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RULE OF LAW CANNOT BE CONSTRUEDAS RETROSPECTIVE UNLESS IT EXPRESSES A CLEAR OR MANIFEST INTENTION TO THE CONTRARY: SUPREME COURT

Team SoOLEGAL 9 Sep 2021 3:11pm

RULE OF LAW CANNOT BE CONSTRUEDAS RETROSPECTIVE UNLESS IT EXPRESSES A CLEAR OR MANIFEST INTENTION TO THE CONTRARY: SUPREME COURT

Hon’ble Apex Court in the case of Assistant Excise Commissioner, Kottayam Vs Esthappan Cherian (6 September 2021 SC370) noted that it cannot be presumed that a law or rule is retrospectively applicable unless there is clear intention in the new rule or amendment.

 

In this case, the facts show that the licensee was a successful bidder in an auction held by the State of Kerala and had deposited a security amount. Further, the state alleged that licensee had committed default in the payment of the bid amount. Pertaining to this a show-cause notice was issued and eventually the license was cancelled.

 

After the cancellation of licence, the shops were managed by the Department of Excise in terms of the Abkari Shops Departmental Management Rules, 1972. The state argued that had the licensee continued operating the shop, he would have gained revenue. It accordingly demanded dues, from the licensee.

 

In appeal, the Division Bench of Kerala HC relied on its previous ruling in Lucka v State of Kerala & Ors.(11-08-2000 in OP 8271/1994) and held that the amended Rule 13 of Abkari Shops Department Management Rules 1972, is inapplicable to contracts awarded or entered into before the amendment came into force and held that since the contracts were entered into before the amendment of Rule13, the licensee was liable to pay only the actual loss suffered by the government, in realisation of rentals and excise duty.

Aggrieved by the HC order, state of Kerala preferred an appeal, in which the Apex Court reaffirmed the order of HC and ruled that “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 principle has been affirmed in many decisions such as Hukum Chand v Union of India(1973) 1 SCR 896); Regional Transport Officer v Associated Transport Madras(1980) 4 SCC 597; Federation of Indian Mineral Industries v Union of India ((2017) 16 SCC 186)and recently, in Union of India v G.S. Chatha Rice Mills(2021 (2) SCC 209).

The bench thereafter upheld the impugned judgment dismissing the appeal but at the same time issued certain directions pertaining to the matter.



Tagged: Apex Court   Abkari Shops Departmental Management Rules   Department of Excise    Excise Commissioner   Division Bench   Kerala HC   Indian Mineral Industries   Union of India   Chatha Rice Mills  
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