JUDGMENT [ENTITY], J.
1. The petitioners challenge the orders dated 28-7-1994, 15-5-1990 and 14-5-1995, passed by the respondents calling upon the petitioners to pay transfer fees in terms of the provisions of the [ACT] ('the Act'), on account of amalgamation of Kesarval Breweries Ltd. with the petitioners' company. While the petitioners contend that the demand of transfer fees is arbitrary and illegal, it is the case of the respondents that pursuant to the amalgamation of Kesarval Breweries Ltd. with the petitioners' company there is a change of entity resulting in transfer of ownership.
2. The challenge of the petitioners is three-fold: firstly, that the amalgamation of Kesarval Breweries Ltd. into the petitioners' company does not amount of transfer of ownership. Secondly, that the said Act does not empower the Government to issue the notification for payment of transfer fees and thirdly that the application for substitution of the name of the petitioner in place of that of Kesarval Breweries Ltd. was filed prior to the coming into force of the notification dated 9-3-1994, and, hence, the same cannot be enforced retrospectively.
As regards the first ground of challenge, [ENTITY], the learned senior advocate arguing on behalf of the petitioners has submitted that the amalgamation of two companies into one company does not amount to transfer of shareholding considering the fact that the shareholding of the petitioners and that of the amalgamated company Kesarval Breweries Ltd. belonged to the same persons and, therefore, by virtue of amalgamation of the said company with the petitioner-company there has been no transfer of ownership of shareholding. It does not constitute a transfer of ownership from one owner to another. In support of this submission reliance is sought to be placed upon the decision of the Allahabad High Court in the matter of Delhi Cloth and [PRECEDENT]. On the other hand, [ENTITY], the learned Advocate-General appearing for the respondents, has submitted that pursuant to the amalgamation of Kesarval Breweries Ltd., with the petitioners' company, the transferor-company has ceased to exist and all its assets have been merged with the transferee-company. The transferee-company in the case in hand is the petitioners' company and, therefore, the respondents are lawfully entitled to demand the transfer fees consequent to the amalgamation. In support of his submissions reliance is placed upon the judgments of the Apex Court in the matter of [ENTITY]v, CIT , [PRECEDENT], , [PRECEDENT]) by Legal Representatives and [PRECEDENT].
3. The Apex Court in [ENTITY] s case (supra) has held that the right of the shareholder to participate in the profits of the company may be readily conceded but it is not possible to accept the contention that the shareholder acquires interest in the assets of the company. It has been further held that the company is a juristic person and is distinct from the shareholders.
4. In [PRECEDENT]'s case (supra) the Apex Court while considering various rights of shareholders has held that a share is transferable but while a transfer may be effective between transferor and transferee from the date of transfer, the transfer is truly complete and the transferee becomes a shareholder in the true and full sense of the term with all the rights of a shareholder only when the transfer is registered in the company register.
5. In [PRECEDENT]'s case (supra) the Apex Court has held that the transferee-company which had been put in possession of the tenanted premises by the transferor-company which was tenant of the premises cannot be deemed to be tenant under the Act on the mere plea that the tenancy right including the leasehold interest in the tenanted premises have come to be transferred and vested in the transferee-company on the basis of the order of the High Court on sanctioning the scheme of amalgamation of company made under [SECTION] and [SECTION] of the [ACT] ('the Act).
6. The Apex Court in Saraswati Industrial Syndicate Lid. 's case (supra) has held that the decision in [PRECEDENT] 's case (supra) lays down the Rule that after amalgamation of the two companies, the transferor-company ceased to have any entity and the amalgamated company acquired a new status and it was not possible to treat the two companies as partners or jointly liable in respect of their liabilities and assets. A contrary view taken by the High Court of Punjab and Haryana on the point of the effect of amalgamation of two companies was declared to be not a correct view. It is further held that the true effect and character of the amalgamation largely depends on the terms of the scheme of merger but there can be no doubt that when two companies amalgamate and merge into one, the transferor-company loses its entity as it ceases to have its business, and though their respective rights or liabilities are determined under the scheme of amalgamation the corporate entity of the transferor-company ceases to exist with effect from the date the amalgamation is made effective.
7. In view of the decision of the Apex Court in [PRECEDENT]'s case (supra) which is directly on the point in issue, the decision of the Allahabad High Court in [PRECEDENT]'s case (supra) is of no assistance in the matter. The law being clear on the point of the effect of amalgamation of two companies and there being clear judicial pronouncement by the Apex Court that the transferor-company ceases to exist with effect from the date the amalgamation is made effective, the contention that amalgamation of Kesarval Breweries in the petitioners' company has not resulted in transfer of ownership cannot be accepted. The Apex Court has made it clear in [ENTITY]'s case (supra) that a company is a juristic person entirely distinct from the shareholders and, therefore, merely because the shareholders of the transferor or transferee-companies were the same persons, that would not enable the petitioners to contend that in spite of amalgamation of two companies there is no transfer of ownership. Besides the scheme of amalgamation of Kesarval Breweries with the petitioners clearly discloses the transfer of ownership of the transferor-company in favour of the transferee-company pursuant to the amalgamation. The first ground of challenge therefore, is devoid of substance.
8. As regards the second ground of challenge, it is the contention of the petitioners that the provisions contained in the said Act do not provide for imposition of transfer fees and [SECTION] of the said Act deals only with the grant of licences and not with the transfer of licences. The contention is countered by referring to [SECTION] of the Act which enables the Government to grant the licences under conditions and restrictions and [SECTION] and [SECTION] read with [SECTION] of the [ACT] ('the Rules'), deal with the provisions regarding the procedure for grant of licence and transfer and its consequences. Reliance is also sought to be placed by the learned Advocate-General in the matter of [PRECEDENT] in support of his contention that the Government under its regulatory powers has the right even to prohibit absolutely every form of activity in relation to intoxicants, its manufacture, storage, export, import, sale or possession and in all these respects the right to regulate these activities or to carry on these activities vests in the State. Reliance is also placed in the matter of [PRECEDENT] 's case (supra).
9. [SECTION] clearly provides that any licence or permit granted under the Act shall be subject to such conditions or restrictions as may be prescribed. The expression "prescribed" is defined under [SECTION] to mean prescribed by Rules made under the said Act. [SECTION] provides that any person desirous of obtaining a licence to establish and work a distillery or brewery or winery for the purpose of manufacturing Indian-made foreign liquors shall apply to the Commissioner. [SECTION] provides that the licence may be renewed every year on payment of the fees due before the expiry of the currency of the licence. [SECTION] provides that the provisions contained in the said Rule shall mutatis mutandis apply to the licences issued under [SECTION] and [SECTION]. [SECTION] provides that a licence granted under the said Act is purely personal and is not transferable. [SECTION] provides that no liquor shop shall be transferred from one licensed premises to another premises unless the licensee has obtained written permission to do so from the Commissioner and while granting such permission the Commissioner shall have due regard to the restrictions specified in [SECTION]. [SECTION] provides that no liquor shop shall be transferred by any licensee to another person unless such person has procured a written permission from the Commissioner to do so or procure a valid licence therefore. These Rules read with [SECTION] and [SECTION] clearly disclose that in the case of transfer of licence, the transferee is bound to pay the transfer fees for continuing to enjoy the benefit of licence granted to the transferor-company. The Apex Court in [PRECEDENT]'s case (supra) has clearly held thus (page 319) :
"In the case of [PRECEDENT] this court upheld the right of the State to prohibit absolutely all forms of activities in relation to intoxicants. It said that the wider right to prohibit absolutely would include the narrower right to permit dealing in intoxicants on such terms of general application as the State deems expedient. The court said that the Government has the power to charge a price for parting with its rights. It also further observed that the licence fee which the State Government charged to the licensee through the medium of auctions or the fixed fee which was charged to the vendors of foreign liquor holding licences need ear no quid pro quo to the services rendered to the licensees."
10. The provisions of the said Act read with those of the said Rules clearly disclose the power vested in the State to impose licence fees for transfer of licence and, therefore, the second ground of challenge is also devoid of substance and, therefore, no fault can be found with the notification fixing the rates for transfer of licence.
11. Lastly, it is sought to be contended that the application which was filed by the petitioners was prior in time to the enforcement of the notification dated 9-3-1994, published in the Official Gazette dated 9-3-1994, ('the notification') and, therefore, it cannot be applied retrospectively to the petitioners' company. It is not in dispute that by order dated 3-9-1993, this court had sanctioned the scheme of amalgamation of Kesarval Breweries with the petitioners' company. It is also a matter, of record that the petitioners filed an application on 2-3-1994, stating that Kesarval Breweries had merged with the petitioners, company pursuant to the amalgamation requested the respondents for endorsement of the licence for manufacture of beers, etc., of the transferor-company in favour of the petitioners' company. While such application was pending for consideration, the said notification came into force. Under the said notification, the rates of excise duty for transfer of licence of the distilleries for manufacture of IMFL (Indian-made foreign liquor) was fixed at rupees one lakh. Undispuledly Notification No. FIN (Rev)/2-35/15-75(c), dated 25-3-1976, clearly discloses that the rates of excise duty under Tart D' of the notification are the rates of fees per year. It is not in dispute and cannot be in dispute that the said notification is an integral part of the notification dated 25-3-1976. The rates for transfer of licence under clause 'II' in the said notification fall under 'Part D' of the notification dated 25-3-1976. It is, therefore, clear that in the case of any transfer of licence taking place during the financial year 1993-94, it would attract the provisions of the said notification since the transfer fees refer to the incidence of transfer in the financial year. It is quite logical that the transfer fees shall be in relation to the incident of transfer taking place any time during the financial year as the said duty is for enabling the party or the firm in whose favour the licence has been transferred to continue to manufacture of the liquor in such financial year. The excise duty is levied in relation to the financial year. Being so, it follows that the transfer fees also relate to the financial year. In this view of the matter irrespective of the fact that the application for transfer was made prior to 9-3-1994, it will not enure to the benefit of the petitioners to avoid the payment of transfer fees under the said Act for the financial year 1993-94. Hence, the third ground of challenge is also devoid of substance.
12. In the result, therefore, the petition fails and is hereby dismissed. Rule is discharged with no order as to costs.