferment of such right, in the circumstances, is a matter of contract between the State Government or the Excise Commissioner and the person or persons who want to acquire such right. In what form the contract will be entered into and what shall be the consideration therefor are matters which primarily lie within the discretion of the authority empowered to grant such right. It is true that in the Act there is no express provision for the grant of a licence for manufacture, supply or sale of country liquor or intoxicating drugs by holding an auction; but if the matter essentially is a matter of contract then it is for the authority entitled to give the contract to decide in what manner, to whom and under what terms and conditions the contract will be given. On behalf of the respondents it was urged that the word `bid' occurring in the explanation to Section 36 of the Act by necessary implication clearly shows that the Act itself contemplates and provides for the grant of the licence to sell by retail in different modes, one of them being the holding of an auction and the granting of the licence to the highest bidder, other conditions being satisfied. The argument is not without force, but as mentioned above even without the aid of the said argument it can reasonably be held that it is legally open to the State Government and, for that matter, the Excise Commissioner also, to decide whether particular shop or shops should be made available for retail vend of country liquor to person or persons making the highest bid at auctions held in that behalf. In the circumstances, is unnecessary to enter into the merits and demerits of the various ramifications of the arguments raised in this connection. 31. The system of holding auctions for grant of exclusive privilege of retail vend of country liquor is a system which has been prevalent almost throughout the length and breadth of India for over half a century. If the foundation of the system is contractual, it is not open to any person obtaining a contractual or quasi-contractual right to carry on the trade of retail vend of country liquor to plead that the amount payable under the bid made by him is an imposition of illegal or unwarranted tax. A person making the highest bid at an auction held for granting exclusive privilege of selling country liquor by wholesale or by retail does not ipso facto become entitled to carry on the business of selling country liquor. He has further to obtain a licence in which the requisite terms and conditions are prescribed. Although under Section 26 the grantee of an exclusive privilege is permitted to let or assign such privilege to another person, yet the lessee or the assignee concerned does not acquire any right merely by virtue of the lease or assignment and, unless a license has been granted to him by the Excise Commissioner on application being made by him, he cannot exercise any right as the grantee of the exclusive privilege. Thus, the amount paid or payable by the successful bidder at the auction cannot per se be equated with any duty, fee or tax as such. 32. The learned counsel for the petitioners sought to draw support from the decision on the Supreme Court in Ladmikanta Sahu v. Superintendent of Excise Behampur, C.A. 1415 of 1965 decided on April 10, 1967. A copy of the judgment was produced and cited. 32. The learned counsel for the petitioners sought to draw support from the decision on the Supreme Court in Ladmikanta Sahu v. Superintendent of Excise Behampur, C.A. 1415 of 1965 decided on April 10, 1967. A copy of the judgment was produced and cited. In that case the sole question was about the validity of the amendment in Rule 103 (1) of the Excise Rules framed by the Board of Revenue by which retail "off" vend of foreign liquor was subjected to the system of auctioning. On behalf of the State of Orissa it was conceded that the charge for the grant of privilege for the "off" vend of foreign liquor under the system of auctioning is a tax and not a fee. The Supreme Court held that as Section 38 of the Orissa Act did not empower the Board to levy a tax, the amended rule was not authorised by Sec. 38. In regard to Section 22, 27, 28 and 29 of the Orissa Act, which more or less correspond to Section 24, 28, 29 and 30 of the U.P. Act, it was observed that a combined reading of the Sections shows that the State Government can levy duty in the form of a payment for the grant of exclusive privilege in respect of country liquor and intoxicating drugs only. Assuming that under the U.P. Act also the payment for the grant of any exclusive privilege for sale by retail under Section 24 is tentamount to levy of a duty, there is nothing in the Act to show that it is an excise duty or a tax. The true nature and incident of such payments are comparable to payment for grant of ferry or similar rights. 33. Long after close of the arguments the learned Advocate for the petitioners invited our attention to a recent Supreme Court decision in Indian Mica Mercantie Industries v. The State of Bihar, Civil Appeal No. 770 of 1967, decided on 2-4-1971, and placed reliance on the following passage : "Generally speaking by granting a licence the State does not confer any privilege or benefit on any one. All that it does is to regulate a trade, business, or profession in public interest. There may be cases where a Government which is the owner of a particular property may grant permit or licence to some one to exploit that property for his benefit. All that it does is to regulate a trade, business, or profession in public interest. There may be cases where a Government which is the owner of a particular property may grant permit or licence to some one to exploit that property for his benefit. Such a right may be given for consideration. It is only in those cases that a licence or a permit is the case of grant of a licence for carrying on any ordinary trade, business or profession. If it is otherwise the State can sell the right to practise the profession of law in courts or to practise the profession of medicine or any of the other numerous profession at exhorbitant prices or may even put up those rights for auction to be given to the highest bidder. Nothing so bad can be within the contemplation of our laws. We are inclined to think that the learned Judges of the High Court had misunderstood the observations of Seligman quoted in the Commissioner, Hindu Religious Endowments, Madras v. Sri Lakshmindra Thirtha Swamiar of Sri. Shirur Mutt to the effect that it is special benefit accruing to the individual which is the reason for the payment of fee." 34. Stress appears to be laid upon the fact that an exemption was made only in cases where the Government was the owner of the property in respect of which permit or licence had been granted to some one to exploit that property for his benefit; and in other cases of grant of permit or licence the ordinary rule applicable to the imposition of fee was held to be applicable, namely, that the fee imposed be not wholly disproportionate to the services rendered. 35. We see no reason why the above exception be not applied to those cases also in which the State Government can validly restrict the manufacture of an article or the sale thereof by one or two persons. It is settled law that the State has the power to completely prohibit the sale of intoxicants. Consequently, the sale of intoxicants can be restricted by granting a licence to only one person for an area. Even though that person carries on the business of sale of intoxicants under a permit or licence, he is one on whom an exclusive privilege has been conferred. Consequently, the sale of intoxicants can be restricted by granting a licence to only one person for an area. Even though that person carries on the business of sale of intoxicants under a permit or licence, he is one on whom an exclusive privilege has been conferred. The State can, therefore, exercise powers similar to the powers it can exercise in respect of a property of which it is the owner. This exclusive privilege can be conferred by laying down the charges that that person shall have to pay for the grant of the permit or licence, or the permit can be granted to a person who makes the highest bid in a public auction provided that he is otherwise not unsuitable for the grant thereof. The auction money, which can also be called contract money, need not be proportionate to the expenses incurred in regulating the sale of intoxicants. The above Supreme Court decision is thus not helpful to the petitioners. On the other hand, it supports the view that we are taking in this case. 36. It may further be noted that all the petitioners made bids voluntarily at the auctions held for sale of contracts for retail vend of country liquor in certain shops. By making the highest bids they eliminated their competitions and induced the Excise Authorities to grant to them exclusive privilege of selling country liquor by retail in their respective shops. It is not open to them to contend thereafter that they are not liable to pay the auction monies which, by misnamer or loosely, has been called licence fee. Further, under such circumstances the petitioners cannot in any event be held to be entitled to any discretionary relief. 37. The next point for consideration is whether the imposition and levy of excise duty is illegal. The argument on behalf of the petitioners in short is that Section 28 of the Act which empowers the State Government to levy excise duty is constitutionally invalid. The grounds of attack are, firstly, that it infringes Article 14 of the Constitution, and, secondly, that it suffers from the vice of excessive delegation of legislative power. The argument on behalf of the petitioners in short is that Section 28 of the Act which empowers the State Government to levy excise duty is constitutionally invalid. The grounds of attack are, firstly, that it infringes Article 14 of the Constitution, and, secondly, that it suffers from the vice of excessive delegation of legislative power. It has been contended that the section as it originally stood conferred absolute, unfettered and unguided power on the State Government to impose and levy excise duty and, therefore, became void on the coming into force of the Constitution, and that in so far as it suffered from the vice of excessive delegation, it was void ab initio. It could not be revived by any amending measure, i.e. by U.P. Ordinance No. VIII of 1969 and U.P. Act No. VII of 1970. 38. Sec. 28 prior to its amendment did confer extremely wide and unlimited power on the State Government to levy excise duty and countervailing duty at such rate or rates on excisable articles as in its discretion it might consider appropriate. It was therefore assailable on the second ground, and became void under Article 13 (1) of the Constitution by virture of the objection in the first ground. 39. The ground of attack based on the doctrine of excessive delegation is in one important respect materially different from the ground founded on Article 13 of the Constitution. In the latter case the offending law is struck down per force by the mandate of the Constitution contained in Article 13 itself. The aggrieved person has only to show that the law in question violates any of the fundamental rights guaranteed by the Constitution. In case of excessive delegation, however, it has not only to be shown that the law in question actually suffers from the vice of excessive delegation but the power of the competent court has to be invoked to get a declaration as to its invalidity. In a case falling under Article 13 the invalidity attaches simultaneously with the advent of the Constitution if the law is pre-Constitution law and at its very inception if it is post-Constitution. In case of excessive delegation the invalidity attaches when the law is declared invalid by judicial pronouncement. 40. In a case falling under Article 13 the invalidity attaches simultaneously with the advent of the Constitution if the law is pre-Constitution law and at its very inception if it is post-Constitution. In case of excessive delegation the invalidity attaches when the law is declared invalid by judicial pronouncement. 40. A law which is void by virtue of Article 13 (2) of the Constitution is still-born and cannot be revived by removal of the defect by an Amending and Validating Act. The position, however, is different in the case of a law rendered invalid by Article 13 (1) such law can be revived by appropriate amendment so as to remove the defect or obnoxiousnees. This is the legal position enunciated by the Supreme Court in several cases : Bhikaji v. State of M.P., A.I.R. 1955 S.C. 781, Purshottam v. Desai, A.I.R. 1956 S.C. 20, Mahendra Lal v. State of U.P., A.I.R. 1963 S.C. 1019 . 41. This is, however, one case which ostensibly might appear to support the contention made on behalf of the petitioners that Section 28 was still-born and could not be resuscitated. It is B. Sharma v. Union Territory, Pondichery, A.I.R. 1967 S.C. 1480, That was an extreme case-not of delegation of any power by the legislature to the executive for implementation and enforcement of a Statute with ancillary legislative power of fixing rates of tax, but of "a total surrender in the matter of sales tax legislation by the Pondichery Assembly in favour of the Madras legislature." It was specifically for this reason that in the majority judgment it was held that the Act in question "was void or as is often said still-born." The effect of the subsequent Act purporting to amend the principal (impugned) Act was also considered and it was observed that since the Amendment Act was passed on the footing that there was in existence a valid Act, viz., the Principal Act, it was impossible to construe the Amendment Act as an independent legislation whereby the Madras Act was retrospectively brought into operation as from April 1, 1966. 42. There is fundamental difference between a still born Act and an Act of which only some particular provision is invalid or is rendered invalid due to some defect or lacuna. 42. There is fundamental difference between a still born Act and an Act of which only some particular provision is invalid or is rendered invalid due to some defect or lacuna. In the absence of any express bar or inherent incompetence, the power to remove the defect by appropriate Amendment Act or Ordinance, as the case may be, with retrospective effect must he held to be inherent in the legislative power itself. 43. The question whether a taxing Statute can be amended by the competent legislature with retrospective effect so as to levy a tax retrospectively came up for consideration before the Supreme Court in a number of cases. It was held that legislature has such power. This view was expressed in Tata Iron and Steel Co. Ltd. v. State of Bihar, A.I.R. 1958 S.C. 452, M/s. Chhotabhai Jethabhai Patel and Co. v. Union of India, A.I.R. 1962 S.C. 1006, A. H. Abdul S. and Co. v. State of Madras, A.I.R. 1964 S.C. 1729 In the last mentioned case in paragraph 33 it was observed : "The State legislature is free to enact laws which would have retrospective operation. Its competence to make a law for a certain past period depends on its present legislative power and not on what it possessed at the period of time when its enactment is to have operation." 44. The Act here is not a purely taxing Act. It was enacted "to consolidate and amend the law in force in the United Provinces relating to the import, export, transport, manufacture, sale and possession of intoxicating liquor and of intoxicating drugs." When enacted and throughout its career, it could operate even without Sec. 28. It has not been contended or shown that the law-making body which enacted it had no legislative competence to make it or that it suffered from any other inherent infirmity. Under the Government of India Act, 1935 the Provincial legislature had legislative competence to enact laws in regard to intoxicating liquor and imposition of excise duty on alcoholic liquor, opium etc. (Schedule VII List 2 Items 31 and 40). The State legislature under the Constitution is competent to do so, vide Schedule VII List II Entries 8 and 51. Sec. 28 of the Act, therefore, could be amended with retrospective effect so as to remove the defects occasioned by excessive delegation or infringement of Art. 14 of the Constitution. 45. (Schedule VII List 2 Items 31 and 40). The State legislature under the Constitution is competent to do so, vide Schedule VII List II Entries 8 and 51. Sec. 28 of the Act, therefore, could be amended with retrospective effect so as to remove the defects occasioned by excessive delegation or infringement of Art. 14 of the Constitution. 45. Sec. 28 of the Act was amended by U.P. Ordinance VIII of 1969 promulgated on 3-12-1969. Thereafter, U.P. Excise (Amendment and Validation) Act (No. VII of 1970) was enacted by the State Legislature. The Ordinance was repealed. The said Act was passed to amend the U.P. Excise Act, 1910 and to validate certain actions taken thereunder. By Section 2 of this Act it was enacted that Section 28 of the principal Act (IV of 910) shall be re-numbered and be deemed always to have been re-numbered as sub-sec. (1) thereof and the following sub-sections shall be inserted and be deemed always to have been inserted, namely :- "(2) The State Government shall, in imposing and excise duty or a countervailing duty as aforesaid and in fixing its rate, be guided by the directive principles specified in Article 47 of the Constitution of India. (3) Such duty shall not exceed the maximum as provided hereinafter :- (a) Countervailing duty on excisable articles imported in accordance with the provisions of Section 12 (1) :- Item No. Description of excisable article Maximum rate of duty. Rs. 1. Country liquor (excepting 20 per litre tari) 2. ......................................................................................................................... 3. ......................................................................................................................... 4. .......................................................................................................................... (b) Excise or countervailing duty on excisable articles exported in accordance with the provisions of Section 13 :- 1. .............................................................. 2. .............................................................. 3. .............................................................. 4. .............................................................. 5. .............................................................. (c) Excise or countervailing duty on excisable articles transported :- 1. Country liquor (excepting tari) Rs. 20 per litre 2. ......................................................................................................................... 3. ......................................................................................................................... 4. .......................................................................................................................... (d) Excise duty on excisable articles manufactured............ under any licence granted under Section 17 :- 1. Country liquor (excepting tari) Rs. 20 per litre 2. ......................................................................................................................... 3. ......................................................................................................................... 4. .......................................................................................................................... (e) Excise duty on excisable articles manufactured in any distillery established, or any distillery or brewery licensed, under Section 18:- 1. Country liquor (excepting tari.......) Rs. 20 per litre 2. ......................................................................................................................... Section 4 of the said Act reads :- "4. Country liquor (excepting tari) Rs. 20 per litre 2. ......................................................................................................................... 3. ......................................................................................................................... 4. .......................................................................................................................... (e) Excise duty on excisable articles manufactured in any distillery established, or any distillery or brewery licensed, under Section 18:- 1. Country liquor (excepting tari.......) Rs. 20 per litre 2. ......................................................................................................................... Section 4 of the said Act reads :- "4. Validation.-Notwithstanding anything contained in any judgment decree or order of any Court or other authority to the contrary, any imposition, levy or collection or any duty made or purporting to have been made, and any action or thing taken or done in relation thereto, under the provisions of the principal Act before the commencement of this Act including, in particular, any direction or notification issued or purporting to have been issued under Section 28 or Section 46 of the Principal Act, shall be deemed to be, and to have always been valid and effective as if such imposition, levy or collection had been made or action or thing had been taken or done under the Principal Act as amended by this Act, and accordingly; (a) all acts. proceedings or things done or taken by the State Government or by any officer of that Government or by any other authority in connection with the imposition, levy or collection of such duty shall, for all purposes, be deemed to be and to have always been, done or taken in accordance with the law. (b) no suit or other proceedings shall be entertained or continued in any Court or before any authority for the refund of any such duty, and (c) no Court shall enforce any decree or order directing the refund of any such duty." 46. After the amendment, Sec. 28 of the Act no longer remained vulnerable to attack on the ground either of excessive delegation or of infraction or Article 14 of the Constitution. The defect in the Section was not ineffectable and was completely removed by the enactment, U.P. Act VII of 1970. The Section, as it now stands after being amended, does not only fix the maximum rates of excise duty, but also classifies the excisable articles and lays down the maximum limits of duty which can be levied on the articles so classified. Sub-Sec. (2) declares the legislative policy by which the State Government is to be guided in the matter of fixing rates within the prescribed ceilings. Sub-Sec. (2) declares the legislative policy by which the State Government is to be guided in the matter of fixing rates within the prescribed ceilings. It cannot, in the circumstances, be said that any absolute and arbitrary power has been given to the State Government to impose any excise duty or countervailing duty on any excisable article as it likes. The provisions of the Act which have already been referred to above, and the various provisions contained in the Manual would show that the administration of the law relating to intoxicants is a highly complicated affair. Conditions evidently are not the same throughout the territory of the State of Uttar Pradesh. In fact, conditions vary from district to district and from city to city. The local habits of the people in a particular area, the standards of life of different classes of people, the social or customary practices of different classes or communities are some of the important factors which have necessarily to be taken into consideration in applying the different provisions of the Act and in fixing rates of duty. Evidently, therefore, it was not possible for the legislature to lay down in every detail as to how in practice the provisions of the Act are to be applied. It has already been mentioned that the Act gives ample power to the State to take appropriate measures for wholly or partially prohibiting the consumption of intoxicants in different areas and by different classes of people according to the circumstances and conditions obtaining in the area or areas in question or governing the class or classes of people concerned. Hence, the mere fact that the legislature has not laid down a uniform rate of excise duty and has given power to the State Government to impose such duty within the maximum limits prescribed and the mere fact also that State Government has been given power to impose excise duty differently in different areas or in respect of different classes of intoxicants does not render the law invalid. The preamble to the Act was amended in 1941 and, in administering the provisions of the Act, the preamble so added must also necessarily furnish a guiding principle in regard to the exercise of the powers delegated to the State Government in the matter of the administration of the law relating to manufacture, production, import, export, transport, supply, constitution and taxation of all liquor and intoxicating drugs under the Act. The State has also to act in conformity with Article 47 of the Constitution as far as practicable. 47. It was urged that the Act was enacted in 1910 and that Sub-Sec. (2) inserted in Section 28 by U.P. Act VII of 1970 cannot possibly have retrospective effect beyond the date of enforcement of the Constitution in a much as Article 47 itself did not exist then. Technically this is correct, but it does not materially affect Sub-Sec. (1) and (3) of Sec. 28. Even without Sub-Sec. (2), the preamble to the Act as amended in 1941 by itself furnished a sufficient guide. The point raised is really academic because when the petitioners obtained licence for retail vend of country liquor Article 47 of the Constitution was already in force. 48. The challenge by the petitioners to the validity of Section 28 as amended by U.P. Act VII of 1970 and to the imposition of excise duty thereunder must fail. 49. The last point for consideration is whether the term of the licence fixing a minimum quota of country liquor to be lifted by each licensee and saddling liability on the defaulting licensee to pay a sum equivalent to the excise duty payable on the unlifted quantity is valid and enforceable. This is a matter which requires serious consideration as it is not confined to the year 1969-70 only. 50. In 1941 an addition was made in the preamble to the Act. The added preamble professes that in order to promote, enforce and carry into effect the policy of prohibition, it is necessary to authorise the State Government to prohibit the import, export, transport, manufacture, sale and possession of liquor and of intoxicating drugs in Uttar Pradesh or in any specified area or areas thereof. The added preamble, therefore, must be held to contain the basic policy behind the enactment. The added preamble, therefore, must be held to contain the basic policy behind the enactment. Article 47 of the Constitution itself embodies the directive principle casting a duty on the State to endeavour to bring about prohibition of consumption of intoxicating drinks and drugs which are injurious to health. The same principle and mandate is vouched in paragraph 3 of the Manual itself. In paragraph 4 of the Manual it has been even declared and emphasised that considerations of revenue are to be in subordination to the promotion of temperance although every endeavour should be made to ensure to the State as large a share as possible or the profits accruing from the sale of intoxicants. The petitioners contend that having regard to the aforesaid preamble, the provisions of Article 47 and paragraphs 3 and 4 of the Manual, the authorities responsible for the administration of the provisions of the Act acted in clear contravention of the same in imposing a condition requiring the retail venders of country liquor to sell a minimum quantity of country liquor each thereby directly encouraging greater consumption of intoxicants. Not only the authority granting the licence has fixed minimum quotas, it has further imposed a condition that on the failure on the part of a grantee to lift his minimum quota, that is, on his failure to sell for human consumption the minimum quantity of country liquor, he will have to make good to the State Government the short-fall in the actual realisation of excise duty on the quantity of country liquor which he has failed to lift and sell. Although such amount has been sought to be made payable under the garb of compensation, in reality it is nothing but payment of excise duty on quantity of country liquor on which legally no excise duty became payable. It is contended that whether it is sought to be realised in the garb of compensation or by way of loss in revenue on account of short fall in excise duty, the condition imposed in that behalf upon the grantees is ultra vires and unwarranted. It is urged that even on the basis of contract, the condition requiring payment of such sum even by way of compensation would be clearly opposed to public policy as declared by the provisions of the Act itself and the constitutional directive contained in Article 47. It is urged that even on the basis of contract, the condition requiring payment of such sum even by way of compensation would be clearly opposed to public policy as declared by the provisions of the Act itself and the constitutional directive contained in Article 47. In making the aforesaid contentions the petitioners appear to be on very firm ground. 51. Under Section 28 of the Act, which empowers imposition of excise duty or countervailing duty, no duty can be charged or realised unless the taxable event has actually occurred. Under the provisions of the Manual and under the terms and conditions upon which the petitioners have been granted the right of selling by retail country liquor in particular shops, they are liable to pay excise duty on any particular quantity of country liquor as and when the same is lifted from the particular bounded warehouse assigned to them individually. If any vendor has failed to push up his sale upto the minimum quota, it is clear that he has not been able to lift the full quantity from the bounded warehouse. In a case where a particular grantee has failed to lift from the warehouse the entire quantity of the prescribed minimum quota, no taxable event in fact can be said to have ever occurred in regard to the unlifted article. Evidently that amount could not be realised by way of excise duty. The question is whether an equivalent amount can be realised by way of compensation. If a right in this behalf is conceded to the State Government, naturally such a right will be contrary to the avowed fundamental principle already referred to above. If a tax has been lawfully imposed and levied, the person liable to pay has to pay it irrespective of any other consideration, but on principle it seems difficult to recognise the right of the State to reimburse by way of compensation the amount which the tax payer for circumstances beyond his control has failed to earn for the State. There is no legal sanction for such right nor is there any precedent recognising such a right. There is no legal sanction for such right nor is there any precedent recognising such a right. If the matter were to be judged from the contractual aspect, under Section 10 read with Section 23 of the Contract Act such a condition or stipulation must be held to be unenforceable being opposed to public policy and, in the instant case, a public policy declared by the Act itself and by the Constitution. The condition further would be clearly ultra vires the Act itself because the Act does not warrant the imposition of such a condition. 52. The normal incidence of an excise duty is that it is a tax on manufacture or production. Ordinarily it is payable by the manufacturer or the producer. Under the Act the method of collection of the excise duty is to require the retail vendor to deposit in the Government Treasury the amount of duty payable on the quantity of the article which such vendor wants to be supplied with from the bounded warehouse from which he can obtain supply for retail vend. The amount is to be paid in advance. This method by itself is not illegal. The manufacturer or supplier under Sec. 64-A of the Sale of Goods Act would be entitled to acid the duty to the price for which he sells a particular quantity. So there could be nothing wrong if the excise duty is directly realised from the retail vendor who has also to deposit the price of the particular quantity in the Treasury at the same time. 53. The retail vender equally would be entitled to realise pro rata excise duty on the quantity sold to a consumer along with the price under Sec. 64-A of the Sale of Goods Act. The impugned condition would clearly deprive him of this legal right and the entire burden would fall on him. For this reason also, the condition must be held to be invalid and unenforceable. 54. Similar conditions imposed by Governments of some other States have been struck down. The petitioners have relied on the decision of the Madhya Pradesh High Court in Firm Gappulal Jaiswal v. The State of M. P., Misc. Petition No. 19 of 1970 decided by Shivdayal and K.K. Dube JJ. on 20-1-1971, and Bimal Chandra Bannerjee v. State of Madhya Pradesh, 1970 (2) Supreme Court Cases 467 in support of the submission. The petitioners have relied on the decision of the Madhya Pradesh High Court in Firm Gappulal Jaiswal v. The State of M. P., Misc. Petition No. 19 of 1970 decided by Shivdayal and K.K. Dube JJ. on 20-1-1971, and Bimal Chandra Bannerjee v. State of Madhya Pradesh, 1970 (2) Supreme Court Cases 467 in support of the submission. These authorities directly support the contention of the petitioners. The impugned condition deserves to be and must be struck down. 55. In the result, all the petitions are partly allowed. The State Government and the Sales Tax Authorities concerned are directed not to take any proceeding against the petitioners under the U.P. Sales Tax Act, 1948 for levy, assessment or realisation of any sales tax on their turnovers in respect of retail sales of country liquor by them during the period 1-4-1969 to 31-3-1970. The State Government and the Excise Authorities concerned are further directed to desist from realising any amount from the petitioners by way of compensation or otherwise on account of their failure to lift the entire quantity of country liquor fixed as their respective minimum quotas under their respective licences and to refund to the petitioners or petitioners concerned, such amount or amounts, if any, realised on this account. The prayer for other reliefs is rejected. The parties shall bear their own costs.