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2007 DIGILAW 58 (CAL)

RITESH NARULA v. STATE OF WEST BENGAL

2007-02-05

JAYANTA KUMAR BISWAS

body2007
( 1 ) THE writ petitioner is questioning the common order of the Collectors of Excise, Kolkata (North) and Kolkata (South) dated June 1st 2006, which is : "it has been decided by the State Govt. vide Excise Deptt. GO No. 2211-Ex dated 6. 12. 2005 read with Excise Directorate Memo No. 2675 (65)E dated 16. 12. 2005 that no half-bond license will be granted. Besides, it has further been decided that all existing half-bond licenses shall be converted into full bond within six months from the date of issuance of this order. In view of the above directives from the State Govt. all existing half- bond licenses in Kolkata (North) and Kolkata (South) district shall function six days in a week and excise establishment shall be credited full of the excise establishment of the Excise personnel posted therein, and not on the sanctioned strength w. e. f. 1 st July 2006, payable within 7th of August, 2006 and subsequently until further order. " ( 2 ) PROVISIONS of the Bengal Excise Act, 1909, Sections 85 and 86, empowered the State Government to make rules to carry out the objects of that Act and also for regulating the manufacture, supply or storage of any intoxicant, and in particular for regulating the establishment, inspection, supervision, management and control of any place for the manufacture, supply or storage of any intoxicant. In exercise of that power it made the west Bengal Excise (Foreign Liquor) Rules, 1998. Provisions in Rule 20 provide that persons desirous of obtaining licences to establish private warehouses for the deposit and storage of foreign liquor without payment of duty or fee shall be required to apply to the collector concerned, who shall not grant the licence without the previous order of the excise commissioner ; those in Rule 23 provide that the collector shall employ such officer and establishment as the commissioner may direct to the charge of a private warehouse. They also cast an obligation on the licensee of the warehouse to pay to the Government in the manner indicated therein. The cost of officer and establishment is to be computed on the basis of the average of the pay (including special pay, if any) of officers and establishment, the contribution towards leave salary and pension and the compensatory allowance. They also cast an obligation on the licensee of the warehouse to pay to the Government in the manner indicated therein. The cost of officer and establishment is to be computed on the basis of the average of the pay (including special pay, if any) of officers and establishment, the contribution towards leave salary and pension and the compensatory allowance. The previous rules and orders to the extent they were inconsistent with the 1998 Rules were repealed by them. ( 3 ) IN terms of the provisions in Rules 21 and 22 of 601 -SR dated March 30th, 1915 the excise commissioner under his order dated December 5th, 1991 issued general guidelines for determining the size of the excise establishment to be posted in private warehouses for the deposit and storage of spirit other than country spirit without payment of duty. By those guidelines the licensed bonded units working under the Bengal Excise Act, 1909 were classified as half-bond and full-bond. It was said that units of applicants insisting on working whole time on all weekdays should be considered full- bond, and that the half-bond units would work three days in a week, and that after giving a month's notice to the licensees concerned, the licensing authority would be empowered to convert the half-bond units to full-bond ones "if in view of the volume of transaction of business revenue collection in the manufactories/warehouses during the preceding twelve months justify such conversion as per statement of general standards given below or if the licensing authority considers such conversion desirable for any administrative reason including receipt of representation to the effect from the licenses concerned. " ( 4 ) WITH a view establishing a private warehouse for the deposit and storage of foreign liquor, the petitioner (through his proprietorship firm : luxamee Kutir Udyog (Liquor Division) applied to the appropriate authority that granted the requisite licence on December 4th, 2002. Though nothing was mentioned in the licence in which class his unit would fall, in reality it was treated as a half-bond one. He started the business of collecting the locally made foreign liquor from the manufacturers and storing the bottles in his warehouse. On the basis of the licence he was entitled to store them without paying any excise duty, and he was to pay that at the time of permitting the bottles to be taken out of his warehouse. He started the business of collecting the locally made foreign liquor from the manufacturers and storing the bottles in his warehouse. On the basis of the licence he was entitled to store them without paying any excise duty, and he was to pay that at the time of permitting the bottles to be taken out of his warehouse. The process was to be controlled by the excise department officers and staff posted in his warehouse on the working days. For engagement of officers and staff of the Government he was to pay the charges in terms of the provisions in rule 23, as noted before. As a half-bond licensee he was entitled, or rather was required, to keep his warehouse open only on the specified days, and not on all weekdays. ( 5 ) HIS case is that there was not valid reason to issue the impugned order converting the half-bond units into full-bond ones, since a licensee of a warehouse could not be compelled to keep his warehouse open according to the wish of the excise authorities. His further case is that the impugned order will virtually compel him to put up the shutters, since, being a very small businessman, he would not be in a position to bear the cost of officers and establishment directed to the charge of his warehouse, treated as a full-bond unit. By filing opposition the respondents are contesting the case. Their case is that because of increase in sale of foreign liquor the decision, an administrative one, was taken by the competent authority. Their further case is that the conversion was found necessary for proper operation of the warehouses and collection of taxes. By filing reply the petitioner has disputed the fact that sale really increased calling for conversion of all half- bond units into full-bond ones. ( 6 ) COUNSEL for the petitioner has extensively placed the pleadings to persuade me into accepting his contention that the authorities had no materials before them in support of their conclusion that sale of foreign liquor so increased as to call for a change in the existing administrative decision laying down the guidelines. He has pointed out that according to the petitioner the increase in consumption of foreign liquor while benefited the big manufacturers and dealers, substantially reduced business of the licensees of half-bond units whose number increased manifold. He has pointed out that according to the petitioner the increase in consumption of foreign liquor while benefited the big manufacturers and dealers, substantially reduced business of the licensees of half-bond units whose number increased manifold. By citing to me the Apex Court decisions in Union of India v. K. P. Joseph, AIR 1973 sc 303 , (holding that an administrative order can confer, abridge, or take away rights and impose duties) ; Dr. Amarjit Singh Ahluwalia v. The State of Punjab and Ors. , AIR 1975 SC 984 , (holding that without rational justification the Government cannot, at its own sweet will, depart from an administrative instruction, not having the force of law) ; and State of Bihar and Ors. v. Subhash Singh, AIR 1997 SC 1390 , (holding that judicial review of administrative actions of the State being an essential part of rule of law, the courts are empowered to determine not only the constitutionality on the action, but also its procedural part), he has contended that the impugned order, though a pure administrative decision, being vitiated by arbitrariness and unreasonableness is liable to be set aside. His further contention is that it is liable to be cancelled, since it seriously affected the petitioner's existing right available under the guidelines in terms whereof his warehouse was classified as a half-bond unit. ( 7 ) THE question is whether the guidelines issued by the excise commissioner by his order dated December 5th, 1991 created any right of the petitioner to operate his warehouse as a half-bond unit. The impugned order, admittedly being a pure administrative decision, is not justiciable before the writ Court unless it is shown that it infringed his any fundamental or legal right. It is not his case that it is incurably vitiated by any procedural defect, or that it infringed any of his fundamental rights. His case rather is that it curtailed his existing right to operate his unit as a half-bond one, and that such right he acquired from the guidelines issued by the excise commissioner. I am unable to accept his case that the guidelines created any right in favour of anyone to operate, after obtaining licence, a private warehouse as a half-bond unit. I am unable to accept his case that the guidelines created any right in favour of anyone to operate, after obtaining licence, a private warehouse as a half-bond unit. It is very clear from the order of the excise commissioner dated December 5th, 1991 that the guidelines, made strictly for official use, were not a fixed set of rules, but were intended to be normative. ( 8 ) IT was mentioned in the guidelines that licence would be granted to an applicant on the specific condition that he would agree to restrict the days and hours of working according to orders issued by the licensing authority. The guidelines also mentioned that it would be quite permissible for the authority to convert the half-bond units into full-bond ones, even for administrative reasons. That is exactly what has happened in the present case. For administrative reasons and for eking out revenue the impugned order was issued directing conversion of all half-bond units into full-bond ones. I therefore do not see how the petitioner can contend that it has curtailed his existing right to operate his warehouse as a half-bond unit. No provision of law or terms and conditions of the licence conferred any such right on him. Simply because he was permitted to operate his warehouse as a half-bond unit, he is not entitled to say that he has a right to enjoy that status till the time he decides otherwise. The decision whether all warehouses should be treated as full-bond units or whether half-bond system should be discontinued, as was done here, is essentially a policy decision, and hence cannot be questioned on the ground that it economically affects the petitioner ; for such a decision is bound to affect in the manner complained of. ( 9 ) AS to the question of arbitrariness and unreasonableness, I find that the petitioner's endeavour is to impress upon me that on the facts the excise authorities reached a wrong conclusion. Counsel has virtually invited me to reassess the facts disclosed by the parties in their pleadings for substituting my decision for that of the authority that took the policy decision leading to the impugned order. To my mind, that is just not permissible. What is to be seen is the decision making process, and not the correctness of the decision. Counsel has virtually invited me to reassess the facts disclosed by the parties in their pleadings for substituting my decision for that of the authority that took the policy decision leading to the impugned order. To my mind, that is just not permissible. What is to be seen is the decision making process, and not the correctness of the decision. There is no reason to say that the decision is patently perverse or irrational, or that sale and consumption of foreign liquor did not increase at all. What the petitioner contends is that the extent of increase did not call for a decision to convert all half-bond units into full-bond ones. The question whether for the increase the authorities were justified in deciding, as a matter of policy, to abolish the half-bond system, in my view cannot be the subject of judicial review by the writ Court. I therefore hold that the impugned order does not call for any interference. ( 10 ) FOR these reasons I find no merit in the writ petition ; it is accordingly dismissed. There shall be no order for costs in it.