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2023 DIGILAW 2036 (BOM)

Beena Lal Avatramani v. State of Maharashtra

2023-10-17

FIRDOSH P.POONIWALLA, SUNIL B.SHUKRE

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JUDGMENT : Sunil B. Shukre, J. Rule. Rule made returnable forthwith. Heard learned Counsel for the Petitioner and learned AGP for the Respondents. 2. We find that this Petition involves a question of law relating to the power of the Excise Authorities to levy interest on accumulated license fees and in the opinion of the learned Counsel for the Petitioner, the issue is also covered by the judgments of Division Bench of this Court at Aurangabad in Writ Petition No. 13545 of 2017 decided on 21st November 2017 and order of the learned Single Judge in Civil Application No. 2300 of 2019 in Writ Petition No. 13623 of 2018, dated 21st November 2019. We have taken up this matter for final hearing by making Rule by consent of the parties. 3. The Petitioner was issued FL-II license but for some reason or the other it expired some time in the year 2000 and therefore, the Petitioner made an effort to obtain renewal of the said license. First such effort was made by the Petitioner some time in February 2017, wherein she requested that if she was given some concession in paying the renewal fees by installments, it would enable her to run the FL-II license, which was so necessary for her. It appears that the Petitioner also made an Application for grant of concession in charging of the license renewal fees. But, such request of the Petitioner was not granted by the Excise Authorities, which is evident from the impugned communications dated 15th February 2018 and 22nd May 2018. After such rejection of the request of the Petitioner, the Application of the Petitioner was decided by the order passed on 30th August 2022 whereby, the Application for license renewal was granted subject to payment of the license renewal fees, Application Fees and interest at the rate of 2% per month at the accumulated license fees. Being aggrieved by the same, the Petitioner is before this Court. 4. Learned Counsel for the Petitioner submits that no interest on the accumulated license fees could be levied by the Excise Authorities as there is no power conferred upon them, under Section 49 of the Maharashtra Prohibition Act, 1949 ("the Act"). In support he has relied upon the view taken by co-ordinate bench of this Court at Aurangabad in Writ Petition No. 13545 of 2017 decided on 21st November 2017. In support he has relied upon the view taken by co-ordinate bench of this Court at Aurangabad in Writ Petition No. 13545 of 2017 decided on 21st November 2017. He further submits that even if the power of the Excise Authorities to levy interest under Section 114 of the Act is taken into consideration, it can be so, only from the date of demand and not on the amount of accumulated license fees as held in the case of Ashok Pandurang Rane v. State of Maharashtra and Ors., Civil Application No. 2300 of 2019 in Writ Petition No. 13623 of 2018 decided on 21st November 2019 by the Learned Single Judge of this Court. 5. Learned AGP for the Respondents submits that the Petitioner had earlier sought concession in payment of the interest from the authorities but request of the Petitioner was rejected and therefore, now the Petitioner cannot be permitted to question the action of the authorities in levying interest on the accumulated license fees. He further submits that the interest, in terms of Section 114 of the Act is chargeable on the amount due and in this case, it would be in the amount which was due since the year 2000. 6. In our considered view, there is a great force in the submission of the learned Counsel for the Petitioner and no merit in the submission of learned AGP for the State, for the reason that issue involved in this Petition is already covered by the afore stated judgments relied upon by learned Counsel for the Petitioner. 7. In Writ Petition No. 13545 of 2017, Maheshprasad Dwarkadas Jaiswal and Anr. v. State of Maharashtra and Ors., Division Bench of this Court has taken a view that there is no power conferred on the Excise Authority under Section 49 of the Act and the relevant circulars particularly the Circular dated 21st April 1983, to recover interest over the license fees. It is also held that interest can be recovered only when amount is lent and is not paid and is found to be due and recoverable as a debt. It is also held that interest can be recovered only when amount is lent and is not paid and is found to be due and recoverable as a debt. It is further held that the license fees not paid for the period during which business was not being operated by the Petitioner, could not have been treated as a legally recoverable debt from the Petitioner and therefore recovery of the interest is not permissible under any contract, usage or other legal provision. This view has been taken by the Division Bench at Aurangabad by referring to the observations made in another Petition being Writ Petition No.199 of 2006. The relevant observations of the Division Bench as contained in paragraph 8 of the judgment are produced hereunder:- "8. The petitioners have challenged the right of the respondent to claim interest on the licensee fee. It has been held in Writ Petition No. 199 of 2006 that, there is no legal provision to recover interest over the license fees. The following observations have been made on the basis of the legal position: "6.Perusal of section 49 of the Bombay Prohibition Act would make it amply clear that the Government is entitled to recover the license fee including rent for the grant of privileges or right to any person in order to issue the license fro dealing in the liquor business. Section 49 reads as follows :- "Notwithstanding anything contained in this Act, the State Government shall have the exclusive right or privilege of importing, exporting, transporting, manufacturing, bottling, selling, buying, possessing or using any intoxicant, hemp or toddy, and whatever under this Act or any license, permit, pass, thereunder any fees are levied and collected for any license, permit, pass, authorization or other permission given to any person for any such purpose, shall be deemed to include the rent or consideration for the grant of such right ore privilege to that person by or on behalf of the State Government." On careful consideration of section 49 of the Bombay Prohibition Act, 1949 and the relevant circulars, particularly, the circular dated 21-04-1983 issued vide B.P.A/1083/9/PRO/2, it is quite clear that there is no legal provision to recover interest over the license fees. It is well known concept that interest over the license fees. It is well known concept that interest over the license fees. It is well known concept that interest can be recovered only on the amount which is lent and the amount which is found due or recoverable as a debt. License fees which was not paid for by the Petitioner could not have been treated as a legally recoverable debt from the petitioner. The recovery of the interest is not permissible under any contract, usage or other legal provision." 8. There is no reason for us to disagree with the view so taken by the Division Bench at Aurangabad. If one carefully goes through the provisions contained in Section 49 of the Maharashtra Prohibition Act, we would indeed notice that it does not confer any authority upon the Excise Department to claim interest on the license fees or accumulated license fees. This is also the view taken by the learned Single Judge of this Court in his order dated 31st November 2019 passed in Civil Application No. 2300 of 2019 in Writ Petition No. 13626 of 2018 which reads as under:- 7. Section 49 of the Act, true, is silent whether the authorities can levy interest on the accumulated licence fee. It begins with a non-obstante clause. It gives the State Government "exclusive right or privilege" to deal in or with any intoxicant, hemp, or toddy. If this Act, Rule, or Order levies any fees for any license, permit, pass, authoritization or other permission given to any person to deal in liquor, the fees "shall deemed to include the rent or consideration for the grant of such right or privilege". The provision reads: 49.Notwithstanding anything contained in this Act, the State Government shall have the exclusive right or privilege of importing, exporting, transporting, manufacturing, bottling, selling, buying, possessing or using any intoxicant, hemp or toddy, and whenever under this Act or any rules or orders made thereunder any fees are levied and collected for any license, permit, pass, thereunder any fees are levied and collected for any license, permit, pass, authorization or other permission given to any person for any such purpose, such fees shall be deemed to include the rent or consideration for the grant of such right ore privilege to that person by or on behalf of the State Government." 9. There is however, one more section which is section 114 of the Act which also have to be considered by this Court before reaching any final conclusion in the matter. For the sake of convenience the section is reproduced hereunder:- "114. (1) All duties, taxes, fines (except fines imposed by a Court) and fees leviable under any of the provisions of this Act or in respect of any licence, permit, pass or authorisation granted under it and the cost of the supervising staff appointed under section 58A if not paid within the due date or the prescribed period, shall be recovered from any person liable to pay the same or from his surety, if any, with simple interest at the rate of 2 per cent. per month, from the date it has become due, as if they were arrears of land revenue." 10. A bare perusal of the above referred provision of law shows that interest on duties, taxes or fines and fees leviable under any of the provisions of Act under this section can be charged only when duties or taxes or fine or any other fees are not paid within the due date or the prescribed period and whenever there is such a failure to pay a duty or tax or fine or any other fees within the stipulated time, the interest would be chargeable at the rate of 2% per month from the date " it has become due". A duty or tax or fine or fees or any other fee as contemplated in Section 114 (1) would become due only when there is a failure to pay the same within the prescribed time line i.e., within the due date, that is on or before the due date or the time given for payment of the same. That means, the interest at the said rate is chargeable not from the date of the demand of the duty or tax or fine etc. but from the date on which there is a failure to pay the same within the due date or the prescribed period. 11. In the case of Kishor Pandurang Rane & Ors. Section 114 has been interpreted to indicate that the recovery of the interest shall be from the date of demand. The learned Single Judge in our opinion is right in taking a view that interest is recoverable. 11. In the case of Kishor Pandurang Rane & Ors. Section 114 has been interpreted to indicate that the recovery of the interest shall be from the date of demand. The learned Single Judge in our opinion is right in taking a view that interest is recoverable. However, we would like to clarify that the interest, under Section 114, would be payable from the date it becomes due or from the date of demand as the case may be. 12. When we apply the above referred law to the facts of the present case, we find that Respondents have committed a serious error of law and facts in charging interest on the accumulated license fees. Now it is well settled law, as seen from the discussion made herein above, that license fee is not due and payable for the period when the license was not being operated. Besides there is no power conferred under Section 49 of the Act upon the authorities to levy interest on the license fee. The license fee interest demanded in the present case is on the amount of license renewal fee of Rs. 1,44,11,060/- and it is to the extent of Rs. 2,86,58,892/-. Having regard to the settled position of law, such interest could not have been charged upon the license renewal fees and to that extent the action of the Respondents would have to be termed as bad in law. Of course, the Respondents would be within their right to charge interest at the rate of 2% per month at least from the date of demand which is on account of Rs. 1,44,11,060/- from the date of the demand i.e., 30th August 2022, which is the date on which demand notice came to be issued. 13. As regards the contention that after having claimed concession in payment of license fees the Petitioner cannot now agitate the action of the Respondents in charging interest on the accumulated license fees, we must say that when the law does not permit the authorities to charge interest on the accumulated license fees, the demand made by the Petitioner cannot be treated as estopping Petitioner from challenging other action of the authorities because, there is no estoppel against law. A useful reference in this regard may be made in the case of The State of West Bengal and Ors. v. Gitashree Dutta (Dey), 2022 Live Law (SC) 527. 14. A useful reference in this regard may be made in the case of The State of West Bengal and Ors. v. Gitashree Dutta (Dey), 2022 Live Law (SC) 527. 14. The Petitioner has also challenged the legality and correctness of the other communications i.e., 15th February 2018 and 22nd May 2018. But we do not think it necessary to consider such challenge, the final action has been taken by the Respondents only vide communication dated 30th August 2022 which we have already found bad in law to the extent it seeks to charge interest on the accumulated license fees. In the result, we, partly allow the Petition and accordingly pass the following Order:- A. The impugned communication dated 30th August 2022 is hereby quashed and set aside to the extent it levies interest at the rate of 2% per month on the accumulated license fees. B. We clarify that the Petitioner would be liable to pay interest at the rate of 2% per month on the license renewal fee of Rs. 1,44,11,060/- from the date of demand, i.e., 30th August 2022 within a period of six weeks from the date of the order. C. We further direct Respondents to grant renewal of the FL-II license of the Petitioner immediately upon the Petitioner depositing the interest as directed herein above. 15. Rule is made absolute. No costs. 16. The Petition is disposed of accordingly.