1957 (12) TMI 34 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the Excise Orders
2. Interpretation of Excise Rules and Statutes
3. Estoppel Against Government
4. Jurisdiction and Applicability of Article 226
5. Nature of Sikkim as a Foreign State
6. Legality of Gallonage Fee
7. Legislative Competence and Constitutional Validity

Detailed Analysis:

1. Validity of the Excise Orders:
The applicant sought a writ of certiorari to quash the orders of the Collector of Excise, Commissioner of Excise, and Government of West Bengal, which demanded payment of gallonage fees amounting to Rs. 11,989/8/- for foreign liquors supplied to a dealer in Sikkim. The Collector's order dated 30th July 1954 was the original order under dispute.

2. Interpretation of Excise Rules and Statutes:
The applicant argued that he had been selling foreign liquor to licensed dealers in Sikkim since 1946 and issued passes as per the Bengal Excise Act, 1909. The Bengal Excise (Foreign Liquor License Fee) Rules, particularly Rule 3(b), required payment of fees for liquor not supplied under a valid excise pass issued to a licensed dealer. The Court held that the interpretation of statutes and rules cannot be altered by official advice and that there can be no estoppel against the Government on a point of law.

3. Estoppel Against Government:
The applicant relied on a letter from the Collector of Excise, which stated that sales to licensees in areas where sales had been previously made would continue without imposition of gallonage fees. The Court ruled that the Government is not bound by the advice contained in such letters, citing precedents from the American Supreme Court and the House of Lords, which held that official advice does not alter the legality of an act.

4. Jurisdiction and Applicability of Article 226:
The Court noted that the applicant had already availed himself of the ordinary remedies provided by the special Act and could not challenge the original order under Article 226 of the Constitution after failing at all previous stages. This principle was supported by the decision in Kanai Lal Sethi v. Collector of Land Customs, Calcutta.

5. Nature of Sikkim as a Foreign State:
The applicant's argument that Sikkim was a foreign sovereign state was rejected. The Court clarified that Sikkim was a protectorate of India, enjoying autonomy in internal affairs but not considered a foreign state in the context of the Bengal Excise Act. The sale to a dealer in Sikkim did not qualify as a sale under a valid excise pass within the meaning of Rule 3(b).

6. Legality of Gallonage Fee:
The Court held that the sale to Sikkim did not meet the conditions of a valid excise pass, and the gallonage fee was correctly imposed. The assessable quantity of liquor included the stock sold to Sikkim, as there was no valid pass issued under the Bengal Excise Act.

7. Legislative Competence and Constitutional Validity:
The applicant contended that the levy of gallonage fees was ultra vires the powers of the State Legislature under the Constitution. The Court disagreed, stating that the Bengal Excise Act and the rules made thereunder did not deal with international or inter-state trade but were covered by the State subjects in List 2 of the Seventh Schedule of the Constitution. The Court affirmed the legislative competence of the State to impose such fees under the Bengal Excise Act, 1909.

Conclusion:
The Court dismissed the application, holding that the fee was authorized and permitted by statute, and was neither ultra vires, illegal, nor unconstitutional. The Rule was discharged, and the interim order, if any, was vacated without any order as to costs.