D. DIS. NO. 5208/50/RD
Sanction is accorded for extra quota of foreign liquor being allowed to wholesale licensees in Cochin on payment by them of a commission at 20% of the price of liquor. The commission so realised from the wholesale licensees in the Cochin area will be credited to Government.
By order of His Highness the Raj Pramukh,
(Sd.) Assistant Secretary.
The Secretary Board of Revenue,
The Accountant General.'
6. Learned counsel appearing in support of this appeal, before us contends that the order dated July 14, 1950, endorsed on the foot of Exb. (1) was a statutory order passed by the State under Section 17 of the Cochin Abkari Act 1 of 1077 M.E. That section provides, inter alia, that a duty of such amount, as the Diwan may prescribe, shall, if he so directs, be levied on all liquors and intoxicating drugs sold in any part of the Cochin State. In the counter affidavit it was contended that the Secretary, Wine Merchants Association having applied for the extension of the system of charging commission to the Cochin area, the Government allowed the extension as a matter of general policy. No reference whatever was made in the counter affidavit to what is now alleged to be a statutory order passed by the State in exercise of its powers under Section 17. It was not alleged before the High Court and has not been alleged before us that a copy of this alleged order was published in the official Gazette or was ever communicated to the present respondent. On December 19, 1949, the present respondent received only a letter (Exb. B) from the Secretary, Board of Revenue fixing his quota for sale to persons other than licensees. Again, on June 23, 1951, he received a copy of memorandum (Exb. C) from the Excise Division Office, Ernakulam to the Excise Inspectors asking the latter to demand commission at 20% on excess sales. There was no reference in either of those two documents to any alleged order of July 14, 1950. Further the endorsement does not, in terms or in form, purport to be an order made by the State in exercise of the powers conferred on it by Section 17 of the Cochin Abkari Act. It is more in the nature of an intimation given to the Board of Revenue that the Government accorded sanction to extra quotas of foreign liquor being allowed to wholesale licensees in Cochin on payment of the Commission. The State did not make any order fixing any extra quota for any licensees or imposing a commission. It only authorised the excise authorities to allow extra quotas to wholesale licensees in Cochin on payment by them of the requisite commission and directed that the commission so realised from the wholesale licensees in the Cochin area should be credited to the Government. The document was nothing more than what in terms it purports to be, namely, a departmental instruction that the excise authorities might allow extra quotas to wholesale licensees on payment of the requisite commission. Indeed it was in pursuance of this departmental instruction that the excise authorities sent Exbs. B and C to the present respondent. In our opinion Exb. (1) cannot be regarded as a statutory order fixing any quota or imposing any commission. We are also of the opinion that the High Court should not have permitted the appellants to produce and to file Exb. (1) during final argument or use the same against the respondent.
7. Further, Section 18 of the Cochin Abkari Act, which does not appear to have been brought to the notice of the High Court, is, without the proviso which is not material, as follows:
18. 'Such duty may be levied in one or more of the following ways :
(a) by duty of excise to be charged in the case of spirits or beer, either on the quantity produced in or passed out of a distillery, brewery, or warehouse licensed or established under Section 12 or Section 14 as the case may be, or in accordance with such scale of equivalents, calculated on the quantity of materials used or by the degree of attenuation of the wash or wort, as the case may be, as the Diwan may prescribe.
(b) in the case of intoxicating drugs by a duty to be rateably charged on the quantity produced or manufactured (or issued from a warehouse licensed or established under Section 14).
(c) by payment of a sum in consideration of the grant of any exclusive or other privilege:
(1) of manufacturing or supplying by wholesale, or
(2) of selling by retail, or
(3) of manufacturing or supplying by wholesale and selling by retail, any country liquor or intoxicating drug in any local area and for any specified period of time.
(d) by fees on licences for manufacture or sale
(e) in the case of toddy, or spirits manufactured from toddy, by a tax on each tree from which toddy is drawn, to be paid in such instalments and for such period as the Diwan may direct; or
(f) by (import, export or) transport duties assessed in such manner as the Diwan may direct:Provided...........................'
It will be noticed that none of the several ways referred to in the section can possibly be relied upon as authorising the imposition of any commission on the sale of foreign liquor by a wholesale licencee in excess of his quota except Clause (d). According to that clause the duty on foreign liquor in excess of the quota can only be levied by imposing a fee on licenses for the sale of such foreign liquor. It will be recalled that all the three licenses in question were issued under Cochin Abkari Act 1 of 1077 M. E. and the rules which had been framed thereunder on June 2, 1949, and which were in force on the dates of the issue of those licenses. Rule 7 provided that licenses for the sale, amongst others, of foreign liquor would be in the form appended thereto. From F. L. 1 is for a wholesale license for the wholesale vend, inter alia, of foreign liquor not to be drunk on the premises and it provided that a license in that form would be issued by the Board of Revenue for an annual fee of Rs. 2,000. All the licenses issued to the respondent were in Form F. L. 1 and he paid Rs. 2,000 for each of them. The imposition of a further duty under Section 17 read with Section 18 by way of fees on licenses for sale would obviously, therefore, amount to an amendment of the provisions of Rule 7 of the Cochin Abkari rules under which the licenses had been issued. Section 69 of the Act requires that all rules made or notifications issued under this Act shall be made and issued by publication in the Cochin Sarkar Gazette. The section further provides that all such rules and notifications so published shall thereupon have the force of law and be read as part of this Act and might in like manner be varied, suspended and annulled. The rules, which included Rule 7 under which the licenses in question had been issued, have been published in Cochin Sarkar Gazette and those rules have the force of law and have to be read as part of the Act and can only be varied, suspended or annulled in like manner, i.e., by a rule or notification similarly published. It is conceded that the endorsement at the foot of the Exb. (1), which is said to be a statutory order made under Section 17 and which obviously varied the provisions of Rule 7 by enhancing the fee on licences by adding a- 20% commission to the fee already paid was not published in the Cochin Sarkar Gazette. It follows, therefore, that even if the endorsement could be regarded as a rule or notification prescribing the levy of duty, not having been published in the manner aforesaid, the same cannot be regarded as a valid order having the force of law and, therefore, the impost cannot be said to be supported by authority of any law. Learned counsel faintly suggested that the endorsement in question was neither a rule nor a notification but was an order and was, therefore, not governed by Section 69. Section 18 being the machinery section for working out Section 17, and the alleged order not being in terms or form an imposition of a fee on license for sale, under Section 18 Clause (d) learned counsel could not refer us to any other section in the Act under which an order of the kind appearing at the foot of Exb. (1) could be made or show us under what provision of law could such an order have legal effect without its publication in the official Gazette. Assuming the endorsement at the foot of Exb. (1) was an order, not having been published in the official Gazette, it cannot, by reason of Section 69, in any way vary Rule 7 which fixes the fee on licenses in Form F. L. 1 at Rs. 2,000 per annum. The fact of the matter is that the impost was nothing but an executive order, if an order it was, which had no authority of law to support it and was, therefore, an illegal imposition. As explained by this Court in Mohammad Yasin v. Town Area Committee Jalalabad : 1SCR572 , & again in Bengal Immunity Co. Ltd. v. State of Bihar : 2SCR603 , an impost not authorised by law cannot possibly be regarded as a reasonable restriction and must, therefore, always infringe the right of the respondent to carry on his business which is guaranteed to him by Article 19(1)(g) of the Constitution. In this view of the matter it is not necessary to express any opinion on the other points dealt with in the judgment of the High Court.
8. For reasons stated above this appeal must be dismissed with costs.