1982 (5) TMI 186 - SC - Central Excise

constitutional validity of ss. 1(2), 3 and (5) of U.P. Excise (Amendment) ordinance No. 4 of 1979 - the constitutional validity of ss. 1(2), 3 and 5 of U.P. Excise (Amendment) Act No. 13 of 1979 (which replaced the said ordinance No. 4 of 1979) (br) (br) assessed fee in addition to the fixed fee

Issues Involved:
1. Constitutional validity of U.P. Excise (Amendment) Ordinance No. 4 of 1979 and U.P. Excise (Amendment) Act No. 13 of 1979.
2. Legality of levying and recovering "assessed fee" in addition to "fixed fee" (auction money) under the U.P. Excise Act, 1910 as amended by Act 5 of 1976.
3. Whether the combination of methods for determining the sum payable for licences was permissible under the U.P. Excise Act, 1910.
4. Whether the bidders were informed about the "assessed fee" at the time of auction.
5. Whether the scales of surcharge fee were prescribed by the Government or the Excise Commissioner.

Issue-wise Detailed Analysis:

1. Constitutional Validity of U.P. Excise (Amendment) Ordinance No. 4 of 1979 and U.P. Excise (Amendment) Act No. 13 of 1979:
The petitioners challenged the constitutional validity of sections 1(2), 3, and 5 of the U.P. Excise (Amendment) Ordinance No. 4 of 1979 and the U.P. Excise (Amendment) Act No. 13 of 1979, claiming these provisions violated their fundamental rights under Articles 14, 19, and 31 of the Constitution. However, during the hearing, it became clear that even without these amendments, the "assessed fee" could be levied and recovered under the Principal Act of 1910 as amended by Act 5 of 1976. Consequently, the petitioners abandoned this challenge, and no arguments were advanced in this regard.

2. Legality of Levying and Recovering "Assessed Fee" in Addition to "Fixed Fee":
The petitioners argued that the respondents' attempt to levy and recover the "assessed fee" in addition to the "fixed fee" was illegal and without authority of law. However, the court found that the Principal Act of 1910, as amended by Act 5 of 1976, allowed for such levies. The relevant provisions, including sections 24A, 24B, 30, and 41, as well as the amended Rules 639, 641, and 642, supported the legality of the "assessed fee" in addition to the "fixed fee" (auction money).

3. Combination of Methods for Determining the Sum Payable for Licences:
The petitioners contended that under section 30(2) of the Principal Act of 1910, prior to its amendment, the respondents could adopt only one method (either by auction or by calling tenders) for determining the sum payable for licences. However, the court held that the phrase "or otherwise" in section 30(2) was sufficiently wide to allow the State Government or the Excise Commissioner to adopt a combination of methods for granting the licence and determining the licence fee. The amended section 30(2) clarified this legal position, and the court rejected the petitioners' contention.

4. Information to Bidders about the "Assessed Fee":
The petitioners claimed that at the time of the auctions, bidders were not informed that an "assessed fee" would be payable in addition to the "fixed fee." The court found that the auctions were held under the provisions of the Principal Act of 1910 as amended by Act 5 of 1976 and the Rules framed thereunder. The amended Rules 639(2), 641, and 642, which were in force, clearly provided for the "assessed fee." Additionally, the newly inserted condition in the FL-2 licence, which was read out at the time of the auction, indicated that the "assessed fee" would be payable. Therefore, the court held that the bidders had full knowledge of the "assessed fee" and rejected the petitioners' contention.

5. Prescription of Scales of Surcharge Fee:
The petitioners argued that the scales of surcharge fee should have been prescribed by the Government, not the Excise Commissioner. The court referred to section 24B(c), which declared that the Excise Commissioner, while determining or realizing such fee, acted for and on behalf of the State Government. Therefore, the scales of "assessed fee" prescribed under Rule 642 were deemed to have been prescribed by the State Government. The court rejected the petitioners' contention.

Conclusion:
The court concluded that the levy and recovery of the "assessed fee" over and above the "fixed fee" by the respondents for granting FL-2 licences were legal and valid under the U.P. Excise Principal Act of 1910 as amended by Act 5 of 1976 and the amended Rules framed thereunder. Consequently, all the writ petitions were dismissed with costs, quantified at Rs. 5000 payable by each petitioner.

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