Sathiya vs The Deputy Commissioner (Excise), Puducherry

K.K. Sasidharan, J.—The arrack licensees of Puducherry, who are in arrears appears to be inventing novel methods to avoid payment. The background facts of these writ petitions show that the Excise Department, Puducherry is equally capable to introduce new devices to collect the arrears from the revenue defaulters. The petitioner challenges the re-auction notification issued by the Excise Department, Puducherry on the ground that she has fulfilled all the conditions of the confirmation order issued in her favour with respect to the Arrack Shops bearing Nos. 4(O), Karuvadikuppam and 3(O), Pillaichavady.

THE FACTS:

The Government issued a notification dated 3 June 2013 for granting lease of arrack shops in various areas in the Union Territory of Puducherry for the period from 01.07.2013 to 30.06.2014. The petitioner participated in the said auction. The bid submitted by the petitioner for the arrack shop No. 4(O), Karuvadikuppam, Oulgarpet Municipality was the highest. The respondent provisionally accepted the bid and issued an order dated 30.06.2013 informing the petitioner that her bid has been provisionally accepted, subject to confirmation by the Government. The petitioner was permitted to run the arrack shop, pending such confirmation from 01.07.2013 to 30.06.2014 on the terms and conditions prescribed under the notification. Subsequently, the respondent issued the confirmation order dated 03.07.2013 whereby and where under the bid submitted by the petitioner for a sum of Rs. 9,01,000/- per month was accepted. She was permitted to run the arrack shop bearing No. 4(O), Karuvadikuppam. The petitioner complied with all the terms and conditions of the confirmation order. She was also given confirmation with respect to another arrack shop bearing Nos. 3(O), Pillaichavady for a monthly bid amount of Rs. 4,50,795/-. The petitioner has been running both the arrack shops from 01.07.2013.

The petitioner has deposited a sum of Rs. 28,50,000/- by way of Earnest Money Deposit. The respondent was bound to adjust the Earnest Money Deposit towards the monthly lease amount payable by the petitioner for the two arrack shops. The Rules provide that the entire Earnest Money Deposit amount would be adjusted and only the balance amount requires to be paid. The petitioner is liable to pay a sum of Rs. 13,51,795/- with regard to the two arrack shop licenses. However, the respondent insisted that entire amount should be paid without adjusting the Earnest Money Deposit. Since the petitioner was not agreeable for such a course, the Government proposed to conduct re-auction. The re-auction notification is challenged in these writ petitions.

The Deputy Commissioner (Excise) filed a counter affidavit in answer to the contentions raised by the writ petitioner. The Deputy Commissioner contended that the arrack shops in question were earlier taken on lease by G. Mathi @ Venkatesan S/o. Gopalsamy. He is a chronic defaulter. The said G. Mathi @ Venkatesan S/o. Gopalsamy conducted the arrack shops bearing Nos. 3(A) Periaveerampattinam and 10(O) Kanapathychettikulam during the excise year 2012-13. He is in arrears to the tune of Rs. 67,50,000/- and Rs. 10,20,000/-, totalling a sum of Rs. 77,70,000/- for the excise year 2012-13.

The Deputy Commissioner (Excise) found that the petitioner is none other than the Benami of the said G. Mathi @ Venkatesan S/o. Gopalsamy on account of the fact that the document given by the petitioner as security belongs to Thiru G. Mathi @ Venkatesan S/o. Gopalsamy. This made the Excise Department to direct the petitioner to pay the entire dues as a condition precedent for allowing her to conduct the arrack shops.

THE COURSE OF EVENTS:

When the writ petitions came up for hearing on 26.11.2013, the learned counsel for the petitioner, on instructions, submitted that the petitioner is prepared to pay the entire balance amount of Rs. 39,77,308/- (Rupees thirty nine lakhs seventy seven thousand three hundred and eight only) after adjusting the Earnest Money Deposit and as such, she should be permitted to continue the business in arrack.

In view of the submission made on behalf of the petitioner, I have directed the learned Government Pleader (Puducherry) to take instructions as to whether the petitioner could be permitted to run the arrack shops, subject to payment of the entire amount. The matter was adjourned for the purpose of taking instructions from the Excise Department.

When the writ petitions were taken up for hearing on 27.11.2013, the learned Government Pleader (Puducherry) produced a copy of the report indicating that the petitioner is liable to pay a sum of Rs. 39,77,308/- (Rupees thirty nine lakhs seventy seven thousand three hundred and eight only) after adjusting the Earnest Money Deposit. The petitioner is prepared to pay the entire amount. The respondent agreed to permit the petitioner to conduct the arrack shops up to 30 June 2014, subject to the payment of amount indicated above by 28 November 2013. The petitioner is agreeable to pay the amount forthwith. Since the issues have been settled and the petitioner was agreeable to pay the entire arrears, I have directed her to pay the amount by 28 November 2013.

When the writ petitions were taken up for consideration today, the learned Government Pleader (Puducherry) submitted that the petitioner has paid the entire amount of Rs. 39,77,308/- (Rupees thirty nine lakhs seventy seven thousand three hundred and eight only) after adjusting the Earnest Money Deposit. The petitioner agreed to produce documents relating to immovable properties from third parties without producing the documents of those licencees who are in arrears to the Excise Department.

The respondent is perfectly correct in their contention that those who are producing documents of defaulters would not be permitted to run the arrack shops, unless the entire amount due from such licencees are paid. In case, such a drastic action is not taken, it would not be possible for the Excise Department to recover the arrears. The chronic defaulters would continue to bid through their Benami, notwithstanding the non-payment of kist amount to the Excise Department. Such practice should be put an end. It was only for the purpose of protecting public money, the Excise Department has initiated action, which is challenged in these writ petitions.

The petitioner is directed to produce the documents before the respondent to offer as security for due payment of balance amount. In case, such documents are produced, immediately, orders should be issued permitting her to conduct the arrack shops in accordance with the orders of confirmation.

In the view of the subsequent events, the impugned re-auction notification dated 14.11.2013 is quashed. The writ petitions are disposed of with the above direction. No costs. Consequently, the connected miscellaneous petitions are closed.