RAJAHEEL WINE MERCHANTS Vs. COMMISSIONER OF EXCISE

JUDGEMENT

(1.) Amendments made to sub-rule (2) of Rule 4 and sub-rule (2) of Rule 11 of the Andhra Pradesh Foreign and Indian Liquor Rules, 1970 and to sub-rule (12) of Rule 66 of the Andhra Pradesh Distillery Rules, 1970, substituted by G.O.Ms.No.187, Revenue [Excise.-III (2)] Department, dated 18-3-1991, are being challenged in this batch of Writ Petitions. The effect of the above amendments is under sub-rule (2) of Rule 4 the label fee is enhanced from Rs. 100/- to Rs. 25,000/- while under sub-rule (2) of Rule 11 of the Andhra Pradesh Foreign and Indian Liquor Rules, 1970 and under sub-rule (12) of Rule 66 of the Andhra Pradesh Distillery Rules, a fee of Rs.25,000/- is newly introudced. These amendments are made in exercise of the powers conferred by Section 72 of the Andhra Pradesh Excise Act, 1968 (Andhra Pradesh Act 17 of 1968). These amendments are challenged as arbitrary, illegal, -ultra vires and unreasonable and also offending Articles 14 and 19 (1) (g) of the Constitution of India.

(2.) As common questions of law and fact are involved in this entire batch of Writ Petitions, they are being disposed of by a common judgment.

(3.) The main grievance of the petitioners in all the above writ petitions is as follows:- The amended sub-rules prescribe levy of a fee of Rs.25,000/- for each variety of label sought to be approved by the Commissioner of Excise and for similar levy of fee for re-approval in every excise year. The present sub-rule in each case is ultra vires the rule making power conferred on the Government as the levy of such fee is beyond the scope of the main Act itself as it is not provided under the Act for levy of any such fees for approval of labels. It is no where laid down in the Andhra Pradesh Excise Act, 1968 for the levy of any fee for approval of the labels to be affixed on the bottles or for the re-approval of such labels every year. As such, sub-rule (2) of Rule 4 or sub-rule (2) of Rule 11 of the A.P. Foreign Liquor and Indian Liquor Rules 1970 or sub-rule (12) of Rule 66 of the A.P. Distillery Rules, 1970 is beyond the rule making power conferred on the Government under Sec.72 of the Andhra Pradesh Excise Act and consequently it is illegal and unenforceable. As the impugned sub-rules contemplate levy of fees, they must relate to any particular service rendered by the respondents to the petitioners and they mustbe commensurate to the services so rendered. As there is no quid pro quo for the fee sought to be levied, the impugned levy is arbitrary and unsustainable. The above said amendments are given restrospective effect from 28-8-1989 by which the respondents will be entitled to collect the so called label fee of Rs.25,000/- in each case for the approval even in respect of such labels which were already approved by the 2nd respondent long prior to coming into force of the said sub-rules, which is unreasonable. The proposed levy of the fee at the rate of Rs.25,000/- on each variety of the labels approved and to be approved is an unreasonable restriction on the freedom of trade guaranteed on the petitioners under Article 19 (1) (g) of the Constitution of India. It is the complaint of the petitioners in all the writ petitions that the 2nd respondent is insisting on the payment of separate fees in respect of the labels relating to the varieties for which the export permit or import permit, as the case may be is obtained by the petitioners for the same varieties for which the approval fee is paid for local sales. There is no basis for such levy even in the amended rules. As such the demand is illegal and unwarranted. The collection of label fee is only to augment the revenue and there is no basis for enhancement. The impugned action is unconstitutional and violative of Articles 14, 19 and 21 of the Constitution of India since this is an inter-state trade and commerce where the movement of goods within India between a State and State should be free and should not be put to too many restrictions. The impugned amendments are, therefore, contrary to federal structure of the Constitution of India and violative of Article 301 of the Constitution of India.