( 1 ) SRINIVASA Reddy; J aggrieved by the order dated 3rd March, 1999 passed by the learned Single Judge dismissing W. P. No. 2193/99 the petitioner has preferred this appeal challenging the validity and correctness of the order. ( 2 ) THE brief facts of the case are: The demand notice Annexure-K was issued by the Deputy commissioner of Excise, Gulbarga District calling upon the appellant to pay Rs. 10,89,164/- as penalty within 15 days from the date of receipt of the demand notice for failure on the part of the appellant to mature the arrack as required under Rule 14 (3) of the Karnataka excise (Manufacture and Bottling of Arrack) Rules, 1987 (hereinafter called 'the Act' ). Earlier to the demand notice, the Inspector of Excise, gulbarga had served a show-cause notice, produced as Annexure-J to the Writ Petition, on the appellant on 16-12-1995 asking the appellant to show-cause why action should not be taken against him for violating Rule 14 (3) of the Rules. The appellant challenged the demand notice before the learned Single Judge. The learned single Judge dismissed the petition. Hence the appeal. ( 3 ) WE have heard the learned Counsel on both sides. ( 4 ) THIS is the fourth round of litigation between the appellant and the excise department. Three notices earlier issued were quashed by this Court and the matter was remitted to the excise authorities to issue fresh notice after affording opportunity to the petitioner. The notice impugned in the present petition is issued after issuing the show-cause notice to the appellant. Therefore, it cannot be said that the appellant had no opportunity. ( 5 ) THE question that arises for our consideration is: 1) Whether the authority has power to quantify and collect the duty or penalty as claimed in the impugned demand notice? ( 6 ) THE rule whose violation is the subject matter of dispute in the present case is Rule 14 (3) of the Rules, ft reads as under:" (3) Arrack after blending shall be matured in such manner and for such period as may be specified by the Commissioner from time to time. "the circular issued in this connection states in unequivocal terms that:"it is hereby specified that the arrack shai! be matured in wooden vats for a minimum period of 15 days before bottling the same. "the circular issued in this connection states in unequivocal terms that:"it is hereby specified that the arrack shai! be matured in wooden vats for a minimum period of 15 days before bottling the same. "the Circular further clarifies the procedure to be adopted in a situation where for reasons beyond the control of the licencee the arrack cannot be matured for the said period before its bottling. The clarification is to- the following effect:"in case the bottling unit for any reason beyond his control is not able to mature the arrack in the manner and to the extend specified above, the unmatured arraek may be bottled with the prior permission of the officer in-charge of the bottling unit. The penalty for supplying unmatured arrack as specified above would be 20 paise per bulk litre. "the word used in the said circular is 'penalty'. The question is whether the authority has power to levy such penalty or duty or levy, by whatever term it is called, when no provision is made in the statute for such an eventuality. It is the contention of the learned counsel for the appellant that no tax can be imposed by any bye- law or rule or regulation unless the statute under which the subordinate legislation is made, specially authorises the imposition. He relied on the decision in B. C. BANERJEE vs STATE OF M. P. wherein it is held:"the basis of the Statutory power conferred by the statute cannot be transgressed by the rule-making authority. A rule- making authority has no pleanary power It has to act within the limits of the power granted to it. "in that case the Apex Court was seized of notification issued under section 62 of the Madhya Pradesh Exercise Act, 1915 imposing duty on liquor which contractors failed to lift. The Apex Court having found that none of the provisions including Section 62 of the Act empowers levy of tax on excise articles which have not been either imported, exported, transported, manufactured, cultivated or collected, under Section 13 of the said Act, held that no tax can be imposed by any bye-law or rule or regulations unless the statute under which the subordinate legislation is made specially authorises the imposition even if it is assumed that the power to tax can be delegated to the executive. ( 7 ) LET us now examine whether, in the facts and circumstances of the case and in the light of principle laid down in the above case by the Apex Court, the third respondent has the authority of law to levy the penalty as claimed in the impugned notification. ( 8 ) SECTION 71 of the Karnataka Excise Act, 1965 regulates the power of the State Government to make Rules. Sub-clause (d) of clause (ii) of Sub. Section (2) of Section 71 reads: "71. Power to make Rules - (1) The State Government may, by notification and after previous publication, make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing provision, the State Government may make rules - (d) regulating the import, export, transport, manufacture, cultivation, collection possession supply or storage of any intoxicant and may, by such rules, among other matter, - (i ). . . . . . . . . . . . . . . . . . . . ' (ii) declare the process by which spirit shall be denatured and denaturation of spirit ascertained;" though Section 71 does not in specific terms refer to maturing of the arrack, we can safely assume that sub-clause (ii) of Clause (d) excerpted above would govern the process of maturity of the arrack. Thus, Section 71 serves as the basis for Rule 14 (3) which empowers the authority to specify the manner and the period of such maturity before it is bottled. Therefore, it cannot be said that Rule 14 (3) is not without the basis of statutory power. Once it is held that the power to specify the manner and the period is vested statutorily in the Commissioner it would naturally follow that the corollary power to provide an alternative would also vest in the Commissioner. What that corollary power is, is made clear in the clarification given to rule 14 (3) which is excerpted above. If for any reason the arrack could not be matured as stipulated in Rule 14 (3), the officer in-charge of the bottling unit is empowered to allow bottling of the unmatured arrack after levying a penalty of 20 paise per bulk litre. This, certainly, is in the nature of a corollary power and Section 71 of the Act provides the basis for the exercise of this power. This, certainly, is in the nature of a corollary power and Section 71 of the Act provides the basis for the exercise of this power. Exercising of this power would not amount to exercising a plenary power by the concerned authority. Any such exercise cannot be termed as exceeding the limits of the power granted to the authority concerned. Therefore, we hold that the principle laid down in B. C. BANERJEE vs STATE, supra, would not apply to the facts of this case. ( 9 ) ANOTHER reason why we are unable to agree with the contention of the learned Counsel for the appellant is that the bottling of the unmatured arrack permitted under Rule 14 (3) is an option given to the licencee to enable him to continue the supply even if matured arrack is not available. It is an option that he alone could exercise and nobody could force him to do so. Having exercised the option and having thus gained in terms of money and time, saved by bottling the unmatured arrack, it would not be open to the licencee to refuse to pay the penalty or levy or tax or by whatever term it is called. The intention of the legislature appears to be that the reduction in cost or part of it that ensues to the licencee by being permitted to bottle the unmatured arrack must go to the State and not to the licencee. To hold otherwise, would amount to enabling the licencee to make an unconscionable gain. No interpretation of any statute could support such a conclusion. We find no illegality in the demand notice impugned in the Writ Petition. ( 10 ) IN the result, for the reasons stated above, there is no merit in the appeal and it is, accordingly, dismissed. --- *** --- .