Case Note & Summary
The Supreme Court of India heard a civil appeal by special leave filed by an excise licensee against the State of Bihar and others. The dispute concerned the security deposit for six country spirit retail shops in Jamshedpur operating under the sliding scale system under the Bihar and Orissa Excise Act, 1915. The appellant held yearly licences for these shops, originally issued long ago and renewed from year to year. A total security of Rs. 11,099 had been deposited. By an order dated June 27, 1956, the Board of Revenue directed that security deposit for an excise shop under the sliding scale system would be equivalent to two months' average licence fees, which for the appellant would amount to about Rs. 68,000. The Commissioner of Excise directed realisation of the deficit by order dated November 14, 1956. The appellant moved the Board of Revenue in revision; the Board by order dated March 20, 1957 permitted the appellant to move the Excise Commissioner for reconsideration. The Excise Commissioner by order dated March 5, 1958, in supersession of the earlier order, directed that due to special circumstances no increase in security was required and the appellant could continue on the existing security. The Deputy Commissioner requested the Commissioner of the Division to refer the matter to the Board of Revenue, which was done on June 27, 1958. After notice and hearing, the Board of Revenue by order dated October 4, 1959, in exercise of revisionary power under Section 8, set aside the Excise Commissioner's order dated March 5, 1958 and directed that until expiry of current licences on March 31, 1960 there would be no change in security, but proper security in terms of the Board's general directions would be demanded at the time of renewal. The appellant challenged this order in the Supreme Court. The Court examined three main contentions: first, that the Board could not revise the Excise Commissioner's order because of the finality provision in Section 35; second, that the Board had no power to alter the licence condition regarding security; and third, that the revision was contrary to instructions and barred by limitation. The Court held that Section 35 finality did not apply because the Excise Commissioner had not acted under Section 35 on the basis of lists and objections under Section 34, but under general powers under Sections 8 and 7(2)(a) read with Section 2(7). The Board therefore had ample revisionary power under Section 8. On the second issue, the Court rejected the argument that only the licensing authority could fix security; it held that under Sections 38 and 91 the Board could issue general directions regarding licence conditions, including security deposits, and that no licensee had a vested right to renewal under Section 45. The Court further held that Instruction No. 101(10) read with circular letter No. 8624 dated September 9, 1956 did not prevent enhancement at renewal. On the third issue, the Court held that the Board could exercise revisionary power suo motu under Section 8(3), and no period of limitation was prescribed for such exercise; in a suo motu revision no question of limitation arose. The Attorney General had raised a preliminary objection that the Board was not a tribunal under Article 136, but the Court did not decide it as the appeal failed on merits. The appeal was dismissed and the Board's order was upheld.
Headnote
A) Excise Law - Revisionary Powers - Scope of Sections 8 and 35, Bihar and Orissa Excise Act, 1915 - The Board of Revenue can revise an order of the Excise Commissioner under Section 8(3) where the order was not passed under Section 35; finality under Section 35 attaches only to orders passed on consideration of lists, objections and opinions under Section 34. The Excise Commissioner's orders dated November 14, 1956 and March 5, 1958 were passed under general powers under Sections 8 and 7(2)(a) read with Section 2(7), not under Section 35, so the Board had ample power to revise them. Held that Section 35 did not bar revision. (Paras 1-5) B) Excise Law - Licensing Conditions and Security Deposit - Sections 38, 91 and 45, Bihar and Orissa Excise Act, 1915 - The Board of Revenue may issue general directions under Sections 38 and 91 regarding conditions of any licence, including the amount of security deposit. The Board's direction fixing security deposit as equivalent to two months' average licence fees was valid and could be applied as a condition of renewal; no licensee has a vested right to renewal under Section 45, and the licensing authority may require proper security upon renewal. Held that the Board's direction was lawful. (Paras 1-5) C) Excise Law - Applicability of Administrative Instructions - Instruction No. 101(10) and Board's Circular Letter No. 8624 dated September 9, 1956 - The instruction did not prevent enhancement of security at the time of renewal of licences; the Board's order dated October 4, 1959 did not alter security during currency of existing licence but only directed proper security at renewal. Held that the direction did not contravene the instruction. (Paras 1-5) D) Administrative Law - Suo Motu Revision - Section 8(3), Bihar and Orissa Excise Act, 1915 - The Board of Revenue may exercise revisionary power suo motu without an application by an aggrieved party; no period of limitation is prescribed for exercise of such power under Section 8(3). In a case where the Board exercises its power of revision of its own motion, no question of limitation arises, and the Board's order stated it would exercise powers suo motu. Held that the revision was not barred by limitation. (Paras 1-5) E) Constitutional Law - Appeal Maintainability - Article 136, Constitution of India - The Attorney General raised a preliminary objection that the Board of Revenue is not a tribunal within the meaning of Article 136, but the Court found it unnecessary to decide the objection because the appellant had no case on the merits. Held that the preliminary objection was not decided. (Paras 1-5)
Issue of Consideration
Whether the Board of Revenue could revise the Excise Commissioner's order under Section 8 despite Section 35 finality; whether the Board had power to issue general directions regarding security deposits under Sections 38 and 91; whether Instruction No. 101(10) prevented enhancement at renewal; whether suo motu revision was permissible and whether limitation applied; maintainability of appeal under Article 136.
Final Decision
The Supreme Court dismissed the appeal and upheld the Board of Revenue's order dated October 4, 1959. The Court held that the Board had ample power under Section 8 to revise the Excise Commissioner's order, that the Board could issue general directions under Sections 38 and 91 regarding security deposits, and that suo motu revision was permissible with no limitation. The direction to demand proper security at the time of licence renewal was valid.
Law Points
- Revisionary power under Section 8(3) extends to orders not protected by Section 35 finality
- Board may issue general directions under Sections 38 and 91 regarding licence conditions including security deposit
- suo motu revision permissible
- no limitation for suo motu revision
