1992 (3) TMI 368 - SC - Central Excise

Summary

Issues:
Challenge to the new policy of auction-cum-tender for settlement of liquor shops for the year 1991-92.
Validity of the change in policy by the State Government.
Application of promissory estoppel and Article 14 of the Constitution.
Return of National Saving Certificates taken as security under the earlier policy.

Analysis:

Challenge to the new policy of auction-cum-tender for settlement of liquor shops for the year 1991-92:
The appellants challenged the new policy on three grounds. Firstly, they argued that the Excise Act and Rules do not provide for revoking or curtailing a license except as per specific provisions. They contended that the five-year license granted to them could not be made ineffective by the new auction-cum-tender policy. Secondly, they invoked the principle of promissory estoppel, claiming that the government was estopped from changing the policy. Lastly, they alleged that the exercise of power was arbitrary, irrational, and violated Article 14 of the Constitution. The High Court rejected these contentions, and the Supreme Court upheld this decision, agreeing with the reasoning provided by the High Court.

Validity of the change in policy by the State Government:
The State Government changed its policy from annual renewal to auction-cum-tender method for settlement of liquor shops for the year 1991-92. The appellants argued that this change was not a valid change in policy. However, the Supreme Court disagreed, stating that the government had the authority to change its policy under the terms of the license grant itself. The Court emphasized that the right to vend excisable articles is exclusively owned by the State Government. The change in policy was deemed to be in public interest to prevent monopolistic tendencies and enhance revenue, justifying the government's decision.

Application of promissory estoppel and Article 14 of the Constitution:
The appellants' reliance on promissory estoppel and Article 14 of the Constitution was dismissed by the Supreme Court. The Court found no merit in the argument that the appellants had altered their position based on a promise or that the change in policy was arbitrary or discriminatory. It was held that the government's decision to change the policy was a valid exercise of power in public interest, and there was no legal basis for invoking promissory estoppel or Article 14 of the Constitution.

Return of National Saving Certificates taken as security under the earlier policy:
The appellants requested the return of National Saving Certificates submitted as security under the previous policy. The Court deemed this request just and proper, directing the State Government to return the certificates to the licensees within two months. However, this directive did not apply to licensees involved in civil suits regarding the security amounts, as their cases would be governed by the outcome of those proceedings.

In conclusion, the Supreme Court dismissed the appeal, upholding the validity of the State Government's change in policy and rejecting the appellants' arguments based on promissory estoppel and Article 14 of the Constitution. The Court also ordered the return of National Saving Certificates to the licensees as requested.