An administrative order of license cancellation cannot be based on grounds not specified in the show-cause notice; however, courts should allow authorities to initiate fresh proceedings in compliance with natural justice rather than completely immunizing the licensee from potential regulatory action.

O R D E R

1. Delay condoned.

2. Leave granted.

3. These Civil Appeals arise against the judgment and order dated 23.04.2025 in WRIT-C No. 3684 of 2024 and 3683 of 2024 passed by the High Court of Judicature at Allahabad, Lucknow Bench.

4. Facts, to the extent that they are relevant are that the respondent was a CL-2 license holder for wholesale vend of country liquor in District Badaun and District Sambhal for the excise year 2020–21. On the basis of information regarding transportation of liquor, an inspection was carried out at the respondent’s licensed premises, pursuant to which a report dated 04.03.2021 was prepared and a show cause notice dated 05.03.2021 was issued to the respondent alleging discrepancies including non-installation of signboard, shortage of 1980 packets, absence of CCTV cameras and fire safety equipment. The respondent submitted a reply denying the Signaaturel Nolt Veerifigedations. The Commissioner, Excise, by order dated 27.03.2021, Digitally signed by KAPIL TANDON Date: 2026.04.16 Reason:

consequently cancelled the license and forfeited the security deposit. The Commissioner also relied on interception of the truck, statements of its driver and FIRs alleging illegal transportation, and also forged barcodes, all leading to loss to the State exchequer.

5. The revision filed by the respondent before the State Government was dismissed by order dated 23.02.2024. Aggrieved by the dismissal of the revision, the Respondent filed a Writ petition, which came to be allowed by order dated 23.04.2025, which is impugned before us. The High Court allowed the writ petition on the following grounds:

"12. A perusal of the license cancellation order in the context of the show cause notice reveals that the show cause notice was confined to four allegations as recorded above and were said to be in violation of Rule 16 (ka), (kha), (da) and (chha) of the Rules 2020. The five allegations levelled do not entail cancellation of license and are mere infractions, which are referable to the list of compoundable breach as mentioned in Clause nos.4, 5, 7 and 17 of the Rules. Even the other allegation with regard to the transportation of goods and the interception of the goods, which are carrying the goods of a Company and the statements made therein, no specific allegation was levelled against the petitioner so as to warrant the invocation of any of the clauses mentioned in Rule 16(1) which can lead to cancellation of the license.

13. It is also worthwhile to note that the order of cancellation, which records that there was a violation of condition no.4. The order records that the wholesale country liquor was to be supplied through pass P.D.-25A and the records thereof shall be kept, a finding was recorded that the goods were transported without a valid P.D.-25A, which was in violation of condition no.4 of the license. In terms of the show cause notice, there was no allegation levelled to that effect and thus, the finding is without any allegation in the show cause notice or maligned to allege the same.

14. The impugned order further records that there was a violation of Condition No.10 of the condition of the license, which prescribes that the licensee shall prepare and issue computer generated transport pass in triplicate in the form prescribed by the Excise Commissioner in accordance with the provisions of Rule 11, in which name of the retailer, date of issue, purchased quantity and the consideration fee involved shall be entered, whereas the same was violated by the petitioner. The said reasoning is also bereft of any allegation levelled in the show cause notice and without there being any material either alleged or recorded in the impugned orde