JUDGMENT A.P. Misra, J. - The petitioner has challenged and sought for quashing the demand notices (Annwxures A-1 to A-4 to the writ petition) for recovery of vend fee from the petitioner on the industrial alchohol for a period from 24-3-1973 to 31-5-1979. There seems long battle almost for more than two decades between the petitioner and the State for the levy and recovery on this industrial alchohol by means of various petitions and notifications issued by the State Government under U.P. Excise Act (hereinafter referred to as the U.P. Act), and finally, setting at rest the issue in controversy in the case of the petitioner in Review Petition by the Hon'ble Supreme Court in Synthetics and Chemicals Ltd. v. State of U.P., (1990) 1 SCC p. 109. However, the present writ petition was filed in this Court after the filing of the aforesaid Review Petition but before the decision of the aforesaid case. The bone of contention by both the sides for sustaining their claims rests on the interpretation of paragraph 89 of the aforesaid case. The petitioner contends his Review Petition being allowed and the provisions of Section 24-A and 24-B of the U.P. Act being held ultra vires the State is not entitled to recover the said amount from the petitioner and the demand notices are liable to be quashed. On the other hand, the State contends that the Supreme Court holds the said provisions ultra vires prospectively. The demand notice served on the petitioner for a period prior to the period of pronouncement or judgment is not liable to be quashed as it would be valid, as the aforesaid provisions would continue to be valid to the date of aforesaid judgment and hence the writ petition is liable to be dismissed. 2. A short history of the litigation between parties is necessary to appreciate the -controversy in the present case, which are hereunder stated. 3. The petitioner No. 1 is a private limited Company manufacturing synthetics and rubber in its factory at Fatehganj in the District of Bareilly. 4. According to the petitioner, the raw material for manufacturing synthetic rubber is denatured ethyl alcohol. The Government of U.P. invited the petitioner to set up this Factory because, molasses which is produced as a by - product in the process of manufacturing sugar in the U.P., was not being utilised for any industrial purpose. 4. According to the petitioner, the raw material for manufacturing synthetic rubber is denatured ethyl alcohol. The Government of U.P. invited the petitioner to set up this Factory because, molasses which is produced as a by - product in the process of manufacturing sugar in the U.P., was not being utilised for any industrial purpose. Molasses is a raw material for the manufacture of Alcohol. The State of U.P. assured the petitioner that it would get this raw-material and no duties would be levied on the supply of the Industrial Alcohol. 5. After the petitioner set up its Factory, it was supplied industrial alcohol under allocation orders issued by the Excise Commissioner of U.P. who is also the power Alcohol Authority for the State, had issued a Notification No. 8788/XIX-133-A dated 28-11-62 declaring that no excise duty would be levied on the industrial alcohol supplied to the petitioner, another Notification No. 2739-E/XIII/5260 dated 30th July, 1963 was issued by the Government of U.P. amending Rule 17(2) of U.P. Excise Rules and providing that the issues of denatured spirit to industries engaged in the manufacture of synthetic rubber would also be exempt from the payment of vend fee. 6. No vend fee was charged from the petitioner for the supply of denatured spirit, pursuant to the aforesaid Notification till 2nd November, 1972. On 3rd November, 1972, the Government of U.P. enacted Act V of 1972 by adding to it S. 24(A) providing that the State may grant exclusive privilege of sale of foreign liquor to a licensee. "Foreign liquor" had been defined by Notification No. 6121-E/XIII-275 (5)-59 dated 30-12-1960 to include denatured spirit. Pursuant to this, the State of U.P. issued Notification No. 8228- E/XIII-330(1)-69 dated 3rd November, 1972 deleting clause 3 of Rule 17(2) thereby withdrawing the exemption granted earlier to the petitioner. Under this the petitioner would have to pay a vend fee of Rs. 1.10 per bulk litre which would be payable in advance before the spirit was issued to it from the distillery. The petitioner challenged the aforesaid Notification by filing Writ Petition No. 8069 of 1972 in this Court. As soon as the State of U.P. issued the impugned Notification on 2nd November, 1972, the petitioner stopped lifting denatured spirit because it was not economically viable to do so. The petitioner challenged the aforesaid Notification by filing Writ Petition No. 8069 of 1972 in this Court. As soon as the State of U.P. issued the impugned Notification on 2nd November, 1972, the petitioner stopped lifting denatured spirit because it was not economically viable to do so. This Court allowed the Writ Petition vide its judgment reported in 1973 All U 732 Synthetics & Chemicals Ltd. v. State of U.P. The Court held that denatured spirit was admittedly not fit for human consumption and, therefore, no excise duty would be levied on it by the State the Court further held that the impugned levy could not be justified as lee as there was no quid pro quo. 7. After the aforesaid judgment, the Excise Commissioner sent a telegram to various Collectors stating/informing them that vend fee should not be charged from the petitioner. Thereafter, the allotment orders were issued in favour of the petitioner allowing it to lift denatured spirit from various distilleries. In the allotment order dated 5-4-73 it was mentioned : "The supply of alcohol will be made in terms of conditions laid down in its office order dated 28-11-62", which in effect was the order granting the exemption to the petitioner. 8. It was further contended that the petitioner would not have lifted the raw material if it was required to pay vend fee. 9. Thereafter, State of U.P. enacted the U.P. Excise (Amendment) (Re-enactment and Validation) Act of 1976, amending, inter alia, Ss. 24-A, 30, 40 and 41 of the U.P. Excise Act, 1910 and introducing S. 24-B. the Statement of Objects and Reasons of the Act shows that the Act was passed to overcome the basis of the judgment of the High Court of Allahabad in Sheopat Rai (which was followed in Synthetics & Chemicals' case, 1973 All U 732). 10. Before Act V of 1976 was passed by the State of U.P., certain persons, who were, holders of Form PL-16 licences for wholesale vending, filed a petition in this Court for a direction to refund the vend fee which had been paid by them for the three years prior to the institution of the Writ Petition. This petition was dismissed vide its judgment dated 6-10-1978 reported in the case of State of U.P. v. M/s. Agrawal Spirit Supply Co., 1978 AU 1112. This petition was dismissed vide its judgment dated 6-10-1978 reported in the case of State of U.P. v. M/s. Agrawal Spirit Supply Co., 1978 AU 1112. The Court held that in the light of S. 24-A, which had been given a retrospective effect, the vend fee could be validly charged from the wholesale venders and they were not entitled to refund. However, according to the petitioner, the Court did not deal with the question relevant to the petitioner, that is, whether or not the State was entitled to levy on impost for the "purchase or possession" of denatured spirit. 11. The Validation Act V of 1976 was enacted on 16-4-76. The Leave to Appeal holds that the State can recover vend fee against the judgment of Synthetics & from manufacturers and dealers but it does Chemicals dated 24-3-1972, 1973 All LJ 732, not hold that it is recoverable also from was granted on 21-7-1976. The Appeal was purchasers who utilise it for manufacture of filed in the Supreme Court as Civil Appeal other products. It only holds that whoever No. 1130 (NL) of 1976 on 4-10-1976. has a permit such as in F.L. 39 must comply Meanwhile relying on the said decision of with the conditions of that permit. Against judgment the petitioner-Company filed this Hon'ble Court certain wholesale dealers this an application for review in the Supreme in denatured spirit filed a writ petition in this Court. The other parties i.e. the dealers and Hon'ble Court, demanding refund of vend fee have also filed petitions for. These petitions having been allowed by a learned single Judge of this Court, the State review of Uttar Pradesh filed letters patent appeals in this High Court against the said decisions. In the meantime, the State enacted the aforesaid U.P. Act No. 5 of 197 for amending the U.P. Excise Act, 1910 and to validate and re-enact U.P. Excise Amendment Act, 1972. Thereupon, the petitioner-Company intervened in these appeals as the very decision, 1973 All LJ 732 (supra), which was in favour of the petitioner-Company was being reconsidered. These appeals were eventually heard and finally decided by the Hon'ble the Chief Justice and Hon'ble Mr. Thereupon, the petitioner-Company intervened in these appeals as the very decision, 1973 All LJ 732 (supra), which was in favour of the petitioner-Company was being reconsidered. These appeals were eventually heard and finally decided by the Hon'ble the Chief Justice and Hon'ble Mr. Justice Yashoda Nandan reported in 1978 All LJ 1054, M/s. Synthetics & Chemicals Ltd. v. State of U.P. This bench upheld the notification dated 3rd November, 1972 judgment, dated 6th October, 1978 and the bench held that the vend fee paid by the distillers was a part of the consideration for the State's Exclusive privilege granted to them in the wholesale vend of the denatured spirit. Against this decision the wholesale dealers filed special appeals before the Supreme Court by special leave. The petitioner-Company also filed an appeal to the Supreme Court by special leave. The petitioner-Company further filed a separate writ petition Writ Petn. No. 718 of 1979, and one of the distillers M/s. Kesar Sugar Works also filed Writ Petitions (Writ Petitions Nos. 4663 and 4664 of 1978) in the Supreme Court. All these matters were heard and were disposed of by a common judgment by the Supreme Court on 19th November, 1979. This judgment is reported in (1980) 2 SCC 441 : AIR 1980 SC 614 . The State of U.P. v. Synthetics and Chemical Ltd. According to the petitioner, this judgment holds that the State can recover vend fee from manufacturers and dealers but it does not hold that it is recoverable also from purchasers who utilise it for manufacture of other products. It only holds that whoever has a permit such as in F.L. 39 must comply with the conditions of that permit. Against this judgment the petitioner-company filed and application for review in the Supreme Court. The other parties i.e. the dealers and manufacturers have also filed petitions for heard by the Constitution Bench of 7 Judges of Hon'ble the Supreme Court along with Writ Petn. No. 182 of 1980 filed by Synthetics & Chemicals under Article 32 of the Constitution challenging the imposition of the vend fee by the State of V.P. under Notification dated 31-5-1979. After the Division Bench judgment in Supreme Court case which was under review, various States including Maharashtra, Tamil Nadu, Anuhra Pradesh etc. No. 182 of 1980 filed by Synthetics & Chemicals under Article 32 of the Constitution challenging the imposition of the vend fee by the State of V.P. under Notification dated 31-5-1979. After the Division Bench judgment in Supreme Court case which was under review, various States including Maharashtra, Tamil Nadu, Anuhra Pradesh etc. had also amended their Excise Acts, Prohibition Acts and imposed vend fees for the grant of so-called exclusive privilege of manufacturing transporting etc. of Industrial Alcohol. Those imposts were also challenged through Writ Petitions filed under Article 32 in the Hon'ble Supreme Court. The Constitution Bench heard these matters also along with the Review Petition and Writ Petition filed by Synthetics & Chemicals Ltd. and disposed of all the matters by a common judgment dated 25-10-1989, reported in, (1990) 1 SCC 109 , Synthetics Chemicals Ltd. v. State of U.P. In the aforesaid judgment, the Hon'ble Supreme Court has dealt in length with the legality/legislative competence of the vend fee. 12. It is relevant to mention here that the Supreme Court while disposing the aforesaid 1990 Synthetics case was considering two matters : Firstly, the vend fee imposed by State of U.P. which had been struck down by this Court, but was upheld by the Supreme Court in State of U.P. v. Synthetics & Chemicals Ltd. and was the subject-matter of consideration in Review Petition No. 202/20 of 1980; Secondly, the vend/privilege fee that had been imposed by the various other States subsequent to and on the basis of the decision of the Division Bench of the Hon'ble Supreme Court in State of U.P. v. Synthetics & Chemicals, AIR 1980 SC 614 . 13. It is relevant to mention here that the Supreme Court allowed the aforesaid Appeal in the case State of U.P. v. Synthetics & Chemicals (supra) on the 19th December, 1979. Thereafter, on the 17th January, 1980, a Review Petition was filed by the petitioner along with some other interested persons. Then on 17th May, 1980, impugned notices for recovery of the vend fee was issued to the petitioner and thus on 30th May, 1980, the present writ petition was filed impugning the said notices on which interim order was also passed by this Court, which was later confirmed on the 6th October, 1980. 14. The State Government in its counter affidavit repudiated all the contentions raised by the petitioner. 14. The State Government in its counter affidavit repudiated all the contentions raised by the petitioner. According to the respondents, the imposition of vend fee on industrial alcohol being upheld in, 1980 Synthetics case and even in the aforesaid review and the various writ petitions in the 1990 Synthetics case, the Supreme Court held the provisions, namely, Ss. 24-A and 24-B of the U.P. Act ultra vires only prospectively hence the said provisions would only be invalid from the date of its judgment i.e. 25th October, 1989, and thus any levy or collection made or to be made for a period prior to this would be valid. Thus, petitioner cannot take benefit even of this judgment for with stalling recovery as against him which admittedly is for a period earlier than this. Secondly, the present writ petition is barred as on the date of filing the present petition, the highest Court of the land in the 1980 Synthetics case finally adjudicated the rights between the parties and thus this Court should not have either entertained the writ petition or granted any interim order as it was also barred by the principle of res judicata. 15. The aforesaid facts reveal long battle for more than two decades between the petitioner and the State for recovery/quashing of the vend fees in the courts of law resulting into various decisions of this Court and the Supreme Court and amendment of enactments. However, in spite of the Supreme Court finally adjudicating the rights between parties, the question about recovery from the petitioner for the period 24th March, 1979, to 31st May, 1979, is the matter under consideration in this writ petition and the contentions of either party finally rests with the interpretation put forward by them to paragraph 89 of 1990 Synthetics case. For ready reference paragraph 89 is reproduced below : "We must, however, observe that these imposts and levies have been imposed by virtue of the decision of this Court in Synthetics & Chemicals Ltd. case. The States as well as the petitioners and manufacturers have adjusted their rights and their position on that basis except in the case of State of Tamil Nadu. In that view of the matter, it would be necessary to state that these provisions are declared to be illegal prospectively. The States as well as the petitioners and manufacturers have adjusted their rights and their position on that basis except in the case of State of Tamil Nadu. In that view of the matter, it would be necessary to state that these provisions are declared to be illegal prospectively. In other words, the respondents States are restrained from enforcing the said levy any further but the respondents will not be liable for any refund and the tax already collected and paid will not be refunded. We prospectively declare these imposts to be illegal and invalid, but do not affect any realisations already made. The writ petitions and the appeals are disposed of accordingly. The review petitions, accordingly, succeed though strictly no grounds as such have been made out but in the view we have taken, the decision in the Synthetics & Chemicals Ltd. case cannot be upheld. In the view we have taken also, it is not necessary to decide or to adjudicate if the levy is valid as to who would be liable, that is to say, the manufacturer or the producer or the dealer." 16. On behalf of the petitioner No. 1 submissions were made by Mr. S.S. Ray and on behalf of petitioner No. 2 by Mr. M.H. Beg. The first contention was that the decisions of the Supreme Court in paragraph 89 is in two parts, the first part dealt with various writ petitions filed before it under Article 32 of the Constitution of India and while disposing of the same it held the imposts to be illegal prospectively, but while disposing of the Review Petition of the petitioner the same was allowed in toto in view of the law declared in the aforesaid writ petition. The decision given in 1980 Synthetics case so far as it related to the petitioner stands set aside. Secondly, the Supreme Court has declared those provisions prospectively illegal in order to adjust equities between the parties since they were enacted subsequent to and by relying the decisions of the Supreme Court in 1980 Synthetics case. Thus, prospective overruling would only cover the transactions or enactments made subsequent to the 1980 Synthetics case. Consequently, the prospective declaration could not cover the case of petitioner which is for a period prior to the period of the decision of the 1980 Synthetics case. Thus, prospective overruling would only cover the transactions or enactments made subsequent to the 1980 Synthetics case. Consequently, the prospective declaration could not cover the case of petitioner which is for a period prior to the period of the decision of the 1980 Synthetics case. Thirdly, the declaration of prospective illegality is only an equitable device to bar refund of tax already paid. It would not cover any impost raised or demanded under the Statute for the past period to be still permitted to be imposts or collected after declaration of such law to be unconstitutional. 17. On the other hand, for the respondent learned Advocate General contended that the adjustments spoken in paragraph 89 refers to the adjustments already made by the parties for a period prior to date of judgment on 25th October, 1989. Thus, recovery yet to be made in further for the levy for a period posterior to this could validly be made by the State, and, secondly, since the Supreme Court declared Ss. 24-A and 24-B of the U.P. Excise Act to be illegal and unconstitutional prospectively the said provisions would continue to be treated to be valid provision till 25th October, 1989, and thus any action taken by the respondents including recovery from the petitioner of the vend fee for a prior period would be valid. Learned Advocate General also raised a preliminary objection that the present writ petition is not maintainable as this was filed in this Court by the petitioner after adjudication of the rights between the parties finally by the highest court of the land in the 1980 Synthetics case and thus the same is also barred by the principles of res judicata and ex parte interim order passed by this Court of 30th May, 1989, and confirmed on 6th October, 1980, was patently illegal as this Court had no jurisdiction to decide any matter between the parties. 18. It is relevant first to dispose of the preliminary objection before entering into the merits of the case. Reliance by the respondents is mainly on the bar created by the principles of res judicata. The res judicata bars the trial of any suit or an issue which has been directly and substantially in issue in a former suit and where such issue has been finally decided by a competent Court. Reliance by the respondents is mainly on the bar created by the principles of res judicata. The res judicata bars the trial of any suit or an issue which has been directly and substantially in issue in a former suit and where such issue has been finally decided by a competent Court. The principle of res judicata has also been made applicable to the writ petitions also. However, we find two distinguishing features in the present case, first, before filing of the present writ petition on 30th May, 1980. the petitioner already filed a Review Petition before the Supreme Court on the 17th January, 1980. Thus, legal and valid proceedings were still pending on the date the present writ petition was filed and the judgment which was sought to have finally decided the matters between the parties was subject to the decision of the said Review petition. A strong reliance was placed by the respondents in the case of Daryao v. State of U.P., AIR 1961 SC 1457 , in a which it was held that the rule of res judicata is not merely a technical rule but is based on public policy and can be invoked against the petitioner even under Article 32 of the Constitution. It further was held by the Court : "If a writ petition filed by a party under Article 226 is considered on the merits as a contested matter and is dismissed the decision thus pronounced would continue to bind the parties unless it is otherwise modified or reversed by appeal or other appropriate proceedings, permissible under the Constitution............ 19. It is not the case of the respondent that the Review was incompetent. It has sanction of Article 172 of the Constitution of India. Thus it would be covered by other appropriate proceedings referred to in that judgment. Thus, it cannot be said the matter as become final between the parties as it as subject to the review. Since after filing of the said review petition notices of demand n the 17th May, 1980, was issued to the petitioner, hence the present writ petition secondly, even if for the period for which demand notices have been issued could be treated to be valid, the petitioner is not liable o pay vend fee as it was neither a manufacturer nor a seller, but only a purchaser. Then the recovery is for the levy of exclusive privilege would not be covered within the definition of excise revenue, hence could not be recovered as arrears of land revenue. 20. All these were matters prima facie which required consideration in the present writ petition and was not a case to reject in limine when the same was filed. Furthermore, the ex parte interim order dated 30th May, 1980 was confirmed on 6th October, 1980, after hearing learned counsel for the parties. If the respondent State was aggrieved it should have taken the matter to the higher court. Thus, we are of opinion that on the facts of this case there was no bar in entertaining the present writ petition. It is also not a case here the principle of res judicata would apply. Thus, the preliminary objection raised on behalf of the State is not sustainable. II 21. Learned Advocate General made reliance in the case of Jai Singh v. Union of India, AIR 1977 SC 898 , wherein a petition had been dismissed for the same relief and it was held that another writ petition could not be filed or entertained. However, in the present case as we have pointed out earlier the present writ petition there was no finality of the issue decided as it was subject to review. 22. Now, on the merits of the contention raised by the learned counsel for the parties the petitioner contends that the provisions of Ss. 24-A and 24-B of the U.P. Excise Act having been found ultra vires as the State lacks competence of imposition of any tax on the industrial alcohol, the said sections would be void from the very inception. Principle of prospective overruling was applied merely to salvage the already concluded transactions between the period of declaration of law in 1980 Synthetics case till the date of judgment of the 1990 Synthetics case. Further, the principle would not cover the situations prior to 1980 Synthetics case. On the other hand, the respondents contended that paragraph 89 was held to be ultra vires only prospectively. Thus, the provisions of Ss. 24-A and 24-B would continue to be treated to be valid till the date of that judgment. 23. Further, the principle would not cover the situations prior to 1980 Synthetics case. On the other hand, the respondents contended that paragraph 89 was held to be ultra vires only prospectively. Thus, the provisions of Ss. 24-A and 24-B would continue to be treated to be valid till the date of that judgment. 23. Before dealing with the language in paragraph 89 it would be relevant to consider the principle of prospective overruling the American doctrine which has been brought in and made applicable to the Indian law through the decision of the Supreme Court in the case Golak Nath v. State of Punjab; AIR 1987 SC 1643 . It would be relevant to refer to some of the views of the courts in the United States in this regard. In the Federal Reporter, Second Series, Volume 43 (2d) at p. 634 American Supreme Court held as follows : "A decision of the Supreme Court of the United States that a State, may not constitutionally impose an inheritance tax under certain circumstances, affects taxes which under the State statute had accrued or been paid at a time when the Supreme Court was of a different opinion, and refund of such taxes may accordingly be sought. A decision which reverses earlier decisions as to the construction or validity of a statute operates retrospectively, except where contracts have been entered into in reliance upon the statute as constructed by the earlier decisions, or where the statute has been declared valid by earlier decisions and contracts have been entered into in reliance upon the statute an d decisions." The New York Court said : The general principle is that a decision of a court of Supreme jurisdiction overruling a former decision is retrospective in its operation, and the effect is not that the former decision is bad law, but that it never was the law. To this the courts have established the exception that where a constitutional or statute law has received a given construction by the Courts of last resort, and contracts have been made and rights acquired under and in accordance with such construction, such contracts may not be invalidated nor vested rights acquired under them impaired by a change of construction made by a subsequent decision ........ it must be held that the law as pronounced by the United States Supreme Court in Fox Film Corporation v. Doyal (supra) retroacts to the date of the overruled decision ..... and that the law of this State is and always was that copyrights granted by the United States may be subject to the New York personal income tax............. ........it may be said that, generally speaking, courts adhering to the rule that a later decision operates retrospectively have created the following exceptions : (1) Where contracts have been entered into in reliance upon a legislative enactment as construed by the earlier decisions. (2) Where legislative enactment has been declared valid by earlier decisions, and contracts have been entered into in reliance upon the statute and decisions.........while the exceptions above noted appear inconsistent, logically, with the Blackstonian doctrine, they are generally considered to constitute a wiser choice than the complete abandonment or complete enforcement of the doctrine. (2) Where legislative enactment has been declared valid by earlier decisions, and contracts have been entered into in reliance upon the statute and decisions.........while the exceptions above noted appear inconsistent, logically, with the Blackstonian doctrine, they are generally considered to constitute a wiser choice than the complete abandonment or complete enforcement of the doctrine. We think the Supreme Court of Wisconsin has wisely chosen the middle course which avoids, as far as it is possible to do so, injustice to parties who have relied upon the earlier rulings of courts, which are later reversed by the same court, and we have no hesitation in adopting that rule as the law of Arisona." Similarly, in the case Victor Linkletter v. Victor G. Walker, 381 US 618; it was held : "In determining whether to give its decision prospective or retrospective effect, a court must weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purpose and effect, and whether retrospective operation will further or retard its operation; this approach is particularly correct with reference to the Fourth Amendment's prohibitions as to unreasonable searches and seizures." Similarly in the book "Precedent and Law" By Julius Stone AC OBL, 1985 edition, on the retrospectivity of judgment unavoidable as a practical matter, the relevant passage is quoted below : "A balanced view suggests that the resort to the device of merely prospective overruling should be seen as an exceptional measure in some range of cases delimited by reference to the severity of injustice of grave policy involved........To assume reliance on that old rule without requiring proof or at least permitting proof to the contrary, for the purpose of limiting retrospectivity on this ground,'said the late Judge Jerome Frank, is not 'an intelligent method of administering justice'. Unless there was reliance, how could there be injustice arising therefrom? ........The case refer to the evils involved in terms of 'unfairness', 'cruelty', `hardship' 'excessive burden' and the like." 24. When a court overrules an earlier judgment the new judgment is always retrospective except where parties have relied on the earlier judgment and entered into contracts and rights have vested. See 43 Fed. Rep 2nd p. 513 : "It is a general rule that the decision of the highest appellate court of a jurisdiction overruling a former decision is retrospective in its operation. See 43 Fed. Rep 2nd p. 513 : "It is a general rule that the decision of the highest appellate court of a jurisdiction overruling a former decision is retrospective in its operation. In effect, it declares that the former decision never was the law....... There is a well settled exception to this general rule that, where contracts have been entered into or rights acquired upon the faith of a decision, they cannot be impaired by a change of construction made by a subsequent decision........... Similarly, see American Jurisprudence, Second Edition, Volume 20, paragraphs 233 and 235 as follows : "A question which has been said to be an old and difficult one is whether the judicial overruling of a precedent has merely prospective, or also retrospective effect. The general rule in civil cases seems to be that unless the overruling decision declares that it shall have only prospective effect, which the Court overruling its prior decision generally has the power to do, the judicial overruling of a precedent has both prospective and retrospective effect. A decision overruling a judicial precedent will be limited to prospective application where to give it retroactive effect would impose undue hardship on persons who have justifiably relied on the overruled precedent....... The judicial overruling of a precedent should not be given retrospective effect where this would interfere with rights specially contractual rights, duly acquired pursuant to the law as it prevailed prior to the overruling decision. But this qualification of the general rule has been held inapplicable where a party acquiring a right by making a contract did not rely on the overruled precedent." A ruling which is purely prospective does not apply even to the parties before the Court and change of law could affect while the card is direct review. See Victor Linketter v. Victor G. Walker 381 US 618 (supra) : "The petitioner further contended that there was no question of adjusting the equities in the case of the petitioner as the petitioner never realised the vend fee from the consumers. Much argument was raised by showing various paragraphs of the counter and rejoinder affidavits of the parties to assert this contention. Much argument was raised by showing various paragraphs of the counter and rejoinder affidavits of the parties to assert this contention. According to the petitioner, it never lifted the industrial alcohol from the distillery till before issuance of the aforesaid notification dated 20th November, 1962 wherein it was declared that no Excise Duty could be levied on the industrial alcohol supplied to the petitioner. After this, the petitioner started, lifting the same till 2nd November, 1972, when from 3rd November, 1972 Act V of 1972 was passed by the U.P. Legislature adding S. 24-A. After this again, the petitioner never lifted the same till the said enactment was held to be ultra vires by the Allahabad High Court in, 1973 All U 732 (supra), in the petitioner's case. After the judgment the Excise Commissioner sent telegram to the various authorities that supply of the industrial alcohol be made to the petitioner in terms of conditions laid down in the aforesaid order dated 28th November, 1962, which in effect was an order granting exemption to the petitioner. Thereafter, till 1980 Synthetics case no demand was raised on the contrary respondents were treating the petitioner being exempted. Thus, there could be no question of petitioner realising the vend fee from its consumers. Further contended that even in fact it never realised the same from the consumers. On behalf of the State learned Advocate General challenged the averments in the writ petition that there was a fixation of price for the commodity in question, and stated that there is no such fixation and in fact it was admitted by the petitioner in the rejoinder affidavit, itself. 25. Lastly, it is also contended on behalf of the State that since the petitioner company registered under the Companies Act, 1966, and has duly audited balance-sheet for the relevant period in question, viz. between 24th March, 1970 to 25th October, 1989, it was the duty of the petitioner to have filed the same to show that the vend fee has not been recovered by him and thus adverse presumption should be drawn against the petitioner under S. 114 of the Indian Evidence Act. See Hira Lal v. Badku Lal, AIR 1953 SC 225 , Metel Boxco v. Their Workmen, AIR 1969 SC 612 . See Hira Lal v. Badku Lal, AIR 1953 SC 225 , Metel Boxco v. Their Workmen, AIR 1969 SC 612 . However, in view of the findings which we have recorded in the present case, it is not necessary to go into the question whether vend fee has been passed over by the petitioner to the consumer. However, we feel, it is not necessary to go into the question about the fixation of price or whether it was passed on to the consumer or not. 26. Now again we advert to the principle of prospective overruling. In the Golak Nath's case ( AIR 1967 SC 1643 ) (supra), it was held : "In India there is no statutory prohibition against the Court refusing to give retrospectivity to the law declared by it." Similarly it was also held : "Our Constitution does not expressly or by necessary, implication speak against the doctrine of prospective overruling." In this case, the Supreme Court laid down the proposition for the application of the aforesaid doctrine. It was held : "As this Court for the first time has been called upon to apply the doctrine evolved in a different country under different circumstances, we would like to move warily in the beginning. We would lay down the following propositions : (1) The doctrine of prospective overruling can be involved only in matters arising under our Constitution : (2) it can be applied only by the highest court of the country, i.e., the Supreme Court as it has the constitutional jurisdiction to declare law a binding on all the Courts in India; (3) the scope of the retrospective operation of the law declared by the Supreme Court superseding its 'earlier decisions' is left to its discretion to be moulded in accordance with the justice of the cause of matter before it," 27. It cannot be doubted that the said doctrine has been applied in the present case also and the Supreme Court while applying the aforesaid third proposition moulded the relief' in accordance with the justice of the cause. This third proposition is applicable only in cases where the Supreme Court supersedes its earlier decision and moulds the relief in order to check the consequential injustice resulting from the declaration of the law illegal retrospectively to those who bona fide acted in accordance with the law declared by the Supreme Court earlier. 28. This third proposition is applicable only in cases where the Supreme Court supersedes its earlier decision and moulds the relief in order to check the consequential injustice resulting from the declaration of the law illegal retrospectively to those who bona fide acted in accordance with the law declared by the Supreme Court earlier. 28. The doctrine of prospective overruling has to be applied only in, the matter arising under the Constitution by the highest court of the country and on account of wrong declaration of law earlier which has been set aside subsequently. This doctrine enables the Court to bring about smooth transaction by correcting its error without disturbing the impact of those errors of the past transactions. The matter is always left to the Court to prescribe the limits of the retrospectivity and thereby it enables to mould the relief to meet the ends of justice. The very purpose behind the application of this doctrine is that even by correcting its own mistakes already concluded transactions be salvaged by the courts in moulding the relief while subsequently overruling its own earlier decision. 29. According to learned Advocate General the language is clear as it held in paragraph 89 : "In that view of the matter, it would be necessary to state that these provisions are declared to be illegal prospectively........We prospectively declare these imposts to be illegal and, invalid, but do not affect any realisations already made." 30. It was on this, it is contended, when once the Supreme Court held the said provisions to be prospectively illegal necessary corollary follows that the provisions continued to be valid for period prior to the date of the judgment. Further, the words "States are restrained from enforcing the said levy any further" only means enforceability levy for a period subsequent to the date of judgment. On the contrary, the petitioner urged that there could be no question and neither that could be the interpretation that the law declared to be invalid on account of legislative competence would be treated to be valid for a period prior to the period of such declaration A law which is still-born could never be validated by the Courts or even by a legislature. In M.P.V. Sunderararamier & Co. In M.P.V. Sunderararamier & Co. v. State of Andhra Pradesh, AIR 1958 SC 468 , a distinction has been drawn between the law made by a legislature not competent to make it and legislation though within competence but violative of constitutional limitations and it was held :- ..........If a law is on a field not within the domain of the Legislature, it is absolutely null and void, and a subsequent cession of that field to the Legislature will not have the effect of breathing life into what was a still- born piece of legislation and a fresh legislation on the subject would be requisite. But if the law is in respect of a matter assigned to the Legislature but its provisions disregard Constitutional prohibitions, though the law would be unenforceable by reason of those prohibitions, when once they are removed, the law will become effective without re-enactment." On behalf of the respondents reliance was placed in Deep Chand v. State of U.P., AIR 1959 SC 648 . In this case the Supreme Court held that in the construction of constitutional provisions dealing with the powers of legislature the distinction cannot be between the transgression of the ambit of entry of the limitations provided by the fundamental rights since in both the cases the legislature equally transgressed its limit of its constitutional powers. For the respondents it was argued that prospective overruling can equally be applied to cases even of legislative competence. It is true in Deep Chand's case the distinction drawn in the earlier case of Sunderararamier & Co. (supra) was not taken into account. For the petitioner reliance was placed in Mattu Lal v. Radhey Lal, AIR 1974 SC 1596 , in which it was held that the judgment of a larger Bench of the Supreme Court has to be followed in case of conflict with its own judgment and thus Sunderararamier's case being of larger number of Judges the conflict if any in Deep Chand's case would have no effect. Further contended that in Golak Nath's case ( AIR 1967 SC 1643 ) (supra) the provisions were held to be ultra vires being in conflict with the fundamental rights not on account of legislative competence, further the provisions were held to be valid as by amendment of the Constitution they were brought under Schedule 9 of the Constitution of India. Further contended that in Golak Nath's case ( AIR 1967 SC 1643 ) (supra) the provisions were held to be ultra vires being in conflict with the fundamental rights not on account of legislative competence, further the provisions were held to be valid as by amendment of the Constitution they were brought under Schedule 9 of the Constitution of India. Thus, it was urged even if respondents' interpretation of the doctrine is to be accepted a law which was still-born as in the present case it cannot be brought into life by that doctrine. 31. However, we feel it is not necessary for us to go into the question about the conflict of decisions between Sunderaramier case (supra) and Deep Chand (supra) for the purpose of adjudicating the question raised in the present case. 32. In 1990 Synthetics case in paragraph 82, the Supreme Court held :- "...........that the relevant provisions of the U.P. Act, A.P. Act, Tamil Nadu Act, Bombay Prohibition Act, as mentioned hereinbefore, are unconstitutional in so far as they purport to levy a tax or charge imposts upon industrial alcohol, namely, alcohol used and unable for industrial purposes." Here, the declaration of law being unconstitutional is without any rider. The opening sentence of paragraph 89 states" that imposts and levies have been imposed by virtue of the decision of this Court in Synthetics & Chemicals Ltd. case," (1980 Synthetics case). Thus, what was being said was about these imposts and levies made in consequence of the said decision. It seems to us as is also revealed that various States made amendments in their Abkari law (Excise) in pursuance to the said decision after 1980 and it was on account of this it was said "the Thus doctrine of prospective overruling would States as well as the petitioners and not cover such cases manufacturers have adjusted their rights and their position on that basis except in the case of State of Tamil Nadu." The language itself clarifies that the adjustment which is spoken is the adjustment on that basis. Finally, this inference is reinforced by the succeeding words "in that view of the matter it would be necessary to state that these provisions are declared to be illegal prospectively." Thus, we come to the conclusion that in paragraph 89, the declaration of the law to be illegal prospectively only means applying the doctrine of prospective overruling thus salvaging the concluded transactions in pursuance to the declaration of law by the Supreme Court in 11980 Synthetics case. 33. When the Supreme Court was applying the principle of prospective overruling it was only moulding the relief to salvage the injustice-between the parties between the period of declaration of law in 1980 till the period of final decision in that case. Since the principle of prospective overruling is only a device to salvage the parties who have acted in pursuance to the declaration of law by the highest court of law. It merely applies for moulding the relief. 34. The application of doctrine of prospective overruling could never be to put a party in any advantageous position subsequent to the later judgment. A prospective overruling is only for saving the past transactions to withstal injustice, hardship, unfairness, cruelty and excess burden etc. Admittedly, in the present case, the law was declared to be valid and constitutional in 1980, but later in 1990 Synthetics case the Supreme Court corrected its own judgment by declaring that the decision in the earlier case cannot be upheld and thus reviewed its own judgment. The question for consideration in paragraph 89 could only be for the adjustment of transactions made during the period between the declaration of law in 1980 till the final declaration in 1990 Synthetics case. For a period prior to 1980 it cannot be urged that an party acted in pursuance to 1980 case. 35. Learned Advocate General made reliance on 39 Modern Law Review (1976), published from Lindon, under the heading "prospective overruling (a new device for English Courts) at p. 543 onwards. The following passage is quoted hereunder : "When a court overrules prospectively, however, it says that in future a distinction will be made between events or disputes arising before the decision and those arising after the date of the decision. The following passage is quoted hereunder : "When a court overrules prospectively, however, it says that in future a distinction will be made between events or disputes arising before the decision and those arising after the date of the decision. Those which take place before will be decided according to the old law, as stated in the overruled precedent; those which take place after, by the new rule of the overruling decision. Two points should be made at this stage. First, the critical date should be the date of the overruling decision. It stands as a watershed dividing, not litigation which comes before the court, but events in the outside world. The rationale of prospective overruling, as I shall show, is most often reliance on the past statement of law. Therefore, what is important is whether the events occurred when the old statement stood unimpeached. If they did, it should not matter that the dispute was not in fact litigated until after the overruling decision. The second point follows from the first. The parties to the suit in which the old decision is overruled will necessarily be litigating a dispute which took place before the overruling case itself. The argument for prospective overruling is strongest. I believe, when these two corollaries are accepted ............." In the said chapter various reasons were referred to for applying the prospective overruling by the American and British Courts. However, this will not help the argument of the learned Advocate General because in the very chapter referred to by him it was further stated : "The presence of no one of these reasons should be a sufficient ground for limiting the retroactivity of an overruling. The Court should weigh in the other pan the injustice which the overruling seeks to remedy." 36. Now the courts in India have not to occilate between various decisions of the foreign courts for application of principle of prospective overruling in view of the decision in the case of Golak Nath ( AIR 1967 SC 1643 ) (supra). 37. Before the Supreme Court in the 1990 Synthetics case there were two sets of cases, one arising under Article 32 of the Constitution where various provisions made subsequent to 1980 case were subject matter of challenge and the other, the review petition seeking review of judgment of 1980 Synthetics case. 37. Before the Supreme Court in the 1990 Synthetics case there were two sets of cases, one arising under Article 32 of the Constitution where various provisions made subsequent to 1980 case were subject matter of challenge and the other, the review petition seeking review of judgment of 1980 Synthetics case. It is significant to refer here, apart from petitioner, filing the review petition it also filed a writ petition under Article 32 of the Constitution of India. It is relevant and not disputed between the parties that the review petition was ordered earlier by the Supreme Court to be listed after decision of the writ petition. It is in that light the earlier part of that paragraph 89 has to be examined. When the Supreme Court declared the provisions to be illegal prospectively then it was decision on the writ petition. In those writ petitions, the question for adjudication for a period earlier than 1980 decision was not in question. Thereafter, review petitions were also taken up and heard simultaneously, the Supreme Court in the later part of the same paragraph (paragraph 89) disposed of the review petition also, wherein it was held that the review petition succeeds. Because of the view taken by the Supreme Court in the writ petitions as aforesaid the decision in Synthetics and Chemicals case cannot be upheld. This admittedly is decision on the review petition separately and the earlier part of that paragraph is only for decision in the writ petition. Thus, it is clear that the review petition was decided and allowed on account of the decision in the w it petition. It has been brought to our notice that even the petitioner's writ petition which challenged the imposts under Article 32 was for a period u subsequent to 1979 was also allowed along with other writ petitions but the amount deposited by the petitioner between the period 1979 till the date of judgment no refund was granted. The Supreme Court after holding aside the earlier judgment (1980 Synthetics case) in toto. Thus, in law the said judgment does not exist and the declaration of law in, Synthetics and Chemicals Ltd. v. State of U.P. (supra) i.e. 1973 All U 732 revives. 38. There is a distinction between reversing or setting aside a judgment and overruling a judgment by declaring a statute to be illegal. Thus, in law the said judgment does not exist and the declaration of law in, Synthetics and Chemicals Ltd. v. State of U.P. (supra) i.e. 1973 All U 732 revives. 38. There is a distinction between reversing or setting aside a judgment and overruling a judgment by declaring a statute to be illegal. Where a statute is declared to be illegal by the Supreme Court it is a declaration of law to be applicable to all concerned and is binding in view of Article 141 of the Constitution of India. When the Supreme Court allows any review it only means setting aside its own earlier judgment which was subject matter of review and it affects only the parties in the review, proceedings. This is in contrast to the judgment declaring a law to be illegal which is in rem. In case where a judgment is reversed or set aside in any appeal or review the final judgment only affects the rights and obligations between the parties in the same proceeding and if there is any judgment of the lower Court the same is revived. AIR 1954 SC 520 ; AIR 1932 Mad 669; AIR 1943 Mad 514 ; AIR 1929 Bom 180 and AIR 1920 Cal 112. Thus, when review petition was allowed the Supreme Court did not find it necessary to decide whether or not the petitioner was liable to pay the levy under Ss. 24A and 24B of the U.P. Act for a period prior to 1980 Synthetics case as it was not treating Ss. 24A and 24B to be valid for that period. 39. Our aforesaid conclusion is further re-enforced by the last three lines of the very paragraph in which it was held : "In the view we have taken also, it is not necessary to decide or to adjudicate if the levy is valid as to who would be liable, that is to say, the manufacturer or the producer or the dealer." 40. If the contention of the respondents be accepted it would mean in a criminal case a prosecution launched earlier on the basis of a statute declared to be invalid prospectively then the prosecution could be continued even subsequent to such meaning could not be given as it would result into a great injustice and doctrine of prospective overruling in our opinion cannot be stretched to bring injustice to the parties. It has been done only to salvage injustice. 41. Similarly, the following words in paragraph 89 are also significant for the aforesaid conclusions : ....In other words, the respondents States are restrained from enforcing the said levy any further." It could only mean that the respondent-State are restrained from taking further proceedings either for imposing or recovery, levy any further. 42. Applying the principle of prospective overruling as enunciated in Golak Nath's case ( AIR 1967 SC 1643 ) (supra) we find the same principle being applied in paragraph 89 of 1990 Synthetics case. Out of the three principles, the first was that it could be invoked only in matters arising under our Constitution. Admittedly, in the present case, it is a question of testing the legislative competence in accordance with entries in VII Schedule of the Constitution of India. The second principle was that it could be applied only by the highest Court of the land. In this case also it has been applied by the highest Court of our country (Supreme Court), and the third was that the scope of retrospective operation of law declared by the Supreme Court superseding its earlier decision is left to its discretion to be moulded in accordance with the justice of the cause. It is under this the Supreme Court merely moulded the relief under paragraph 89 to save the transactions between 1980 and 1990 to rescue the parties from the injustice that may be caused on account of the reversion of the decision of the Supreme Court by itself. No authority including the Court has the right to make what is ultra vires to be valid. The only exception, which is carved out, is the application of the doctrine of prospective overruling. It again does not make the law to be valid for any period, but saves the parties from resultant injustice in equities, which may result without their fault. It is significant, the principle of prospective overruling in a different form finds place in Article 142 of the Constitution of India. Where the highest Court of law, namely, the Supreme Court has been empowered to pass such a decree or order as is necessary for doing complete justice in a case or matter pending before it. This again would only mean granting such relief for meeting the ends of justice. 43. Where the highest Court of law, namely, the Supreme Court has been empowered to pass such a decree or order as is necessary for doing complete justice in a case or matter pending before it. This again would only mean granting such relief for meeting the ends of justice. 43. In this context it is relevant to refer to the case of (1988) 1 SCC 134 (sic) in which a distinction has been very clearly carved out between declaration of law under Article 141 and moulding of relief under Article 142. 44. It is relevant to mention here that charge of law is always given effect while the case is a direct review and in the present case not like other petitioners the present petitioner applied for the review of the matter which was pending in the Supreme Court was a direct review of the very case which was subject matter of Constitution which was finally decided in the 1990 Synthetics case. 45. In the present case, while the review petition was pending the declaration of law in a petition under Article 32 of the Constitution by the Supreme Court in 1990 Synthetics case could be a cause of change in law which can be given effect to in a case which is a direct review. Admittedly, the petitioner's case for review was a direct review and consequently the Supreme Court on the declaration of law earlier in the writ petition applied the change of law in direct review and thereby absolve the petitioner from the liability of any levy. This is an inevitable consequence flowing from the allowing of the review that the petitioners are absolved from the liability to pay any levy in respect of industrial alcohol, which was subject matter for consideration in the review itself. 46. The doctrine of prospective overruling applies only in subsequent cases and not in the same case between the same parties in a further proceeding. Thus, the contention on behalf of the respondents of making the prospective overruling applicable even in review petition cannot be accepted. 47. In view of the aforesaid conclusion the only possible interpretation that could be given to paragraph 89 of 1990 Synthetics case is that the impugned provisions, Ss. Thus, the contention on behalf of the respondents of making the prospective overruling applicable even in review petition cannot be accepted. 47. In view of the aforesaid conclusion the only possible interpretation that could be given to paragraph 89 of 1990 Synthetics case is that the impugned provisions, Ss. 24A and 24B of the U.P. Excise Act so far as it relates to industrial alcohol they beyond are legislative competence of the State Legislature and ultra vires of the Constitution. Secondly, for a period between 1980 and 1990 the parties acting in pursuance to 1980 Synthetics case having adjusted their rights in accordance with the declaration of law by the Supreme Court earlier such transactions and actions are salvaged on the basis of the principle of prospective overruling, and finally, in view of this the Supreme Court allowed the review .petition. In other words 1980 Synthetic case was set aside. 48. In view of our aforesaid findings the demand notices dated 17th May, 1979 (Annexure A-1 to A-4 to the writ petition) raised against the petitioner is not sustainable as the respondents would not be entitled to levy or recover vend fee for a period which is subject matter of consideration in the present writ petition. OM PRAKASH, J.:- I have had the benefit of going through the judgment, drafted by my learned brother A. P. Misra, J. I fully agree with the view taken by him that the respondents are not entitled to levy vend fee for the period from 24-3-1973 to 31-5-1979 on the purchases of industrial alcohol having been made by the petitioner during the aforesaid period. However, I would like to add a few paragraphs to highlight the submissions made by the learned counsel for the petitioner. 50. I need not state the facts as full back- drop of the case has been set out by my learned brother. The controversy revolves round the interpretation of para 89 of the Supreme Court decision, rendered in the case of the petitioner itself : Synthetic's and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109 . 50. I need not state the facts as full back- drop of the case has been set out by my learned brother. The controversy revolves round the interpretation of para 89 of the Supreme Court decision, rendered in the case of the petitioner itself : Synthetic's and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109 . Constitutional validity of S. 24A and S. 24B of the U.P. Excise Act, 1910 whereunder the vend fee was imposed on the purchases of industrial alcohol made by the petitioner was challenged before the Supreme Court and in para 82 of the said decision, the Supreme Court referring to the said provisions held that they are unconstitutional, in so far as these purport to levy a tax or charge imposts upon the industrial alcohol, namely alcohol used and usable for industrial purposes. In pars 88 of the aforesaid decision, the Supreme Court observed that in respect of industrial alcohol, the States are not authorised to impose the impost they have purported to do and that the contentions of the petitioners must succeed and such impositions and imposts must go as being invalid in law, so far as industrial alcohol is concerned. The Supreme Court further clarified in the same paragraph that this will not affect any impost so far as potable alcohol as commonly understood is concerned. It is, therefore, clear that the Supreme Court held that the States have no authority to impose any tax or impost on industrial alcohol and that tax could be levied by the States only on potable alcohol. So this was a clear case of legislative impotency on the part of the State of U.P. so far as the imposition of vend fee on industrial alcohol is concerned. In view of M.P. Sunderaramier and Co. v. State of Andhra Pradesh, AIR 1958 SC 468 which still holds the field, a law enacted by a State or by Parliament without legislative competency is still-born piece of legislation and is absolutely null and void abinitio, but if a law enacted by Parliament or by a State, contravene constitutional prohibitions, that would be unenforceable by reasons of those prohibitions and once they are removed, the law will become effective without re- enactment. So a distinction was made between a law enacted without legislative competency, and a law enacted violating constitutional prohibitions; the former being abinitio void and the latter being unenforceable, so long as the constitutional prohibitions are not removed. 51. The relevant provisions of the U.P. Excise Act, 1910 having been declared unconstitutional by the Supreme Court in Synthetics and Chemicals Ltd. (supra), no vend fee could be levied/recovered by the State. But the learned Advocate General literally interpreting para 89 of the Supreme, the earlier one, then much injustice will be Court decision dated 25-10-1989 urged that the aforesaid provisions of the Act, 1910 were declared ultra vires by the Supreme Court only prospectively and, therefore, the earlier judgment of a Division Bench of the Supreme Court in the case of the petitioner (see The State of U.P. v. Synthetics and Chemicals Ltd., AIR. 1980 SC 614 upholding the validity of the vend fee would remain operative up to 25-10-1989, when later decision overruling the decision dated 17-12-1979, was pronounced. The question is whether the provisions which have been held ultra vires on account of the legislative incompetency by the Supreme Court by the subsequent decision dated 25-10-1989, could be made operative by the Supreme Court till that date. A law enacted without legislative authority being still-born and void ab initio in view of the Sunderaramier and Co. case (supra) which has not been overruled so far, cannot be made operative by the Supreme Court. It is presumed that the Supreme Court would not have gone against the ratio of that decision and, therefore, it has to be held that the Supreme Court never intended to make the provisions of the Act, 1910 which have been declared ultra vires, operative in the preceding period. The law which is ab initio void due to legislative incompetency, cannot be revived even by the legislature, unless appropriate amendment is made in the Constitution, much ,less by the Supreme Court. Therefore, the submission of the learned Advocate General that the relevant provisions of the Act, 1910 remained operative till the date of subsequent decision of the Supreme Court, cannot be ,stained. 52. Then the question is : why did the Supreme Court declare such provisions illegal prospectively in para 89? The submission of the learned counsel for the petitioner is that the doctrine of prospective overruling is based on equity. 52. Then the question is : why did the Supreme Court declare such provisions illegal prospectively in para 89? The submission of the learned counsel for the petitioner is that the doctrine of prospective overruling is based on equity. On the basis of the earlier decision dated 17-12-1979 of the Supreme Court holding that the State legislature is competent to levy vend fee, several other States brought in legislation in this behalf and thereunder numerous parties entered into contracts creating vested interest. If such rights are disturbed by subsequent decision overruling caused. Earlier decision is overruled to remove the illegality and injustice. But if the parties acted upon the decision of the Supreme Court, then several rights are created and if the decision is overruled later, then the rights vested by virtue of the earlier decision would extinguish and that would lead to great injustice to the people who Mona fide acted upon the earlier decision of the Supreme. Court and by virtue of which the rights were vested in them. It is, therefore, to prevent such injustice, the Supreme Court may invoke the doctrine of prospective overruling which is based on equitable considerations. Sri Ray learned counsel for the petitioner argued that when earlier decision dated 17-12-1979 was rendered by the Supreme-Court, the petitioner started to collect vend fee from customers and paid the same to the State and likewise several other States immediately made enactments for granting licence for the exclusive or other privilege. The argument is that immediately after the decision dated 17-12-1979, the petitioner and other people in other States entered into several transactions. If the subsequent decision of the Supreme Court holding relevant provisions of the Act, 1910 ultra vires is taken to the logical end, then the vend fee deposited by the petitioner with the State after the earlier decision of the Supreme Court, would have become refundable to, the petitioner by the State and if such refund is permitted by virtue of the subsequent decision then that might make the petitioner undue rich because the petitioner may or may not refund the said amount to its customers. Undue enrichment of any party to a transaction is abhorred by haw and the Supreme Court never approved that either a citizen or the State should get what he or it is not entitled to. Undue enrichment of any party to a transaction is abhorred by haw and the Supreme Court never approved that either a citizen or the State should get what he or it is not entitled to. So with a view to settling the equities between the parties and not to divest the parties of their vested rights, Sri Ray urged that the Supreme Court held that the provisions would remain illegal prospectively. So prospective overruling is not a rule but an exception and such doctrine is to be pressed into service where overruled decision gave rise to contracts creating vested rights in the parties. In the Federal Reporter, I second Series, Volume 43 on page 634 of which, American Supreme Court held that the general principle is that a decision of supreme jurisdiction overruling a former decision is retrospective in its operation and the effect is not that the former decision is bad law but that it never was the law. It further held that the rule that later decision operates retrospectively is subject to certain exceptions and one of the exceptions is that where a legislative enactment has been declared valid by earlier decisions and contracts have been entered into in reliance upon the statute and the decisions, then the subsequent decision would operate prospectively, otherwise considerable injustice might be caused to the parties who entered into transactions in good faith relying on the earlier decision. Thus there is considerable force in the submission of Sri Ray, counsel for the petitioner that the Supreme Court did not and could not have intended to make the impugned provisions of the Act, 1910 operative during the period next preceding to 25-10-1989 i.e. the date of subsequent decision. The Supreme Court would be loath to make the provisions enacted without legislative competency, operative for any portion of the period. Therefore, only legitimate interpretation that can be made of the observations of the Supreme Court made in pars 89 is that the doctrine of prospective overruling was invoked to settle the equities between the parties which was possible only by putting a fullstop by not permitting any further collection or refund of the impost illegally imposed. The provisions of the Act, 1910 having been declared ultra vires, it is inconceivable that the petitioner remained liable to pay vend fee for the period from 24-3-1973 to 31-5-1979. The provisions of the Act, 1910 having been declared ultra vires, it is inconceivable that the petitioner remained liable to pay vend fee for the period from 24-3-1973 to 31-5-1979. when no legislative authority was vested in the State of U.P. to impose levy on the purchasers of industrial alcohol. ORDER : For the reasons recorded by us, the writ petition is allowed and the impugned demand notices are hereby quashed. Costs on parties.