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Chhattisgarh High Court · body

2013 DIGILAW 216 (CHH)

SHANKUNTLA JAISWAL v. STATE OF C. G.

2013-07-24

R.N.Chandrakar, Sunil Kumar Sinha

body2013
JUDGMENT Sunil Kumar Sinha, J. 1. The petitioner was granted a Hotel-Bar licence (FL-3). It was for the period from 30.4.2003 to 31.3.2004. Some residents of the locality took objection, against the Bar of the petitioner. They made representation to the concerned Excise Authority. After preliminary inquiry regarding the representation, the same was produced before the Licencing Authority, District Collector Raipur, in "Samadhan Sivir" on 22.6.2003. The Licencing Authority considered the representation of the residents and without affording any opportunity of being heard to the petitioner, cancelled the aforesaid licence granted to the petitioner on 22.6.2003 itself. The petitioner challenged the validity of the said order by filing Writ Petition No. 2178/2003. The said writ petition was allowed by a Single Judge of this Court on 18th August, 2003. The Single Judge quashed the order dated 22.6.2003 passed by the Licencing Authority. Thereafter the seal of the lock of the Bar was opened by the respondents on 31.8.2003. The petitioner, thereafter, filed a representation dated 25.9.2003 for refund of Rs. 47,916/- being the amount of licence fee for the period commencing from 22.6.2003 and ending on 31.8.2003 (when the Bar was sealed). The petitioner also claim Rs. 20,833/- as the licence fee for one month, because the FL-3 licence was granted to the petitioner on 30.4.2003, whereas, according to the petitioner, the said licence would have been granted to her on 1.4.2003 i.e. for complete financial year commencing from 1.4.2003 to 31.3.2004. The petitioner, thus claimed refund of a total sum of Rs. 68,749/-. 2. When the above representation was not being disposed of, the petitioner filed W.P. No. 809/2004 which was disposed of by the Single Judge on 16.6.2004 with a direction that the representation filed by the petitioner be considered and decided at the earliest preferably within a period of one month from the date of production of the copy of the said order and the amount found due be paid to the petitioner as per rules. 3. The licencing Authority, thereafter, rejected the representation of the petitioner on 13.7.2004 holding that the petitioner was not entitled to refund of licence fee for the period of closure in view of the provisions of Section 31 (3) of the C.G. Excise Act, 1915 (hereinafter referred to as the 'Act'). 3. The licencing Authority, thereafter, rejected the representation of the petitioner on 13.7.2004 holding that the petitioner was not entitled to refund of licence fee for the period of closure in view of the provisions of Section 31 (3) of the C.G. Excise Act, 1915 (hereinafter referred to as the 'Act'). It was also held that the petitioner was also not entitled to refund of the fee for one month i.e. from 1.4.2003 to 30.4.2003 because the licence fee for opening the Bar itself was deposited by the petitioner on 26.4.2003 and thereafter the licence was granted to her. The petitioner has challenged the validity of the aforesaid order and has prayed for refund Rs. 68,749/- along with interest at the rate of 12% per annum. 4. Mr. Amit Verma, learned counsel appearing on behalf of the petitioner, has submitted that the licence of the petitioner was not cancelled on account of any breach mentioned in Section 31 (1) of the Act, therefore, the matter of refund of fee would not be governed by the provisions of Section 31 (3) of the Act. He further submitted that the action taken by the Licencing Authority was u/S 32, therefore, the above licence fee was required to be refunded to the petitioner u/S 32 (3) of the Act. 5. On the other hand, Mr. U.N.S. Deo, learned Govt. Advocate appearing on behalf of the respondents, has opposed these arguments and supported the decision taken by the Licencing Authority. 6. We have heard counsel for the parties. 7. Section 31 (1) of the C.G. Excise Act, 1915 gives power to the Licencing Authority to cancel or suspend licence, etc. It reads as under:- "31. U.N.S. Deo, learned Govt. Advocate appearing on behalf of the respondents, has opposed these arguments and supported the decision taken by the Licencing Authority. 6. We have heard counsel for the parties. 7. Section 31 (1) of the C.G. Excise Act, 1915 gives power to the Licencing Authority to cancel or suspend licence, etc. It reads as under:- "31. Power to cancel or suspend licence, etc.- (1) Subject to such restrictions as the State Government may prescribe, the authority granting any licence, permit or pass under this Act may cancel or suspend it - (a) if any duty or fee payable by the holder thereof be not duly paid; or (b) in the event of any breach by the holder thereof or by any of his servants, or by anyone acting on his behalf with his express or implied permission, of any of the terms or conditions thereof; or (c) if the holder thereof, or any of his servants, or any one acting on his behalf with his express or implied permission, is convicted of any offence under this Act or any other law for the time being in force relating to revenue, or of any offence (under the Dangerous Drugs Act, 1930 (II of 1930), or under the Indian Merchandise Marks Act, 1889 (IV of 1889), or under any section which has been introduced into the Indian Penal Code (XLV of 1860), Sec. 3 of that Act; or (d) if the holder thereof is convicted of any cognizable and non-bailable offence; or (e) if the holder thereof is punished for any offence referred to in clause (8) of Sec. 167 of the Sea Customs Act, 1878 (VII of 1878); or (f) where a licence, permit or pass been granted on the application of the holder of any lease granted under Sec. 18, on the requisition in writing of such lessee; or (g) if the conditions of the licence, permit or pass provide for such cancellation or suspension at will. (1-A) Before making an order canceling or suspending a licence permit or pass under sub-section (1), the authority aforesaid shall record in writing the reasons for the proposed action, furnish to the holder thereof a brief statement of the same and afford him a reasonable opportunity of being heard. (1-A) Before making an order canceling or suspending a licence permit or pass under sub-section (1), the authority aforesaid shall record in writing the reasons for the proposed action, furnish to the holder thereof a brief statement of the same and afford him a reasonable opportunity of being heard. (2) Where a licence, permit or pass held by any person is cancelled under clause (a), clause (b), clause (c) or clause (e) of sub-section (1), the authority aforesaid may cancel any other licence, permit or pass granted to such person under this Act or under any other law for the time being in force relating to excise revenue, or under the Opium Act, 1878 (1 of 1878). (3) The holder of a licence, permit or pass shall not be entitled to any compensation for its cancellation or suspension nor to the refund of any fee paid or deposit made in respect thereof. (4) Where a licence is cancelled or suspended under clause (a), clause (b), clause (c) or clause (e) of sub-section- (a) the fee payable for the balance of the period for which such licence would have been current but for such cancellation or suspension, may be recovered, from the ex-licensee as excise revenue; (b) the Collector may take the grant under management or resell it at the risk and loss of the ex-licensee, but any profit realized by such management or resale which is not in excess of the amount recovered under clause (a) for such period shall be paid to the ex-licensee." 8. A perusal of Section 31 would show that the power given to the Licencing Authority for cancellation of the licence has to be exercised on certain conditions which are enumerated in Clauses (a) to (g). If any of the above conditions mentioned in sub-section (1) of Section 31 appears to be there, the Licencing Authority would be entitled to cancel the licence of the concerned licencee after giving due opportunity of hearing to him/her and if a licence is cancelled on the above breach then only, under sub-section (3) of Section 31, the holder of a licence, permit or pass shall not be entitled to any compensation for its cancellation or suspension nor to the refund of any fee paid or deposit made in respect thereof. The Licencing Authority has taken a view that the cancellation of the licence was u/S 31 (1), therefore, the petitioner was not entitled to any refund as per sub-section (3) of Section 31. 9. It has been mentioned in the impugned order that as the petitioner was found guilty of irregularities and violation of the rules, therefore, the aforesaid action was taken which would not entitle the petitioner to refund of the fee under sub-section (3) of Section 31. The above part of the impugned order does not appear to be factually correct. The order dated 22.6.2003, passed by the Licencing Authority, would show that the ladies of the locality had raised certain objection regarding Hotel-Bar of the petitioner and it was also found that there was a temple near the Bar and the licence of the petitioner was cancelled on the above two counts. That is to say that it was neither a case of breach of conditions of the licence by the petitioner nor that her licence was liable to be cancelled on any of the conditions enumerated in Section 31 nor that on a case of proved violation of any rule by the petitioner. The petitioner's licence was simply cancelled on account of representation made by the residents of the area as also that a temple was situated near the Bar. We are of the view that in the above facts and circumstances of the case, the cancel1ation of the licence of the petitioner cannot be classified as are action taken u/S 31 (1) of the Act, 1915, therefore, the provisions of sub-section (3) of Section 31 would not be applicable in case of the petitioner and the Licencing Authority was not justified in refusing the refund of fee to the petitioner by taking resort to the provisions of Section 31 (3) of the Act. 10. Section 32 of the Act, 1915 provides power to the Licencing Authority to withdraw licences. It provides that whenever the authority which granted any licence under this Act considers that such licence should be withdrawn for any cause other than those specified in Sec. 31, 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- (a) on the expiration of fifteen days' notice in writing of its intention so to do, or (b) forthwith without notice. Sub-Section (3) of Section 32 further provides that when a licence is withdrawn under subsection (1), any fee paid in advance or deposit made by the licencee in respect thereof shal1 be refunded to him, after deducting the amount (if any) due to the Government. 11. We must keep in mind that an action in law can not be determined or classified on the nomenclature used by the authority. It has to be judged on the substance of it. In the instant case, as we have already stated, the - licence was not cancelled on account of any default and cancellation was not u/S 31. Though the Licencing Authority has loosely used the word like 'cancellation', but, in fact, his action would show that it was simply a withdrawal of the licence u/S 32 of the Act because there was no situation prevailing, on which, the provisions of Section 31 would have been attracted. We are of the view that in the above facts and circumstances of the case, the Licencing Authority was required to refund the licence fee for the period of closure after deducting the amount if any due to the Government. 12. Notwithstanding the provisions of S. 32 of the Act, even otherwise also, if the action taken by the Licencing Authority by passing the order dated 22.6.2003 was not u/S 31 (1), as has been held by us, the result would be that the petitioner would be entitled for the refund of licence fee for the above period. 13. The petitioner had deposited Rs. 2,50,000/- as the licence fee for the period commencing from 30.4.2003 to 31.3.2004. Thus she was entitled to refund of the licence fee for the period of closure i.e. from 22.6.2003 to 31.8.2003 as would be determined on the basis of the total fee of Rs. 2,50,000/- for the above period. 14. So far as the argument relating to refund of fee of one month, i.e. for the period in between 1.4.2003 to 29.4.2003, is concerned, the petitioner cannot make a claim for the same, because, for grant of the licence to the petitioner, she had paid the licence fee only on 26.4.2003. Thus, the grant itself became due in her favour on 26.4.2003 or immediately thereafter. Therefore, she cannot claim the benefit of any period prior to it. 15. For the foregoing reasons, the petition is partly allowed. Thus, the grant itself became due in her favour on 26.4.2003 or immediately thereafter. Therefore, she cannot claim the benefit of any period prior to it. 15. For the foregoing reasons, the petition is partly allowed. The impugned order dated 13.7.2004, so far as it relates to refund of the licence fee for the period of closure, is set-aside. The respondents are directed to calculate the licence fee for the period from 22.6.2003 to 31.8.2003 (closure period) and refund the same to the petitioner with simple interest at the rate of 6% per annum from 31.8.2003 till realization. 16. The respondents shall bear their own cost and they shall also bear the cost of the petitioner. HEADLINE Provisions of Section 31(1) and 32 of the C.G. Excise Act, 1915 - Discussed. Petition Partly Allowed.