24 June 2024


Judgments

Supreme Court

Assistant Excise Commissioner, Kottayam & Ors. vs. Esthappan Cherian & Anr.

MANU/SC/0604/2021

06.09.2021

Civil

Rule Or Law Cannot Be Construed As Retrospective Unless It Expresses A Clear Or Manifest Intention To The Contrary

The State of Kerala, is aggrieved by the judgement of the High Court, which allowed the Respondent’s -("the licensee") writ petition -whereby he claimed for an order quashing a demand in respect of a certain amount towards the balance sought to be recovered after a country liquor license was cancelled.

The facts stated shows that, the licensee was a successful bidder in an auction held by the State of Kerala and had deposited a security amount, to ensure the timely payment of the amounts (kist) due in terms of the contract entered into. Alleging that, the licensee did not remit the kist due to the State in a timely manner, a show-cause notice was issued and eventually the license was cancelled.

In this case, it is evident that when the state initiated recovery proceedings it did not give credit of the amounts collected under the head of department management fee -as was required under pre-existing Rule 13 of the Abkari Shops Departmental Management Rules. Its main contention before this court is that amounts collected as departmental management fee were not adjustable. In view of the decision in Lucka vs. State of Kerala And Ors., there cannot be any dispute that contracts entered into before amendment of Rule 13-as in this case-were not to be treated as those transactions for which amounts were non- adjustable. There is no indication that Rule 13 applied retrospectively.

There is profusion of judicial authority on the proposition that a rule or law cannot be construed as retrospective unless it expresses a clear or manifest intention, to the contrary. Another equally important principle applies: in the absence of express statutory authorization, delegated legislation in the form of rules or regulations, cannot operate retrospectively.

The Respondent had succeeded before the High Court and was thus entitled to claim regarding adjustment of the departmental management fees, for the period after its contract was terminated. The Respondent was also entitled to claim relief under the Amnesty Scheme, which was denied to it despite having succeeded before the High Court. Eventually, when the Scheme was announced afresh in 2011, this Court permitted the Respondent to deposit 50% of the admitted amount.

Upon payment of 50% of the amount, i.e. 50% of Rs. 40,51,288 within two months, the Respondent’s liabilities towards the arrears of dues for the liquor vend in issue which was cancelled by the appellant State’s order shall stand discharged. The state is hereby directed to release the Respondent’s property attached and sought to be sold, towards satisfaction of the above liability, upon receiving the said balance 50% of the amount within two months or latest within four weeks of receipt of the amount.

The Respondent shall not be liable to pay any interest for the upheld payment or for any other reason whatsoever, on the principal amount, i.e. Rs. 40,51,288. The State shall refrain from initiating any proceedings for its recovery towards arrears for the said period the contract was to be in operation, i.e. 1993-94. The impugned judgment is accordingly upheld. The appeal is dismissed.

Tags : Demand Quashing Legality

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