In Brief
A liquor licensee in Kerala successfully bid for arrack shops for 1993-94 but the license was cancelled after four months for non-payment. The State demanded recovery of revenue losses totalling over Rs. 77 lakhs without crediting amounts it had already collected. The High Court held the amended departmental management rules (23-12-1993) could not apply retrospectively to pre-existing contracts (entered 01-04-1993). The Supreme Court upheld this, reaffirming that rules cannot operate retrospectively without clear statutory intent. The State was required to credit departmental management fees and excise duty collected during State management (Rs. 31+ lakhs), and the licensee was permitted to discharge liability by depositing 50% of the remaining amount within two months.
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