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IN THE HIGH COURT OF ALLAHABAD
PANKAJ BHATIA, J.
Kuldeep Agarwal - Petitioner
Versus
State Of U.P. And 3 Others – Respondents
Writ Tax No. 1039 of 2021
Decided On : 04-04-2023
U.P. Excise Act - Section 74 - The Uttar Pradesh Excise Settlement of Licenses for Retail Sale of Foreign Liquor (Excluding Beer) (Seventeenth Amendment) Rules, 2019 - Rule 18(1) - Bar - Inspection - Irregularities - Ending foreign liquor - It is alleged against petitioner that an inspection was carried out at bar of petitioner and in said inspection, certain irregularities were found - From inspection report it transpires that certain bottles of liquor which were of different shops were found in bar of petitioner for which license was granted - It was also found that bar was running on date of prohibition through salesman - In terms of search and seizure carried out, spot memo was prepared and an FIR was lodged against licensee and the salesman on same allegations as recorded in search and seizure memo - In terms of said inspection, several irregularities were found in licensed premises; petitioner was served with a show cause notice - Whether infractions referred to in Rule 18(1)(a) to (i) are compoundable? - in seizure memo, there is no averment that the liquor was being sold on day of prohibition, however, while passing cancellation order and in show-cause notice, it was alleged and found that the petitioner was selling liquor on the day of prohibition, however, said infraction clearly finds mentioned at Serial No.10 in the list attached. [Para 37]
Finding of Court : Coming to the allegation levelled against the petitioner in respect of loss of special fees in form of revenue on account of sale, order passed by Licensing Authority in its finding, after referring to submissions, records the reason that on basis of the above referred submissions, in the licensed premises on date of prohibition (Gandhi Jayanti), foreign liquor of a different shop and beer of a different shop were recovered for which an FIR was lodged; on the basis of said finding, authority proceeded to record that on basis of illegal keeping of foreign liquor and beer, there was a loss of special fees to State - It is essential to notice that the special fees is chargeable for sale of liquor and beer at restaurants, however, the said special fees or its loss can be caused only if the sale is effected. Merely by recovery of the liquor allegedly belonging to another shop and there being no finding in respect of sale of such liquor, there is no basis whatsoever to record that loss of special fees was being caused and thus, to that extent, finding recorded is wholly perverse.
Result : Writ petition stands partly allowed.
JUDGMENT :
(Pankaj Bhatia, J.)
1. Heard Shri Neeraj Sharma, learned counsel for the petitioner and Sri A.C. Tripathi, counsel for the respondents.
2. Present petition has been filed challenging the order dated 06.10.2021, 03.01.2020 and 27.10.2019 passed by the respondent no.1, 2 and 3.
3. Facts, in brief, are that the petitioner was granted a bar license of Hotel Ganesh Garden & Restaurant at Khaier, District Aligarh in the year 2012 under Rule 8(ii) of the Rules relating for vending foreign liquor read with Notification No.25535 and Notification No.10759; license fees is said to have been paid up to the year 2019 - 20.
4. It is alleged against the petitioner that an inspection was carried out at the bar of the petitioner on 02.10.2019 and in the said inspection, certain irregularities were found. From the inspection report it transpires that certain bottles of liquor which were of different shops were found in the bar of the petitioner for which the license was granted. It was also found that the bar was running on the date of prohibition through salesman. In terms of the search and seizure carried out, spot memo was prepared and an FIR was lodged on 03.10.2019 against the licensee and the salesman on the same allegations as recorded in the search and seizure memo.
5. In terms of the said inspection, several irregularities were found in the licensed premises; the petitioner was served with a show cause notice on 03.10.2019 (Annexure -2). The infractions recorded in the search and seizure memo were stated in the show cause notice and it was stated that on the basis of the infractions, it transpires that the petitioner had violated Condition No.5, 6 and 7 of the license and further loss of revenue was caused as there was a provision for charging a special fees for serving liquor at the bar.
6. In the light of the infractions and on the allegations that prima-facie, the licensee was breaching Condition Nos.5, 6 & 7 of the licensee and was evading the payment of special fees, the petitioner was called upon to show-cause as to why the steps may not be taken for cancellation of the license. The petitioner was required to submit a reply within a period of seven days. Simultaneously, alongwith the said show-cause notice, a suspension order was also passed against the petitioner.
7. The petitioner submitted a reply to the said show-cause notice on 12.10.2019 before Respondent No.3 (Annexure -3) denying the allegations as levelled in the show-cause notice on all grounds and in addition to the said denial, made a request that the case of the petitioner be considered for compounding in terms of the mandate of Section 74 of the U.P. Excise Act (hereinafter referred to as 'the Act').
8. After considering the reply filed by the petitioner, an order came to be passed on 27.10.2019 (Annexure -4) whereby in exercise of powers conferred by virtue of Rule 18(1) of The Uttar Pradesh Excise Settlement of Licenses for Retail Sale of Foreign Liquor (Excluding Beer) (Seventeenth Amendment) Rules, 2019 and The Uttar Pradesh Excise (Settlement of Licences for Retail Sale of Beer) Rules, 2001 as amended in the year 2019 (hereinafter referred to as ‘the Rules, 2019’), license of the petitioner was cancelled.
9. The petitioner approached this Court by filing a writ petition challenging the order of cancellation dated 27.10.2019. The said petition was dismissed on the ground of availability of alternative remedy of appeal under Section 11(1) of the Act. The petitioner preferred an appeal under Section 11(1) of the Act, which too was dismissed vide order dated 03.01.2020. The petitioner once again filed a writ petition challenging the appellate order. The said writ petition was dismissed on the ground of availability of remedy of revision before the State Government. The petitioner preferred a revision under Section 11(2) of the Act before the State Governmen
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