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TMI Blog1992 (2) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... om the market, it installed its own distillery from may 1970 at Bilimora, within the State of gujarat. This was for the purpose of manufacturing industrial alcohol from molasses. On July 3rd, 1969 the second respondent, the Director of Prohibition and excise, Gujarat State, Ahmedabad issued a licence to the appellant for manufacturing spirit. In accordance with the conditions No. 2 and 3 of the licence, the 2nd respondent appointed a staff of 9 persons. The said staff consisted of one Inspector, one Sub-Inspector, one Nayak, one jamadar and five constables to supervise the manufacture of spirit in the appellant's distillery plant. The appellant was also required to provide residential accommodation to the supervisory staff within the factory premises. On July 3rd, 1969 the 2nd respondent asked the appellant to deposit the supervisory charges. From time to time, these supervisory charges were also deposited in accordance with the directions of 2nd respondent. It requires to be stated at this stage that the levy of supervisory charges, is traceable to section 58(A) of Bombay Prohibition Act of 1949. The Section says: Sec.58(A) : The State government may be general or sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as potable alcohol. Such a regulatory measure is perfectly valid as seen from Southern Pharmaceuticals Chemicals v. State of Kerala, AIR 1981 SC 1863. This decision was noted with approval in Synthetics Chemicals Ltd. Etc. (Supra). However, such a power was sustained though not on police power but as a regulatory measure. As regards the services rendered, the appellants are precluded from contending that the services did not make the impost, since the High Court has noted that it was not contended before it that there was not sufficient quid pro quo between the quantum of impost and the services rendered to the manufacturer or businessman. We are relieved of the necessity of deciding the correctness of these submissions by a detailed judgment, since identical points were raised in Civil Appeal No. 503 of 1974 (Sh. Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. v. The State of Gujarat Anr.) to which one of us (Mohan, J.) was a party. The said Civil Appeal has been dismissed considering these aspects and upholding the validity of Section 58(A). The said judgment will squarely cover this case as well. We fully concur with the reasons contained therein. In Synthetics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us approval of the Government may prescribe the size and nature of the establishment necessary for supervision of a manufactory and the cost of the establishment and other incidental charges in connection with such supervision be realised from the licensee. There can be no doubt that the supervisory staff is deployed in a bonded manufactory by the Government for its own protection to prevent the leakage of revenue, but there is no denying the fact that a licensee undoubtedly receives a service in return. The cost of the establishment levied under Section 14(e) of the Act is to be collected from the licensee in the manner provided by Rule 16(4) of the Kerala Rectified Spirit Rules, 1972,relevant part of which reads: (4) All the transactions in the spirit store shall be conducted only in the presence of an Excise Officer not below the rank of an Excise Inspector. Such officer shall be assisted by at least two Excise Guards. The cost of establishment of such officer and the guards shall be payable by the licensee in advance in the first week of every month as per counter-signed challan to be obtained from such officer. The rate at which the cost of establishment is to be paid by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to him, it has been accepted by courts all along that the 'police power' of the State enables regulations to be made regarding manufacture, transport, possession and sale of intoxicating liquor. Such police power could be exercised as to impose reasonable restriction as to effectuate the power. He referred to the observations of this Court in Cooverjee B.Bharucha v. The Excise Commissioner and the Chief Commissioner, Ajmer Ors., [1954] SCR 873 which quoted the passage from Crowley v. Christensen,(1890) 24 Lawyers' Edn. 620. Reference was also made to Hari Shanker's case (supra). Where this Court quoted Vol. 38 of the American Jurisprudence where it was stated that the higher the fee is imposed for a licence, better is the regulation. Reliance was also placed on P. N. Kaushal's case (supra). It was contended that it has been accepted by this Court that the police power is excercisable for regulation of an activity of a legislature within the permissible field or impost as regulatory measure. It may be valid though it may neither be fee nor a tax in the limited sense of the term. See the observations of this court in Southern Pharmaceuticals Chemicals. Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d substance, as we look upon the instant legislation, fee or levy which has no connection with the cost or expenses administering the regulation, can be imposed purely as regulatory measure. Judges by the pith and substance of the impugned legislation, we are definitely of the opinion that these levies cannot be treated as part of regulatory measures. in this view of the matter we do not detain ourselves with examining the numerous American decisions to which our attention was drawn by learned counsel very elaborately and thoroughly. This is an added reasoning to uphold the validity of Section 58(A). Turning to the second argument about the absence of quid pro quo, we need only extract the following from the judgment of the High Court: Section 58(A) of the Bombay Prohibition Act creates a statutory duty of supervision and incidentally provides for recovering from a manufacturer or a businessman the cost of supervision which is primarily necessitated by the manufacturer or businessman having been permitted under a licence to carry on lawfully a business or industrial activity which would otherwise have been unlawful. We need not go into the details of this aspect because ..... X X X X Extracts X X X X X X X X Extracts X X X X
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