Judgment

BHARGAVA, J.: - The respondent, Gopal Chandra Khound, is the holder of a licence of a country liquor shop issued by the appellant. Sub-Divisional Officer and Collector, Shivasagar. The Superintendent of Excise of the Sivsagar Sub-Division, in which the shop of the respondent is situated, Inspected some liquor shops in the month of June. 1965 and discovered that some of the bottles in the shops were not properly sealed. The covers could be turned all round without detaching them from the bottles and without breaking the seal. There could also be seepage from the covers if the bottles were turned up side down. He felt that this left a scope for tampering as well as deterioration in strength of the liquor in storage beyond the permissible limits; and consequently, a few days later on 24th June, 1965, he issued a letter to the Officer-in charge, Warehouses, Jorhat and Nazira, which were issuing the sealed bottles, to take all possible steps to secure the marked closures properly and to ensure that no sealed bottles of liquor with loose closures were issued from the warehouses. A copy of this letter was endorsed as a circular to all the lessees of the liquor shops, including the respondent. In the endorsement to the lessees, the Superintendent of Excise added that the lessee should not take delivery of such liquor in sealed bottles with loose closures and, in case, through heavy rush at the time of issue, some such bottles with loose closures happened to creep into their consignments, they should be returned at once to the Officer-in charge, Warehouse concerned for getting them properly secured.

2. Subsequently, on 31st July, 1965, he made a check of the shop of the respondent. He found two bottles on the sale rack with loose covers which appeared to him to be suspicious. He tested their strength and discovered that the strength was far below the strength of issue from the Warehouse. The respondent was expected to store liquor of strength 30 U. P., while the strength of the liquor in these two bottles was 44.9 U. P. and 49.0 U. P. Thereupon, he also checked the remaining 13 battles which were on that sale rack. He found that the strength of 5 of them was 30 U. P., while the remaining 8 had liquor of strength 48.4 or 48.8 U. P. He marked these bottles, took them In his possession, and recorded a report of his inspection. Thereafter, he sent a report to the appellant informing him of this inspection and stating his opinion that the respondent had deliberately diluted and weakened the 30 U. P. liquor in the bottles on the sale rack after having tampered with the seals. He recommended that the respondent should be asked to show cause why his licence should not be cancelled and security forfeited. In pursuance thereof, the appellant issued a notice to the respondent to show cause on 16th August, 1965. The respondent in his explanation denied having diluted or weakened the liquor in the bottles on the sale rack. He explained that the seals were of such a nature that there could be no dilution unless the covers were completely removed, so that, according to him, the charge of dilution was out of question and was absolutely impossible. He suggested in his explanation that, very likely, the deterioration must have taken place in the warehouse before the bottles were issued to him. The explanation contained further details showing cause against the notice issued to him. The appellant asked for comments on this explanation from the Superintendent of Excise. The Superintendent of Excise recorded his comments on 6th September, 1965. On a consideration of these documents, the appellant cancelled the licence of the respondent. The respondent filed an appeal before the Board of Revenue. The Board dismissed the appeal by the order dated 17th January, 1966. There upon the respondent filed a petition under Article 226 of the Constitution before the High Court of Assam and Nagaland. The High Court set aside the order of the appellant and the Bo