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2006 DIGILAW 349 (JHR)

Radhe Biscuits v. State of Jharkhand

2006-04-10

M.Y.EQBAL

body2006
ORDER M.Y. Eqbal, J. 1. In this writ petition, the petitioner has prayed for quashing the order dated 4.3.2006 passed by the Excise Commissioner. Jharkhand, Ranchi whereby he has put a condition for renewal of retail licence of Group I and Group II shops for the year 2006-07 and directed that in cases where Group I and Group II excise shops of a district has been settled with one person/firm, the licence for both the groups shall be renewed together and, in no circumstances, the renewal of one group shall be made after leaving another group. 2, The facts of the case lie in a narrow compass: In 2004, Government of Jharkhand came with a new excise policy on 21.2.2004 according to which all retail country liquor and spiced country liquor shops falling within the district would be constituted and settled in one group and all retail foreign liquor, wine and beer shops in a district would be constituted and settled in another group. Pursuant to the aforesaid policy decision, a sale notification in Form 127 was issued by the Deputy Commissioner, Dhanbad inviting application for settlement of retail country and spiced country liquor shops in one group (Group I) and foreign liquor and beer shops in another group (Group II) for the period 2004-2007 through auction-cum-tender. Petitioner applied for settlement of both the groups of shop in the district of Dhanbad and deposited security money separately for each group of shops. The petitioner was declared the highest bidder in respect of both the groups of shop and the same was settled with it. Accordingly, licence for the year 2004-05 was issued in favour of the petitioner for both the groups of shop separately on payment of licence fee. In 2006 the Excise Commissioner issued impugned order dated 4.3.2006 incorporating a new condition for renewal of Groups I and II retail licences for the year 2006-07. According to this condition, in cases where Group I and Group II excise shops of a district has been settled with one person/firm, the licence for both the groups shall be renewed together and in no circumstances, the renewal of one group shall be made after leaving another group. 3. A counter-affidavit has been filed by the department of Excise and Prohibition, Govt. 3. A counter-affidavit has been filed by the department of Excise and Prohibition, Govt. of Jharkhand , Ranchi, Wherein the respondents, inter alia, stated that petitioner has taken settlement of Group I and Group II shops on the condition that it would pay Rs. 2,52,00,000.00 per month as licence fee. But the petitioner had not deposited the licence fee for four months i.e. December 2005, January 2006, February 2006 and March 2006 which comes to nearly rupees ten crores. It is further stated that the petitioner never lifted the Minimum Guarantee Quota and thereby violated the terms and conditions of the licence. It is also stated that petitioner and many other licencees who are having licences for both the groups have surrendered Group I in the midst of block period of three years by taking the advantage of interim order passed in W.P. (C) No. 1493 of 2005 and other analogues cases disposed of on 24.3.2006. 4. In a separate counter-affidavit filed by Deputy Commissioner, Dhanbad and Assistant Commissioner, Excise, Dhanbad, it is stated that petitioner is a defaulter, inasmuch as heavy admitted dues more than ten crores has not been deposited till the financial year 2005-06. It is further stated that at the midst of licence period petitioner cannot surrender licence of any Group. It is also stated that Government can at any time change the policy decision and the licencees are bound to abide by those conditions. 5. Mrs. Ritu Kumar, learned counsel appearing for the petitioner, assailed the impugned order as being illegal and wholly without jurisdiction. Learned counsel submitted that when settlement of both the groups of shop has been made separately and separate licence fee has been prescribed then the same cannot and shall not be clubbed together at the time of renewal of license. Learned counsel further submitted that the impugned action of the Excise Commissioner is nothing but mala fide, erroneous and arbitrary exercise of power and intended with an oblique motive to defeat the bona fide action of the licensee to surrender its licence for one group of shop for which the petitioner is lawfully permitted under the provisions of Section 44 of the Excise Act. 6. Mr. 6. Mr. R.A. Gupta, learned counsel appearing for the State, on the other hand submitted that the authority under the Excise Act and the Rules have all the powers to come with a new policy in the interest of the State Revenue. Learned counsel drew my attention to Clause 24 of the sale notification and submitted that the Excise Commissioner and other competent authorities are entitled to issue time to time necessary guidelines and terms and conditions which shall be abided by the licensees. Learned counsel further submitted that huge amount of licence fee is due against the petitioner and therefore the petitioner is bound to obtain the license of two groups for the next financial year. 7. Considering the facts of the case and the submissions made by the learned counsels, the following two questions arise for consideration: (i) Whether the Government, Department of Excise can change its policy decision and modify the terms and conditions for the renewal of licence? (ii) Whether a licensee of a retail shop is entitled under the law to surrender its licence or licences in the midst of the period of licence? 8. Re : (i) So far first question is concerned, it is well settled that a citizen can not have fundamental right to trade and carry on business of sale and purchase of liquor or intoxicating drugs, The Government has exclusive privilege to take a policy decision time to time and put conditions which a licensee has to carry on unless it is wholly arbitrary and capricious. 9. A similar question arose as to whether the Excise Authority can thrust settlement of country liquor shops along with retail foreign liquor shops. This Court answering the question in affirmative in WPC No. 3281 of 2004 (order dated 3.8.2004) observed: Learned counsel for the State pointed out to Annexure-D series to show that the two lots were finalized in favour of the said party namely Ramesh Chandra Rai in presence of the petitioner who has also put his signature on the bidding register without making any offer. He further pointed out that even at the time of final bidding on 12.7.2004 petitioner did not offer his rate even for the settlement of Foreign Liquor shops, for which he was earlier interested. He further pointed out that even at the time of final bidding on 12.7.2004 petitioner did not offer his rate even for the settlement of Foreign Liquor shops, for which he was earlier interested. If the department has taken a policy decision to settle both the two lots to one person and petitioner is not interested for taking the two lots, it cannot be said that policy decision of the department is bad. 10. Recently some of the licensees in respect of the country liquor, spiced country liquor and Indian made foreign liquor in different districts of State of Jharkhand have challenged the notification issued by the Commissioner of Excise, Govt. of Jharkhand whereby Clause 14(kha) of the said notification was amended and mode of adjustment of advance license fee was changed. This Court dismissing those writ petitions being WPC No. 1526 of 2005 and analogous cases, held: The only question that falls for consideration is whether the conditions of the Sale Notification issued in Form 127 can be amended or modified by the authorities of the respondents for the purpose of grant of licence to trade in country liquor, spiced country liquor and Indian Made Foreign Liquor. A copy of the Sale Notification has been annexed as Annexure I to the writ petition. Condition No. 24 of the Sale Notification very clearly provides that the licensees shall abide by all the terms and conditions and the rules that may be time to time made by the respondents. The licensees shall also abide by the instructions and conditions that may time to time be issued by the respondents. From perusal of the Notification it is evident that Condition No. 14(kha) of the Sale Notification provides that the advance licence fee will be adjusted at the last year of block period of settlement. If the advance amount is yearly adjusted, it will give liberty to the licensees to escape from contract after the end of financial year their sweet will. For avoiding the situation and in the interest of the State revenue, this condition has been incorporated in the Sale Notification. Admittedly, by the Sale Notification petitioners were allowed the grant for three years but the licence has to be renewed every year and, therefore, no prejudice would be caused to the petitioners if advance licence fee is adjusted at the end of contract period. 11. Admittedly, by the Sale Notification petitioners were allowed the grant for three years but the licence has to be renewed every year and, therefore, no prejudice would be caused to the petitioners if advance licence fee is adjusted at the end of contract period. 11. In the instant case, therefore, I reiterate my view and hold that the authorities under the Excise Act are vested with the power to take a policy decision and modify the terms and conditions for the grant of or renewal of licence. 12. Re : (ii) The next question that falls for consideration as to whether licensee has right to surrender the licence or licences granted for carrying on business of sale of liquor. 13. Chapter VI of the Bihar Excise Act, 1915 deals with' the licences, permits and passes. Section 30 empowers the Collector to prepare a list showing places where the Collector proposes to grant licence for the retail sale of spirit. Sections 32 to 35 prescribe the procedure for the grant of licence for retail sale of spirit. Same provision applies in case of grant of licence for retail sale of intoxicated drugs other than spirit as provided under Section 36 of the Act. Sections 37 to 39 deal with the procedure of levy of fee and other terms and conditions. Section 40 speaks about the execution of agreement between the authorities and the licensee in conformity with the tenor of his licence. Section 41 provides that no licence granted under this Act shall be deemed to be invalid merely by reason of any technical defect, irregularity or omission in the licence or in any proceeding/(s) taken prior to the grant thereof. Section 42 deals with the power of the authority to cancel or suspend licence, permits or passes.- 14. Sections 43 and 44 are relevant sections for the purpose of deciding the instant questions. Section 43 lays down the power of the authority to withdrawn licence. This section provides that whenever the authority who granted any licence under this Act, if considers that the license should be withdrawn for any cause other than those specified in Section 42, it shall remit a sum equal to the amount of the fees payable in respect thereof for fifteen days, and may withdraw the licence either on the expiration of fifteen days' notice in writing of its intention to do so, or forthwith. The power vested in the prescribed authorities under this section is absolute, subject to giving of remission or refund of licence fee and payment of compensation to the party whose licence is withdrawn. 15. Similarly, Section 44 gives a right to the holder of a licence to withdraw the same on the expiration of one month's notice in writing giving time to the Collector of his intention to withdraw it and on payment of the fees payable for the licence for the whole period for which it would have been current for such surrender. Section 44 reads as under: Surrender of licence.-(1) Any holder of a licence granted under this Act to sell an intoxicant may, unless his licence is liable to cancellation or suspension under Section 42, surrender the same- (a) on the expiration of one month's notice in writing given by him to the Collector of his intention to surrender it, and (b) on payment of the fees payable for the licence for the whole period for which it would have been current but for such surrender: Provided that, if the Excise Commissioner is satisfied that there is sufficient reason for the surrender of a licence, he may remit to the holder thereof the sum so payable on surrender, and any fees paid in advance or any portion of such sum or fees. (2) Sub-section (1) shall not apply in the case of a licence for the sale of any country liquor or intoxicating drug in the exercise of an exclusive privilege granted under Section 22. Explanation.-The words "holder of a licence" as used in this section, include a person whose tender or bid for a licence has been accepted, although he may not actually have received the licence. 16. Sub-section (2) of Section 44 clearly provides that provisions of Sub-section (1) will not apply in case of licence for the sale of any country liquor or intoxicating drug in the exercise of an exclusive privilege granted under Section 22 of the Act. 17. In the instant case, the admitted fact is that the sale notification was issued for settlement of retail shops for three years and the settlement was made for three years i.e. from 1.7.2004 to 31.3.2007 but the licence to carry on business as per the settlement was granted every year. The first licence was granted to the petitioner for the period 15.12.2004 to 31.3.2005. The first licence was granted to the petitioner for the period 15.12.2004 to 31.3.2005. After the expiry of the first licence the same was renewed for the period 1.4.2005 to 31.3.2006. Petitioner's case is that since settlement of manufacturing and whole sale supply of country made liquor in the State of Jharkhand was not concluded within time the supply of country made liquor remained interrupted from June 2005 and there was no supply of spiced country liquor from October 2005 as a result of which the entire sale from the petitioner's retail outlet was adversely affected. Petitioner, therefore, for the aforesaid reasons, and for other reasons gave notice dated 27.2.2006 to the Deputy Commissioner, Dhanbad under Section 44(1) of the Excise Act and expressed its intention to surrender the licence for sale of spiced country liquor. Considering the provision of the Act referred to hereinabove I am of the opinion that a holder of a licence granted under the Act can surrender his license in accordance with the procedure provided therein. 18. At this stage, I would like to mention that an intervention petition has been filed by one M/s. Duita Alcohol Pvt. Ltd. a grantee of exclusive privilege for the whole sale business of manufacture and supply of country made liquor and spiced liquor within the district of Dhanbad. Virtually, he has supported the grounds taken by the petitioner for surrender of licence i.e. total non-supply of country liquor and spiced liquor from October 2005. In the intervention petition it is stated that although the intervener was awarded exclusive privilege for manufacture and whole sale supply to country liquor vide memo No. 1723 dated 18.10.2005 but inspite of deposit of licence fee the place selected by the intervener and installation of bottling plant, the Department raised several objections and approval of site plan was granted only in January 2006. Thereafter, all the formalities were complied with and the plant was ready for manufacturing liquor. The Department issued show-cause notice to the intervener on 4.3.2006 asking him to show-cause as to under whose direction and order they started manufacturing and bottling of country liquor. Thereafter, all the formalities were complied with and the plant was ready for manufacturing liquor. The Department issued show-cause notice to the intervener on 4.3.2006 asking him to show-cause as to under whose direction and order they started manufacturing and bottling of country liquor. Para 38 of the intervention petition is quoted herein below: That on one hand the respondent No. 4 was not taking any steps towards ensuring the lifting/purchase of country liquor by the retailers from his warehouse at Dhanbad besides refusing to acknowledge the communications of the intervener-applicant and on the other hand he sent an innocuous show-cause notice bearing No. 259 dated 4.3.2006 directing the intervener-applicant company to show cause as to under whose directions and orders they had started the manufacture and bottling of country liquor. The said notice had been issued despite the completion of entire formalities leading to the issuance of license in Form 27 by the respondent No. 3 granting permission to the intervener-applicant for manufacture and wholesale supply of country liquor. 19. From perusal of intervention application it is clear that the entire grievances of the intervener is against the authorities of the department and the syndicate but the fact remains that there was total non-supply of country liquor and spiced liquor for the period as alleged by the petitioner. In the aforesaid circumstances, petitioner's notice of his intention to withdraw the licence needs consideration by the authorities in the light of provisions of Section 44 of the Excise Act. 20. In the facts and circumstances of the case, I dispose of this writ petition by passing the following order: (i) The Government has exclusive privilege to take a policy decision time to time and put conditions which a licensee has to carry on unless it is wholly arbitrary and capricious. (ii) I hold that the holder of a licence, like the petitioner, is entitled under the law to surrender any licence in accordance with procedure provided under Section 44 of the Act. Hence, the competent authority and the Excise Department is directed to take a decision on the application filed by the petitioner for surrender of licence within two weeks from the date of receipt/production of a copy of this order. Petition disposed of.