POLYCHEM LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) The short question that arises for our consideration in this appeal is whether the State Government is empowered to collect differential supervision charges with retrospective effect under Section 58-A of the Bombay Prohibition Act, 1949

(2.) The facts leading to the filing of this appeal are as follows:- The first appellant is a company registered under the provisions of the Companies Act, 1956. The second appellant is a share-holder and Director of the first appellant-company. The appellants, for the sake of convenience, will be referred to hereinafter as the 'Company'. The Company is engaged in the manufacture of alcohol potable liquor, country liquor and alcohol based chemicals. As required under Section 58-A of the Act read with Condition No. 2 of the License issued to the Company in Form 'I', the Company used to pay in advance the supervision charges towards the costs of the staff deputed for the purpose of supervising the operation of manufacture, storage and issue of spirit. The Inspector of Prohibition and Excise by a letter dated 19th July, 1979 informed the Company that the wages and dearness allowance of Government servants were increased retrospectively and on account of that the supervision charges payable by the Company comes to Rs. 1,54,379.79 for the period 1970 to 1979. However, pursuant to the said letter dated 19th July, 1979, no steps were taken by the respondents to collect the differential amount from the Company. While so, the Company on 7th April, 1983 received a Demand Notice dated 21st March, 1989 calling upon the Company to pay the differential amount of supervision charges amounting to Rs. 99,702.10 immediately within 15 days from the date of the receipt of the said Demand Notice, failing which legal action to recover the amount as arrears of land revenue would be taken.

(3.) Aggrieved by the said demand of differential supervision charges retrospectively, the Company moved the High Court by filing a Writ Petition No. 1672/83 under Article 226 of the Constitution of India. The said writ petition was heard along with Writ Petition No. 940/82 and the main judgment was rendered in Writ Petition No. 940/82. A Division Bench of the Bombay High Court upheld the impugned demand of differential supervision charges retrospectively. The Company, aggrieved by the judgment of the Bombay High Court dated 12-9-90, has preferred this appeal by special leave.