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IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
M/s Indo Spirits – Appellant
Versus
Commissioner of Excise, Govt. of NCT of Delhi – Respondent
W.P.(C) 17126 of 2022 & CM Appl. 54419 of 2022
Decided On : 13-01-2023
Excise - Transfer of Stock - Delhi Excise Rules, 2010 - Rule 56
Fact of the Case:
The petitioner sought permission to transfer its stock of IMFL from one warehouse to another after losing its liquor license. The excise department denied the transfer, citing that stock is tied to the licensed premises.
Finding of the Court:
The court held that the petitioner, no longer holding a valid liquor license, should be allowed to dispose of the stock as per Rule 56 of the Delhi Excise Rules, 2010. It permitted the destruction of expired stock and the transfer of the remaining stock to an alternate premises.
Issues: The main issue was whether the petitioner could transfer its stock of IMFL to an alternate premises after losing its liquor license.
Ratio Decidendi: The court relied on Rule 56 of the Delhi Excise Rules, 2010, which provides a procedure for the disposal of leftover stock by a licensee after the expiry or determination of the license.
Final Decision: The court allowed the destruction of expired stock and the transfer of the remaining stock to an alternate premises, without imposing additional duties.
JUDGMENT
Prathiba M. Singh, J. (Oral)--This hearing has been done through hybrid mode.
2. The present petition has been filed by the Petitioner-M/s Indo Spirits seeking permission to transfer the Petitioner's stock of IMFL from its present warehouse at E-32, Okhla Phase-II, New Delhi (hereinafter `E-32 premises') to an alternate premises. The Petitioner impugns the order dated 5th December, 2022 passed by the Commissioner of Excise dismissing the representations of the Petitioner seeking permission to transfer the said stock.
3. The Petitioner held L-1 wholesale license under the Delhi Excise Policy 2021-22 and was engaged in the business of wholesale supply of liquor in Delhi from 17th September, 2021 to 31st August, 2022. In accordance with the terms and conditions of L-1 license, the Petitioner took three warehouses on lease basis including the one located at E-32, Okhla Phase-II, New Delhi. The case of the Petitioner is that with the new excise policy, which was introduced in September, 2022, the Petitioner no longer is a licence holder for sale of liquor in Delhi. In fact, the said premises has been sealed by the department. For the E-32 premises, the Petitioner is stated to be incurring huge rent to the tune of Rs.33,48,000/- per month including GST, which it wishes to avoid as it already has another licensed premises, where the stock can be stored.
4. It is submitted by Mr. Sameer Rohatgi, ld. Counsel appearing for the Petitioner that the new warehouse where the Petitioner intends to shift some of the stock is at B-230, Okhla Industrial Area, Pocket A, New Delhi-110020 (hereinafter `B-230 premises'). He further submits that a substantial portion of the stock is also due to expire in January, 2023. Accordingly, the Petitioner wishes to destroy stock of 79,127 cases and shift only 25,374 cases.
5. Ld. counsel for the Respondents submits that such transfer has not been permitted as the stock is always tied to the premises which is entered in the portal of the excise department. He further submits that such transfer is not permissible under the Act and Rules.
6. Heard. The facts of this case show that the Petitioner no longer enjoys a valid liquor license in terms of the Act and Rules, and it has to deal with the leftover stock. The manner in which the leftover stock can be dealt with is prescribed in Rule 56 of the Delhi Excise Rules, 2010 where the Petitioner has to find an alternate licensed buyer. If there is no alternate licensed buyer which the Petitioner can identity, the stock continues to remain with the Petitioner. Recently, this Court in Anheuser Busch Inbev India Ltd. v. Govt. of NCT of Delhi, W.P.(C) 16485/2022, 7th December, 2022: examined the governing scheme in respect of the manner in which leftover stock is to be dealt with and observed as under:
"16. A number of writ petitions are being filed before this Court in respect of issues, which arise qua the new excise policy, which has been introduced by the GNCTD.
17. The Delhi Excise Act, 2009 along with Delhi Excise Rules, 2010, clearly provide for the manner, in which the left-over stock is to be dealt with. The relevant rule, i.e., Rule 56 of the Delhi Excise Rules, 2010 reads as under:
"56. Procedure dealing with left over stock. If any person, who has held a licence under these rules, has in his possession, on the expiry, or determination of his licence, any intoxicant, he shall take action for its disposal in the following manner:
(a) he shall submit to the Deputy Commissioner the list of such intoxicants within fifteen days from the expiry of the licence indicating therein the sale price of each brand. The Deputy Commissioner may allow him time, not exceeding 15 days for the disposal of such stocks to the existing licensees:
Provided that if duty has not been paid on such stocks and the purchaser does not hold a licence permitting him to possess them in bond, the duty on such stocks at the rates in force on the date of sale shall be recovered from the
AI
The court upheld the right to dispose of left-over stock under the Delhi Excise Rules despite new licensing restrictions, ensuring compliance with regulatory procedures.
The main legal point established in the judgment is that the applicant is entitled to dispose of leftover stock under Rule 56 of the Delhi Excise Rules, 2010 and to seek a refund of any excess excise....
Statutory rules providing for the relocation of licensed premises due to valid property tenure issues take precedence over administrative policies regarding the initial competitive bidding process us....
A regulatory authority cannot reject an application for shifting a licensed premises on grounds of the initial tender process if the request satisfies the specific statutory requirements for relocati....
The court affirmed the necessity for administrative bodies to accommodate lawful business operations upon receipt of relevant permissions, balancing enforcement with procedural fairness.
The court emphasized that under Rule 294-A of the Assam Excise Rules, shifting of licensed premises is permissible when the landlord refuses lease extension, irrespective of financial bid considerati....
A licensee's request to shift premises for an alcohol retail shop due to a landlord's refusal must be evaluated under specific regulations allowing such moves within the same district.
The court approved the temporary de-sealing of premises for stock movement, emphasizing compliance with administrative permits and the role of regulatory authorities.
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