JUDGMENT/ORDER V. Ramasubramanian, J. Challenging the Excise Policy Announcements which stipulated the levy of additional fee and penalty, whenever the quantity of liquor manufactured and/or sold, fell short of the minimum guaranteed quota fixed every year for the licensees, three groups of persons, namely manufacturers/distillers/bottlers, wholesalers and retailers have come up with this batch of writ petitions. 2. We have heard Mr. K.D. Sood, learned Senior Counsel appearing for the manufactures/distillers/bottlers, Mr. Sanjeev Bhushan, learned Senior Counsel appearing for the wholesalers, Mr. Satish Kumar, learned Counsel for the retailers and Mr. Ajay Vaidya, learned Senior Additional Advocate General appearing from the respondents-State. 3. It was agreed across the Bar that CWP No. 5232 of 2014 filed by M/s Mohan Meakin Ltd. may be taken as the lead case in so far as the manufacturers/distillers/bottlers are concerned and CWPs Nos. 8047 of 2014 and 2302 of 2015 filed respectively by Aradhana Wines and Paradise Wines may be treated as lead cases in so far as wholesalers are concerned and CWP Nos. 2069 and 2745 of 2015 filed respectively by Abhay Prashar and Amit Wine may be treated as the lead cases in so far as retail vends are concerned. What is under challenge 4. What is challenged in the writ petitioners filed by the manufactures/distillers/bottlers is Condition Nos.10.28(A) and 10.29 of the Excise Policy for 2014-2015, by which an additional fee and a penalty was sought to be levied, if the manufacturers/distillers/bottlers failed (i) to manufacture the quantum of liquor for which they were granted license and (ii) to sell as much quantity of liquor for which they were granted the wholesale license to vend. 5. What is under challenge in the writ petitions filed by the wholesalers, is also the same Condition No. 10.28 (A), but with specific focus on Condition No. 10.28 (A) (8) of the Excise Policy 6. What is challenged by the retailers in these writ petitions is Condition No. 4.3 of the Excise Policy announced in respect of four consecutive years namely, 2013-14, 2014-15, 2015-16 and 2016-17. 7. Therefore, in essence, the challenge by the manufacturers/distillers/bottlers is confined to two conditions contained in the Excise Policy of one particular year, namely 2014-15. Similarly, the challenge by the wholesalers is confined to only one condition contained in the Excise Policy for the year 2014-15. 7. Therefore, in essence, the challenge by the manufacturers/distillers/bottlers is confined to two conditions contained in the Excise Policy of one particular year, namely 2014-15. Similarly, the challenge by the wholesalers is confined to only one condition contained in the Excise Policy for the year 2014-15. However, the challenge by the retailers is to a particular condition contained in the Excise Policy for the four consecutive financial years, namely 2013-14 to 2016-17. 8. Condition No. 4.3 of the Excise Policy which is under challenge in the writ petitions filed by the retailers, had some variations year to year. In other words, Condition No. 4.3 in the Excise Policy of the year 2013-14 was worded differently from Condition No. 4.3 in the Excise Policy of the year 2014-15. The distinction may be better understood if they are presented in a tabular column: Condition No. 4.3 for the year 2013- 2014. Condition No. 4.3 for the year 2014- 2015. The licensee shall be required to lift the cent percent monthly Minimum Guaranteed Quota as fixed for each vend failing which he shall still be liable to pay the licence fee fixed on the basis of the minimum Guarantee Quota. In addition, the licensee shall also be liable to pay additional fee at the rate of Rs. 20/- per proof litre on the un-lifted Quota, which falls short of the Minimum Guaranteed Quota. The Asstt. Excise & Taxation Commissioner/Excise & Taxation Officer I/c of the District shall review the position of lifting of Minimum Guaranteed Quota on monthly basis. If he finds that the licensee has failed to lift the monthly Minimum Guaranteed Quota by the date scheduled for monthly recovery of license fee, he shall proceed to recover the amount of additional fee as mentioned above. Each licensee shall be required to lift the Minimum Guaranteed Quota both of Country Liquor and IMFS as fixed for each vend failing which he shall be liable to pay the license fee fixed on the basis of the Minimum Guaranteed Quota. In addition to the payment of license fee on the unlifted Minimum Guaranteed Quota of the Country liquor, the licensee shall also be liable to pay additional fee at the rate of Rs. 10/- per proof litre on the unlifted Quota of Country liquor which falls short of 100% of the Minimum Guaranteed Quota. In addition to the payment of license fee on the unlifted Minimum Guaranteed Quota of the Country liquor, the licensee shall also be liable to pay additional fee at the rate of Rs. 10/- per proof litre on the unlifted Quota of Country liquor which falls short of 100% of the Minimum Guaranteed Quota. Besides this, the licensee shall also be liable to pay a penalty of Rs. 7/- per proof litre on the unlifted quota of Country Liquor which falls short of the benchmark of 80% of the Minimum Guaranteed Quota. Similarly, the licensee shall also be liable to pay additional fee @ Rs. 56/- per proof litre on the unlifted quota of IMFS which falls short of 100% of the Minimum Guaranteed Quota of IMFS. The licensee shall also be liable to pay a penalty of Rs. 14/- per proof litre on the unlifted quota of IMFS which falls short of the benchmark of 80% of the Minimum Guaranteed Quota. The Asstt. Excise & Taxation Commissioner/Excise & Taxation Officer I/c of the District shall review the position of lifting of Minimum Guaranteed Quota on Quarterly basis. Lifting position for 1st quarter of the year 2014-15 shall be reviewed latest by 30 July, 2014, for the second quarter, it shall be reviewed latest by 30th October, 2014, for the third quarter latest by 15th January, 2015 and lifting position for the fourth quarter shall be reviewed positively by 10th March, 2015. The AETC I/c of the District shall ensure recovery of the additional fee as well as the amount of penalty on unlifted quota which falls short of the quarterly quota of the vend of such defaulting licensees with the prior approval of the Collector (Excise) of the concerned Zone who shall also ensure that the AETC or ETO I/c of the concerned District has recovered the amount of additional fee and penalty as referred to above. In case, the defaulting licensee lifts his unlifted quota of any quarter in subsequent quarters or latest by 10th March, 2015 by attaining 100% benchmark of Annual Minimum Guaranteed Quota for the purpose of additional fee and 80% benchmark of the Annual Minimum Guaranteed Quota for the purpose of penalty, such licensee shall be entitled to set off the amount so deposited previously with prior approval of the Collector (Excise) of the Zone concerned. However, the aforementioned order of the Collector (Excise) concerned shall be subject to the final approval of the Excise and Taxation Commissioner (H.P.). The Collector (Excise) of the Zone concerned shall further ensure submitting the Quarterly Reports of the Zone to the Excise & Taxation Commissioner, Himachal Pradesh District-wise and licensee-wise at least before the end of the Quarter subsequently to the quarter to which the report relates for the first three quarters and for the last quarter on 31st March of the Financial Year itself. 9. The offending portions of Condition Nos. 10.28 (A) and 10.29 of the Excise Policy for the year 2014-15 reads as follows: "10.28(A): Apart from above, some other new provisions are further incorporated in the Excise Announcements for the year 2014-15 inter-alia as hereunder :- (1) Bottling of IMFS and country liquor in Pet bottles (For Export only) shall be allowed irrespective of the fact that it is banned for sale in the state of Himachal Pradesh provided sale thereof is allowed in the concerned importing/Manufacturing State outside H.P. (2) ....... (3) ....... (4) ....... (5) ....... (6) ....... (7) ....... (8) The Per Annum Minimum Sale-limit licensee-wise and category-wise is fixed in respect of L-1B, L-1BB and L-1 wholesale license-holders of the State for the year 2014- 15. As per Annuxure-'F' annexed herewith the details of Annual Benchmarks of Sale-limits in respect of L-1 licenses of Himachal Pradesh for the year 2014-15 have been shown. The Annual Benchmarks of Sale-limits of L-1B and L-1BB licensees have been shown in annexed Annexure-'E' itself at Sr. No. 12 to 27 thereof. The aforesaid Condition of per annum licensee-wise and category-wise Minimum Sale limit in terms of proof liters has been prescribed as per details vide Annexures- E & F. Therefore, the afore-mentioned L-1, L-1B and L-1BB wholesale license-holders, whose Annual Sale-limits is less than 40,000 Pls, above 40,000 Pls but less than 80,000 Pls, above 80,000 Pls but less than 1,20,000 Pls and above 1,20,000 Pls during the year 2014-15, their existing Annual Sale-limits are enhanced upto 30%, 20%, 16% and 6% respectively. However, while enhancing the existing minimum Annual Sale-limits of these various licensees upto 30%, 20%, 16% and 6% referred to above as the case may be, the Excise and Taxation Commissioner, Himachal Pradesh reserves the right to rectify the clerical errors of calculations in allocating the Annual sale targets of such wholesale licensees for the year 2014-15 during the financial year as and when it may be necessary to do so. The Annual Benchmarks of sale limits fixed for the year 2014-15 to such afore-mentioned licensees have been assigned keeping in view the fact that the licensees in the higher range of Annual Sale-limits are not allocated lesser Annual Benchmarks of sale in totality as compared to the licensees falling on the immediate lower range of Annual Sale-limits on the bordering margins and on happening of such an event, the percentage of Annual Sale-limits of the immediate higher range of licensees has been enhanced rationally upto the Annual Benchmarks of Sale-limits level of the licensees falling on the immediate lower borderline range of the licensees. Considering the financial sustainability aspect, a sale of minimum of 40,000 Pls of IMFS by the L-1 category of first range of licensees is made mandatorily applicable. The AETC/ETO I/c of the District shall ensure monitoring of quarterly sale of minimum of the 25% of the per annum sale limit by each category of such licensees as referred to above and in the event of the sale falling short of the above mentioned minimum quantity of IMFS, such licensee shall be liable to pay an additional fee @ Rs. 28/- and a penalty @ Rs. 14/- per proof litre separately on the sale falling short of the above mentioned minimum prescribed sale limit of IMFS. In addition to it, such licensee who has not made abovementioned sale of IMFS as per annum minimum prescribed sale limit for the year 2014-15 shall also not be eligible for renewal of his/her license for the year 2015-16. 14/- per proof litre separately on the sale falling short of the above mentioned minimum prescribed sale limit of IMFS. In addition to it, such licensee who has not made abovementioned sale of IMFS as per annum minimum prescribed sale limit for the year 2014-15 shall also not be eligible for renewal of his/her license for the year 2015-16. The AETC/ETO I/c of the District shall review the position of per annum minimum sale limit of IMFS on quarterly basis sale position of the IMFS for 1st quarter of the year 2014-15 shall be reviewed latest by 30th July, 2014, for the second quarter, it shall be reviewed latest by 30th October, 2014, for 3rd quarter latest by 15th January, 2015 and sale position for the 4th quarter shall be reviewed positively by 10th March, 2015. The AETC/ETO I/c of the District shall ensure recovery of the additional fee as well as the amount of penalty on the quantity of IMFS falling short of the quarterly quota of every such whole sale vend of such defaulting licensee with the prior approval of the Collector (Excise) of the concerned Zone who shall also ensure that the AETC/ETO I/c of the concerned District has recovered the amount of additional fee and penalty as stated hereinabove. In case, the defaulting licensee makes up his short sale of the IMFS of any quarter in subsequent quarters or latest by 10th March, 2015 thereby attaining the Annual Minimum prescribed sale Limit in terms of prescribed proof litres, such licensee shall be entitled to set off the amount so deposited previously on account of additional fee and the penalty with the prior approval of the Collector (Excise) of the concerned Zone. However, the afore-mentioned order of the Collector (Excise) of the Zone concerned shall be subject to the prior approval of the Excise & Taxation Commissioner (H.P.). The Collector (Excise) of the Zone shall further ensure sending of the quarterly reports of the Zone to the Excise & Taxation Commissioner, Himachal Pradesh District-wise and licensee-wise at least before the end of the quarter subsequent to the quarter to which the report relates for the first three quarters and for the last quarter on 31st March of the Financial Year itself. 10.29: Provision regarding Annual Sale Limits of the Manufacturers of Country Liquor and Indian Made Foreign Spirit. 10.29: Provision regarding Annual Sale Limits of the Manufacturers of Country Liquor and Indian Made Foreign Spirit. Each Manufacturer/Bottler of Country liquor and IMFS within the state including L-1B and L-1BB licensees shall be mandatorily required to manufacture/bottle and ensure sale of Minimum Annual Production Capacity Benchmark of the Unit/Plant for the year 2014-15 which has been determined based on formula of Minimum Capacity created and utilized on pro-rata basis of total quota prescribed by the Govt. failing which the Unit/Plant shall be liable to pay penalty keeping in view the capacity utilization percentage of each Country liquor and IMFS manufacturing plant based on the data of 2012-13. The enhanced quota for the successive years 2013-14 and 2014-15 has also been added on the data of 2012-13 for the purpose of determining Annual Production Capacity Utilization for the year 2014-15. The Distillery with Bottling license/Bottling Plant-wise Charts indicating benchmarks of Annual Minimum Production capacity Utilization and Sale-limits targeted to be achieved by each Plant for the year 2014-15 have been prepared and annexed herewith as Annexure-D for H.P. based Country Liquor Plants and Annexure-E for H.P. based IMFS manufacturing Plants. Out of the afore-mentioned Distilleries with Bottling licence/Bottling Plants, those Distilleries with Bottling licence/Bottling Plants whose Annual Capacity Utilisation/sale is less than 10%, 10% to 20%, 20% to 30% and above 30% during the year 2014-15, shall be liable to enhance their existing minimum annual production capacity utilization/sale upto 30%, 20%, 16% and 6% respectively. However, while enhancing the existing minimum annual production capacity utilization/sale-limits of the various licensees upto 30%, 20%, 16% and 6% referred to above as the case may be, the Excise & Taxation Commissioner, Himachal Pradesh reserves the right to rectify the clerical errors of calculation in allocating the Annual Production/Sale targets of such Bottlers/licensees for the year 2014-15 during the financial year as and when it may be necessary to do so. The target percentage of Annual Production capacity Utilisation/Sale-limits to such aforementioned Bottlers/Licensees has been assigned keeping in view the fact that the licensees/Bottlers in the higher range of Annual Production capacity Utilisation/Sale-limits are not allocated lesser targets of percentage in totality as compared to the licensees/Bottlers falling on the immediate lower range of Annual capacity Utilisation/Sale-limits on the bordering margins and on happening of such an event, the percentage of Annual capacity Utilisation/Sale-limits of the immediate higher range of licensees/Bottlers has been enhanced rationally upto the target percentage level the licensees/Bottlers falling on the immediate lower borderline range of the Bottlers/licensees. An additional fee of Rs. 5/- per proof litre and penalty @ Rs. 7/- per proof litre separately in the case of Country liquor manufacturers and an additional fee @ Rs. 28/- per proof litre and penalty @ 14/- per proof litre separately in the case of IMFS manufacturers shall be leviable and imposable on the under produced/unsold quota of Country liquor or IMFS as the case may be which falls short of the afore-mentioned prescribed Annual quantity/percentage of the Minimum Annual Production Capacity Utilization Limit/sale of each such Distillery with Bottling license/Bottling Plant as indicated against the names of each one of them in Annexures 'D' and 'E' annexed herewith and applicable for the year 2014-15. In case, the defaulting licensee manufacturers and sells his under-produced/unsold quota of any quarter in subsequent quarters or latest by 10th March, 2015 thereby attaining the prescribed under-produced/unsold limit of such Minimum Annual Production Capacity Utilisation Limit/sale-limit, such licensee shall be entitled to set off the amount so deposited previously on account of additional fee and the penalty with prior approval of the Collector (Excise) concerned. However, the aforementioned order of the Collector (Excise) concerned shall be subject to prior approval of the Excise and Taxation Commissioner (H.P.). The Collector (Excise) of the Zone concerned shall further ensure submitting the Quarterly Reports of the zone to the Excise & Taxation Commissioner, Himachal Pradesh District-wise and licensee-wise at least before the end of the Quarter subsequent to the quarter to which the report relates for the first three quarters and for the last quarter on 31st March of the Financial Year itself." 10. In a nutshell, the impact of Condition No. 4.3 as it stood for the year 2013-14 was (i) that a licensee should lift whatever is the Monthly Minimum Guaranteed Quota as fixed for him cent percent and (ii) that in case of his failure to lift the Minimum Guaranteed Quota, he will become liable, to pay Rs. 20/- per proof litre on the un-lifted Quota, in addition to the licence fee fixed for the entire quota. 11. Similarly, the impact of Condition No. 4.3 on the retailers for the year 2014-15 and the subsequent years was (i) that each licensee should lift the Minimum Guarantee Quota of both Country Liquor and Indian Made Foreign Spirit as fixed for each vend; (ii) that in case the licensee failed to lift the Minimum Guaranteed Quota of Country Liquor, he will be liable to pay an additional fee at the rate of Rs. 10/- per proof litre on the un-lifted quota of country liquor; (iii) that in case of failure to lift the Minimum Guaranteed Quota and in case the quantity falls below 80% of the Minimum Guaranteed Quota, the licensee will also be liable to pay a penalty of Rs.7/- per proof litre, in the case of Country Liquor; (iv) that in the case of IMFS, the additional fee payable will be Rs. 56/- per proof litre on the un-lifted quota and (v) that in case the lifted quota of IMFS falls below 80% of the Minimum Guaranteed Quota, a penalty of Rs. 14/- per proof litre will also be payable. 12. In so far as the manufactures/distillers/bottlers are concerned, what is actually challenged is a similar provision contained in Condition No. 10.28 (A)(8) and Condition No. 10.29. These conditions in entirety are not under challenge, but only those portions which have a monetary impact upon the petitioners alone are challenged. The impact of the offending portion of these conditions is as follows: (i) that a sale of a Minimum 40,000 proof litres of IMFS by the L-1 category of First Range of Licensees is mandatory; (ii) that in case the sale of IMFS falls short by the Minimum Quota, the Licensee is liable to pay an additional fee of Rs. 28/- and penalty of Rs. 28/- and penalty of Rs. 14/- per proof litre separately on the shortage; (iii) that a licensee who has not made the minimum sale of IMFS, as per the prescribed sale limit for the year 2014-2015 shall not be eligible for renewal of licence for 2015-16; (iv) that each manufacture/bottler of country liquor and IMFS within the State including L.1-BB licensee should mandatorily manufacture/bottle and ensure sale of Minimum L-1 Production Capacity Benchmark of the Unit/Plant; (v) that in case a licensee is guilty of short manufacturing/short selling, he will be liable to pay an additional fee of Rs. 5/- per proof litre with penalty of Rs. 7/- per proof litre, in addition to the licence fee for the entire quota in respect of country liquor; (vi) that in case of failure on the part of the licensee to produce/sell the quota allotted of IMFS he shall pay an addition fee of Rs. 28/- per proof litre and a penalty of Rs. 14/- per proof litre. 13. Thus, what is under challenge in these writ petitions is the levy of (i) additional fee and (ii) penalty, for producing and/or selling, less than the quota allotted to each licensee. 14. Before we proceed further, it must be noted that the grant/renewal of licenses to manufacture/distil/bottle and the license to wholesale or retail vend, of country liquor, foreign liquor etc. is always subject to Policy Announcements made year after year. The Annual Policy so announced will always contain a Clause relating to minimum guaranteed quota and the license fee. The minimum guaranteed quota for the retail vend of country liquor and foreign spirit is fixed at different levels for each of the districts of Himachal Pradesh, depending upon the statistics regarding consumption (it is a pity that a welfare State expects the consumption of liquor to increase year after year). The minimum guaranteed quota and annual license fee fixed for the retail vend of country liquor and foreign spirit for the year 2013- 2014 were as follows: "4.1The Minimum Guaranteed Quota (MGQ) has been fixed at 1,89,20,000 proof litre of Country Liquor and 1,61,61,000 proof litre of Foreign Spirit {Indian Made Foreign Spirit (IMFS) & Imported Foreign Spirit (IFS) both bottled in India (B.I.I) and bottled in original (B.I.O) for the State. No quota has been fixed for Beer, Wine, Cider and RTD Beverages. No quota has been fixed for Beer, Wine, Cider and RTD Beverages. The district-wise allotment of the MGQ is as under:- Name of District Minimum Guaranteed Quota Country Liquor (in Pls) Foreign Spirit (in Pls) 1.Shimla 30,71,917 22,90,156 2.Solan 11,49,523 12,94,450 3. BBN Baddi 11,61,250 10,94,300 4.Sirmour 10,04,054 9,13,800 5.Kinnaur 1,75,246 2,47,848 6.Bilaspur 11,29,588 9,74,800 7.Mandi 21,61,782 15,40,814 8.Kullu 7,43,888 14,25,631 9.Lahaul Area 26,439 66,914 10.Hamirpour 11,83,930 8,50,055 11.Kangra 30,13,134 21,83,000 12.Revenue District Nurpur 9,94,321 8,52,930 13.Una 16,50,810 13,89,335 14.Chamba 14,54,118 10,36,967 Total 1,89,20,000 1,61,61,000 4.2 The License fee on the various kinds of liquor has been fixed for the year 2013-2014 as under:- (i) Country liquor Rs.141/- per proof litre. (ii) Indian Made Foreign Spirit Rs 210/- per proof litre. (iii) Beer Rs.28/- per bulk litre. (iv) Imported Foreign Spirit (B.I.I) Rs.220/- per proof litre. (v) Imported Foreign Spirit (B.I.O.) Rs.240/- per proof litre. (vi) Imported Beer (B.I.O) Rs.35 per bulk litre. (vii) Imported Wine & Cider (B.I.O) Rs.30/- per bulk liltre. (viii) Indian Made Wine & Cider (Imported through S-1B licenses only) Rs.28/- per bulk litre. (ix) RTD Beverages (a) Rs.21/- per bulk litre in the case of alcoholic contents upto 5% (b) Rs.28/- per bulk litre in the case of alcoholic contents exceeding 5% but not exceeding 8%" 15. Similarly the minimum guaranteed quota of country liquor and the foreign spirit and the annual license fee fixed for the year 2014-2015 were as follows: "4.1The Minimum Guaranteed Quota (MGQ) has been fixed at 2,00,80,700 proof litre of Country Liquor and 1,72,13,500 proof litre of Foreign Spirit {Indian Made Foreign Spirit (IMFS) & imported Foreign Spirit (IFS) both bottled in India (B.I.I) and bottled in original (B.I.O) for the State. No quota has been fixed for Beer, Wine, Cider and RTD Beverages. The district-wise allotment of the MGQ for the year 2014-2015 is as under:- Name of District Minimum Guaranteed Quota Country Liquor (in Pls) Foreign Spirit (in Pls) 1.Shimla 31,49,433 23,68,558 2.Solan 12,33,702 13,82,422 3. BBN Baddi 12,02,616 11,29,449 4.Sirmour 10,53,513 9,81,939 5.Kinnaur 1,89,266 2,67,676 6.Bilaspur 11,96,251 10,12,418 7.Mandi 23,34,725 16,64,089 8.Kullu 8,03,399 15,39,681 9.Lahaul Area 28,554 72,267 10.Hamirpour 12,62,047 9,17,842 11.Kangra 32,45,781 23,57,650 12.Revenue District Nurpur 10,70,927 9,21,164 13.Una 17,45,852 14,90,054 14.Chamba 15,64,636 11,08,291 Total 2,00,80,700 1,72,13,500 4.2 The License fee on the various kinds of liquor has been fixed for the year 2014-2015 as under:- (i) Country liquor Rs.147/- per proof litre. (ii) Indian Made Foreign Spirit Rs 219/- per proof litre. (iii) Beer Rs.28/- per bulk litre. (iv) Imported Foreign Spirit (B.I.I) Rs.229/- per proof litre. (v) Imported Foreign Spirit (B.I.O.) Rs.249/- per proof litre. (vi) Imported Beer (B.I.O) Rs.35 per bulk litre. (vii) Imported Wine & Cider (B.I.O) Rs.30/- per bulk liltre. (viii) Indian Made Wine & Cider (Imported through S-1B licenses only) Rs.28/- per bulk litre. (ix) RTD Beverages (a) Rs.21/- per bulk litre in the case of alcoholic contents upto 5% (b) Rs.28/- per bulk litre in the case of alcoholic contents exceeding 5% but not exceeding 8%" 16. The philosophy behind (if it could be called a philosophy) the fixation of minimum guaranteed quota and the levy of additional fee and penalty, for short manufacturing and/or short selling, is that the right to manufacture and sell liquor is the monopoly of the State, which is parted with in favour of the private players upon payment of a fixed fee and the generation of a particular level of revenue for the Government and that having taken a license to enjoy the privilege, any failure on the part of the licensee to manufacture and/or sell the fixed quota hits upon the revenues of the State. 17. Keeping in view the above background in mind, let us now see the grounds on which the manufacturers/distillers/bottlers, the whole sellers and the retailers challenge the impugned policy conditions. Brief grounds of challenge by the 3 categories of persons 18. The challenge to the impugned policy conditions, by the manufacturers, some of whom also hold subsidiary licenses to wholesale vend of liquor, as projected by Mr. K. D. Sood, learned Senior Counsel is on the following grounds: (i) That the levy of additional fee, for the purpose of compensating the State for the loss of revenue in the form of duty of excise, has been repeatedly held by courts to be ultra vires and that therefore, there cannot be any such levy. K. D. Sood, learned Senior Counsel is on the following grounds: (i) That the levy of additional fee, for the purpose of compensating the State for the loss of revenue in the form of duty of excise, has been repeatedly held by courts to be ultra vires and that therefore, there cannot be any such levy. (ii) That the manufacturers as well as the wholesalers are not entitled as per the statutory prescriptions and the license conditions, to sell liquor in the open market, but they are obliged to sell whatever is manufactured and/or held in stock by them only through the retailers and that too upon the production of passes/permits by the retailers and hence the manufacturers and wholesalers cannot be penalized with the levy of additional fee and penalty for not achieving the target when the achievement of target depends upon the performance of somebody else; (iii) That in any case, no penalty can be levied through the Excise Policy issued year after year, especially when there are special provisions for levy of penalty under Chapter-VI of the Himachal Pradesh Excise Act, 2011; and (iv) That the levy of additional fee and penalty upon all the three stake holders, namely the retailers, the wholesalers and the manufacturers, will have in a cascading effect, leading to the collection of three times the revenue. 19. The challenge to the impugned policy conditions is made by the wholesalers, as projected by Mr. Sanjeev Bhushan, learned Senior Counsel, on the following grounds: (i) That neither the Act nor the Rules contemplate any levy for not selling the quota allotted, except under sub-Rule (22) of Rule 35-A of the Himachal Pradesh Liquor License Rules, 1985 and hence the levy of additional fee and penalty is unauthorized; (ii) That insofar as the wholesalers are concerned, the levy of additional fee and penalty was in force only for one year, namely, 2014-2015, but not before or after the said year, though the said levy continued for about four years in respect of the retailers; and (iii) That even the wholesalers are not entitled to sell the entire quantity held by them in stock, in the open market and hence they cannot be penalized for the failure, if any, on the part of the retailers to lift the guaranteed quota. 20. On behalf of the retailers, it was contended by Mr. 20. On behalf of the retailers, it was contended by Mr. Satish Kumar, learned counsel- (i) that the additional fee levied for short selling, partakes the character of excise duty, as it is intended to compensate the State for the loss of revenue in the form of excise duty and hence it is unauthorized by law; (ii) That due to the levy of additional fee and penalty, persons who sell less, end up paying more and hence the policy is arbitrary; (iii) That since the levy of additional fee is for the failure to sell the minimum guaranteed quota, it is also in the nature of a penalty for the breach of license conditions and hence the levy of two penalties is completely arbitrary. (iv) That the levy of additional fee and penalty for short selling was dispensed with in the Excise Policy of the year 2018-2019; and (v) That even while calculating the quantum of sales for the last quarter of the year, the authorities take the sales made only up to the 10th day of March, and not 31st day of March, which has resulted in an arbitrary application of the policy, even if the policy is presumed without admitting, to be valid. Response of the State 21. In response to the aforesaid contentions, it is argued by Mr. Response of the State 21. In response to the aforesaid contentions, it is argued by Mr. Ajay Vaidya, learned Senior Additional Advocate General- (i) that the minimum guaranteed quota for the manufacturers is fixed every year by the State Government, after the approval of the Cabinet, by taking into consideration, the production/sale for the previous year, the optimum capacity utilization of the Unit etc.; (ii) That the State is the exclusive owner of the privilege to trade in liquor and the citizens do not have any fundamental right to carry on the business to manufacture and sell liquor, (iii) That the Himachal Pradesh Excise Act, 2011 prohibits the manufacture, possession and sale of any intoxicant, except under the authority and subject to the terms and conditions of a license granted by the Financial Commissioner; (iv) That Section 27 of the said Act empowers the Government to grant lease to any person, of the right of manufacturing, supplying, selling and of storing for manufacture or sale, liquor, upon payment of "such sum" in addition to excise duty or countervailing duty and hence the levy under challenge is perfectly authorized by Section 27; (v) That the writ petitioners who had accepted the grant/renewal of licenses year after year with their eyes wide open to the Policy Announcements made year after year, are now estopped from challenging one of the conditions contained in the policy for renewal of the license; (vi) That what is charged by way of additional fee and penalty under the impugned policy conditions are not in the nature of excise duty or any other tax, but only a fee for the breach of the conditions of license; (vii) That the petitioners have not challenged the fixation of minimum guaranteed quota but have merely challenged the levy of additional fee and penalty for the failure to lift the minimum guaranteed quota and hence the challenge itself is invalid; (viii) That while duties of excise and countervailing duties of alcoholic liquor for human consumption, if such liquor is manufactured or produced in the State, is covered by Entry 51, the production, manufacture, possession, transport, purchase and sale of intoxicating liquor is covered by Entry 8 in List II of Schedule 7 of the Constitution. (ix) That Condition No. 1.1 of the Policy Announcements for the year 2014-2015 made it very clear that the liquor licenses are granted subject not only to the provisions of the Act and the Rules but also subject to the licensee fulfilling any other obligation, as imposed by the orders of the Excise and Taxation Commissioner; (x) That even the distillery license issued in Form D-2 contains a condition to the effect that the licensee should comply with all the directions of the Excise and Taxation Commissioner and hence the policy conditions cannot be challenged; (xi) That the power to levy additional fee and penalty emanates from Section 27 of the Himachal Pradesh Excise Act, 2011, which empowers the Government to grant lease upon payment of "such sum"; and (xii) That in any case it is not necessary, as held by the Supreme Court in Surinder Singh vs. Central Government and others, (1986) 4 SCC 667 that all the conditions should be traceable only to the Statutory Rules. Distinction between the 3 categories of persons before us 22. Though all the three categories of persons who are before us, namely (i) manufacturers/distillers/bottlers, (ii) wholesalers, and (iii) retailers, are on common ground in their attack to the impugned policy conditions, to a great extent, their right to challenge the impugned policy conditions, vis-a-vis the obligations cast upon them under the licenses, are placed on different turfs. Therefore, we may have to deal with the cases of these three categories of writ petitioners separately, as the prism through which their rights have to be seen, has different colour variations. 23. That these three categories of persons have different sets of rights and obligations arising under the respective licenses and that therefore, their grounds of challenge to the impugned policy conditions have to be tested on different parameters, can be best understood, if we have a look at (i) the different types of licenses contemplated by the Rules, (ii) the different types of fees stipulated by the Rules and (iii) the different types of obligations cast upon them by the Rules. Therefore, let us now take a look at the statutory provisions before we deal with the cases of each of these three categories of persons. A survey of the Statutory provisions: 24. Therefore, let us now take a look at the statutory provisions before we deal with the cases of each of these three categories of persons. A survey of the Statutory provisions: 24. Until the State of Himachal Pradesh became an independent State, the law relating to import, export, transport, manufacture, sale and possession of intoxicating liquor was governed by the Punjab Excise Act, 1914 (Punjab Act 1 of 1914). After the reorganization of the States, the provisions of the same Act were adopted. 25. Section 58(1) of Punjab Act 1 of 1914 confers power upon the State Government to make Rules for carrying out the provisions of the Act. Sub-Section (2) of Section 58 lists out the matters in respect of which provisions may be made in the Rules so issued by the State Government. Some of the matters which may be dealt with by the Rules, are indicated in Clauses (d), (e) and (f), which read as follows: "58. Powers of State Government to make rules.- (1) ................ (2) In particular, and without prejudice to the state generality of the foregoing provisions, the State Government may make rules- (a) .......... (b) .......... (c) .......... (d) regulating the import, export, transport or possession of any intoxicant or excise bottle and the transfer, price or use of any type or description of such bottle. (e) regulating the periods and localities for which, and the persons, or classes of persons, to whom, licenses, permits and passes for the vend by wholesale or by retail of any intoxicant may be granted and regulating the number of such licenses which may be granted in any local area. (f) prescribing the procedure to be followed and the matters to be ascertained before any license is grantee for the retail vend of liquor for consumption on the premises." 26. In exercise of the powers so conferred by Section 58(1) of the Punjab Act 1 of 1914, the Government of Himachal Pradesh issued a set of Rules known as the "Himachal Pradesh Liquor License Rules, 1986". These Rules are divided into several parts. Part-A deals with the classes of licenses and the Authorities empowered to grant and renew licenses and Part-B contains Regulations governing the grant and renewal of licenses. 27. These Rules are divided into several parts. Part-A deals with the classes of licenses and the Authorities empowered to grant and renew licenses and Part-B contains Regulations governing the grant and renewal of licenses. 27. Part-A of these Rules deals with (i) foreign liquor, (ii) country spirit, (iii) denatured spirit, (iv) rectified spirit, (v) country fermented liquor and country spirit prepared from fruits, and (vi) special items. The provisions contained in Part-A of the Rules contemplate the grant of different types of licenses. 28. In the year 2011, the State of Himachal Pradesh got its own enactment known as Himachal Pradesh Excise Act, 2011 (HP Act 33 of 2012). By Section 82 of H.P. Act 33 of 2012, all the provisions of Punjab Act 1 of 1914, except a few, such as Section 58, got repealed. This is perhaps for the reason that the H.P. Liquor License Rules, 1986 were issued in exercise of the powers conferred by Section 58(1) of the Punjab Act 1 of 1914. In fact, Section 80(1) of H.P. Act 33 of 2012 also confers Rule making powers upon the Statement Government. Sub-Section (2) of Section 80 lists out the matters in respect of which the Government was empowered to make Rules. The list of matters included in Section 80(2), is comprehensive. Clause (d) of sub-Section (2) of Section 80 of the H.P. Act 33 of 2012 is more detailed than Clause (d) of Section 58(2) of the Punjab Act 1 of 1914. What was included in Clause (e) of sub-Section (2) of Section 58 of the Punjab Act 1 of 1914, was included as Clause (i) of sub-Section (2) of Section 80 of the H.P. Act 33 of 1914. Clause (j) of sub-Section (2) of Section 80 of the H.P. Act 33 of 2012 is also in pari materia with Clause (f) of Section 58(2) of the Punjab Act 1 of 1914. 29. Despite sub-Section (2) of Section 80 of the H.P. Act 33 of 2012 containing almost identical or an improvised version of the matters covered in sub-Section (2) of Section 58 of the Punjab Act 1 of 1914, the Government did not think fit to issue a new set of Rules under the H.P. Act, but chose to follow the very same set of Rules issued in 1986 in exercise of the powers conferred under the Punjab Act. As a consequence, it is the H.P. Liquor License Rules, 1986 that continue to hold the field till date and these Rules have validity, in view of Section 82 of the H.P. Act which saves Section 58 of the Punjab Act from repeal. Different types of licenses under the Rules: 30. Though the Rules contemplate around 41 types of licenses, some of them relate to denatured spirit, rectified spirit, country fermented liquor etc., about which we are not concerned in this case. The licenses other than the licenses relating to denatured spirit etc., about which we are concerned in this case may fall broadly under the categories of (i) wholesale vend of foreign liquor to various categories of persons; (ii) retail vend of foreign liquor to various categories of persons; (iii) wholesale vend of country spirit held by a distillery or a warehouse; and (iv) retail vend of country spirit to various persons. These are only broad categories and not exhaustive. Other than these types of licenses, Part-A of the Rules also contemplate the grant of licenses for bottling of foreign liquor and bottling of country spirit. 31. Part-B of the Rules contains Rules 2 to 25 that stipulate the procedure for the grant and renewal of licenses. Part-C of the Rules contains five Rules, namely Rule 26 to Rule 30, indicating the different types of fees payable in respect of the licenses under these Rules. 32. Rule 26 of the HP Liquor License Rules, 1986, prescribes three different types of fees payable for the grant of various types of licenses under the Rules. It is of significance and hence, it is extracted as follows: "26. The fees payable in respect of licenses under these rules are of the following kind: (a) fixed fees; (b) assessed fees; (c) fees fixed for allotment or by auction or negotiation or renewal or tender." 33. Though Rule 26 contained in Part-C of the Rules provides for three different types of fees, namely (i) fixed fees, (ii) assessed fees, and (iii) fees for allotment, the other provisions contained in Part-C deal only with the issues relating to fixed fees and assessed fees. While the matters relating to fixed fees are dealt with in Rules 27 to 29, under Part-C(i), the provision relating to assessed fee is dealt with, only in Rule 30 under Part-C(ii). While the matters relating to fixed fees are dealt with in Rules 27 to 29, under Part-C(i), the provision relating to assessed fee is dealt with, only in Rule 30 under Part-C(ii). The third category of fee indicated in Rule 26 namely "fees fixed for allotment" is actually taken to Part-F of the Rules. 34. For the purpose of easy appreciation, but with an element of approximation (if not mistakes), the different types of licenses contemplated by Part-A of the Rules, the category into which they fall and the nature of the fee chargeable in respect of the same, are presented in a tabulation as follows: Types of licenses Category into which they fall Type of fee payable L.1, L.1-A, L.1-B, L.1- BB, L.1-C & L.13 Wholesale vends Fixed fee alone L.2-A, L.9-A, L.10-BB, L.12-AA & L.14-C Certain types of retail vends Fixed fee alone L.3, L.3-A, L.4, L.4-A, L.5, L.5-A, L.6, L.7, L.8, L.9 & L.12-C Different types of retail vends A combination of fixed fee and assessed fee L.12-A & L.12-B Two different types of retail vends Assessed fee only, but together with fixed fee in the case of cinema L.2, L.14, L.14-A & L.14-B Retail vend of foreign liquor to public only and wholesale vend to certain types of licenses, retail vend of country spirit for consumption on and off the premises or at a fair or on a special occasion Allotment, renewal, auction or negotiation 35. Rule 15 of the H.P. Liquor License Rules, 1986 contains a prohibition, prohibiting the holding of certain types of licenses in conjunction with certain other types of licenses. Rule 17 lists out certain types of licenses which may be granted only to the holders of certain other types of licenses. 36. The Himachal Pradesh Liquor License Rules 1986 contains four Schedules, namely Schedules-A to D. Schedule-A lists out the different types of licenses indicated in Rule 27 and the rate of fees per annum fixed in relation thereto. Therefore, by its very nature, Schedule-A gets amended year after year, depending upon the Annual Excise Policy Announcements. 37. Schedule-B to the Rules prescribes the rates of assessed fee payable for licenses which fall under the category of assessed fees. Schedule-C provides the rates of application fee for allotment, renewal fee, basic license fee and annual license fee. 38. Therefore, by its very nature, Schedule-A gets amended year after year, depending upon the Annual Excise Policy Announcements. 37. Schedule-B to the Rules prescribes the rates of assessed fee payable for licenses which fall under the category of assessed fees. Schedule-C provides the rates of application fee for allotment, renewal fee, basic license fee and annual license fee. 38. While some of the fees stipulated in Schedules-A, B and C are fixed, the others are indicated as rates per proof litre or bulk litre. 39. Thus, in essence, the Himachal Pradesh Liquor License Rules, 1986 contemplates different types of fees. The amount of fixed fees payable for different types of licenses included in Rule 27, are stipulated in Schedule-A in a tabular column and this tabular column gets amended year after year. Therefore it appears that the Rules are exhaustive, providing not only for (i) different types of licenses and (ii) different types of fees, but also providing for the actual amount of fees payable for that particular year. With this introduction, of the broad scheme of the Rules, let us now come to the grounds on which the impugned policy conditions are challenged by the three different categories of persons before us. Contentions of the manufacturers/distillers/bottlers: 40. In paragraph 18 above, we have recorded in brief, the contentions of Mr. K.D. Sood, learned Senior Counsel appearing for the manufacturers. His first ground of attack to the impugned policy conditions is that the levy of additional fee, for the purpose of compensating the State for the loss of revenue in the form of duty of excise, has been repeatedly held by courts to be ultra vires and that therefore, there cannot be any levy unauthorized by the Act and the statutory rules. Reliance is placed in this regard by the learned Senior Counsel for the petitioners upon the decision of the Supreme Court in B.C. Banerjee vs. State of M.P., AIR 1971 SC 517 . It was held in the said decision that "no tax can be imposed by any by-law or rule or regulation unless the statute under which the subordinate legislation is made specifically authorizes the imposition, even if it is assumed that the power to tax can be delegated to the executive". It was held in the said decision that "no tax can be imposed by any by-law or rule or regulation unless the statute under which the subordinate legislation is made specifically authorizes the imposition, even if it is assumed that the power to tax can be delegated to the executive". It was further held in the said decision that the basis of the statutory power cannot be transgressed by the rule making authority and that a rule making authority has no plenary power. 41. The decision in B.C. Banerjee was also cited with approval by two larger Benches, one in State of Madhya Pradesh vs. Firm Cappulal, AIR 1976 SC 633 and another in Excise Commissioner U.P. vs. Ram Kumar, AIR 1976 SC 2237 . B.C.Banerjee was followed even in Lilasons Breweries Pvt. Ltd. vs. State of M.P., AIR 1992 SC 1393 . 42. Relying upon the ratio laid down by the Supreme Court in the aforesaid cases, it is contended by Mr. K.D. Sood, learned Senior Counsel for the petitioners that neither any excise duty nor any compensation in a sum equivalent to excise duty can be levied on the unlifted quantity of liquor, wherever a minimum guaranteed quota is fixed. 43. But in our considered view, there is a small distinction between the cases decided by the Supreme Court and the batch of cases on hand. 44. In B.C. Banerjee, a condition was imposed that the successful bidders will have to sell a prescribed minimum quantity of liquor in their shops and that if they failed to take delivery of the prescribed minimum quantity, they will have to pay excise duty on the quantity of liquor that they failed to take delivery. Therefore, having regard to Entry 51 of List-II in the Seventh Schedule to the Constitution and Section 25 of the M.P. Excise Act, 1915 authorizing the levy of excise duty, the Supreme Court came to the conclusion in B.C. Banerjee that no power was conferred upon the rule making authority to levy duty on any article which did not fall within the scope of Section 25. 45. But the statutory provisions contained in the H.P. Excise Act, 2011 makes a clear distinction between excise duty and countervailing duty on the one hand and the consideration payable for the grant of a lease (the appropriate nomenclature is license). 45. But the statutory provisions contained in the H.P. Excise Act, 2011 makes a clear distinction between excise duty and countervailing duty on the one hand and the consideration payable for the grant of a lease (the appropriate nomenclature is license). As in the case of Section 25 of the M.P. Excise Act, 1915, Section 36 of H.P. Excise Act, 2011 also provides for the levy of excise duty or countervailing duty. But Section 38 of the H.P. Excise Act, 2011 makes it clear that the State Government, in addition to or instead of, any excise duty or countervailing duty, may accept a sum in consideration of a lease of any right under Section 27. 46. Section 27(1) also makes it clear that the State Government may lease to any person the right of manufacturing, supplying by wholesale, selling by wholesale or by retail or storing for manufacture or sale, any country liquor, foreign liquor etc. upon payment of such sum, in addition to the excise duty or countervailing duty. It may be useful to extract Section 38 and 27 (1) as follows: "38. Payment for grant of leases. - The State Government may, in addition to or instead of any excise duty or countervailing duty leviable under this Chapter, accept a sum in consideration of the lease of any right under section 27." 27. Grant of leases of manufacture, sale etc. – (1) The State Government may lease to any person, competent to contract, on payment of such sum in addition to excise duty or countervailing duty, on such conditions and for such period, as it may deed fit, the right - (a) of manufacturing or of supplying by wholesale, or of both, or (b) of selling by wholesale or by retail, or (c) of storing for manufacture or sale, any country liquor, foreign liquor, beer, wine spirit within any specified area." 47. Again, Section 28(1) empowers the Financial Commissioner to grant any license, permit or pass upon payment of such fees, if any and subject to such restrictions and on such conditions as the Financial Commissioner may direct. Section 28(1) reads as follows: 28. Again, Section 28(1) empowers the Financial Commissioner to grant any license, permit or pass upon payment of such fees, if any and subject to such restrictions and on such conditions as the Financial Commissioner may direct. Section 28(1) reads as follows: 28. Fees and other conditions for grant of licenses, permits and passes.- (1) Every license, permit or pass, under this Act, shall be granted - (a) on payment of such fees, if any, (b) in such form and containing such particulars, (c) subject to such restrictions and on such conditions, and (d) for such period, as the Financial Commissioner may direct." 48. Thus, there are two distinguishing features between the writ petitions on hand and the decision of the Supreme Court in B.C. Banerjee. They are: (i) what was sought to be collected from the licensees in B.C. Banerjee was the actual excise duty even on the quantity of liquor that was not lifted. But in the case on hand what is sought to be collected is only an additional fee. (ii) In B.C. Banerjee, the Supreme Court took note of Section 27 of the M.P. Excise Act, 1915, which is in pari materia with Section 38 of the H.P. Excise Act, 2011. However, there was no provision in the M.P. Excise Act which is similar to Sections 27(1) and 28(1) of the H.P. Excise Act, 2011. In particular, Section 28(1) contains a delegation of power to the Financial Commissioner to grant a license, permit or pass "on payment of such fees" as the Financial Commissioner may direct. Therefore, the flaw in the legislation of the State of Madhya Pradesh pointed out by the Supreme Court in B.C. Banerjee, does not exist in the H.P. Excise Act, 2011. 49. In fact, B.C. Banerjee was distinguished by a Bench of the same composition in Panna Lal vs. State of Rajasthan, AIR 1975 SC 2008 . The question that was taken up for consideration in Panna Lal was as to whether the excise license granted to a person rendered him liable to pay a stipulated sum mentioned in the license or not. It was contended before the Supreme Court that the amount of money sought to be collected as a guaranteed sum, under the exclusive privilege system, partook the character of excise duty on the unlifted quantity of liquor. It was contended before the Supreme Court that the amount of money sought to be collected as a guaranteed sum, under the exclusive privilege system, partook the character of excise duty on the unlifted quantity of liquor. In support of the said contention, the decision in B.C. Banerjee was relied upon. But in para 33 of the report in Panna Lal, the Supreme Court pointed out that in the Rajasthan's case, the State Government did not impose any excise duty on the licensee and that when a stipulated sum of money is collected for enjoying the privilege, the same did not tantamount to the levy of excise duty. The same distinction as drawn by the Supreme Court in Panna Lal would apply to the case on hand also. 50. It is true that in a later decision in State of M.P. vs. Firm Cappulal, the Supreme Court identified that there could be two different situations, one of the type that arose in B.C. Banerjee and another of the type that arose in Panna Lal. Firm Cappulal was found on facts, by the Supreme Court to be of B.C. Banerjee type. Therefore, Firm Cappulal may not be of any assistance to the petitioners. 51. Since B.C. Banerjee was not distinguished in Firm Cappulal but was held only to be of a different type, the question again came up for consideration in Excise Commissioner vs. Ram Kumar, cited supra. But in Ram Kumar, what was sought to be levied was "still head duty" on the quota allotted and a compensation equal to the still head duty, to the extent of shortfall. Thus, Ram Kumar was actually a case of levy of duty and hence the Court distinguished the decision in Panna Lal and held that the issue is settled in B.C. Banerjee. After finding on facts that what was levied was a duty disguised as compensation, the Court held in Ram Kumar that the same was impermissible in law as it represented in reality, a demand for excise duty on the unlifted quantity of liquor. In para 18 of the report, what was opined by the Supreme Court in Ram Kumar was "that the demand made by the State, though disguised as compensation, was in reality a demand for excise duty on the unlifted quantity of liquor which is not authorized by the provisions of the Act". 52. In para 18 of the report, what was opined by the Supreme Court in Ram Kumar was "that the demand made by the State, though disguised as compensation, was in reality a demand for excise duty on the unlifted quantity of liquor which is not authorized by the provisions of the Act". 52. Therefore, right from B.C. Banerjee, the Court was troubled only with the lack of authorization under the provisions of the Act. Hence before applying the line of decisions starting from B.C. Banerjee, we must see if there was authorization or not, under the provisions of the Act. As we have pointed out, there was authorization under Section 27(1) and particularly upon the Financial Commissioner under Section 28(1). Therefore, the line of decisions starting from B.C. Banerjee cannot be used by the petitioners as a magic wand to produce the desired result. 53. The second contention of Mr. K.D. Sood, learned Senior Counsel for the manufacturers/distillers/bottlers is that the manufacturers as well as wholesalers are not entitled as per the statutory prescriptions and the license conditions to sell liquor in the open market. They are supposed to sell whatever is manufactured or held in stock, only to the retailers and that too upon the production of passes/permits by the retailers. In such circumstances, it is his contention that the manufacturers and wholesalers cannot be penalized for not selling the minimum guaranteed quota. 54. It is not in dispute on the side of the respondents that the manufacturers and wholesalers cannot take the liquor manufactured or held in stock by them, to the open market and vend the same. It is only through retailers and that too upon production of passes/permits that whatever is produced or held in stock can be sold. Therefore, the question arises is as to whether the manufacturers and wholesalers can be imposed with consequences of breach of the license conditions to manufacture and/or sell the minimum guaranteed quota. 55. We think that in this regard, the State is in a catch-22 situation. They have to either fall or stand on the strength of their own plea that what is sought to be levied by way of additional fee and penalty is not in the nature of excise duty. 56. 55. We think that in this regard, the State is in a catch-22 situation. They have to either fall or stand on the strength of their own plea that what is sought to be levied by way of additional fee and penalty is not in the nature of excise duty. 56. The law is well settled that if something is payable by way of tax or duty, the liability to pay would not depend upon the performance or non-performance of the assessee. But if something is payable only in terms of the contract, which in these cases have taken the shape of licenses, then the contractual obligation so imposed upon the assessee can certainly be tested on the parameters of performance, failure or breach etc. 57. To escape the wrath of B.C. Banerjee, the respondents have taken a stand in these cases that additional fee and penalty do not partake the character of a tax or duty and that they fall only in the realm of contractual condition. If it is so, an obligation for the breach of a contract cannot be imposed upon a person who cannot be held responsible for the breach of contract, especially when the fulfillment of the contractual conditions depends upon what the State does and what another set of licensees namely the retailers, do. 58. By imposing a restriction upon the manufacturers and wholesalers from selling their product directly in the open market, through statutory prescriptions, the State has tied their hands. To say thereafter that these licensees, whose hands were tied by the State, failed to swim the English Channel, making them liable for certain consequences, would be completely arbitrary. Therefore, the second contention raised by the learned Senior Counsel for the petitioners is well founded. 59. The third contention of the learned Senior Counsel for the petitioners is that no penalty can be levied through Annual Policy Announcements, de hors the provisions of Chapter-VI of the H.P. Excise Act, 2011. 60. It is true that Chapter-VI of the H.P. Act 2011 contains provisions for various types of penalties. Section 39 deals with penalty for unlawful production, manufacture, possession, import, export, transport, sale etc. Section 40 speaks about penalty for rendering or attempting to render denatured spirit fit for human consumption. Section 41 provides for penalty for mixing noxious substance with liquor. It is true that Chapter-VI of the H.P. Act 2011 contains provisions for various types of penalties. Section 39 deals with penalty for unlawful production, manufacture, possession, import, export, transport, sale etc. Section 40 speaks about penalty for rendering or attempting to render denatured spirit fit for human consumption. Section 41 provides for penalty for mixing noxious substance with liquor. Section 42 speaks about compensation for death or injury caused to any person due to consumption of liquor. Section 43 deals with penalty for certain acts by licensee or his servants. Section 44 deals with penalty for fraud by licensed manufacturer or vendor, Section 45 stipulates penalty for consumption of liquor in a chemist's shop, Section 46 prescribes penalty for consumption of liquor in public places and Section 47 speaks about penalty for offences not otherwise provided for. Section 49 provides for enhanced punishment for certain offences after previous conviction. 61. But most of the penalties statutorily prescribed under Chapter-VI, are punishable with imprisonment. It is only Sections 43 and 47 that do not provide for imprisonment. Therefore, it is clear that the scope and ambit of Chapter-VI of the Act is completely different from the penalty contemplated for breach of license conditions. Though Section 43(d) also provides only for a penalty of imposition of fine, in case the holder of a license willfully does or omits to do anything in breach of any of the conditions of licenses, thereby making it possible for the respondents to bring the case of the petitioners even under the said provision, we do not think that the penalty contemplated by the Annual Policy Announcements is just the same as the penalty contemplated under Section 43(d). This is for the reason that under Section 55(1)(b), no Judicial Magistrate shall take cognizance of an offence punishable under Section 43 except on a complaint of the Collector or Excise Officer. Therefore, the failure to lift the minimum guaranteed quota, cannot be brought within the purview of Section 43(d). Hence, the contention that the penalty contemplated by the impugned policy conditions, de hors the provisions of the Chapter-VI of the Act, is ultra vires, cannot be accepted, as they operate in two different fields. 62. The last contention of Mr. Therefore, the failure to lift the minimum guaranteed quota, cannot be brought within the purview of Section 43(d). Hence, the contention that the penalty contemplated by the impugned policy conditions, de hors the provisions of the Chapter-VI of the Act, is ultra vires, cannot be accepted, as they operate in two different fields. 62. The last contention of Mr. K.D. Sood, learned Senior Counsel for the manufacturers is that the levy of additional fee and penalty upon all the three stake-holders, namely the retailers, wholesalers and the manufacturers will have a cascading effect leading to the collection of three times the revenue and hence it is unreasonable and arbitrary. 63. There can be no quarrel about the fact that a taxing Statute cannot be tested on the ground of reasonableness. But the respondents have taken a positive stand that the additional fee and penalty do not partake the character of a tax or excise duty. Therefore, the contention whether what is sought to be levied is reasonable or not, can be tested. 64. As we have pointed out earlier, the manufacturers/distillers/bottlers as well as the wholesalers are aggrieved only by condition Nos.10.28A and 10.29 of the Excise Policy for only one year, namely 2014-2015. But insofar as the retailers are concerned, they are aggrieved by a similar condition contained in condition No. 4.3 of the Excise Policy for four consecutive years, namely 2013-2014 to 2016-2017. Therefore, the argument of the learned Senior Counsel for the manufacturers in this regard, is available only in respect of one year namely 2014-15 and not the other years. 65. In simple terms, for the year 2014-2015, all the three categories of persons, namely manufacturers, wholesalers and retailers were made liable to pay additional fee and penalty on the quantum of liquor that they failed to lift as per the minimum guaranteed quota. This, according to the learned Senior Counsel for the manufacturers is unreasonable, since the same resulted in claiming the same amount from three different parties. 66. The correctness and validity of the aforesaid contention can be tested only by some mathematical calculation. Therefore, let us take one physical example of one manufacturer, namely Mohan Meakin Ltd.. 67. In Annexure-E of the Annual Policy Announcements, for the year 2014-2015, the annual minimum production capacity utilization and sales units for each of the manufacturers was provided in a chart. At Sr. Therefore, let us take one physical example of one manufacturer, namely Mohan Meakin Ltd.. 67. In Annexure-E of the Annual Policy Announcements, for the year 2014-2015, the annual minimum production capacity utilization and sales units for each of the manufacturers was provided in a chart. At Sr. No. 8 of the chart contained in Annexure-E, the minimum annual bench mark fixed for Mohan Meakin Ltd., the petitioner in the lead writ petition CWP No. 5232/2014, was indicated as 9,79,352.740 proof Ltrs. Therefore, the quarterly quota allotted to Mohan Meakin Ltd. was to be 2,44,838.184 proof Ltrs. The actual sale made by Mohan Meakin Ltd. during the first quarter of 2014-2015 ending with June, 2014 was indicated by the respondents themselves in a demand, as 85549.500 proof Ltrs. The difference between the quarterly quota for presumed sale and the actual quarterly sale made by them, was arrived at in the tabulation as 1,59,288.684 proof Ltrs. (2,44,838.184-85,549.500). 68. Therefore, the additional fee leviable was indicated in the demand to be Rs.44,60,083.00, calculated @ Rs.28 per proof Ltrs. for the shortfall of 1,59,288.684 proof Ltrs. In addition, a penalty was also demanded @ Rs.14/- per proof Ltrs., which worked out to be Rs. 22,30,042.00. 69. If the manufacturer, namely, Mohan Meakin Ltd. is guilty of selling less than the minimum guaranteed quota to the extent of 1,59,288.684 proof Ltrs. during the first quarter of 2014-2015, the wholesaler and retailer are also equally guilty of not lifting the very same quantity. What is manufactured, actually finds its way to the market, through the wholesaler and the retailer. What does not find its way to the market, is what is sought to be charged with. Therefore, naturally the quantity that was not sold, was the quantity that never reached the market. (Even assuming that the retailers indulged in selling spurious liquor, the quantity of authenticated liquor sold by them will remain the same) 70. The wholesalers and the manufacturers are made liable to pay Rs.28/- per proof Ltrs. towards additional fee and Rs.14/- per proof Ltrs. towards penalty for the unlifted quantity. Therefore, what is collected from the manufacturers and the wholesalers is virtually Rs.56/- per proof Ltrs. towards additional fee and Rs.28/- per proof Ltrs. towards penalty (as each of the two will pay Rs.28/- per proof Ltrs. towards the additional fee and Rs.14/- per proof Ltrs. towards the penalty). 71. towards penalty for the unlifted quantity. Therefore, what is collected from the manufacturers and the wholesalers is virtually Rs.56/- per proof Ltrs. towards additional fee and Rs.28/- per proof Ltrs. towards penalty (as each of the two will pay Rs.28/- per proof Ltrs. towards the additional fee and Rs.14/- per proof Ltrs. towards the penalty). 71. In addition, the retailers are also imposed with an obligation to pay the additional fee on the unlifted quota of IMFS, @ Rs.56/- per proof Ltrs. Therefore, for the first quarter of 2014-2015, a manufacturer was required to pay an additional fee of Rs.28/- per proof Ltrs., the wholesaler was required to pay an additional fee of Rs.28/- per proof Ltrs. and the retailer is required to pay an additional fee of Rs.56/- per proof Ltrs. This makes the total amount of additional fee levied on the very same quantity to be Rs.112/- per proof Ltrs. This is in addition to Rs.14/- per proof Ltrs. to be paid by the manufacturer towards penalty and an equivalent amount to be paid by the wholesaler towards penalty. But insofar as the retailer is concerned, the penalty of Rs.14/- per proof Ltrs. is payable only if the unlifted quota falls short of 80% of the minimum guaranteed quota. In case it does, the retailer also pays Rs.14/-, which makes the total amount of penalty collected, as Rs.42/- per proof Ltrs. (@ Rs14/- for each of the three categories of persons, namely, manufacturer, wholesaler and retailer). 72. Therefore, in effect, the respondents will be entitled to collect, for the first quarter of 2014-2015, (i) a total of Rs.112/- per proof Ltrs. towards additional fee; and (ii) a total of Rs.42/- per proof Ltrs. towards penalty. In other words, an amount of Rs.154/- per proof Ltrs. can be collected by the respondents on the unlifted quota. 73. In respect of Mohan Meakin Ltd., the unlifted quota for the first quarter of 2014-2015, was indicated to be 1,59,288.684 proof Ltrs. But if this quota had been actually lifted, the respondents would have collected a particular amount towards the excise duty. Let us now see what they would have collected towards the excise duty. 74. Mr. Ajay Vaidya, learned Senior Additional Advocate General provided to us a tabulation containing the rate of excise duty levied during the year 2014-2015 on Country Liquor and Indian Made Foreign Spirit. Let us now see what they would have collected towards the excise duty. 74. Mr. Ajay Vaidya, learned Senior Additional Advocate General provided to us a tabulation containing the rate of excise duty levied during the year 2014-2015 on Country Liquor and Indian Made Foreign Spirit. For the purpose of testing the correctness of the last contention of the manufacturers, let us take a highest rate of duty of excise as a bench mark. For Indian Made Foreign Spirit with an ED price of about Rs.5000/- per case the duty of excise levied for 2014-2015 was Rs. Rs.80/- per proof Ltrs. The rate of license fee for IMFS for the very same period was Rs.219/- per proof Ltrs. Therefore, on IMFS, the State was entitled or expected to collect Rs.219/- per proof Ltrs. with a duty of excise of a maximum amount of Rs. 80/- per proof Ltrs. (actually for IMFS with ED price of above Rs.5000/- per case alone, the duty of excise was Rs.80/- per proof Ltrs, but for IMFS with ED price of below Rs.1200/- per case, the duty of excise was Rs.32/- per proof Ltrs. and for IMFS with an ED price between Rs.1200/- and Rs.5000/- per case, was Rs.55/- per proof Ltrs.). 75. But for the purpose of calculation we have taken a figure that is most advantageous to the State. If this figure of Rs.80/- per proof Ltrs. is taken as the duty of excise for IMFS for the year 2014, then the amount that the State would have collected per proof Ltrs. would have been Rs.299/- per proof Ltrs. (Rs.219 towards the license fee and Rs. 80/- per proof Ltrs. towards the excise duty). 76. As we have pointed out earlier, the yearly quota allotted for Mohan Meakin was 9,79,352.740 proof Ltrs. The quota for the first quarter was 2,44,838.184 proof Ltrs. If this entire quantity had been lifted, the State would have secured a revenue of little less than about Rs.7.30 crores (rupees seven crores thirty lacs). (Rs.2,44,838.184 x Rs.299). 77. But what was lifted was 85.549.500 proof Ltrs., providing an actual revenue of around Rs.2.55 crores (rupees two crores fifty five lacs). Therefore, we would have normally expected a short fall of around rupees five crores. 78. But the annual license fee of Rs.219/- per proof Ltrs. (Rs.2,44,838.184 x Rs.299). 77. But what was lifted was 85.549.500 proof Ltrs., providing an actual revenue of around Rs.2.55 crores (rupees two crores fifty five lacs). Therefore, we would have normally expected a short fall of around rupees five crores. 78. But the annual license fee of Rs.219/- per proof Ltrs. is payable not on the actual quantity of sale but on the minimum guaranteed quota. The petitioners have no quarrel about this. Therefore, the petitioner Mohan Meakin was obliged to pay (and they are not disputing this), a license fee of Rs.219/- per proof Ltrs. of IMFS, on the entire quarterly quota, namely 2,44,838.184 proof Ltrs. Therefore, by way of annual license fee, Mohan Meakin Ltd. would have paid around Rs.5.35 crores. (2,44,838.184 per proof Ltrs. X Rs.219/-). 79. Hence the actual short fall was only around rupees two crores. (Rs.7.30 crores - Rs.5.35 crores). Let us now see whether the State was attempting to collect an amount more than this amount of rupees two crores, by imposing the same levy of additional fee and a penalty upon the three different categories of persons. 80. As we have indicated earlier, the manufacturer is obliged to pay Rs.28/- per proof Ltrs. towards the additional fee and a penalty of Rs.14/- per proof Ltrs. towards the penalty. The wholesaler is required to pay a similar amount towards the additional fee and penalty. In the example that we have taken on hand of Mohan Meakin Ltd. the short fall was more than 20%. In other words, even 80% of the minimum guaranteed quota was not achieved during the first quarter of 2014-2015. Therefore, the retailer was also liable to pay an additional fee of Rs.56/- per proof Ltrs. and a penalty of Rs.14/- per proof Ltrs. 81. Thus, all the three of them had cumulatively become liable to pay an additional fee of Rs.112/- per proof Ltrs. (Rs.28+Rs.28+Rs.56= Rs.112) and penalty of Rs.42 per proof Ltrs. (Rs.14x3). In other words, on the same unlifted quota, the three categories of persons before us had cumulatively become liable to pay Rs.154/- per proof Ltrs. (Rs.112+42/-). 82. The unlifted quota for the first quarter of 2014-2015 for Mohan Meakin, even according to the respondents was 1,59,288.684 proof Ltrs. On this unlifted quantity, the manufacturer became liable to pay an additional fee of Rs.28/- per proof Ltrs. and a penalty of Rs.14/- per proof Ltrs. (Rs.112+42/-). 82. The unlifted quota for the first quarter of 2014-2015 for Mohan Meakin, even according to the respondents was 1,59,288.684 proof Ltrs. On this unlifted quantity, the manufacturer became liable to pay an additional fee of Rs.28/- per proof Ltrs. and a penalty of Rs.14/- per proof Ltrs. The wholesalers became liable to pay an equivalent amount and the retailers had also become liable to pay an additional fee and penalty totaling to a grand amount of Rs.154/- per proof Ltrs. 83. Therefore, the amount collected towards the additional fee and penalty on this short fall in sale of 1,59,288.684 proof Ltrs., @ Rs.154 per proof Ltrs. would come to more than Rs.2.46 crores (rupees two crores and forty six lacs). 84. In other words, the actual loss of revenue (in the form of duty of excise) for the State, due to the deficit in the production-cum-sale was around Rs.2.00 crores for the first quarter of 2014- 2015 in respect of one manufacturer. But what was sought to be collected by way of additional fee and penalty for compensating this loss of revenue, was Rs.2.46 crores. Therefore, the last contention of the learned Senior Counsel for the petitioners/manufacturers that the levy of additional fee and penalty upon all the three categories of persons for the very same deficit in sale has a cascading effect, merits acceptance. 85. Thus, two out of four grounds raised by the manufacturers may have to be upheld. Contentions on behalf of the wholesalers: 86. The first ground on which the wholesalers assail the impugned policy conditions is that neither the Act nor the Rules contemplate any levy for not selling the quota allotted, except sub-Rule (22) of Rule 35-A of the Rules and hence, the levy of additional fee and penalty is unauthorized. 87. But the aforesaid contention may not be wholly correct. As we have pointed out earlier, the Himachal Pradesh Excise Act, 2011, contains three provisions, two in Chapter-IV and one in Chapter-V, which authorize the levy of (i) such sum, (ii) fees, and (iii) sum. These are Sections 27, 28 and 38, the first two of which fall in Chapter-IV and the third falls in Chapter-V. The Act also contains a separate provision in Section 36 included in Chapter-V for the levy of excise duty or countervailing duty. These are Sections 27, 28 and 38, the first two of which fall in Chapter-IV and the third falls in Chapter-V. The Act also contains a separate provision in Section 36 included in Chapter-V for the levy of excise duty or countervailing duty. Sections 27, 28 and 38 of the Act have already been extracted by us in paragraphs 46 and 47 above. While Section 27 speaks about payment of "such sum" for the grant of a lease of the right of manufacturing or supplying by wholesale or of selling by wholesale or retail or of storing or of storing for manufacture or sale, Section 28 speaks of payment of "fees" for the grant of license, permit or pass. Again Section 38 speaks of acceptance of "a sum" in consideration of the lease of any right under Section 27. 88. When the Financial Commissioner is expressly authorized by section 28, to issue directions for the grant of license upon payment of fees, there is no use contending that the levy is unauthorized by law. 89. Coming to the Rules, we have already pointed out that Rule 26 of the H.P. Liquor License Rules, 1986 speaks of three different types of fees payable in respect of licenses. The rule is extracted in paragraph 32 above. 90. The types of licenses for the grant of which fixed fee alone is payable, the types of licenses for the grant of which a combination of fixed fee and assessed fee is payable, the types of licenses for the grant of which fees for allotment, renewal or auction is payable, are all provided in a tabular column in paragraph 34 above. From the table provided in paragraph 34 above, it is clear that the wholesale vendors, who are entitled to the grant of L.1, L.1-A, L.1-B, L.1-BB, L.1-C and L.13 licenses, are liable to pay fixed fees, as per Rule 27. We do not find any Rule other than Rule 26, which we have extracted above, that categorizes the different types of fees payable by a licensee. According to the petitioners, there is no Rule in the entire scheme of H.P. Liquor License Rules, 1986, which speaks about additional fee. This is why it is contended by Mr. Sanjeev Bhushan, learned Senior Counsel for the wholesalers that a fee not authorized by the Rules cannot be levied. 91. According to the petitioners, there is no Rule in the entire scheme of H.P. Liquor License Rules, 1986, which speaks about additional fee. This is why it is contended by Mr. Sanjeev Bhushan, learned Senior Counsel for the wholesalers that a fee not authorized by the Rules cannot be levied. 91. But the above argument, appears to have arisen out of a confusion in the manner in which the Rules are grouped. As we have pointed out elsewhere, the matters relating to fixed fees are grouped under Part-C(i) in Rules 27 to 29. The provision relating to assessed fees is given in Part-C(ii), in Rule 30. But fee for allotment, renewal, auction etc., spoken to by Rule 26(c) is taken to Part-F. 92. Rule 34 reserves for the Financial Commissioner, the right to grant all or any of the licenses indicated in Rule 1, by auction or by negotiation or by private contract or by any other arrangement. But this power is not available to the Financial Commissioner in so far as the licenses which can be granted on fixed fee or assessed fee or both. This is made clear by Rule 34 itself. Rule 35(1) makes it clear that the licenses for certain types of retail vends of foreign liquor can be granted only by allotment or renewal on fixed fee. Therefore, it appears that what is dealt with by Rule 26(c) is not a third category of fee, though, such an impression is created. 93. Apart from the three categories of fees indicated in Rule 26, there are also other types of fees, indicated in Rule 35. Rule 35(5) speaks about the rates of application fee, renewal fee, basic license fee and the rates of license fee applicable on different kinds of liquor. Therefore, Schedule-C also contains rates of renewal fee, basic license fee and license fee. These types of fees are also defined in the Explanation under sub-Rule (6) of Rule 35. 94. Rule 35-A, one of the sub-Rules of which is relied upon by the wholesalers, deals broadly with the allotment of licenses. Though there is nothing inherent in Rule 35-A to indicate that the conditions stipulated therein apply only to the retailers, the Government has understood Rule 35 as applicable only to retailers. We shall deal with aspect separately in the next part of this order. Though there is nothing inherent in Rule 35-A to indicate that the conditions stipulated therein apply only to the retailers, the Government has understood Rule 35 as applicable only to retailers. We shall deal with aspect separately in the next part of this order. Sub-Rule (22) of Rule 35-A reads as follows: "35-A. Allotment of licenses. xxx xxx xxx (22) The licensee shall be required to lift the Minimum Guaranteed Quota as fixed for each vend failing which he shall still be liable to pay the license fee fixed on the basis of the minimum quota. In addition to the payment of license fee on the un-lifted Minimum Guaranteed Quota the licensee shall also be liable to pay additional fee at the rate of Rs. 20/- per proof litre on the un-lifted quota, which falls short of 80% of the Minimum Guaranteed Quota. The Asstt. Excise & Taxation Commissioner/Excise & Taxation Officer I/C of the district shall review the position of lifting of Minimum Guaranteed Quota on monthly basis. If he finds that the licensee has failed to lift 80% of the annual Minimum Guaranteed Quota by 15th of March and after hearing then licensee comes to the conclusion that the licensee will not be able to make up the deficiency by 31st March, he shall proceed to recover the amount of the additional fee as mentioned above." 95. Even if the aforesaid Rule 35-A is not applicable to wholesalers, the contention of the wholesalers that the levy of additional fee is unauthorized by the Act and the Rules cannot be sustained. This is for the reason that the Act contains provisions for the levy of "such sum" and "sum" as well as "fees". Each of these words has a different connotation. Therefore, the first contention that the impugned policy conditions are ultra vires the Statute or Rules, is unsustainable. 96. The second contention that in respect of manufacturers and wholesalers, the levy of additional fee and penalty was confined only to one year namely 2014-15 and that neither before nor after the said year, any such levy was made, does not take the petitioners anywhere. In a writ petition, we are only concerned with the question whether a levy is authorized or unauthorized. The fact that the respondents never imposed such a levy in the past, does not make it invalid. In a writ petition, we are only concerned with the question whether a levy is authorized or unauthorized. The fact that the respondents never imposed such a levy in the past, does not make it invalid. Similarly, even if the respondents had levied it for any number of years, the same would not become legal, if it is unauthorized by law. Hence, the second ground of attack has to fail. 97. The third ground of attack by the wholesalers is that they are not permitted by the Statute to sell the available stock in the open market and that they are supposed to sell the liquor only through the retails upon production of passes and permits and that therefore, they cannot be penalized for any failure on the part of the retailers to lift the guaranteed quota. This contention of the wholesalers is similar to one of the contentions of the manufacturers. The contention of the manufacturers has been upheld in this regard. Therefore, on the same logic, the third ground of attack made by the wholesalers has to be upheld. Contentions on behalf of retailers: 98. The first contention of the retailers is that the additional fee levied for short-selling, partakes the character of excise duty, as it is intended to compensate the State for the loss of revenue in the form of excise duty. But this is the very same contention that was raised on behalf of the manufacturers, on the basis of a long line of decisions starting from B.C. Banerjee. However, we have rejected this contention, on the basis of statutory prescriptions. 99. Moreover, the retailers cannot be heard to raise such a contention, for two reasons. As we have stated elsewhere, the levy of additional fee for the retailers, commenced (i) from the year 2009 when Rule 35-A(22) was inserted and (ii) from the year 2013-14 when condition no. 4.3 was incorporated in Annual Policy Announcements which continued up to the year 2016-17. The retailers came up with a writ petition for the first time only in the year 2015, challenging not only the policy conditions imposed in the Excise Policy for 2013-14 but also the policy condition imposed in the Excise Policy for 2014-15. 4.3 was incorporated in Annual Policy Announcements which continued up to the year 2016-17. The retailers came up with a writ petition for the first time only in the year 2015, challenging not only the policy conditions imposed in the Excise Policy for 2013-14 but also the policy condition imposed in the Excise Policy for 2014-15. By the time the retailers chose to challenge the condition contained in the Excise Policy 2013-14, the next Excise Policy for 2014-15 had already come and the retailers, year after year, chose to apply for renewal. Therefore, the retailers cannot be heard to raise the above contention, after having repeatedly applied for renewals year after year dispute the existence of a rule and the continuation of such a policy. 100. The question of estoppel against a Statute may not arise in this case, as we have already pointed out the provisions contained in the Statute. In addition, sub-Rule (22) of Rule 35-A, which we have already extracted above, provides for the levy of additional fee on the unlifted quota, which falls short of 80% of the minimum guaranteed quota. Rule 35-A in entirety including its sub-Rule (22) was inserted, by way of an amendment vide Notification No. 7-155/2008-EXN-9076-95 Dated 31.03.2009, published on 06.04.2009. Therefore, the concept of levying additional fee for the failure to lift the minimum guaranteed quota had been introduced way back in 2009 and Mr. Satish Kumar, learned counsel appearing for the retailers, conceded that the attempt to challenge Rule 35-A (22) was only faint and feeble. No valid ground is raised in support of the challenge to the said rule. No argument was raised to the effect that Rule 35-A(22) is ultravires the Act. In fact the argument that the levy of additional fee and penalty are unauthorised by law goes contrary to the challenge to rule 35A(22). This is why, in the course of hearing, the learned Counsel gave up the challenge to the rule. As against the rigours of the impugned policy conditions, Rule 35A(22) is less harsh. Therefore, the challenge to the same was given up. Hence the contention of the retailers that the levy is unauthorized by law, is unsustainable. 101. The second contention advanced on behalf of the retailers is that due to the levy of additional fee and penalty, persons who sell less, end up paying more and hence the policy is arbitrary. 102. Therefore, the challenge to the same was given up. Hence the contention of the retailers that the levy is unauthorized by law, is unsustainable. 101. The second contention advanced on behalf of the retailers is that due to the levy of additional fee and penalty, persons who sell less, end up paying more and hence the policy is arbitrary. 102. But once it is admitted that the levy is both authorized by the Rules and by the terms and conditions of contract, the petitioners cannot challenge the levy on the ground that it imposes a burden which is onerous. Winners and losers have to pay different prices and they cannot weigh the efforts taken, in terms of the return. 103. The third contention advanced on behalf of the retailers is that the levy of additional fee is in the nature of a penalty, as it is imposed for the breach of license conditions. Therefore, it is contended that to levy an additional fee and a penalty would tantamount to imposition of double penalties. 104. But we do not agree. What is contemplated by condition No. 4.3, in substance is as follows: "(i) That insofar as country liquor is concerned, the licensee should pay an additional fee at the rate of 10/- per proof ? litre on the unlifted quota of country liquor which falls short of 100% of the minimum guaranteed quota. (ii) That in respect of country liquor, the licensee, in addition to the additional fee, should also pay a penalty of 7/- per ? proof litre if the unlifted quota falls short of the benchmark of 80% of the minimum guaranteed quota. (iii) That in respect of IMFS, the licensee should pay an additional fee at the rate of 56/- per proof litre on the ? unlifted quota of country liquor which falls short of 100% of the minimum guaranteed quota. (iv) That in respect of IMFS, the licensee, in addition to the additional fee, should also pay a penalty of 14/- per proof ? litre if the unlifted quota falls short of the benchmark of 80% of the minimum guaranteed quota." 105. Therefore, the additional fee and penalty operate at two different levels. Therefore, there cannot be a challenge on the ground that the additional fee itself partakes the character of penalty. 106. litre if the unlifted quota falls short of the benchmark of 80% of the minimum guaranteed quota." 105. Therefore, the additional fee and penalty operate at two different levels. Therefore, there cannot be a challenge on the ground that the additional fee itself partakes the character of penalty. 106. The next contention advanced on behalf of the retailers is that the levy of additional fee and penalty for short-selling, was dispensed with in the Excise Policy of the year 2018-19. But we do not know how the same would make the impugned policy conditions unlawful. The concession shown in subsequence years will not make the levy made in the previous years unlawful. 107. The last contention raised on behalf of the retailers is that even while calculating the quantum of sales for the last quarter of the year, the Authorities take only the sales made up to the 10th day of March and not the 31st day of March and that therefore, the policy condition is bad at least to the extent of its application. 108. We have already extracted condition No. 4.3 of the Annual Policy Announcement of the year 2014-15. At the cost of repletion, we should once again extract the relevant portion of condition No. 4.3, which forms the subject matter of the last contention on behalf of the retailers. The second part condition No. 4.3 for the year 2014-15 reads as follows: "The Assistant Excise and Taxation Commissioner/Excise and Taxation Officer I/C of the District shall review the position of lifting of minimum guaranteed quota on quarterly basis. Lifting position for the first quarter of the year 2014-15 shall be reviewed latest by 30th July, 2014, for the second quarter, it shall be reviewed latest by 30th October, 2014, for the third quarter latest by 15th January, 2015 and lifting position for the fourth quarter shall be reviewed positively by 10th March, 2015........ In case the defaulting licensee lifts his unlifted quota of any quarter in subsequent quarters or latest by 10th March, 2015 by attaining 100% benchmark of annual minimum guaranteed quota for the purpose of additional fee and 80% benchmark of the annual minimum guaranteed quota for the purpose of penalty, such a licensee shall be entitled to set off the amount so deposited previously with the prior approval of the Collector (Excise) of the zone concerned." 109. It appears from the extracted portion of condition No. 4.3 that what is to be taken into account for ascertaining the achievement of target, appears to be the quota lifted up to the 10th March, insofar as the last quarter is concerned. While the extracted portion of condition No. 4.3 provides for a set off, if the failure to lift the minimum guaranteed quota in any one or more of the first three quarters is compensated in the subsequent quarter, there is no such provision insofar as the last quarter is concerned. 110. Therefore, the extracted portion of condition No. 4.3 suffers from two incongruities. They are: (i) Though the minimum guaranteed quota is ordained to be lifted during the period of twelve calendar months, the performance is assessed once in a quarter of three months. But so far as the last quarter is concerned, the above extracted portion makes it obligatory for the retailer to achieve the entire target by the 10th March of the year. In other words, though the target for lifting the minimum guaranteed quota can be achieved in a period of twelve calendar months, what is achieved in a period of eleven months and ten days alone is taken into account. (ii) While set off is permitted for the shortfall in the quota lifted during the first three quarters, if such shortfall is compensated before the 10th day of March, there is no such provision for a set off for the shortfall in the fourth quarter. Even if the shortfall in the quota lifted during the period from 1st January to the 10th day of March, is compensated by lifting additional quantity during the period from 11th day of March to the 31st day of March, the licensee is still made liable, at least by the language employed in the above extracted portion of condition No. 4.3. 111. In any case, once a statutory rule imposes an obligation to lift the minimum guaranteed quota and once the statutory Rule {Rule 35-A (22)} also indicates the consequences for the failure to lift the minimum guaranteed quota, it is not possible for the respondents to impose a condition in the Excise Policy, which will overreach the statutory Rule. Rule 35-A (22) has not been repealed or amended. Therefore, we do not know how condition No. 4.3 can be enforced without amending Rule 35-A(22). 112. Rule 35-A (22) has not been repealed or amended. Therefore, we do not know how condition No. 4.3 can be enforced without amending Rule 35-A(22). 112. On this aspect, it is contended by Mr. Ajay Vaidya, learned Senior Additional Advocate General that where an Authority is conferred with a power to do a certain act under the Statute, subject to any Rules made thereunder, such Authority will have jurisdiction to exercise that power even by issuing administrative instructions, if no Rule had been framed. He places reliance in this regard, upon the decision of the Supreme Court in Surinder Singh vs. Central Government, (1986) 4 SCC 667 . It was held in paragraph 6 of the said decision as follows: "Where a Statute confers powers on an Authority to do certain acts or exercise power in respect of certain matters, subject to Rules, the exercise of power conferred by the Statute does not depend on the existence of Rules unless the Statute expressly provides for the same. In other words, framing of the Rules is not a condition precedent to the exercise of the power expressly or unconditionally conferred by the Statute. The expression "subject to Rules" only means, in accordance with the Rules, if any. If Rules are framed, the powers so conferred on Authority could be exercised in accordance with these Rules. But if no Rules are framed, there is no void and the Authority is not precluded from exercising the power conferred by the Statute." 113. The decision in Surinder Singh was also followed in Orissa State (Prevention & Control of Pollution) Board vs. Orient Paper Mills, (2003) 10 SCC 421 . It was held therein that the power vested under a statutory provision, would still be exercisable even in the absence of the Rules and that the non-framing of Rules does not curtail the power of the State Government to issue a notification. 114. Since Section 28(1) empowers the Financial Commissioner to issue directions with regard to payment of fees for the grant of licenses, permits and passes, it is contended by the learned Senior Additional Advocate General that the ratio of the decision in Surinder Singh will squarely apply. 115. But we do not think so. The ratio of the decisions in Surinder Singh and Orissa State (Prevention & Control of Pollution) Board will not be applicable to the cases on hand. 115. But we do not think so. The ratio of the decisions in Surinder Singh and Orissa State (Prevention & Control of Pollution) Board will not be applicable to the cases on hand. This is for the reason that in the cases on hand, a statutory rule is in existence. 116. If the statutory Rules had been completely silent, with regard to the fixation of minimum guaranteed quota and with regard to the consequences for the failure to achieve the quota, we could have accepted the aforesaid contention. Once the statutory Rules had occupied the field in the form of Rule 35- A(22), there was nothing left for the executive to exercise. In fact the ratio in Surinder Singh is also to this effect, as can be seen from the last two lines of the portion from the decision in Surinder Singh extracted above. It is made clear in the aforesaid portion of the decision in Surinder Singh that if no Rules are framed, there is no void and the Authority is not precluded from exercising the power conferred by the Statute. Since the Rules are framed in this case with regard to the obligation to lift minimum guaranteed quota and since the Rules also speak about the consequences for failure to do so, there was no void left for the executive to fill up. Therefore, the last contention of the learned counsel appearing for the retailers has to be upheld and the impugned policy condition, to the extent to which it is in conflict with Rule 35- A(22) has to be struck down. 117. But before we do so, we should deal with some of the contentions of Mr. Ajay Vaidya, learned Senior Additional Advocate General appearing for the State. 118. The first contention of Mr. Ajay Vaidya, learned Senior Additional Advocate General is that under Article 298 of the Constitution, the executive power of the State shall extend to carrying on of any trade or business and the making of contracts for any purposes. Insofar as the trade of manufacture and sale of liquor is concerned, the State has the exclusive privilege and citizens do not have any fundamental right to carry on the business of manufacture and sale of liquor. Insofar as the trade of manufacture and sale of liquor is concerned, the State has the exclusive privilege and citizens do not have any fundamental right to carry on the business of manufacture and sale of liquor. The Himachal Pradesh Excise Act, 2011 also prohibits the manufacture, possession and the sale of any intoxicant except under the authority and subject to the terms and conditions of a license granted by the Financial Commissioner. The licenses issued are in the realm of a contract and hence it is contended by the learned Senior Additional Advocate General that it was up to the licensees to enter into a contract or not. The licenses are renewed according the learned Senior Additional Advocate General, year after year and hence if the terms and conditions of the contract are not acceptable, it was always open to the licensees to walk out. No one, according to the learned Senior Additional Advocate General, compelled the licensees to enter into a contract. Having entered into a contract it is not open to them to challenge one of the conditions of contract. 119. In other words, the contention of the learned Senior Additional Advocate General is that it was up to the licensees to take it or leave it. 120. But as rightly contended by Mr. K.D. Sood, learned Senior Counsel for the manufacturers, the argument to take it or leave it, advanced by the State of Kerala under the Kerala Abkari Shops Disposal Rules, 2002 was rejected by the Supreme Court in Kerala Samsthana Chethu Thozhilali Union vs. State of Kerala, (2006) 4 SCC 327 . Paragraph 58 of the report in the said decision may be usefully extracted as follows: "58.Take it or leave it" argument advanced by Mr. Chacko is stated to be rejected. The State while parting with its exclusive privilege cannot take recourse to the said doctrine having regard to the equity clause enshrined under Art. 14 of the Constitution of India. The State must in its dealings must act fairly and reasonably. The bargaining power of the State does not entitle it to impose any condition it desires." 121. In Mohan Meakin Ltd. vs. State of Himachal Pradesh, (2009) 3 SCC 157 , the Supreme Court followed the decision in Kerala Samsthana Chethu Thozhilali Union. 122. The State must in its dealings must act fairly and reasonably. The bargaining power of the State does not entitle it to impose any condition it desires." 121. In Mohan Meakin Ltd. vs. State of Himachal Pradesh, (2009) 3 SCC 157 , the Supreme Court followed the decision in Kerala Samsthana Chethu Thozhilali Union. 122. The argument "take or leave it" cannot be advanced on behalf of the State at least insofar as the manufacturers are concerned. Once an industry is set up at a huge cost, providing for employment opportunities and the development of ancillary industries, to the people of the State, the survival of the industry, cannot be thrown at the mercy of State on the ground that the industry has the option either to get the license renewed or to shut down. In these days when the Governments of each State compete with one another to woo industrial houses to set up plants in their States, it is not open to the Government to contend that they have a choice to take it or leave it. 123. While the Courts will be loathe to interfere in matters of contract between the State and private parties, the Courts can always identify statutory contracts as distinguished from non-statutory contracts and test the terms and conditions of the contract on the touch stone of statutory prescriptions. Therefore, the first contention of the learned Senior Additional Advocate General has to be rejected. 124. It is true that the State is the exclusive owner of the privilege to trade in liquor. It is also true that there is no fundamental right in any citizen to do trade or business in intoxicants. In Nashirwar vs. State of Madhya Pradesh, (1975) 1 SCC 29 , the Court explained that the trade in liquor has always stood on a different footing from other trades. It was also clarified that the State has the exclusive right or privilege of manufacture and sale of intoxicating liquor and that therefore, the consideration charged for the grant of such privilege, is neither a tax nor excise duty. 125. It was also clarified that the State has the exclusive right or privilege of manufacture and sale of intoxicating liquor and that therefore, the consideration charged for the grant of such privilege, is neither a tax nor excise duty. 125. After citing with approval, the decision in Nashirwar, a Constitution Bench of the Supreme Court held in Har Shankar vs. Deputy Excise and Taxation Commissioner, (1975) 1 SCC 737 that the power of the Government to charge a price for parting with its rights and not the mode of fixing that price, that constitutes the essence of the matter. In paragraph 56 of the said decision, the Constitution Bench drew a distinction between a tax and a fee and indicated that the fixed fee charged to the vendors of foreign liquor need not bear any quid pro quo to the services rendered to the licensees. The Constitution Bench also traced the power of the Government to enter into contracts in this regard, to Article 298. To this extent, the learned Senior Additional Advocate General is right that the issue lies in the realm of contract. But beyond the same, nothing flows out of Nashirwar or Har Shankar. 126. As we have pointed out earlier the contract entered into by the State in the form of a license, can always be tested with reference to the Statute and the Rules framed there-under. None of the aforesaid decisions prohibit the testing of the same. 127. Relying upon the observations of the Constitution Bench in paragraphs 15 and 16 of its decision, it is contended by the learned Senior Additional Advocate General that the petitioners who offered their bids in the auctions, did so with full knowledge of the terms and conditions attached to the auctions and hence they cannot be permitted to wriggle out of the contractual obligations. He also contended that the licensees offered their bids voluntarily in the auctions with full knowledge of the commitments which the bids involved. Therefore, he contended that it was not open to them to come to Court. 128. But as we have pointed out earlier, the petitioners in these cases are persons who already held licensees which came up for renewal year after year. The terms and conditions for the renewal, are indicated in the Annual Excise Policy Announcements. Therefore, he contended that it was not open to them to come to Court. 128. But as we have pointed out earlier, the petitioners in these cases are persons who already held licensees which came up for renewal year after year. The terms and conditions for the renewal, are indicated in the Annual Excise Policy Announcements. As rightly contended by the learned Senior Counsel for the petitioners, the applications for renewal of licenses are required to be made, as per Rule 11 of the Himachal Pradesh Liquor License Rules, 1986, before the end of December each year. But the Annual Excise Policy Announcements are made only in March. Therefore, there is no comparison between the cases on hand and the cases before the Supreme Court in Nashirwar and Har Shankar. 129. Moreover, the petitioners before the Constitution Bench in Har Shankar were persons who committed default in payment of a portion of the license fee fixed in the auction. Even the annual license fee payable in installments, was not paid by them and when the arrears of license fee were sought to be recovered they came up with a contention that the arrears co-related to the unlifted quota in respect of remaining period of the lease. 130. But in the cases on hand all the petitioners have paid whatever is the fee fixed for the entire minimum guaranteed quota. What is sought to be recovered from them is the loss of revenue that the State allegedly suffered, in the form of duty of excise, due to the entire quota not being lifted. Therefore, the mantra of Har Shankar cannot produce the results, in these cases. 131. The reliance placed by the learned Senior Additional Advocate General on the decision of the Supreme Court in Rajendra Singh vs. State of Madhya Pradesh, (1996) 5 SCC 460 is also faulty for the very same reason. As seen from paragraph 3 of the said decision, the petitioner therein failed to pay even the bid amount and committed default. Cases where there is default in payment of the bid amount stand on a different footing from cases where the bid amount is paid in full, but an additional fee levied for failure to sell a fixed quantity, comes under challenge. 132. Cases where there is default in payment of the bid amount stand on a different footing from cases where the bid amount is paid in full, but an additional fee levied for failure to sell a fixed quantity, comes under challenge. 132. Placing strong reliance upon the decision of another Constitution bench in State of Punjab vs. Devans Modern Breweries Ltd., (2004) 11 SCC 26 , it was contended by the learned Senior Additional Advocate General that once it is accepted that what is sought to be levied is part of the privilege price, then the licensees had an option to opt out of the business, in case such levies were considered by them to be detrimental to their interests. Our specific attention is drawn to the last line of paragraph 103 of the report in the said decision. Drawing our attention to paragraphs 116, 119 and 121 of the report it is also contended by the learned Senior Additional Advocate General that the persons who had entered into a contractual relationship with the State cannot turn around and question the terms and conditions of the contract. 133. But as we have pointed out earlier, the power to enter into a contract, which is recognized by Article 298 of the Constitution is regulated by the Himachal Pradesh Liquor License Rules. Therefore, the terms and conditions of the license, can always be tested within the four corners of the Statutory Rules for finding out whether they run contrary to the Rules or not. 134. The next contention of Mr. Ajay Vaidya, learned Senior Additional Advocate General, is that the petitioners have not chosen to challenge the fixation of minimum guaranteed quota under the policy conditions but have merely challenged the levy of additional fee and penalty for the failure to lift the minimum guaranteed quota. Therefore, it is his contention that a person who does not question the imposition of an obligation cannot challenge the imposition of certain consequences flowing out of non-compliance with the obligations. 135. The above contention is fairly justified. Persons who did not question the fixation of minimum guaranteed quota, cannot come and contend that even if they failed to fulfill their contractual obligations, no consequences should follow. 136. But on the above sole ground, it is not possible for us to throw the writ petitions out. 135. The above contention is fairly justified. Persons who did not question the fixation of minimum guaranteed quota, cannot come and contend that even if they failed to fulfill their contractual obligations, no consequences should follow. 136. But on the above sole ground, it is not possible for us to throw the writ petitions out. The reason is that the failure to fulfill the terms and conditions of license does not result in the only consequence of imposition of additional fee and penalty. It may also lead to other consequences such as the cancellation of license. So long as all the consequences of the failure to lift the minimum guaranteed quota are not challenged and so long as only one of the consequences of the breach of the license conditions is challenged, the writ petitions are maintainable, even without a challenge to the obligation imposed under the policy conditions. Therefore, this contention of the learned Senior Additional Advocate General has to be rejected. 137. The next contention of the learned Senior Additional Advocate General revolves around Entries 8 and 51 of List-II of the Seventh Schedule to the Constitution. While Entry 8 relates to production, manufacture, possession, transport, purchase and sale of intoxicating liquors, Entry 51 relates to duties of excise on alcoholic liquors manufactured or produced in the State. This contention of the learned Senior Additional Advocate General is intended to drive home the point that the State has the exclusive privilege to deal in liquor. 138. We have no quarrel with the above proposition. Right from Nashirwar and Har Shankar up to the latest decision in Devans, the Supreme Court has again and again confirmed this position. 139. It is next contended by Mr. Ajay Vaidya, learned Senior Additional Advocate General that condition No. 1.1 of the Policy Announcements for the year 2014-15 made it clear that liquor licenses are granted, subject not only to the provisions contained in the Act and the Rules, but also subject to the licensee fulfilling any other obligation as imposed by the orders of the Excise and Taxation Commissioner. Even in the distillery licenses issued in Form D-2, a condition is incorporated that the licensee should fulfill all the directions of the Excise and Taxation Commissioner. Even in the distillery licenses issued in Form D-2, a condition is incorporated that the licensee should fulfill all the directions of the Excise and Taxation Commissioner. Therefore, it is contended that even the terms and conditions of contract recognize the power of the Excise and Taxation Commissioner to impose certain obligations not expressly provided by the Act and the Rules. 140. We have no difficulty in accepting even this contention. As a matter of fact, the Financial Commissioner has power by virtue of Section 28 of the H.P. Excise Act, 2011 to issue directions even with regard to payment of fees for the grant of licenses, permits and passes. Similarly, condition No. 1.1 of the Policy Announcements confers power upon the Excise and Taxation Commissioner to impose obligations that may not be traceable to the Act and the Rules. Thus, there are sufficient safeguards for both the Financial Commissioner and the Excise and Taxation Commissioner. 141. But it does not mean that either the Financial Commissioner or the Excise and Taxation Commissioner can impose an obligation, which runs contrary to an obligation imposed by the Act or the Rules. It is always permissible for us to test whether an additional obligation imposed by the Excise and Taxation Commissioner as per condition No. 1.1 of the Policy Announcements, runs contrary to any Rule. It is well within our jurisdiction to test whether the field sought to be covered by the Excise and Taxation Commissioner is already occupied by the provisions of the Act or the Rules. In the case on hand, Rule 35- A(22) appears to hold the field. Therefore, we can certainly invoke the theory of occupied field and test whether there is any repugnancy. 142. Placing reliance upon the decision of the Supreme Court in Rajendra Singh vs. State of Madhya Pradesh, (1996) 5 SCC 460 , it is contended by Mr. Ajay Vaidya, learned Senior Additional Advocate General that the jurisdiction of the High Court under Article 226 is not intended to facilitate the avoidance of obligations voluntarily involved. It was held in said case that even in cases where there are complaints of violation of statutory Rules and conditions, it must be remembered that the violation of each and every provision does not furnish a ground for the Court to interfere. 143. It was held in said case that even in cases where there are complaints of violation of statutory Rules and conditions, it must be remembered that the violation of each and every provision does not furnish a ground for the Court to interfere. 143. We do not know how the decision in Rajendra Singh can be pressed into service on behalf of the respondents. As in the case of Har Shankar, Rajendra Singh was also a case where a person who became the highest bidder for a certain number of liquor shops, failed to pay even the bid amount in monthly installments. When the shops were re-auctioned, they fetched a lesser amount giving rise to a claim for payment of the differential amount in terms of the contract. When this demand was challenged and the matter landed up in Supreme Court, the Supreme Court observed that several considerations indicated in the decision should be kept in mind while examining complaints of violation of statutory Rules. 144. But we have to keep in mind, a fundamental difference between cases where a party to a contract attempts to wriggle out of the contract on the ground of violation of the procedure prescribed by law, and cases where the conditions of contract are challenged as being violative of statutory prescription. In the case on hand, at least the retailers pitch their claim on the ground that the impugned policy conditions run contrary to the statutory Rules. This is an issue not covered by the decision in Rajendra Singh. Conclusion: 145. We made, in the course of hearing, four pointed queries to the learned Senior Additional Advocate General. After getting instructions from the officials of the respondents, the learned Senior Additional Advocate General submitted the response of the Department to those queries. The queries made by us and the response of the State are presented in a tabular column as follows: Sr. No. Query Answer 1. Rule 35-A(22) notified on 06.04.2009. Sub Rule 22: was it introduced in 2009 and has it undergo any change till date? The Rule was introduced on 06.04.2009 vide Notification No. 7-155/2008-EXN-9076-95 dated 31.03.2009 published on 06.04.2009. There has been no amendment notification issued by the Financial Commissioner (Excise) therefore, no change has been carried out in the Rule 35-A(22) till date. 2. Does this rule applied to Whole Sellers/Retails/Manufacturers/or does it apply to Retailer only? The Rule was introduced on 06.04.2009 vide Notification No. 7-155/2008-EXN-9076-95 dated 31.03.2009 published on 06.04.2009. There has been no amendment notification issued by the Financial Commissioner (Excise) therefore, no change has been carried out in the Rule 35-A(22) till date. 2. Does this rule applied to Whole Sellers/Retails/Manufacturers/or does it apply to Retailer only? Rule 35-A of the H.P. Liquor Rule, 1986 is the main Rule and has been specifically made "Subject to Rule 34 of these Rules". Accordingly, rule 35- A(22) is applicable to retail sale licensees. 3. Does it apply to all or only one? Hence, it does not apply to all i.e. (a) Manufactures, (b) Whole Sellers and (c) Retailers, but it only applies to Retailers. 4. What was the necessity for imposing the condition 4.3 in the annual Excise Policy? The condition No. 4.3, 10.28(8) and 10.29 of the Excise announcement was approved by the State Govt. The gist of reasons for introduction of para 4.3 and 10.29 which is as under: (i) Non-lifting of remaining 20% quota resulting in Revenue loss. (para 4.3) (ii) The percentage level of capacity utilization of certain Plants was below 6% of their Annual Production capacity, but are still continuing. However their indulgence in the clandestine activities of evasion of levies cannot be all together negated. Therefore, regulation of the activities of such Plants has become necessary in the interest of Govt. Revenue. (para 10.29) 146. It is clear from the above, that insofar as the retailers are concerned, the obligation to lift the minimum guaranteed quota, as fixed by the concerned Authority year after year, is imposed by Rule 35-A(22) of the H.P. Liquor License Rules, 1986 itself. The consequences that would fall upon the licensees in the event of their failure to fulfill this obligation, are also spelt out in Rule 35- A(22) itself. Therefore, what is left by Rule 35-A(22) to the executive is only the determination of the minimum guaranteed quota every year. 147. To put it in simple terms, there are three issues to be addressed. They are: (i) the obligation to lift the minimum guaranteed quota; (ii) what actually is the minimum guaranteed quota in a particular year; and (iii) what are the consequences of failure to lift the minimum guaranteed quota. 148. Rule 35-A(22) occupies the field in respect of issues (i) and (iii). They are: (i) the obligation to lift the minimum guaranteed quota; (ii) what actually is the minimum guaranteed quota in a particular year; and (iii) what are the consequences of failure to lift the minimum guaranteed quota. 148. Rule 35-A(22) occupies the field in respect of issues (i) and (iii). It leaves issue (ii) alone to be determined by the executive, year after year, depending upon the average annual consumption in the State, district-wise. Therefore, what is left unoccupied by the statutory Rules, where the executive can have a play in the joints, is the fixation of minimum guaranteed quota every year. Since the other two issues fall in the occupied field, the respondents cannot issue Annual Policy Announcements, without amending the Rules. 149. Just as a Statute cannot override the Constitution and just as a Rule cannot override a Statute, an executive instruction cannot override a Rule. Fixing a rate of additional fee and a rate of penalty, by ignoring the rate of additional fee stipulated in Rule 35-A(22), would tantamount to executive instructions overriding the statutory Rules. Therefore, condition No. 4.3 of the Excise Policy announced in respect of the years 2013-14, 2014-15, 2015-16 and 2016-17, is ultra vires Rule 35-A(22) and hence, all the writ petitions of the retailers challenging condition No. 4.3, deserve to be allowed. But we are obliged to point out that the respondents are entitled to collect the additional fee at the rate and in the manner prescribed in Rule 35-A(22), for all these years in question, including the years from which and during which, the Rule had been in force. 150. Insofar as the wholesalers and manufacturers are concerned, the Rules are silent about any obligation to lift the minimum guaranteed quota. Therefore, it is open to the respondents to fill up this void, in the form of Annual Policy Announcements, as held by the Supreme Court in Surinder Singh, which was followed in Orient Paper Mills. 151. But since what is sought to be collected by way of additional fee and penalty, is as per the terms of the contract, they can be tested in terms of the provisions of the Contract Act. 151. But since what is sought to be collected by way of additional fee and penalty, is as per the terms of the contract, they can be tested in terms of the provisions of the Contract Act. When so done, it is found that the wholesalers and manufacturers are imposed with a financial burden, not for their own failure to fulfill the contractual obligations, but for the failure of third parties namely retailers to fulfill their obligations. We have elaborated this position elsewhere while dealing with the second contention of the manufacturers. In addition, the additional fee and penalty sought to be collected from all the three categories of persons, exceeds the loss of revenue that the State would suffer in the form of excise duty. We have given detailed mathematical calculation with regard to the same. For one act of failure on the part of one of the three parties, which results in the loss of revenue in the form of duty of excise to the extent of a particular amount, it is unreasonable to impose a burden upon all the three categories of persons resulting in the collection of more amount than what was lost by way of duty of excise. Therefore, condition Nos. 10.28(A) (8) and 10.29 of the policy conditions for the year 2014-15, insofar as manufacturers and wholesalers are concerned, are liable to be set aside. 152. Therefore, in fine- (A) the writ petitions filed by the manufacturers and wholesalers are allowed and condition Nos. 10.28(A) (8) and 10.29, insofar as they impose the burden of additional duty and penalty for failure to lift the minimum guaranteed quota are set aside, however with a rider that they shall pay the license fee for the entire minimum guaranteed quota; and (B) the writ petitions filed by the retailers are partly allowed and condition No 4.3 of the policy announcements for all the 4 years namely 2013-14 to 2016-17 are set aside, with a rider that the retailers will be liable to pay the license fee for the entire minimum guaranteed quota together with the additional fee as stipulated in Rule 35-A (22) of the Himachal Pradesh Liquor License Rules, 1986 for all the years during which the said rule is in operation.