C. Y. SOMAYAJULU, J. ( 1 ) HEARD the counsel for petitioner and the government Pleader for Excise. ( 2 ) PETITIONER, which is carrying business in toddy, has licence for three shops and one depot. On 23-01-2003 the Task Force, hyderabad surprised the depot of the petitioner and took samples of toddy in the depot under a panchanama and registered a case under Section 37 (a) of the A. P. Excise act. On the ground that the samples drawn from the depot are adulterated, excise officials suspended the licence not only of the depot from where the samples were drawn but also the three toddy shops of the petitioner. Subsequently the licence granted to the petitioner for the depot and the three shops was cancelled by the excise officials. Questioning the cancellation of the licences petitioner filed this writ petition. ( 3 ) THE contention of the learned counsel for the petitioner is that in view of the ratio in T. Laxma Goud v. Excise Superintendent1 cancellation of licence of the three shops of the petitioner from where no samples were lifted, without issuing a show-cause notice is improper. The contention of the learned government Pleader is that since Supreme court in State of U. P. v. Harendra Arora2 held that breach of procedure, when no prejudice is established, is not and cannot be a ground for quashing proceeding and since petitioner failed to establish prejudice petitioner is not entitled to any revision. ( 4 ) AS per Section 31 (2) of the Excise Act, if licence or permit is cancelled under sub-Rule (1), the authority has power to cancel any other licence granted to such person under the Act. The power of the authorities to cancel licence is not in dispute, but the method of exercise of such power is in dispute. Petitioner admittedly was not given a show-cause notice for cancellation of the licence of the shops after the licence of its depot is cancelled. In fact it is a composite cancellation order. Depot licence of the petitioner is cancelled on the ground that the sample drawn therefrom is found adulterated. Though no samples are lifted from the shops of the petitioner, shop licences are cancelled on the ground of cancellation of depot licence. Though petitioner questioned the cancellation of depot licence because the result of analysis shows that the sample is adulterated. Depot licence of the petitioner is cancelled on the ground that the sample drawn therefrom is found adulterated. Though no samples are lifted from the shops of the petitioner, shop licences are cancelled on the ground of cancellation of depot licence. Though petitioner questioned the cancellation of depot licence because the result of analysis shows that the sample is adulterated. Excise officials are at liberty to cancel depot licence. The question now is whether the excise officials are right in cancelling the shops licence of the petitioner. ( 5 ) THE facts in Laxma Goud case (supra) are almost similar to the facts in this case, in that case also the toddy depot licence, where the toddy was found adulterated, and the shop licence, where no samples were drawn were cancelled simultaneously. Questioning the said cancellation, the license filed a writ petition. A learned Judge of this Court holding that issuance of show-cause notice for taking action under sub-section (2) of section 31 of the Excise Act, is mandatory set aside the cancellation of licence of the shops. In this case also samples admittedly were not drawn from any of the three shops of the petitioners. On the basis that depot licence of the petitioner is cancelled only the licence of the shops of the petitioner was cancelled. The decision relied on by the learned government Pleader does not apply to the facts of this case, because cancellation of licence, without issuing a show-cause notice, does cause prejudice to a party and so it cannot be said that petitioner is not prejudiced by non-issuance of a show-cause notice. ( 6 ) IT is made clear that setting aside the order of cancellation of shop licence of the petitioner does not come in the way of the excise officials exercising their powers under section 31 (2) of the Act. But, without issuing a show-cause notice, excise officials cannot cancel the licence of the shops of the petitioner under Section 31 (2) of the Excise act. In view thereof I hold the order of cancellation of the licence of the three shops of the petitioner without issuing a show-cause notice is improper. ( 7 ) THEREFORE, the writ petition is allowed in part. Cancellation only of the licence of shop Nos. 1 to 3 belonging to the petitioner at Yellareddypet village and Mandal is set aside. In view thereof I hold the order of cancellation of the licence of the three shops of the petitioner without issuing a show-cause notice is improper. ( 7 ) THEREFORE, the writ petition is allowed in part. Cancellation only of the licence of shop Nos. 1 to 3 belonging to the petitioner at Yellareddypet village and Mandal is set aside. Petition with regard to cancellation of the licence of the depot of the petitioner is dismissed. No costs.