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2025 DIGILAW 746 (TS)

Sri Sai Srinivas Wines v. State of Telangana

2025-06-04

G.RADHA RANI

body2025
ORDER : G. RADHA RANI, J. This Writ Petition is filed with the following prayer: “This Hon’ble Court may be pleased to issue any order or direction writ or writs more particularly on in the nature of WRIT OF MANDAMUS declaring that the action of the 1 st respondent in issuing the Memo No. 6390/Excise – II(i)/2024 dated 15.02.2025 by setting aside the proceedings of the 2 nd respondent dated 20.02.2024 and directing the 5 th respondent to implement the orders of the 1 st respondent, is arbitrary, illegal and violation of principles of natural justice and consequently, set aside the same and further direct the 5 th respondent to remove the lock on the on the shop of the petitioner bearing Premises No.4-100/78, Lakshmidevipally Village, Sarangapur Mandal, Jagtial District pending disposal of the writ petition and pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case.” 2. Heard Sri L.Ravi Chander, learned Senior Counsel appearing for Sri D.Y.N.L.N.Charyulu, learned counsel for the petitioner, and learned Government Pleader for Prohibition and Excise appearing for respondent Nos.1 to 5, and Sri B.Mallesh Yadav, learned counsel appearing for respondent No.6, and perused the record. 3. The case of the petitioner, in brief, is that it has been granted A4 licence, vide Licence No.JTL043/2023-25 dt.05.12.2023, to run a retail liquor shop at Sarangapur Village, for a period of two years; that since, the place at which it has been granted licence to run a retail liquor shop was not doing good business, it had approached the 4 th respondent authority and made an application under Rule 28(3) of the Telangana Excise (Grant of Licence of Selling by Shop and Conditions of Licence) Rules, 2012 (for short, ‘the Rules’), for shifting of the shop from Sarangapur Village to Laxmidevipally Village, since both the villages fall within the same mandal. 4. 4. It is the further case of the petitioner that on the petitioner approaching the 4 th respondent and submitting the above-mentioned application, the said application was forwarded to the 2 nd respondent, who, in turn, by his proceedings No.2403/2023/CPE/TS/F4 dt.20.02.2024 permitted the petitioner to shift the shop from the premises bearing No.4-9, Sarangapur Village and Mandal to newly proposed premises No.4-100/78 of Laxmidevipally Village of Sarangapur Mandal on certain terms and conditions; that on the 2 nd respondent issuing the aforesaid proceeding, the petitioner had complied with the conditions specified under the Rules by paying 2% of tax in an amount of Rs.2,00,000/-; and that thereafter, shifted the shop to the newly permitted premises at Laxmidevipally Village and doing business since, 2024. 5. It is the further case of the petitioner that the unofficial respondent herein, who was granted licnece to run a retail liquor shop, vide Licence No.JTL/044/2023-25 dt.05.12.2023, had filed an appeal against the proceedings dt.20.02.2024 of the 2 nd respondent before the 1 st respondent who by Memo No.6930/Ex.II(1)/2024-1 dt.16.03.2024 had set aside the order of the 2 nd respondent dt.20.02.2024; that the petitioner has assailed the order of the 1 st respondent dt.16.03.2024, by filing a Writ Petition before this Court, vide W.P.No.8126 of 2024 and this Court by its order dt.27.03.2024 was pleased to suspend the order of the 1 st respondent; and that thereafter, the said Writ Petition was disposed of by order dt.22.04.2024 by setting aside the order of the 1 st respondent dt.16.03.2024 and remanding the matter dt.22.04.2024 back to the 1 st respondent directing the 1 st respondent to conduct enquiry and pass orders in accordance with law within a period of four (4) weeks from the date of receipt of a copy of the order. 6. 6. It is the further case of the petitioner that on this Court setting aside the order dt.16.03.2024 and remanding the matter back to the 1 st respondent, it had filed objections dt.11.11.2024 requesting the authorities to consider and pass appropriate orders by taking into consideration the rule position empowering the authorities to pass orders for shifting the A4 licence shop under Rule 28(3) of the Rules 2012; and that the 1 st respondent without considering the objections submitted by the petitioner had passed order once again vide Memo No.6930/Ex.II(1)/2024-3 dt.15.02.2025 observing that the 2 nd respondent passed orders permitting shifting of the petitioner’s premises without any valid ground or compelling reasons. 7. It is vehemently contended by the petitioner that the order of the 1 st respondent is not a speaking order and no valid reasons or grounds are recorded by him for setting aside the order of the 2 nd respondent in permitting shifting of the petitioner’s A4 licence shop from Sarangapur Village to Laxmidevipalli Village; and that the finding recorded by the 1 st respondent in the impugned order that the 2 nd respondent by his proceeding dt.20.02.2024 did not record valid/compelling reasons in support of his decision permitting shifting of A4 shop is factually incorrect, unless the 2 nd respondent had recorded valid reasons for permitting the same. 8. On behalf of the petitioner, it is also contended that in terms of the provisions of Rule 28 of the Rules, the power is conferred only with the Commissioner, who on due consideration of the application made by the petitioner and the report furnished had validly exercised the said power and as such, it is not open for the 1 st respondent to hold that the 2 nd respondent did not record valid or compelling reasons for allowing shifting of the petitioner’s A4 licence shop from Sarangapur Village to Laxmidevipally Village. 9. 9. It is also contended that proviso to sub-rule (3) of Rule 28 of the Rules, empowers the Commissioner to consider and permit for valid reasons shifting of licenced premises, notwithstanding the notified area but within the mandal and since, the 2 nd respondent authority on due consideration of the application made by the petitioner having granted permission vide his proceedings dt.20.02.2024, the 1 st respondent ought not to have set aside the same by considering the application submitted by the petitioner, in exercise of powers conferred under Section 63 of the Telangana Excise Act, 1968 (for short, ‘the Act’), which deals with appeals, while the power exercised is in the nature of revision. 10. On behalf of the petitioner, it is contended that since, the 1 st respondent could not have adjudicated the appeal filed by the unofficial respondent under Section 63 of the Act, by addressing the impugned order which is in the nature of revision, the 1 st respondent authority not only lacks jurisdiction but also the order suffers from improper reason; and that the unofficial respondent being a competitor to the petitioner’s business, the 1 st respondent authority ought not to have entertained the application and ought to have granted the same. 11. By pleading as above, the petitioner seeks for setting aside the order of the 1 st respondent dt.16.03.2024. 12. Per contra, learned Government Pleader for Prohibition and Excise appearing on behalf of respondent Nos.1 to 5 would submit that the order of the 2 nd respondent in permitting shifting of the petitioner’s shop from the notified area i.e. Sarangapur Village outside the non-notified area i.e., Laxmidevipally, is since not based on any valid reason, the said order was set aside by the 1 st respondent pursuant to an application made by the unofficial respondent herein. 13. 13. Learned Government Pleader would further submit that the petitioner was very much aware at the time of applying for licence itself as to place for which it is making application seeking for grant of A4 licence for sale of liquor and also the business it would do at that place; and that the claim of the petitioner that after obtaining licence, for opening A4 liquor shop in notified area of Sarangapur, the petitioner submitted application requesting to shift his A4 licenced shop bearing Door No.4-9 of Sarangapur Village to premises baring Door No.4-100/78 of Laxmidevipally Village, Sarangapur Village, with a licence fee of Rs.50,00,000/- within the same Mandal, due to lack of sales in Sarangapur Village, which was duly forwarded to the 2 nd respondent by considering the report of the 3 rd respondent in Cr.No.138/2023/A5 dt.21.12.2023, had granted permission to the petitioner for shifting of the A4 licenced premises to non-notified area; that the aforesaid permission granted by the 2 nd respondent is without independent consideration by the said authority himself; and that the 2 nd respondent while according permission had merely acted on the report and recommendations of the 3 rd respondent which in turn based on the report of the 4 th respondent and that for the said reason, the order was set aside by the 1 st respondent, initially on 16.03.2024 which was the subject matter of Writ Petition before this Court vide W.P.No.8126 of 2024; and that on this Court setting aside the new order of the 1 st respondent, the impugned order has been passed afresh by duly considering the objections submitted by the petitioner. 14. 14. Learned Government Pleader further submits that since, the order of the 2 nd respondent is based on the report and recommendations of the 3 rd and 4 th respondents, and the said authority himself having not applied his mind as to whether there exists valid reasons for the petitioner to seek any permission to shift the shop from the notified area to non-notified area, the 1 st respondent authority by the impugned order dt.15.02.2025 was only required to examine the record as to whether the order permitting shifting of the petitioner’s A4 licence would be from notified area to non-notified area had recorded valid and compelling reasons, and since, the order of the 2 nd respondent did not indicate any reasons the same could not be sustained and accordingly was set aside. 15. Learned Government Pleader would further submit that the unofficial respondent – 6 th respondent had filed an appeal on 01.03.2024 against the order of the 2 nd respondent dt.20.02.2024 permitting shifting of the petitioner’s A4 licenced shop from the notified area to non-notified area thereby affecting his business, the 1 st respondent by considering the aforesaid appeal as an application filed under Section 64 of the Act had called for the record, examined and found the order of the 2 nd respondent not in accordance with the Rules had set aside the same. 16. A counter-affidavit on behalf of the unofficial respondent – 6 th respondent is filed. 17. By the counter-affidavit, it is contended that in terms of Rule 28(3) of the Rules, permission for shifting of licenced premises can be granted for valid reasons within the notified area; that the Commissioner is also vested with the power to consider and permit shifting of licenced premises within the same mandal or municipality or municipal corporation, as the case may be, subject to valid reasons existing for permitting such shifting; and that the 2 nd respondent by proceedings dt.20.02.2024 however without considering there exist any valid reasons, had merely acted on the basis of the report and recommendations of the 3 rd and 4 th respondents and did not specify himself as to whether the ground on which petitioner had sought for shifting of the A4 licneced shop from notified area to non- notified area would constitute valid reason. 18. 18. On behalf of the unofficial respondents, it is further contended that the report submitted by the 3 rd and 4 th respondents on the basis of which the 2 nd respondent authority had issued permission, in favour of the petitioner, permitting shifting from the notified area i.e. Sarangapur to non-notified area i.e. Laxmidevipally does not reflect the correct details of the off take of liquor from Telangana State Beverages Corporation Limited, are if only considered properly would show that the claim of the petitioner of it not having proper sales would stand falsified. 19. On behalf of the 6 th respondent, it is contended that in terms of Rule 28(3) of the Rules, the authorities are required to consider ‘valid reasons’ for permitting shifting of A4 licence and the said rule is pari materia to Rule 29(3) of the Telangana (Lease of Right of Selling by Shop and Conditions of Licence), Rules 2005; and that a Division Bench of this Court in W.A.No.1336 of 2006 by order dt.12.02.2007 while considering the scope of the expression “valid reason” had held that in order to exercise power under sub-rule (3) of Rule 29 of the Rules, permitting shifting of licenced premises must be for good and sufficient reason having bearing on public interest. 20. On behalf of the unofficial respondent, it is further contended that the Commissioner while according permission to shift A4 licenced premises is required to make further enquiry by himself and ought not to have acted on the recommendations made by the Deputy Commissioner and inasmuch as the proceeding dt.20.02.2024 passed by the 2 nd respondent clearly indicates that the said authority not only considered the report and recommendations of the 3 rd and 4 th respondents herein, but also failed to note that the claim of the petitioner does not corroborate with the record of the TSBCL and that the plea of poor sales cannot constitute valid reason inasmuch the petitioner was very much aware of the business it would do at the time of making application and being granted licence. 21. 21. On behalf of the unofficial respondent, it is also contended that since by the order of the 2 nd respondent dt.20.02.2024, the petitioner is permitted to shift his A4 licenced shop from Sarangapur notified area to Laxmidevipally non-notified area, the distance between the unofficial respondent licenced premises vide Licence No.JTL/044/2023-25 dt.05.12.2023 is only being two kilometers, the same would adversely affect the business of the petitioner for which he was granted licence. 22. On behalf of the 6 th respondent, it is contended that it is for the said reason, the 6 th respondent had submitted appeal/application to the 1 st respondent as provided under the Act and the said authority by considering the overall circumstances and also the fact that the order of the 2 nd respondent is entirely based on the report and the recommendations of the 3 rd and 4 th respondents had validly set aside the same and therefore, the present Writ Petition is liable to be dismissed. 23. On behalf of the 6 th respondent, it is also contended that the petitioner had resorted to suppression while approaching this Court by the present Writ Petition by claiming of poor sales, while the record of sales from 01.12.2021 to 31.07.2023 i.e. earlier licence period, indicates that the retail turn over of sales is of Rs.10.00 crores and that erstwhile licencee had paid an amount of Rs.87,00,000/- as licence fee out of earning of Rs.2,10,00,000/- as commission from the sales of Rs.10.00 crores and thus, is not entitled to seek permission for shifting the licenced premises or for that matter approaching this Court under Article 226 of the Constitution of India. 24. On behalf of the 6 th respondent, it further contended that the Sarangapur is Mandal Head Quarter and has various amenities like commercial bank, Mandal Health Centre, Educational Institutions, Government Mandal Offices and consists of population of 3255 members including Potharam Village; and that being a Mandal head quarter there will be a regular visit of community of people to the mandal head quarter and as such the petitioner cannot claim of having door as well as on account of locational disadvantages. 25. I have taken note of the respective contentions urged. 26. 25. I have taken note of the respective contentions urged. 26. Though on behalf of the petitioner it has been contended by the learned Senior Counsel that the order of the 1 st respondent on examination, it is seen that the order of the 2 nd respondent dt.20.02.2024 not only does not record valid/compelling reasons for the said authority permitting shifting of petitioner’s A4 licenced shop, but also the said finding of the 1 st respondent is factually incorrect; and that the order of the 2 nd respondent dt.20.02.2024 categorically records that the 2 nd respondent authority by considering the report and recommendations of the Deputy Commissioner and after careful examination having accorded permission for shifting of petitioner’s A4 licence shop from notified area Sarangapur Village and Mandal to Laxmidevipally Village (non-notified area). 27. However, a perusal of the order of the 2 nd respondent dt.20.02.2024, does not record the satisfaction of the 2 nd respondent authority with regard to the existence of valid reason for him to permit shifting of A4 licence from notified area to non-notified area. On the other hand, the 2 nd respondent by his proceedings dt.20.02.2024 had only stated that he had examined the report and recommendations of the Deputy Commissioner while according permission, while the mandate under proviso to Rule 28(3) of the rules require the 2 nd respondent to indicate the “valid reasons” while granting such permission. 28. Though on behalf of the petitioner, it is contended that the 2 nd respondent being satisfied with the representation of the 3 rd and 4 th respondents indicating the reason, it has to be construed as the 2 nd respondent being in agreement with the District Excise Prohibition Officer with the said reason is thereby constituting ‘valid reason’ of the said authority in the absence of the order dt.20.02.2024 reflecting the mind of the 2 nd respondent as to on what basis the said authority has accepted the report and recommendations of the 3 rd and 4 th respondents on being examined by him, this Court is of the view that mere examination of the report and recommendation of the 3 rd and 4 th respondents by the 2 nd respondent and according permission for shifting of petitioner licence premises from notified area to non-notified area cannot be considered as by recording ‘valid reason’. 29. 29. In this regard, it would be useful to refer to the provisions of Rule 29(3) of the Andhra Pradesh Excise (Lease of right of selling by shop and conditions of licence) Rules, 2005, which was the subject matter of consideration in a writ appeal before this Court in W.A.No.1336 of 2006 with Rule 28(3) of the Rules 2012. Rule 28(3) Rule 29(3) Shifting of the licensed premises may be permitted for valid reasons within the notified area and subject to conditions as may be specified by the Commissioner of Prohibition & Excise, subject to payment of 1% of the “Retail Shop Excise Tax” or Rs.25,000/- whichever is higher. Provided that the Commissioner may consider and permit for valid reasons shifting of the licensed premises, notwithstanding the notified area of the licensed premises, within the same Nagar Panchayat or Municipality or Municipal Corporation without affecting the total number of Notified shops in the said Mandal or Municipality or Municipal Corporation subject to conditions as specified by the Commissioner and subject to payment of 1% of “Retail Shop Excise Tax” or Rs.25,000/- whichever is higher. Shifting of the licensed premises may be permitted for valid reasons within the notified area and subject to conditions as may be specified by the Commissioner subject to payment of one per cent of the lease amount or Rs.25,000/- whichever is higher; Provided that the Commissioner may consider and permit for valid reasons shifting of the licensed premises, notwithstanding the notified area of the licensed premises, within the same Mandal or Municipality or Municipal corporation, without affecting the total number of notified shops in the said Mandal or Municipality or Municipal Corporation subject to condition as specified by the Commissioner and subject to payment of one per cent of lease amount or Rs.25,000/- whichever is higher. 30. 30. A comparative reading of the aforesaid Rules, would clearly show that proviso to rule 28(3) of the Rules 2012 is pari materia to proviso to Rule 29(3) of the ealier Rules 2005, which was duly considered by a Division Bench of this Court in W.A.No.1336 of 2006 , since, the pari materia provision has been considered and the expression “valid reason” as contained in the said provision had been interpreted, whereby a Division Bench of this Court had held that the authority who is empowered with the power to accord permission is required to consider by himself making further enquiry as to whether there exist valid reason and not by merely accepting the recommendation of the Deputy Commissioner without directing his attention to the language of Rule 29(3) which envisages granting of permission for shifting of licenced premises for ‘valid reasons’, cannot be held to be valid. 31. In the facts of the present case, as noted hereinabove, from a perusal of the order of the 2 nd respondent dt. 20.02.2024, the same except recording that the 2 nd respondent having obtained a report and recommendations of the 3 rd and 4 th respondents and examining the same, did not mention as to how the said authority had satisfied himself of ‘valid reason’ and accepted for permitting the petitioner to shift A4 licenced shop from notified area to non-notified area. 32. Since, the order of the 2 nd respondent itself is a non-speaking order, the contention of the petitioner that the order of the 1 st respondent in setting aside the same does not record reasons cannot be accepted, as the basic order under consideration itself does not record any reasons. 33. Dealing with the contention of the petitioner that the 1 st respondent lacks jurisdiction, to consider the appeal filed by the unofficial respondent under Section 63 of the Act, it is to be noted that Section 63 of the Act, while deals with the appeal, Section 64 of the Act confers power of revision on the 1 st respondent authority. Dealing with the contention of the petitioner that the 1 st respondent lacks jurisdiction, to consider the appeal filed by the unofficial respondent under Section 63 of the Act, it is to be noted that Section 63 of the Act, while deals with the appeal, Section 64 of the Act confers power of revision on the 1 st respondent authority. Though the unofficial respondent had submitted an appeal under Section 63 of the Act, the Act does not provide for an appeal against the order of the 2 nd respondent authority, the appeal filed by the unofficial respondent herein though under Section 63 of the Act would have to be considered as an application filed under Section 64 of the Act seeking revision of the order of the 2 nd respondent. 34. It is settled position of law that the authorities empowered under the Act are required to consider the “substance rather than the form” as held by the Supreme Court in Dowell and company Limited Vs commercial Tax officer , [ (1985) 3 SCC 230 ] 35. Since, the 1 st respondent being empowered under the Act to examine the records of any officer in respect of any decision, order or other proceeding under the Act and for the purpose of satisfying themselves as to the correctness or legality or propriety of such decision or order or as to the regularity of such proceeding, it cannot be said that the action of the 1 st respondent authority by considering the appeal submitted by the unofficial respondent even assuming that the said authority lacks jurisdiction under Section 63 of the Act to consider the appeal would have to be treated in exercise of suo motu power under Section 64 of the Act and as such, the said action of the 1 st respondent authority cannot be held as without jurisdiction or lacks jurisdiction. 36. 36. Further, it is also seen that though on behalf of the petitioner it is contended that on account of poor sales, it having approached the respondents-authorities and making an application seeking permission to shift the A4 licenced shop from notified area to non-notified area though within the same Mandal, it is to be noted that since it is not the first time that a licence is being granted in respect of the notified area, the 2 nd respondent ought to have taken note of the previous excise period sales turnover and the licence fee paid by the licencee during such period for him to accept the claim of the petitioner constituting valid reason while granting permission for shifting. Since, the order of the 2 nd respondent dt.20.02.2024 did not proceed by considering all the relevant facts, and the petitioner having obtained licence for a notified aera and immediately, thereafter having made an application seeking permission for shifting to a non-notified area, results in loss of revenue not only to the person who had obtained licence in non-notified area like the 6 th respondent but also to the respondents, from which licence fee is required to be paid. It is for the said reason also, the order of the 2 nd respondent was required to examine by the 1 st respondent in exercise of power of revision under Section 64 of the Act either by suo motu or on an application which in the facts of the present case has been done by the 1 st respondent based on the appeal filed by the 6 th respondent herein, though in the form of an appeal instead of application and also under a wrong provision would not in the considered view of this Court vitiate the action of the 1 st respondent. 37. Accordingly, this Court is of the considered view that the present Writ Petition as filed is devoid of merit and it is accordingly dismissed. No order as to costs. 38. Miscellaneous petitions, if any, pending in this writ petition shall stand closed.