Facts: The Petitioners, partners of Laxmi Country Bar, sought transfer of a CL-III license (No. 355) for retail sale of country liquor, previously held by Shri Jaikishan Chandulal Sugand and Shri Shankarlal Duseja. An application for transfer was made on March 9, 2021, and the Collector allowed the transfer on July 6, 2021, directing payment of Rs. 20,21,270/- as privilege fees under the Bombay Prohibition (Privileges Fees) Rules, 1954. The Petitioners claim no time limit was specified for payment. Before the fees were paid, the State Government, on May 31, 2022, enhanced the privilege fees to Rs. 45,00,000/-. The Petitioners were later directed to pay the enhanced fees.
Procedural Posture: The Petitioners filed a Writ Petition under Articles 226 and 227 of the Constitution of India challenging the Collector's order dated May 6, 2024, which directed them to pay the enhanced privilege fees. The Petitioners sought a direction to record their names on the license based on the original order of July 6, 2021. During the pendency of the petition, the Court directed the Petitioners to deposit Rs. 10,00,000/-.
Issue: Was the Collector justified in insisting that the Petitioners pay the enhanced privilege fees as per the amended Rule 5, which came into effect on May 31, 2022, when the application for transfer was made and initially approved before the amendment? Does the Collector have the power to review the earlier order directing payment of fees at the old rate?
Holding: No, the Collector was not justified in insisting on the enhanced fees. The impugned order was quashed and set aside. The Petition was allowed, directing the authorities to record the Petitioners' names on the license, subject to payment of interest as per Section 114(1) of the Bombay Prohibition Act.
Reasoning: The Court reasoned that the application for license transfer was made and approved before the amendment to Rule 5. The amendment increasing the fees does not have retrospective effect on applications already decided. The Court emphasized that the Collector's subsequent order demanding enhanced fees effectively amounted to a review of his earlier order, which is impermissible. The Court relied on Balabai Vasantrao Patil Vs. The Collector of Kolhapur & Ors. to support the view that the Collector lacks the power to reconsider a concluded proceeding. The Court clarified that the Petitioners are liable to pay interest on the delayed payment of the original privilege fees as per Section 114(1) of the Bombay Prohibition Act.