IMPORTANT POINT
The appellant was given sanction to start an independent and additional bottling warehouse at Sahibabad, District Gaziabad by the competent authorities and thus it cannot be cancelled on the ground that it was only a temporary permission to facilitate the appellant to continue with the process of bottling during shifting of its distillery and the bottling plant from one place to another at Saharanpur.

Headnote:Excise Act and Rules-Appellant having a distillery with a bottling plant at Nawabganj, Saharanpur-Started a bottling warehouse in Gaziabad District with permission of Competent Authority as it had big contracts from Delhi Administration and Gaziabad was near to Delhi-Later appellant had to shift his distillery and bottling plant to another place in Saharanpur-Govt. cancelling Appellant s licence to run the bottling warehouse in Gaziabad District on ground that it was temporary permission to complete shifting of distillery and bottling plant from one place in Saharanpur to another place-Whether correct on facts and record? (No)-Appeal allowed, cancellation of licence set aside.
Held : In this background if we have to consider the impugned order of the respondents dated 6.11.1992 it is seen that an entirely new stand has been taken on behalf of the State. This letter the original of which is in Hindi and a fresh translation thereof was provided to us on behalf of the State inter-alia states : "It is also made clear that during this period you must stop the Bottling plant at Sahibabad and further bottling must only be done at your relocated site of your distillery at Saharanpur. After the expiry of these 3 months you will not be allotted any alcohol from other distilleries for your bottling plant at Sahibabad." Actually, this was a letter in reply to the complaint of the appellant on insufficient electric supply to its distillery at the relocated plant. In this letter the State took the opportunity of informing the appellant of closing its bottling plant at Sahibabad. By this letter it is clear that the respondents treated the earlier permission granted to the appellant as a temporary permission to last till the appellant shifted its distillery and the bottling plant attached to it. We have already noticed that from the original application and the sanction granted thereof, it is clear that the permission to start the bottling plant at district Ghaziabad which was ultimately established at Sahibabad, district Ghaziabad, was not temporary or stand-by permission. It was given for a specific purpose of facilitating the appellant to bottle bulk country-liquor at Sahibabad so that the appellant could compete with the other bidders for supply of country liquor to the State of Delhi. That permission cannot be treated as a permission having been granted as a stand-by permission till the appellant shifted its distillery and the bottling unit at Saharanpur. We are satisfied that the High Court has erred in coming to the conclusion that the licence granted to the appellant to establish and run a bottling unit at Sahibabad, district Ghaziabad is a temporary one. We however make it clear that if the appellant has not complied with any of the provisions of the said Excise Act and Rules or has contravened any of the provisions of the Act or any of the terms of the licence, it is open to the State to take such action as is legally permissible but this licence to run a bottling warehouse at Sahibabad, district Ghaziabad, shall not be cancelled on the ground that the same was granted as a temporary measure. In the result, the appeal succeeds and is allowed. The order dated 16.11.1992 is hereby set aside. No costs. (Para 13, 14 & 15)

JUDGMENT

Santosh Hegde, J.-The appellant herein, which is a limited company, was running a distillery with a bottling plant at Nawabganj, Saharanpur, since 1910. On 14.7.1980 it made an application to the Commissioner of Excise, State of U.P., stating that its distillery has been operating annual licences for wholesale supply of country-liquor to Delhi Administration for many years continuously. Therefore, it stated that it wanted to establish a bottling warehouse in district Ghaziabad to meet its requirement of supplying country-liquor to Delhi conveniently and economically. It pleaded that due to close proximity to Delhi if it is permitted to start a bottling unit somewhere in the district of Ghaziabad, it will have obvious advantages since bulk of its production of country-liquor was being sold in Delhi. It also stated in the said application that it would help the company to bid competitively in the auctions and consequently, the State would also stand to benefit from the excise revenue. In the said letter, it is stated in clear terms that the State Government would not stand to lose anything by permitting the company to start the bottling warehouse in district Ghaziabad because it would continue to bottle both at Saharanpur as well as at Ghaziabad, hence, the State excise duty from Saharanpur would not suffer. It was also made specific in the said application that it was seeking a licence for an additional bottling warehouse at Ghaziabad.

2. Pursuant to the said application, the appellant was informed on 29.7.1980 that it is permitted to bottle country spirit under bond for exports in a bonded warehouse to be licensed for suitable premises to be indicated by the appellant at Ghaziabad along with various other conditions. The said intimation also called upon the appellant to make necessary arrangements after executing counterpart agreement prescribed under the Excise Rules and that the amended CL-I licence will be issued by the Office of the Excise Commissioner as also F.L.-3 licence will be issued by the Collector, Ghaziabad.

3. It is stated that for a considerable time the appellant was unable to establish the bottling warehouse as permitted under the letter of the Excise Commissioner, referred to above. But it is an admitted fact that such a warehouse with the permission of the authorities was established at Sahibabad, district Ghaziabad, and has been functioning for a number of years. In the meantime, it is noticed that the appellant faced certain difficulties in running of its distillery and bottling warehouse at Saharanpur because of the dispute in regard to the property in which its distillery plant was situated at Saharanpur as also because of the provisions of the Water (Prevention & Control of Pollution) Act, 1974. Therefore, sometime in the year 1987 the appellant wrote to the Commissioner of Excise in view of the above-cited difficulty that it be permitted to shift its distillery from Saharanpur to some other suitable place. The Government as per its letter dated 20.7.1998 informed the appellant that it had no objection to shifting the said distillery from Saharanpur to some other place, other than Sahibabad, district Ghaziabad. Subsequently, by another letter of the Government dated 7.9.1988, the appellant was informed that in supersession of its aforesaid letter dated 20.7.1988, the Government had decided to approve the transfer of the distillery of the appellant to a place near the existing site in Saharanpur and that it had no objection to the working of the appellant s bottling plant at a place owned by the appellant in any other district provided this did not result in reduction in the number of workers working in the district of Saharanpur. Consequent to the above order of the Government dated 7.9.1988, the Assistant Commissioner of Excise informed the appellant the sanction of the Government for shifting of the site of the distillery of the appellant. This was done by its letter dated 27.9.1988. In the sa