United Distillers (Pvt. ) Ltd. v. State of Bihar — 1985 DIGILAW 202 (PAT)

JUDGMENT : S. S. Sandhawalia, C. J.- What is the true import of the concept of exclusive privilege under section 22 of the Bihar and Orissa Excise Act, 1915? Whether Section 3 of the Bihar Excise (Amendment and Validation) Act, 1981 (Bihar Act 17 of 1982) validates the levy of exclusive privilege duty on all excise licensees not only retrospectively, but also warrants such a levy prospectively? This is the twin questions necessitating the hearing of this set of connected cases by the Division Bench. 2. The facts are not in serious dispute and may be noticed with relative brevity from C. W. J. C. No. 3170 of 1984 (United Distillers (Private) Limited vs. The State of Bihar and others). The petitioners company runs a distillery at Mirganj, in the district of Gopalganj, for the manufacture of spirit for chemical and industrial uses. It is averred that the denatured spirit manufactured by the petitioner is unfit for human consumption. Under section 13 of the Bihar and Orissa Excise Act; 1915 (hereinafter referred to as the' Act'), the petitioner is obliged to obtain a license for the manufacture of spirit falling within the definition of the term 'intoxicant' under section 2 (12)(a),which is issued by the Collector of the district in which the' distillery is situate and is issued in the prescribed form No. 28A. Similarly, the petitioner has also to obtain another licence for the manufacture of denatured spirit from the Collector of the district in the prescribed form No. 25. It is highlighted on behalf of the petitioner that in antithesis to the, ordinary licences, the Act has given special treatment for the grant of exclusive privilege of manufacturing, supplying or selling wholesale or retail any country liquor or intoxicating drug within a specified local area under section 22. The grantee of such exclusive privilege has also to obtain a licence consequent to such grant from the Collector or the Excise Commissioner. But it is pointed out that the grant of this exclusive privilege lies with the State Government and it is conferred and relates to specified local area and is granted after due public notice. By the Amending Act 17 of 1982, of its predecessor Ordinances, the respondent State extended the grant of exclusive privilege to the manufacturing, storing, using, possessing, etc. of denatured spirit as well. By the Amending Act 17 of 1982, of its predecessor Ordinances, the respondent State extended the grant of exclusive privilege to the manufacturing, storing, using, possessing, etc. of denatured spirit as well. It is, however, the case that the licences held by the petitioner earlier were not treated and cannot become, the subject matter of grant of any exclusive privilege under the scheme of the Act. Detailed reference is then made to the appointment of Alcohal Committee by the Central Government and the consequent legislation in its wake, to which reference now seems unnecessary. Reference is then made to section 29 of the Act which authorises the State Government to accept a sum in consideration of the grant of any exclusive privilege under section 22 instead of or in addition to any duty leviable under the Act. A grievance is then made that in the purported exercise of the powers under sections 22 and 29 of the Act, the impugned notification (Annexure- Ii bas chosen to impose a liability of Rs. 2,000/- per month on the petitioner on account of the so-called exclusive privilege in respect of the years 1984 and 1985. This levy is sought to be challenged on a wide varieties of grounds, but primarily on the premise that any levy of exclusive privilege duty is not at all attracted in the case of the petitioner- with regard to, its licences for toe manufacture of spirit and denatured spirit, under section 13 of the Act. 3. In the counter-affidavit filed on behalf of the respondent State, the factual position is not put in serious dispute. The firm stand taken On its behalf is that by virtue of the Bihar Excise (Amendment and Validation) Ordinance, 1980, which ultimately became Act No. 17 of 1982, all licences granted shall be deemed to be exclusive privilege within the meaning of Section 22 of the Act. It is clamed that the licence granted for manufacture under section 13 of the Act is also a privilege grant and comes within the purview of exclusive privilege as visualised in section 22 and, therefore, an exclusive privilege levy can be made thereon. It is the stand that the privilege of allowing the manufacture of intoxicants, liquor, denatured spirit, etc. vests in the Government and the grant of a mere licence will not mean parting with the privilege by the State Government exclusively held by it. It is the stand that the privilege of allowing the manufacture of intoxicants, liquor, denatured spirit, etc. vests in the Government and the grant of a mere licence will not mean parting with the privilege by the State Government exclusively held by it. Basic reliance is on the Amending Act 17 of 1982, as both validating and Warranting the fiction that all licences shall be deemed to be exclusive privilege within the meaning of section 22, prospectively also. 4. In the reply to the counter-affidavit, the writ petitioner's stand is highlighted on the ground that since the spirit manufactured by the petitioner is a denatured one and is unfit for human consumption no such duty or levy can be imposed, It is the case that the licences having been granted to the petitioner under section 13 of the Act, the question of further exclusive privilege under section 22 and 29 cannot arise at all. 5. Now the core of the challenge to the impugned notification (Annexure 1) is that exclusive privilege levy can be imposed only if such an exclusive privilege has been first conferred upon a person under section 22 of the Act by the State Government. It is only thereafter that either the State Government may accept payment of it sum in consideration of the grant of any such exclusive privilege under section 29 or may levy any duty under a licence received in that behalf from the Collector or the Excise Commissioner under sub-section (2) of section 22. Thus the Act does not visualise any blanket imposition of exclusive privilege levy on any and every kind of licence granted, under the Act. In sum, the argument is that without the grant of an exclusive privilege first under section 22, the imposition of any exclusive privilege levy is unwarranted and illegal. 6. The argument aforesaid forthwith poses the question as to what is the true concept of an exclusive privilege. Now the term "exclusive privilege" has not been defined in the exhaustive definition clause of section 2 of the Act. Nor is it a term of art, having a precise legal connotation. However, its true import is well brought out by the plain language of the phraseology employed in the context in which it has been laid in section 22 of the Act. Nor is it a term of art, having a precise legal connotation. However, its true import is well brought out by the plain language of the phraseology employed in the context in which it has been laid in section 22 of the Act. For facility of reference, this may be first quoted (as it now stands amended) : "22. Grant of exclusive privilege of manufacture and sale of country liquor or intoxicating drugs or denatured spirit or any other intoxicant- (1) The State Government may grant to any person, on such conditions and for such period as it may think fit, the exclusive privilege- (a)(i) of manufacturing, or supplying wholesale, or (ii) of manufacturing and supplying whole sale, or (iii) of selling wholesale or retail; or (iv) of manufacturing or supplying whole-sale and, selling retail, or, (v) of manufacturing and supplying wholesale and selling retail any country liquor or intoxicating drug within any specified local area, or (b) of manufacturing, storing, using, possessing, exporting, importing including wholesale or retail sale of liquor which after manufacture is denatured to render it unfit for huam consumption and is thereby termed as denatured spirit, and any other intoxicant : Provided that public notice shall be given of the intention to grant any such exclusive privilege, and that any objection made by any person residing within the area affected shall be considered before an exclusive privilege is granted. (2) No grantee of any privilege under subsection (1) shall exercise the same unless or until he has received a licence in that behalf from the Collector or the Excise Commissioner." 7. In the light of the above, Mr. Chatterjee, the learned counsel for the petitioner, forcefully contended that an exclusive privilege by its' very nature cannot be one of a general and universal application. The very use of the word "privilege assumes that it is first a peculiar or special benefit conferred upon a person. Coupled with the word "exclusive", it follows that such & privilege or benefit has been conferred to the exclusion of another or others. Such an exclusion may be either territorial or, for lack of any other precise terminology, it may be personal to an• individual. As regards the first, the conferment of such privilege would operate in a particular or geographical area of, the State or indeed. Such an exclusion may be either territorial or, for lack of any other precise terminology, it may be personal to an• individual. As regards the first, the conferment of such privilege would operate in a particular or geographical area of, the State or indeed. it may encompass the whole of the State itself, As regards the second, the privilege may be exclusionary of other persons to the effect that they would be prohibited or excluded from entering the same field or area of operation. Consequently, the very notion of exclusive privilege must have some element of either territorial or personal exclusion therein. If there is neither a privilege granted territorially nor exclusion of other persons from I doing the same thing, then this would cut at the very root of the concept of an exclusive privilege in ordinary terminology, if not precisely such a concept would be something akin to a monopoly. As quid pro quo for any monopoly, the State may either accept a payment for the grant of exclusive privilege or impose any duty leviable under the Act on the holder of such an exclusive privilege. In homely metaphor, the two concepts are inter-related, namely, the grant of something akin to monopoly in the first instance and, secondly, the price or payment for the said monopoly, either in the shape of a consolidated sum or by leviable duties under the Act. 8. The aspect of territorial exclusion was highlighted by the learned counsel rightly by relying on clause (a) of sub-section (i) of section 22. It was pointed out that the exclusive privilege of manufacturing, supplying or selling in wholesale or retail is visualised in the context of specified local areas. On plain reading of clause (a) aforesaid, it would appear that the use of the words "within any specified local area" are of general application to all the sub-clauses (i), (ii), (iii), (iv) and (v) of clause (a). Unless the clause is so read, it would not convey any sense and all the clauses (i) to (iv) would be merely left in the limbo. Therefore, it Was rightly highlighted that one basic factor of exclusion under section 22 is territorial or to put it in other words, such exclusive privilege is given "within a specified local area only". Unless the clause is so read, it would not convey any sense and all the clauses (i) to (iv) would be merely left in the limbo. Therefore, it Was rightly highlighted that one basic factor of exclusion under section 22 is territorial or to put it in other words, such exclusive privilege is given "within a specified local area only". This view is buttressed when reference is made to the proviso to Sub-section (1) of section 22 which provides for a public notice before the grant of any exclusive privilege. This requires that objection made by any person residing within the area affected shall be received and considered before exclusive privilege is granted. This provision would equally indicate that exclusive privilege operates within a specified local area and it is the public or the person within that area who is clothed with the right to file objection against the same. Consequently in one for one from the other exclusion of some kind lies at the root of the concept of an exclusive privilege which, in turn, us a pre-condition for levy of duty therefore or a payment of sum in consideration of its grant. 9. That the grant of an exclusive privilege under section 22 is radically different from other licences required for manufacture, sale, etc. sic becomes manifest when the scheme of the statute in Chapter IV of the Act is analysed. Section 13 requires a licence for the manufacture of dealing or possessing excisable articles specified in clauses (a) to (f), thereof. Similarly, sections 14 and 16 require licence to be granted by the Collector for the drawing of Tad in notified area or depositing or keeping intoxicants in warehouse for other places of storage. Section 19 provides for permits for the possession of intoxicants generally, and under section 20, a licence is required for the sale of intoxicants or any portion of hemp plant from which the intoxicating drug can be manufactured or produced. It is after the. Ordinary licensing provisions have been delineated that section 22 spells out the peculiarity with regard to the grant of an exclusive privilege. Secondly such a grant can be made only by the State Government on such condition and for such period as it may think fit. It is after the. Ordinary licensing provisions have been delineated that section 22 spells out the peculiarity with regard to the grant of an exclusive privilege. Secondly such a grant can be made only by the State Government on such condition and for such period as it may think fit. Sub-section (2) of section 22 then provides that no grantee of an exclusive privilege under sub-section (1) will exercise the same until he has received a licence in that behalf from the Collector or the Commissioner. 9A. From the above it is manifest that under section 22 the grant of the exclusive privilege as mentioned under sub-section (1) provides the procedural requirement of a subsequent licence therefor under sub-section (2) by the subordinates of the State Government, namely, the Collector or the Commissioner. This is further evidenced by the prescribed form no. 2 in Schedule IV which has particular reference to a licence to manufacture spirit in distillery issued to the grantee of an exclusive privilege under section 22. Condition 7 in this form is particularly relevant and reads as under. "7. This licence is contingent upon a grant of the exclusive privilege of supply under section 22 of the Bihar and Orissa Excise Act, 1915, and determination of such grant for and reason whatever shall also determine the license." It necessarily follows from the above that the licence required for the grantee is a procedural .requirement for concretising the already existing grant of the exclusive privilege by the State Government. Therefore, reading of sub-section (2) of section 22 with form no. 28 of Schedule IV of the Rules would leave no manner of doubt that the grant of exclusive privilege by the State Government comes first and the procedural licence therefor follows thereafter. This is indeed another significant and meaningful distinction betwixt the issue of ordinary licences under section 13 of the Act and a grant of exclusive privilege under section 22 of the same. 10. What appears to be plain on principle and the language of sections 22 and 29 seems to be equally well buttressed by precedent. This is indeed another significant and meaningful distinction betwixt the issue of ordinary licences under section 13 of the Act and a grant of exclusive privilege under section 22 of the same. 10. What appears to be plain on principle and the language of sections 22 and 29 seems to be equally well buttressed by precedent. In Amar Chandra Chakraborty V. The Colledor of Excise (AIR 1972 Supreme Court 1963), their lordships considering virtually the identical provision of predecessor section 22 of the Bengal Excise Act, observed as under : "Section 22 contemplates the grant of exclusive privilege which amounts to a virtual monopoly for manufacturing, supplying and selling at wholesale or retail country liquor or intoxicating drugs within a specified local area. 11. To conclude on this aspect, the true import of the concept of exclusive privilege under section 22 of the Act envisages a peculiar benefit granted by the State to a person to the exclusion of others in a specified local area. It is something distinct and different from the licences visualised under sections 13, 14, 16 or 20 in Chapter IV and is in no way to be confused with the same. 12. Once it is held as above, it would necessarily follow that exclusive privilege duty cannot be foisted on the existing ordinary licences under section 13 of the Act. The general licences under sections 13, 14, 16 and 20 of the Act form a distinct and separate class from the grant of exclusive privilege and imposition of fees or consolidated payments leviable as such. These two distinct and separate classes can neither coalesce nor be treated as synonymous. As was noticed earlier, the whole scheme of section 22 is that an exclusive privilege is conferred first by the State and then the grantee must be procedurally get the requisite licence thereafter. According to learned counsel, this process cannot be inverted and a general licensees cannot be declared an exclusive privilege grantee and foisted with liability on that premise. 13. Faced with the uphill-and, indeed, the impossible-task of establishing that an ordinary licensee for the manufacture of denatured spirit under section 13 was an exclusive privilege grantee, Mr. C. K. Sinha, learned counsel for the respondents, primarily fell back on the validating Ordinance-the Bihar Excise (Amendment and Validation) Ordinance, 1980 (Bihar Act 17 of 1982). 13. Faced with the uphill-and, indeed, the impossible-task of establishing that an ordinary licensee for the manufacture of denatured spirit under section 13 was an exclusive privilege grantee, Mr. C. K. Sinha, learned counsel for the respondents, primarily fell back on the validating Ordinance-the Bihar Excise (Amendment and Validation) Ordinance, 1980 (Bihar Act 17 of 1982). The basic reliance was on section 3 thereof for submitting that by a legal fiction all licences already granted have been deemed to be exclusive privilege within the meaning of section 22 of the Act, and, consequently, leviable to such duties. The main contention herein is that this legal fiction is applicable not only for the past as a validating clause (on the date of enforcement of the Ordinance) but equally applicable to all existing licences in the future as well. The stand is that by statutory flat all existing licences by a fiction are clothed with the attributes of exclusive privilege under section 22 of the Act and all requirements including the crucial one of public notice regarding the same must equally be deemed to have been satisfied. 13. Since the argument turns entirely on the language and the phraseology of section 3 of the Ordinance and the Act (which are ill pari materia) and with more particularity on the last sentence thereof (underlined for emphasis), it is apt to read the same at the outset: "3. Validation of levy of certain fees. — Notwithstanding anything to the contrary contained in any decree, JUDGMENT : or ORDER :of any Court, the fee fixed, levied and realised or purported to be fixed, levied and realised under sub-section (7) of Section 90 of the Act read with. Section 22 of the Bihar and Orissa Excise Act, 1915 (Bihar and Orissa Act II of 1915), shall be deemed to have been validly fixed, levied and realised as if this Ordinance were in force on the day on which such fee was fixed, levied and realised or purported to be fixed, levied and realised and shall not be called in question merely on the ground that such fee was excessive or disproportionate or unrelated to services rendered and all licenses granted therefor shall be deemed to be exclusive privilege within the meaning of section 22 of the said Act." 14. How to correctly construe the aforesaid provision, it is necessary to view the same in the context of its legislative history. Indeed, it is impossible to appreciate the import of a validating provision without reference as to what it was intended to validate. The legal background travels as far back as 2 decades exactly, It would appear that Messrs Indian Mica and Micanite Industries Ltd. first took up the gauntlet against the levy of duty on denatured spirit by preferring C. W. J. C. No. 887 of 1955 (Indian Mica and Micanite Industries Ltd. v. The State of Bihar). The levy was sought to be challenged on the familiar ground that the same is a tax and not a fee. The writ application was dismissed by a Division Bench of this Court by the JUDGMENT : dated the 14th of October, 1966 holding that the levy was, in essence, a fee and not a tax. The matter was, however, carried to the Final Court and the Constitution Bench in The Indian Mica and Micanite, Industries Ltd. v. The State of Bihar (AIR 1971 Supreme Court 1182) allowed the appeal and set aside the JUDGMENT : of the High Court and remitted the case back for disposal according to Jaw in the light of that decision, whilst permitting the State to place material before the High Court to show that the value of the services rendered by the State were in reasonable co-relationship with the fee charged. In accordance with that direction the matter was then heard by the Division Bench and decided in The Indian Mica and Micanite Industries Ltd. v. The State of Bihar and another (1974 BBCI 698) which allowed the writ petition and set aside the levy imposed with the further direction that the respondent State should refund the amount realised from the writ petitioner. The State Government, however, instead of refunding the amounts in question came out with an Ordinance purporting to validate the imposition in question with retrospective and thereby to render inoperative the decision of the Court on 1974 BBCJ 698 (supra). The writ petitioner therein then challenged the very validity of the Bihar Excise (Amendment and Validation) Second Ordinance, 1977 promulgated by the Governor of Bihar on the 22nd of December, 1977 and the succeeding Ordinances. The writ petitioner therein then challenged the very validity of the Bihar Excise (Amendment and Validation) Second Ordinance, 1977 promulgated by the Governor of Bihar on the 22nd of December, 1977 and the succeeding Ordinances. This argument was, however, repelled in India Mica and Micanite Industries Ltd. V. State of Bihar (AIR 1980 Patna 32) with the following observation : "The inevitable result and consequence that has to follow on these events taking place is that the levy of fee on the purchase of denatured spirit stands fully protected and the petitioner now does not remain entitled any more to claim the advantage and benefits derived under the previous JUDGMENT : of this Court, and thus the petitioner fails in its long drawn struggle for its enuncipation, from the levy of fees in question; perhaps for such an occasion it was said that 'there is no worse torture than the torture of laws'." It is not in dispute that subsequent similar validating ordinances including the Bihar Excise (Amendment and Validation) Ordinance, 1980 (Bihar Ordinance No. 133 of 1980) were passed which ultimately culiminated in Bihar Excise (Amendment and Validation) Act, 1981 (Bihar Act 17/1982). 15. In view of the aforesaid retrospect, a close look at section 3 aforequoted would plainly indicate that it was directed primarily to giving a legal sanction or protection to the exactions already made on denatured spirit, o which were not wan anted by the existing section 22 of the Act and had been struck down in essence by the Final Court itself in The Indian Mica and Micanite Industries Ltd. v. The State of Bihar (AIR 1971 Supreme Court 1182), and in compliance therewith later by the High Court in The Indian Mica and Micanite Industries Ltd. v. The State of Bihar and another ( 1974 BBCJ 698 ). It deserves highlighting that prior to the amendment of section 22 the grant of exclusive privilege was confined to the manufacture and sale of only two things, namely, country liquor and intoxicating drugs. Therefore, exclusive privilege duty could equally operate within the parameters of those limitations and could be levied only on either country liquor or the intoxicating drugs. It could not, therefore, possibly be applied to denatured spirit which was not potable and was unfit for human consumption. The respondent State levied a duty on denatured spirit and attempted to justify it as a fee. It could not, therefore, possibly be applied to denatured spirit which was not potable and was unfit for human consumption. The respondent State levied a duty on denatured spirit and attempted to justify it as a fee. That attempt, as has already been noticed, did not succeed and the exactions were struck down and the amounts so recovered were directed to be refunded. In ORDER :to validate the exactions and to avoid the liability of the refund, successive Ordinances culminating in validating Act 17 of 1982 were promulgated. Thereby section 22 was first amended to enlarge its ambit and to expressly bring denatured spirit and also other intoxicants within its field. The earlier lacuna in the section, which did not encompass denatured spirit or other intoxicantes, was thus sought to be removen and make the same applicable in the past. Retrospectivity was given to the amended section with effect from 1915 and it was declared that the amended section shall be deemed to have always been so substituted. Having thus brought denatured spirit within the concept of exclusive privilege and further giving retrospectivity to the same, the Ordinances and the amending Act then proceeded, by virtue of section 3, to validate the earlier levies and give them the sanction of the law though at the time they were imposed, they did not have the legal clock of protection. Clearly enough, therefore, the preceding Ordinances and the subsequent Act 17 of 1982 were primarily a validating statute with the necessary amendment in section 22 for providing the legal base to override the earlier JUDGMENT :s striking down the levy on denatured spirit. 16. Now, it is more or less common ground before us that both prior to the amendment and subsequent thereto the Act provides for licensing of potable country liquor or intoxicant drugs, other intoxicants and excisable materials. Such licensing is envisaged by sections 13, 14, 16 and 20 of the Act. Admittedly, these sections do not• envisage any concept of an exclusive privilege and are plain and simple provisions for licensing materials which come within the wide ambit of the Act. The core question, therefore, is whether section 3 of the. Such licensing is envisaged by sections 13, 14, 16 and 20 of the Act. Admittedly, these sections do not• envisage any concept of an exclusive privilege and are plain and simple provisions for licensing materials which come within the wide ambit of the Act. The core question, therefore, is whether section 3 of the. amending and validating Act not only validates the past exactions purporting them to be exclusive privilege duty but also warrants the levy of exclusive privilege duty On all and every kind of excisable licenses prospectively in the future as well. 17. One may straightway notice that the learned counsel for the petitioners, Mr. Chatterji kept his sights at a level and fairly took the stand that in the present case that he is laying no challenge to the retrospective operation of the Act validating the levies already made. His primary and frontal challenge was that section 3 cannot have any prospective, application and docs not warrant an exclusive privilege duty on ordinary excise licenses in the future as well in contravention of the provisions of the Act. According to him, the validating section, as is its normal function, was enacted only to sanctify the past exactions (which, were not in accordance with Law) and is in no way intended to warrant any such levy contrary to the letter and spirit of the Act in the future as well. 18. On the other hand, the basic reliance of Mr. C. K. Sinha, the learned counsel for the respondent State, was on section 3 of the validating Act and, indeed, to pinpoint with greater particularity the submission was rested on the last part thereof which bears repetition— "and all licences granted therefor shall be deemed to be exclusive privilege". Resting himself literally on the language aforesaid, Mr. Sinha's main submission is that a legal fiction has been created by the statute which would be applicable not only to the past levies but is equally to all licences under the Act, which must, by virtue of the said fiction, be read as exclusive privilege licence. Further this fiction is to be applied prospectively in the future as well, and, therefore, would warrant the levy of exclusive privilege duty on all kinds of licences granted under the Act. 19. The aforesaid submission, despite some superficial plausibility, is plainly untepable on a closer analysis. Further this fiction is to be applied prospectively in the future as well, and, therefore, would warrant the levy of exclusive privilege duty on all kinds of licences granted under the Act. 19. The aforesaid submission, despite some superficial plausibility, is plainly untepable on a closer analysis. Firstly it seeks to construe the last two lines of section 3 of the validating Act in total isolation of what precedes them and thereafter attempts to construe them with hyper-technicality. It is well settled that not only a section but even a whole statute is to be harmoniously construed. Therefore, the last part of section 3 cannot be divorced and severed from what precedes the same. Nor can it be interpreted as if in a total vacuum by itself. It seems plain that on an over all view of section 3 of the validating Act, it has overridden the earlier decree, JUDGMENT : or ORDER :of the courts and created a fiction that the already exacted levies must, by a fiction, be deemed as exclusive privilege levy and validated the same despite the fact that they may not have been supportable as a tax or as a fee. 20. By now it has become well settled that both the legislature and the judiciary in a way an dominant within their own particular respective fields. Neither of them can or should trench or trespass into an arena reserved for the other. It is not the province of the legislature to render a judicial JUDGMENT : itself or to nullify and override a judicial verdict lawfully rendered within jurisdiction. Similarly, the judiciary cannot usurp for itself the legislative field. However, the legislature undoubtedly has the plenary power of legislating retrospectively as well. Consequently, if it validly changes the law with retrospective effect, it may take away the very foundation or the base upon which JUDGMENT : was squarely rested and in this way neutralise the effect of such judicial determination. This indeed is the only lawful methodology given to a legislature to take away the effect of a lawfully rendered JUDGMENT : if it is so advised for compelling reasons. This indeed is the only lawful methodology given to a legislature to take away the effect of a lawfully rendered JUDGMENT : if it is so advised for compelling reasons. Herein, it therefore, seems plain that in ORDER :to override the earlier JUDGMENT :s quashing the levy on denatured spirit and directing a refund of what has already been collected, it became necessary for the legislature to amend section 22 retrospectively and thereafter to create a fiction for validating the collections already made; In fact, this alone would have given validity to the validating Ordinances and the subsequent valic1ating Act. It is for this reason that section 2 of the validating Act first substituted section 22 and then gave retrospectivity to the same. If it were not to be so done, the very constitutionality of section 3 of the validating Act would itself be in jeopardy, because then it would have amounted to a naked usurption and trespass into the judicial field of overriding the earlier JUDGMENT :s without in any way changing the base of the law on which they were rested. The scheme of sections 2 and 3 of the validating Act is thus in a way a clue in its interpretation. What has been said above is supported by a consistent line of binding precedent and it is unnecessary to multiply the same, and it suffices to quote the observation of the Constitution Bench in Shri Prithvi Cotton Mills Ltd. etc. v. Broach Borough Municipality and others (AIR 1970 Supreme Court 192), which is directly relevant for the validation of a taxing statute and the recoveries made thereunder : "Before we examine Section 3 to find out whether it is effective in its purpose or not we may say a few words about validating statutes in general. When a legislature sets out to validate a tax declared by a Court to be illegally collected under ineffective or au invalid law, the cause for ineffectiveness or invalidity must be removed before validation can be said to take place effectively. The most important condition, of course, is that the legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. The most important condition, of course, is that the legislature must possess the power to impose the tax, for, if it does not, the action must ever remain ineffective and illegal. Granted legislative competence, it is not sufficient to declare merely that the decision of the court shall not bind for that is tantamount to reversing the decision' in exercise of judicial power• which the legislature does not possess or exercise. A Courts's decision must always bind unless the conditions on which it is based are so fundamentally altered that the decision could not have been given in the altered circumstances. Ordinarily, a Court holds a tax to be invalidly imposed because the power to tax is wanting or the statute or the rules or both are invalid or do not sufficiently create the jurisdiction. Validation of a tax so declared illegal may be done only if the grounds of illegality or invalidity are capable of being removed and are ill fact removed and the tax thus made legal. Sometimes this is done by providing for jurisdiction where jurisdiction had not been properly invested before. Sometimes this is done by re-enacting retrospectively a valid and legal taxing provision and then by fiction making the tax already collected to stand under the re-enacted law." 21. Now, once it is held, as it must be, that the deeming fiction in the last part of section 3 of the validating Act was intended to legitimise the otherwise illegal exaction made earlier then afortiori such a fiction has to be confined to the object for which it has been created. A legal fiction is not to be inordinately expanded and enlarged. By its very name 'fiction' it is necessarily a thing which is nut true to the actual state of the thing existing. A legal fiction is a methodology for achieving a particular legal result and in this context it was expressly for giving validity and a legal sanction to retain a levy which originally did not have that cloak of legal protection. Therefore, a fiction generally, and the particular one under examination is not to be extended beyond the area over which it was intended to expose its umbrella of protection. Reference in this connection may be made to the long line of precedent of the Final Court beginning with Bengal Immunity Co. Therefore, a fiction generally, and the particular one under examination is not to be extended beyond the area over which it was intended to expose its umbrella of protection. Reference in this connection may be made to the long line of precedent of the Final Court beginning with Bengal Immunity Co. Ltd v. State of Bihar and others (AIR 1955 Supreme Court 661) wherein it was observed- "The judicial decisions referred to in the dissenting JUDGMENT : in 'State of Travancore-Cochin v. Shanougba Vilas Cashew Nut Factory ( AIR 1953 SC 333 ) (supra) at pp-342 and 343 and the case of-'East End Dwellings Co. Ltd. v. Finsbury Borough Council, 1952 AC 109 at p. 132 clearly indicate that a legal fiction is to be limited to the purpose for which "it was created and should not be extended beyond that legitimate field." The aforesaid view has been reiterated in Commissioner of Income-tax v. Amarchand N. Sharoff (AIR 1963 Supreme Court 1448 at page 1452) and Commissioner of Income-tax v. Vadilal Lallubbai etc. etc. (AIR 1973 Supreme Court 1016 at page 1019-paragraph 12). 22. In line with the above, sections 2 and 3 of the validating Act have to be read together and must be given a harmonious construction. It seems manifest that as regards the present and the future the legislature amended and substituted a new section 22 by considerably widening its scope. The earlier cases in which the levy had been struck down pertained to denatured spirit which was not then within the scope of exclusive privilege of section 22 as it was then confined to country liquor and intoxicating drug only. To cure the lacuna denatured spirit was expressly brought within the ambit of section 22 by amendment and the same was given a retrospective effect. A legal fiction was created by section 3 to bring the earlier levies within the scope of the amended section 22. However, as regards the future, the amended section 22 was to have free play. Construed as a whole, the validating Act would indicate that whilst section 2 by amending section 22 took care of the future, the latter section 3, as its very heading indicated, was only to validate the levy of certain fees and duties exacted in the past only. Construed as a whole, the validating Act would indicate that whilst section 2 by amending section 22 took care of the future, the latter section 3, as its very heading indicated, was only to validate the levy of certain fees and duties exacted in the past only. The purpose of legal fiction in section 3 was thus expressly confined to the past and had no relevance to the future. 23. Mr. C. K. Sinha, learned counsel for the respondents, took up the generic stand that all legislations are deemed to be prospective and, therefore, section 3 must also be necessarily given the same effect. This submission seems to miss the import and purpose of the validating Act in general and of section 3 thereof in particular. As the heading of the Validating Act indicates, it is both an amending and validating provision, with particularity, section 3 is headed as "validity of levy of certain fees" and thus is clearly a validating clause. In pt. Ram Prakash v. Smt. Savitri Devi (AIR 1958 Punjab 87) the Full Bench assumed the matter to be axiomatic by tersely observing as under : "Curative and validating statutes operate on conditions already existing and can have no prospective operation." Again in Black's Law Dictionary at page 1719 it has been pinpointed as follows: "Validating Statute. A statute, purpose of which is to cure past errors and omissions and thus make valid what was invalid, but it grants no indulgence for the correction of future errors." Now, herein there is no manner of doubt and indeed it is common ground that section 3 is nothing but a validating provision, the very concept of validation being to give legal sanction for actions done in the past which at the time they were done were unsupportable in the eye of law. To my mind, the very concept of an alleged validation in fururo is a contradistinction in terms. The law does not, and, indeed, should not envisage first an action against the provisions of the statute in future and then seek to give validity to such illegal thing prospectively. The only permissible and legal course is to amend the law for its future application (whilst validating the past action. The law does not, and, indeed, should not envisage first an action against the provisions of the statute in future and then seek to give validity to such illegal thing prospectively. The only permissible and legal course is to amend the law for its future application (whilst validating the past action. if necessary) and not in the reverse to envisage action violative of the letter and spirit of the statute and yet give validity thereto by deeming fiction to operate in the future as well. 24. In fairi1ess to Mr. C. K. Sinha, one must however, notice is ingenious argument in the alternative that even if the fiction in section 3 of the validating Act did not apply prospectively- in general yet it would continue to at least apply to all licences existing on the date of the enforcement of the First Ordinance and culminating in the validating Act. The stand was that the law had clothed all existing licences with all the attributes of exclusive privilege under section 22 of the Act by virtue of the deeming fiction. Further it was the stand that by the same deeming fiction the express requirement of public notice, etc. in section 22 must be equally deemed to have been satisfied. The aforesaid contention, though it might bring credit to the learned counsel's ingenuity, is nevertheless untenable. No particular rationale could be pointed out as to why the existing licences prior to the date of the 'Ordinance would get foisted perpetually with the attributes of an exclusive privilege in the future despite the express requirement of a renewal of a licence after the appropriate time. The submission seems to lose sight of the specific provision of section 45 of the Act itself in the following terms: "No person to whom any licence has been granted under this Act shall have any claim to the renewal of such licence or save as provided in section 43, any claim to compensation on the determination thereof." From the above, it is manifest that far from there being any implied right to a renewal, section 45 in term negatives any claim of renewal of the licence. In this situation, a renewal of at1 old licence becomes closely akin to a fresh grant. In this situation, a renewal of at1 old licence becomes closely akin to a fresh grant. If once it is conceded, as it was done, in this context that the fiction would not apply to fresh licences after the date of the enforcement of the ordinance, one fails to see why it would continue to stick to an earlier. licence to which there is no right of renewal and which, in essence (barring procedural difficulties) amounts to the grant of a fresh licence. The submission, therefore, must inevitably be rejected. 25. Equally untenable was the stand of the learned counsel for the respondents that the express and mandatory provisions of public notice in section, 22 can virtually be, blown away as if by a side wind on the basis of the deeming fiction. It seems unnecessary to examine the matter on principle because it appears to me as substantially covered by Final Court's precedent, by, way of analogy, in Amar Chandra Chakraborty v. The Collector of Excise, Govt., of Tripura, Agartala and others (AIR 1972 Supreme Court 1863). Therein the identical provision of predecessor section 22 of the Bengal Excise Act, was under consideration and their Lordships in categoric term held as follows; "The public notice is thus a condition precedent to the grant of exclusive, privilege. The underlying policy of Section 22 seems to be not to allow such an important matter to be decided in the secrecy of office without giving it proper publicity. All the conditions of the proposed grant including the duration are expected to be notified. Such notification would serve also to eliminate chance of favouritism, nepotism and corruption. Section 22 seems also, to have its, roots in these deeper considerations. Failure to give such public notice was, therefore, in our opinion, rightly considered by the learned Judicial Commissioner to be fatal to the grant of the exclusive privilege to the appellant. Nothing convincing has been said at the bar against this view. If non-compliance with the proviso to Section 22 (1) is by itself fatal to the grant of exclusive privilege then the impugned ORDER :dated July 6, 1970 is sustainable on this ground alone and the Writ Petition was thus rightly dismissed. In view of the above, it seems difficult, if not impossible, to hold that the mandatory requirements of public notice can be brushed aside on the theory of a deeming fiction. In view of the above, it seems difficult, if not impossible, to hold that the mandatory requirements of public notice can be brushed aside on the theory of a deeming fiction. As was noticed earlier, a fiction is not to be extended beyond its specific purpose and it certainly cannot be so extended to run directly counter to a specific mandatory provision of the statute. 26. To finally conclude on this aspect, it must be held that section 3 of the Bihar Excise (Amendment and Validation) Act does not warrant or authorise the levy of exclusive privilege duty prospectively on all and various kinds of excise licences granted under the Act except the express grants under section 22 thereof. 27. Once it is held as above, it necessarily follows that exclusive privilege duty cannot now be levied on licence under section 13, 14, 15, 16 and 20 of the Act. That is exactly what annexure 1 purports to do. This being unwarranted by law, the said notification is hereby quashed along with any consequential recoveries ORDER :ed thereunder. All the writ petitions are consequently allowed without any ORDER :as to cost. 28. B. P. Jha. J. - I agree.