Rajkumar D. Govindani vs Collector of Pune and others

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1996 Supreme(Bom) 634

IN THE HIGH COURT OF BOMBAY
R.M. Lodha, J.
Rajkumar D. Govindani ....Petitioner.
Versus
The Collector of Pune and others....Respondents.
Writ Petition No. 5203 of 1996, decided on 7-11-1996.
Advocates appeared :
Mrs. Veena B. Thadani, for the petitioner.
V.M. Parsurami, Assistant Government Pleader, for respondents No. 1 to 3.

Headnote:Section 54(1)(a)-Evidence Act. 1872, Section 114(a)-Validity of cancellation of license of Foreign liquid dealer-Purchase of Foreign liquor at cheaper rates resulting in evading excise duty-Contention -Excise duty not payable by purchaser-Held-Purchase at cheaper rate, licence cannot he cancelled-Order cannot be sustained-Petition allowed.-Power to cancel or suspend the licence, permit pass or authorization granted to a person could be exercised by the Competent Authority if any fee or duty payable by the licence holder has not been duly paid. Meaning thereby if the licence holder fails to pay any fee or duty payable by him, the authority who granted such licence. Permit. Pass or authorization may suspend or cancel the same after recording the reasons in writing cancellation and/or suspension of licence. Permit. Pass or authorization affects vitally the rights of licence and therefore, such action must squarely fall within the power conferred on such authority. From the reasons stated in the order passed by Collector Pune, the order of suspension of petitioners licence cannot be sustained.
Section 54(1)(a)-Cancellation under Section 54(1)(a) i.e, FL-I licence under Bombay Foreign Liquor Rules 1953-Purchase of Foreign Liquor wilfully at a much cheaper rate-No exercise duty was liable to be paid-Suspension of licence Illegal-Order of competent authority and commissioner set aside,-Power to cancel or suspend the licence, permit pass or authorization granted to a person could be exercised by the Competent Authority if any fee or duty payable by the licence holder has not been duly paid. Petitioner who had purchased the goods at cheaper rate than the cheapest brand of Indian made foreign liquor could be said to have not paid fee or duty payable by him. I am afraid under Section 54(l)(a), the licence cannot be cancelled or suspended by Competent Authority on the ground that the foreign liquor was purchased by licence holder knowingly and wilfully at much cheaper rate than the cheapest brand of Indian made foreign liquor. The order passed by the appeal authority is also liable to be set aside.
Section 114(2)-See Bombay Prohibition Act, 1949, Section 54(1)(a).

JUDGMENT -R.M. LODHA, J.:---Rule Returnable forthwith. Mr. Parsurami, Assistant Government Pleader waives service for respondents No. 1 to 3. By consent writ petition is heard finally.

2.The petitioner in the present writ petition filed under Articles 226 and 227 of Constitution of India questions the correctness of the order dated 24-7-96 passed by the Collector, Pune suspending petitioner's FL-I licence under section-54(1)(a) of the Bombay Prohibition Act, 1949, and, the order passed by the Commissioner of State Excise, Maharashtra State, Mumbai dated 4-10-96.

3.The petitioner states that he carries on business of wholesale foreign liquor and was granted FL-I licence under the provisions of Bombay Foreign Liquor Rules, 1953 framed under the Bombay Prohibition Act, 1949. It appears that the petitioner purchased 500 boxes of foreign liquor from M/s. Amit Wine Agencies on 4th August-1995. According to petitioner these 500 boxes were sent to him by M/s. Amit Wine Agencies on bill accompanied by transport pass No. 386 dated 4th August 95. The transport pass was signed by officer posted at M/s. Amit Wine Agencies and was received by petitioner's employee posted at his godown. The bill for supply of 500 cases also contained a certificate in Form-B.B. stating that duty has been paid.

4.The inspector, State Excise Division, Flying Squad, Kokan Division, Thane raided house No. 1131 situate behind Konegaon Police-Station, Ramji Saoji Compound, Mauje Konegaon on 28-11-95 at 10 a.m. and found 500 cases of National Doctor Reserve No. 1 Brandy in the custody of the petitioner. A Case No. 159/95 has been registered under the provisions of section-66(1)(b), 65, 81, 83 and 108 of the Bombay Prohibition Act, 1949 against the petitioner. According to State Excise authorities, the said stock of 500 cases did not appear to be official by paying all taxes. Accordingly, Collector, Pune in exercise of his powers under section 54(1)(a) of the Bombay Prohibition Act, 1949 suspended the licence granted to the petitioner from the date of the order dated 24-7-96 to 31-3-1997. The appeal was preferred by the petitioner before the Commissioner of State Excise aggrieved by the order of Collector and the appeal authority also by the impugned order dated 4-10-96 maintained the order passed by the Collector.

5.Mrs. Thadani, learned Counsel appearing for the petitioner contends that the stock of foreign liquor of 500 cases was purchased by the petitioner from M/s. Amit Wine Agencies on bill accompanied by transport pass and certificate in Form-B.B. that duty has been paid, and, the petitioner was not liable to make any payment of duty and, therefore, the licence could not be suspended by the Collector under section 54(1)(a) of the Bombay Prohibition Act.

6.Mr. Parsurami, learned Assistant Government Pleader does not dispute that the licence has been suspended by the Collector, Pune in exercise of his powers under section-54(1)(a) only. But he submits that since there was evasion of excise duty by the petitioner in collusion with M/s. R.T. Traders and M/s. Amit Wine Agencies, it cannot be said that the Collector acted beyond his jurisdiction in suspending the licence.

7.I have considered the contentions raised by the learned Counsel for the parties and also perused the order passed by the Collector, Pune on 24th July-96 and the order passed by Commissioner of State Excise on 4-10-1996.

8.The principal reason assigned by the Collector, Pune in suspending the licence as well as in the order passed by the Commissioner of State Excise in appeal is that the petitioner had purchased the 500 cases of foreign liquor on too lower a rate and that showed that the petitioner was aware that duty on the goods was evaded and the petitioner having knowingly and wilfully purchased these goods on much cheaper rate than the cheapest brand of Indian made foreign liquor, he connieved and abetted the offence of duty evasion and, therefore, licence was liable to be suspended under section-54

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