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Issues Involved:
1. Validity of the demand notice for the difference amount between the agreed bid and re-auction amount. 2. Validity of the demand notice for defaulted instalments of the licence fee. Summary: Issue 1: Validity of the demand notice for the difference amount between the agreed bid and re-auction amount The Supreme Court addressed the appeals against the Punjab High Court's judgment quashing the demand notices for the recovery of the difference between the agreed bid amount and the re-auction amount for a liquor vend. The Court observed that the respondents failed to deposit the required security amount, contravening the conditions of the auction and the Punjab Liquor Licence Rules, 1956. The Deputy Excise & Taxation Commissioner issued a show-cause notice and subsequently re-auctioned the licence, resulting in a loss of Rs. 3,46,000. The High Court quashed the demand notice, following its earlier decision in Kanhiya Lal Bhatia & Co. v. State of Haryana & Ors., which was later reversed by the Supreme Court in State of Haryana v. Jage Ram & Ors. The Supreme Court held that the amounts charged were in the nature of a price for parting with the State's privilege, not a tax or excise duty. The Court concluded that the respondents were liable for the difference amount, emphasizing that the writ jurisdiction under Art. 226 was not intended to facilitate avoidance of voluntarily incurred obligations. Issue 2: Validity of the demand notice for defaulted instalments of the licence fee In a separate appeal, the respondents had offered the highest bid for a liquor vend licence but failed to pay the instalments of the licence fee. The High Court quashed the demand notice for the first instalment, following its decision in Kanhiya Lal's case. The Supreme Court noted that the respondents operated the licence without paying any instalments, constituting a fundamental breach of an essential condition. The Court held that the Excise & Taxation Commissioner would have been justified in cancelling the licence under r.36(23)(2) of the Rules. Instead, the respondents were served with a demand notice, which they challenged. The Supreme Court concluded that the respondents were bound to pay the defaulted instalments and set aside the High Court's judgment, allowing the appeals with costs. Conclusion: The Supreme Court allowed the appeals, setting aside the High Court's judgment and orders, and dismissed the writ petitions filed by the respondents. The Court upheld the validity of the demand notices for both the difference amount and the defaulted instalments of the licence fee, emphasizing the binding nature of the contractual obligations arising from the auction.
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