The Judgment of the Court was as follows:
P.B Mukharji, J.:— This is an application under Art. 226 of the Constitution. The applicant is P.H Avari carrying on business at No. 5, Dharamtolla Street, Calcutta. He seeks for a writ of certiorari to quash the order of the Collector of Excise, Calcutta, dated the 30th July, 1954, the order of the Commissioner of Excise, West Bengal, dated the 25th August, 1954 and the order of the Government of West Bengal, dated the 4th October, 1956.
2. The order of the Collector of Excise, dated the 30th July, 1954 is the original basic order against which the present complaint is made in the petition. That order stated—
“Under Rule 3(b) of the rules published with the Notification No. 918A. Ex. dated 11-9-42, you are liable to pay gallonage fees amounting to Rs. 11,989-8 in respect of foreign liquors mentioned in the passes as noted below
“Pass (numbers and dates were given in the order) issued by you in favour of the Ramdasram Ramphalram of Gangtok (dikkim) not a licensee within the meaning of the West Bengal Excise Act.”
3. There is another part of the order which asked the applicant to pay gallonage fees amounting to Rs. 1,463-8 in respect of other quantities. But no complaint or objection is made with regard to that. The order complained against directed the applicant—
“You are, therefore, directed to pay the gallonage fees amounting to Rs. 11,989-8, within 7 days from the receipt of this notice,”
4. The facts may be stated briefly. The petitioner carries on the business of importing foreign liquor from outside India and selling foreign liquor so imported and country-made to other licensed dealers. He is authorised to carry on such business under a license for the sale of foreign liquor granted under the Bengal Excise Act, 1909. The terms of license material for purposes of this application are:
“(1) Sri Pesi Hormusji Avari, resident of Calcutta is hereby authorised by the undersigned, Collector of Excise, Calcutta, to sell foreign liquor (other than denatured spirit) to licensed dealers at 5, Dharamtolla Street, Calcutta, from 1-4-53 to 31-3-54.
(2) That he do not sell any foreign liquor to another licensed dealer (including holders of licenses for hotels, restaurants, bars, canteens dak bungalows, railway refreshment rooms, steamers and dining cars) except under a pass to be issued by him, one copy of which should be sent to the Superintendent of Excise, Calcutta, and the other to the Superintendent of Excise of the District to which the consignment is sent.”
5. It is the petitioner's case that he has been carrying on such business from the year 1946 under the name and style of Calcutta Foreign Liquor Trading Co. His license has been renewed from year to year. It is also his case that since the beginning of his business he has been selling foreign liquor to other dealers outside India and for this purpose he used to issue passes in terms of the clauses in the license quoted above. In the usual course of business he sold and supplied to Ramdas Ramphalram in Gangtok (Sikkim) who he alleges is a licensed dealer in foreign liquor in the State of Sikkim. It is his case that he has been selling foreign liquor to Ramdas since the year 1946. In selling and supplying the foreign liquor to Ramdas he issued passes purporting to be in terms of his license and also against excise import permits said to be granted by appropriate authorities in the State of Sikkim. He submitted regularly copies of all passes issued by him covering all sales to Sikkim. A material part of the Bengal Excise (Foreign Liquor License Fee) Rules with which it will be necessary to deal, came into operation from the 6th November, 1950. The petitioner's ease is that he has been dealing with Sikkim before the 6th November, 1950. Section 12 of the Bengal Excise Act provides that—
“No intoxicant exceeding such quantity as the Provincial Government may prescribe by notification either generally or for any specified local area, shall be imported, exported or transported, except under a pass:
“Provided that, in the case of duty-paid foreign liquor other than denatured spirit, such passes shall be dispensed with unless the Provincial Government by notification, otherwise directs with respect to any local area.”
6. It also provided that the passes required under section 12 can be granted by the Collector and such passes will be either general for definite periods and particular kinds of intoxicants, or special for specified occasions and particular consignments only. The words ‘export,’ ‘import’ and ‘transport’ under the Bengal Excise Act have been given their qualified and naturally limited meaning, namely,—
‘Export’ means under the Act ‘to take out of West Bengal otherwise than across a customs frontier as defined by the Central Government.’
‘Import’ means ‘to bring into West Bengal otherwise than across a customs frontier as defined by the Central Government.’
7. Transport means ‘to remove from one place to another within West Bengal.’
8. Being a law relating to excise, these limited meanings are obvious.
9. In exercise of powers conferred by section 86 of the Bengal Excise Act the Government has made the Bengal Excise (Foreign Liquor License Fee) Rules. By Rule 2 ‘assessable quantity’ means ‘the difference between the licensee's opening stock of liquor together with the receipts and his closing stock of liquor in saleable condition.’ Rule 3 provides that a holder of a licence for the sale of foreign liquor to the trade shall pay certain fees. Sub-clause (a) of Rule 3 provides that a licensee shall pay in advance an annual fee upon the assessable quantity of the previous twelve months at specified rates shown there. Sub-rule (b) of Rule 3 provides that a licensee shall pay upon so much of the assessable quantity as has not been supplied under a valid excise pass issued to a person who holds or is deemed under section 20 of the Bengal Excise Act, 1909, to hold a license thereunder for the sale of foreign liquor, fee at the rates prescribed in sub-rule (1) of rule 5. Sub-rule (1) of Rule 5 provides for additional fee for ‘public off’ licenses stating that licensee for the sale of foreign liquor shall pay, in addition to the annual lump fee, fee calculated on the assessable quantity at specified rates shown in the table therein.
10. The main body of these Rules was framed in 1942. Sub-rule (b) of Rule 3 was introduced by Notification No. 2416 dated the 6th November 1950. After introduction of Rule 3(b) it is alleged that certain members of the trade asked for clarification of the position with regard to imposition of gallonage fee of sales in and outside West Bengal and the Collector in answer by his letter No. 39 R.E dated 17th May, 1951 to Messrs. Phipson & Co. had stated that sales to licensees of areas to which sales had heretofore been made would be continued without imposition of gallonage fees. It is alleged that the petitioner relied on and acted on such interpretation. Dr. Atul Gupta fox, the applicant argued that the Government is bound by the advice contained in that letter of the 17th May, 1951 and is estopped from contending otherwise.
11. Reliability of official advice cannot in my judgment alter the construction of the Statutes and the Rules made thereunder. There can be no estoppel against the Government on a point of law and construction of statute. Neither the Government nor this court will be bound by interpretation of the Act and the Rules made by the Collector of Excise. The law of this country is what the Statute and rules thereunder say and how the courts of the land interpret them and not what a particular Government or administrative officer says. If the Government officer's interpretation is wrong, the party acting on it takes the risk. This view that I am taking is supported by the decision of the American Supreme Court in Federal Crop Insurance Corporation v. Merrill (1) (332 U.S 380) in which the court held that a farmer could not recover on insurance issued in violation of a published regulation even though the application for insurance had been approved by the local agency of the Corporation. Similarly in Howell v. Falmouth Boat Construction Ltd. (2) (1951) A.C 837, the House of Lords says that the fact that a Government officer in his dealings with the subject may have assumed an authority, which he did not possess, to grant a licence, does not debar the Crown from enforcing a statutory prohibition or entitle the subject to maintain that there has been no breach of it. See the observations of Lord Simonds at p. 845 of the Report and Lord Normand at p. 849 of the same Report. The Privy Council decision in Attorney General for Ceylon v. A.D Silva (3) [(1953) A.C 461] is the latest pronouncement on this subject and takes the same view. In India the law insists that where contracts or engagements are required to be in particular forms with particular officers of authority to sign them, that must be strictly complied with in order to bind the government. For obvious reasons the government and the administration cannot like an ordinary person be estopped by the acts of its numerous agents and officers each parforming his work in a limited sphere and with his specially limited authority imposed by his very nature of work. Reference may in this connection be made to s. 175 (3) of the old Government of India Act. 1935 and the present Article 299 of the Constitution and such cases as Chaturbhuj v. Moreswar (4) [(1954) S.C.A 373] and Anath v. Dominion of India (5) (A.I.R 1955 Cal. 626). If the laws of the land are to be found and taken from official correspondence and official advise contained in demi-official communication and circulars, then the Constitution and the Statutes passed by the constitutionally authorised institutions of Parliament and State Legislatures will find their substance and authority gravely imperilled, supplanted and undermined, a situation which I consider wholly inconsistent with the theory and practice of Parliamentary democracy in India with the courts as the exclusive constitutional organs for interpreting the laws of the realm. I shall conclude this branch of the argument by quoting the following observations of Lord Simonds in Howell's case (2) (supra) at p. 845 of the Report to which I have already made a reference where his lordship not only put the legal implications of the reliability of official advice generally with great clarity but also in particular examined the case of such reliability even in criminal matters—
“The illegality of an act is the same whether or not the actor has been misled by an assumption of authority on the part of a Government officer, however high or low in the hierarchy. I do not doubt that in criminal proceedings it would be a material factor that the actor had been thus misled if knowledge was a necessary element of the offence and in any case it would have a bearing on the sentence imposed. But that is not the question. The question is whether the character of an act done in face of a statutory prohibition is affected by the fact that it has been induced by a misleading assumption of authority. In my opinion the answer is clearly no. Such an answer may make more difficult the task of the citizen who is anxious to walk in the narrow way, but that does not justify a different answer being given.”
12. After the Collector's order calling upon him to pay the gallonage fee, the applicant appealed to the Commissioner. Thereafter the applicant went in revision to the Government. The applicant failed at all the stages to upset the order of the Collector of Excise. He now complains against the order in this court under Article 226 of the Constitution.
13. The obvious objection to such a petition under section 226 of the Cons- titution is taken by Mr. B. Das for the Government, on the basis of the decision of Kanai Lal Sethia v. Collector of Land Customs, Calcutta (6) reported in 60 C.W.N 1042. This is a decision of a Division Bench which is binding on me. In that decision, Chakravartti, C.J delivering the judgment comes to the conclusion that:
“It is quite true that the existence of an alternative remedy is not an absolute bar to a recourse to Article 226 of the Constitution but this court has always held that if a party has availed himself of the ordinary remedies provided for by a special Act, he cannot thereafter turn round and begin once again from the bottom by challenging the original order under Article 226 of the Constitution.”
14. It applies with considerable force to this case because the points which the applicant is urging are points which he certainly could have taken in this court and in the first instance when the order of the Collector was made.
15. I shall now notice the other objections of the applicant to the order. His case is that he sold the liquor in question to Ramdas of Gangtok (Sik-kim) who holds a licence in the State of Sikkim and that the sale took place in Sikkim. The applicant is between the two horns of a dilemma. If the sale took place in Sikkim, then Dr. Gupta on his behalf argues that the application of Rule 3(b) and the imposition of a gallonage fee or sale to Sikkim is ultra vires and illegal, because he assumes that Sikkim is a foreign sovereign State. If his assumptions are right, the consequence must follow, for it is not the Government's case that the Bengal Excise Act was intended to apply to foreign sovereign States and to what is known as the export and import trades across Customs barriers of foreign countries. He is then met with the situation that if Sikkim was a foreign State, according to him, then how was it that he was admittedly issuing passes under the terms of the licence granted by the West Bengal Government. The passes contemplated in section 12 of the Act are not passes granted to persons who are licence-holders of and under foreign States and foreign Governments. This is the basic fallacy and confusion on which the applicant's case rests.
16. The applicant's contention before the Commissioner of Excise was that the pass which he was authorised under the Rules to issue should be treated as a valid pass within the meaning of Rule 3(b) of the Bengal Excise Rules. His further contention was that Ramdas of Gangtok held a licence granted by the Sikkim State and in the absence of any condition to be determined by the Excise Commissioner, such a licensee should under section 20(1) (a) be deemed to be a licensee granted under the Bengal Excise Act. His other group of contentions before the Commissioner was that exports to other States which were formerly provinces of India had the sanction of practice for many years behind it and that practice was that no gallonage fee was charged. In support of that he relied on illustrations about Andaman Islands, Kashmir State, Burma and also to Sikkim on the strength of the Collector's letter which I have already mentioned. Dr. Atul Gupta, appearing for the appli- cant on this petition has urged the same points before this court.
17. The claim of the applicant, in my opinion, is unsound. The first wrong assumption of the applicant is to take Sikkim at a fully sovereign foreign State. It is not. Under treaty with India, Sikkim is India's protectorate. That is the treaty dated the 5th December, 1950. It provides that ‘Sikkim is a protectorate of India enjoying autonomy in regard to its internal affairs.’ In fact, it provides that ‘the external relations of Sikkim would be conducted and regulated solely by the Government of India, and that ‘the Government of Sikkim would have no direct dealings with any foreign power, and that Sikkimese nationals travelling to foreign countries would be treated as India-protected persons for the purpose of Pass Ports, receiving from Indian representatives abroad the same protection and facilities as Indian nationals,’ and the treaty also stipulates that ‘the Government of Sikkim would not levy any import duty, transit duty, or other imports on Indian goods brought into or in transit through Sikkim, with reciprocal treatment of goods of Sikkimese origin brought into India.’ It is therefore clear that Sikkim is not a Customs frontier in the sense understood in the international trade with sovereign foreign States. The position of a protectorate depends on the terms of the protectorate. In this case I have set out the relevant terms.
18. The second defect in the applicant's argument is that sale to Ramdas of Ganglok (Sikkim), even assuming that Ramdas holds a licence of the Sikkim State, does not make that sale as one under ‘a valid excise pass issued to a person who holds or is deemed under section 20 of the Bengal Excise Act, 1909, to hold a licence thereunder for the sale of foreign liquor’ within the meaning of the Bengal Excise Rule 3(b). It is clear enough that a licence under the Bengal Excise Rules or under the Bengal Excise Act means a licence-holder under the Act and not the license-holder of a different Government like that of the protectorate of Sikkim. Sikkim is not a province or a State of the territory of the Union of India. By the very express terms of the protectorate over Sikkim, it is clearly recognised that Sikkim enjoys autonomy in her internal affair. Excise is an internal affair.
19. Secondly, section 20(1a) of the Bengal Excise Act says that “no intoxicant shall be sold except under the authority and subject to the terms and conditions of a licence granted in that behalf by the Collector, provided a licence for sale granted under the Excise Law in force in any other province may, on such conditions as may be determined by the Excise Commissioner, be deemed to be a licence granted under this Act.” The difficulties of the applicant to come within the ambit of this section are manifold. First, I find it difficult to hold that Sikkim as a protectorate country could come within the meaning of the word ‘province’ as used in this section. I have no doubt that it cannot. Secondly, in any event, the fact of a licence from Sikkim Government will not help unless the Excise Commissioner here determines to deem it as a license under this Act. Now in this case the Excise Commissioner had made no such determination even if he could. As the Commissioner has rightly in- dicated, the case of Andamans or of Burma is not analogous to Sikkim.
20. It is necessary to remark here on a point of fact. It is said by the applicant that the sale in this case was made in Sikkim. The affidavit by the Commissioner of Excise is that he has no knowledge of that fact and he makes no admission with regard thereto. It is difficult to determine these disputed questions of fact in affidavit and should not be determined on an application under Article 226 of the Constitution on affidavits alone. One cannot, however, help remarking that the opening terms of the license as quoted above shows that the applicant was authorised by the terms of the license to sell foreign liquor ‘to licensed dealers at 5, Dharamtolla Street,’ and if that is so, how was it that he was selling liquor outside that place in Sikkim? It is unnecessary however for the purposes of the present application and having regard to the view I take of the law, to pursue this question of fact any further.
21. All that the Excise Collector has done is to determine the assessable quantity under the Bengal Excise Rules. Under Rule 2(al) “assessable quantity” means the difference between the licensee's opening stock of liquor together with the receipts and his closing stock of liquor in saleable condition. Then Rule 3(b) provides that a licensee shall have to pay upon so much of the assessable quantity as has not been supplied under a valid excise pass issued to a person who holds or is deemed under section 20 of the Bengal Excise Act, 1909, to hold a license. Now as there was no valid excise pass within the meaning of Rule 3(b) and as these liquors alleged to have been sold to Sikkim were in a saleable condition, they naturally have to be added back to the assessable quantity. That is that all the Collector of Excise had done and what the Commissioner confirmed and what the Government of West Bengal finally approved.
22. Lastly, Dr. Gupta for the applicant argues that the levy of gallon-age fee is legislation regarding inter-State trade and commerce and, therefore, ultra vires the powers of the State Legislature under the Constitution. Dr. Gupta contends that under Item 42 of the Union List in the Seventh Schedule of the Constitution, inter-State trade or commerce is an exclusive legislative subject for Parliament and so also trade and commerce with foreign countries and import and exprot across Customs frontiers. But I do not read the Bengal Excise Act and the Rules made thereunder as in any way dealing with international trade or inter-State trade. The specially limited meanings of ‘export,’ ‘import’ and ‘transport’ under the Act are enough to show that the Act does not deal or even purport to deal with international trade or inter-State trade. I consider that the legislation Bengal Excise Act, 1909, and the Rules and the Notifications thereunder even after the Constitution are covered by the State subjects in List 2 by Item No. 51 which specifically deals with duties of excise on goods manufactured or produced in the State and countervailing duties on goods manufactured or produced elsewhere in India. The list includes alcoholic liquors for human consumption. There is also Item 8 in List 2 relating to intoxicating liquors, their production, manufacture, transport and sale in the State list. It must be remembered and recalled that the Bengal Excise Act, 1909 had the previous sanction of the former Governor-General under section 5 of the Indian Council's Act, 1892. It was therefore valid law existing at the time of the Constitution and since then still remains so.
23. Section 27 of the Act gives power to the State Government to impose duty on import, export, transport and manufacture of excisable article. Sections 30 to 44A under Chapter VI of the Bengal Excise Act deal with licenses, permits and passes. Section 38 provides that every license granted under the Act shall be granted on payment of ‘fees.’ It also provides that such license or permit under this Act shall be granted for such period as may be prescribed by rules made by the Government.
24. Section 85 of the Bengal Excise Act gives the State Government power to make rules to carry out the objects of the Act or any other law for the time being in force relating to the excise revenue. In addition to the general powers so granted it is expressly provided under section 85(2) (d) of the Act, that the State Government may make rules for regulating the import, export or transport of any intoxicant. This section is followed by section 86 which contains further powers of the State Government to make rules. Among them express rule-making power is given for regulating the supply of any intoxicant. By section 86(7) of the Bengal Excise Act it is expressly provided that the State Government may make rules for prescribing the scale of fees or the manner of fixing the fees payable in respect of any of the exclusive privileges granted under any license, permit, or pass granted under this Act and section 86(8) provides expressly for regulating the time, place and manner of payment of such fees. In an explanation to section 86 of the Bengal Excise Act it is expressly provided that fees may be prescribed under clause (7) of this section at different rates for different classes of exclusive privileges, licenses, permits, passes or storage, and for different areas.
25. I am, therefore, satisfied both by the terms of the Statute and the rules made thereunder that the State Government can charge a fee.
26. The Bengal Excise (Foreign Liquor License Fee) Rules were framed under section 86 of the Act. All that Rules 3A and B provide are the terms of a license. Among these terms is the term that a license-holder should pay certain fees on the assessable quantity of the liquor. The distinction sought to be drawn between tax and fee, one as going to the general revenue and the other levied for specific service, as pointed out in the Supreme Court decisions of Mahant Sri Jagannalh Ramanuj Das v. The State of Orissa (7) (1954) S.C.R 1046 and the Commissioner, Hindu Religious Endowments, Madras v. Sri Lakskmindra Thirtna Swamier of Sri Shirpur Mutt (8) (1954) S.C.R 1005, is not germane in the context of the present application. The distinction between a tax and a fee is well-known, namely, that the tax is levied as part of a common burden and the fee is the payment for a special benefit or privilege Translating that expression to the con text of the present facts, the lee in this case was for the specific benefit of a particular license that is obtained in this ease. This fee is annexed to the license as one of its many terms and conditions. I need hardly add that by section 89 of the Bengal Excise Act these fees and all kinds of excise revenue go to the general fund and the process prescribed for the recovery of arrears of revenue are available for this purpose. The word ‘excise-revenue’ under the Bengal Excise Act includes revenue derived or derivable from any fee under section 2(1) of the Act.
27. I, therefore, hold that the fee is authorised and permitted by Statute and is neither ultra vires nor illegal nor unconstitutional
28. The application, therefore, must fail and is dismissed. The Rule is discharged and interim order, if any, vacated. There will be no order as to costs.
A.K.D.G