STATE OF PUNJAB Vs. BALBIR SINGH

JUDGEMENT

(1.) This appeal by special leave comes up before us from the judgment and order of the Division Bench of the High Court of Punjab and Haryana dismissing the appeal of the State of Punjab against the judgment and order of the learned single Judge given on 27 March 1967 in Civil Writ Case No. 2021 of 1966. The learned single Judge had allowed the petition of the respondent M/s. Balbir Singh and Sons. who were the highest bidders at an auction for country liquor vends relating to certain villages in the district of Ferozepore for the year 1965-66. Under the terms of the licence issued to the respondent on conditions specified before the auction, the auction fee and the security had to be deposited before lifting the minimum quota of liquor fixed under the licence. For reasons not mentioned in the judgment of the High Court, which considered it unnecessary to go into them, the respondent-firm did not lift the minimum quota of liquor fixed under the licence. It also did not pay the full amount of licence fee as undertaken by it. The Excise authorities of the appellant State, therefore, demanded payment of the still-head duty on the entire minimum quantity of liquor which the respondent-firm was required to lift under the licence. The High Court allowed the petition following an earlier decision of that court merely on the ground that the respondent-firm had not been given an opportunity of being heard.

(2.) After the judgment under appeal before us, this Court has clarified the whole position in several decisions, and in particular, in Har Shankar v. Deputy Excise and Taxation Commr., (1975) 3 SCR 254 followed in Sham Lal v. State of Punjab, (AIR 1976 SC 2045). In Har Shankar's case (supra). Chandrachud J. speaking for the Constitution Bench of this Court said as under:

(3.) In the aforementioned case of Har Shankar, all the relevant authorities on th subject were quite exhaustively considered by this Court.Subsequent decisions of this Court have followed the principle laid down in Har Shankar's case (supra). Learned counsel for the State also drew our attention to a recent judgment of this Court in State of Punjab v. Mulkh Raj and Co. in Civil Appeals Nos.1381-1382 and 1737 of 1974, delivered on 28 January 1977 = (reported in AIR 1977 SC 1550)where this Court held, inter alia that considerations governing cancellation of licence under S. 36 of the Punjab Excise Act 1914 are not relevant in considering the question whether the demand was lawful under the terms which became binding on both sides as a result of mutual obligations carried out by following the conditions on which the liquor vends were auctioned. It is the enforcement of the liabilities arising out of mutually agreed conditions of auction,which were sought to be enforced by the demand notice. which was quashed by the High Court.