Supreme Court of India State of Madhya Pradesh v. Tikam Das

This case explains whether the State can charge a higher license fee on leftover liquor stock by giving new rules a retrospective start date. The Supreme Court said yes—because the Excise Act allowed the Government to make rules with retrospective effect. If rules validly change, the balance stock can be asked to pay the difference so that all vendors face the same fee scale.

• Can the State apply enhanced license fees retrospectively to balance stock after the license period ends?
• Can stock already covered by an earlier fee be charged again at the higher rate from a backdated start date?

• Subordinate legislation can be retrospective if the parent statute expressly or by clear implication allows it.
• Equity and parity in fee/tax systems support charging enhanced fees on surplus stock so that all licensees operate under the same updated scale.

The Supreme Court upheld the amended Foreign Liquor Rules and their retrospective start date. It held that the parent Act allowed such rule-making. The balance stock as on 31 March 1964 was liable to pay the difference in fees. The High Court’s order was set aside. The appeal succeeded, with each party bearing its own costs.

Where the parent statute authorizes it, subordinate legislation may be given retrospective effect. A rule that collects the difference in fees on balance stock is valid and promotes parity among licensees under the revised fee regime.

• Clarifies when Governments can give rules a backdated start.
• Guides pricing/stock strategies near license year-end.
• Stresses fee parity across vendors to prevent uneven burdens.

1. Parent Act power is the gateway for retrospective rules.
2. Balance stock can lawfully face “difference in fee.”
3. Parity and equity justify the enhancement on old stock.
4. High Court view reversed; State demand sustained.

Mnemonic: “Retro Rules Raise Remainders.”

• Retro: Parent Act permits retrospective effect.
• Rules: Amended rules validly framed.
• Remainders: Balance stock pays the difference.

Issue: Can enhanced fees be applied retrospectively to balance liquor stock?

Rule: Retrospective subordinate legislation is valid if the parent Act authorizes it (M.P. Excise Act, ss. 62–63).

Application: The amended Foreign Liquor Rules expressly required difference in fees on balance stock; parity among licensees supports the measure.

Conclusion: Yes. The demand for enhanced fees on surplus stock was lawful. Appeal allowed.

Subordinate Legislation

Rules made by the Government under powers granted by an Act.

Retrospective Effect

A rule operates from a past date fixed by law.

Balance Stock

Unsold inventory remaining at the end of a license period.

• Cases on retrospective delegated legislation under fiscal/excise laws.
• Supreme Court rulings emphasizing parity and non-arbitrariness in fee and tax schemes.

Reviewed by The Law Easy.