Satyaveer vs The State of Rajasthan and Others

Bela M. Trivedi, J.

The petitioner has challenged the order dated 17.06.2015 passed by the Excise Commissioner, suspending the composite licence for sale of the country liquor and Indian made foreign liquor at shop Nos. 1 and 3, situated in the Municipal Limit of Behror, for a period of one month, exercising powers under Section 70 of the Rajasthan Excise Act, 1950 (hereinafter referred to as "the said Act").

The petitioner was granted the composite licence by draw of lottery for Behror area for the year 2014-2015 by the District Excise Officer on 01.04.2014 (Annexure-1) for three shops known as shop Nos. 1, 2 and 3, situated in the municipal area of Behror. It appears that on the random checking conducted by the Excise Department for the shops of the petitioner on 15.12.2014, the Excise Inspector, Behror Circle, Behror while inspecting the shop had picked up the samples of Imperial Blue Whiskey and Royal Stage Whiskey from the shop Nos. 1 and 3 of the petitioner, and had sent to the Excise Laboratory at Udaipur for testing. Since as per the report of the Excise Laboratory, there was some variation found in the strength of Imperial Blue Whiskey picked up from the shop No. 1 and in the sample of Royal Stage Whiskey picked up from the shop No. 3, the Excise Department had registered two cases bearing F.I.R. No. BLC case 49/24.2.15 for Imperial Blue Whiskey and F.I.R. No. BLC case 50/24.2.15 for Royal Stage Whiskey. It further appears that thereafter a notice was sought to be issued by the Excise Department on 29.05.2015 (Annexure-3), calling upon the petitioner as to why his licence should not be cancelled in view of the registration of cases under Section 58(c) of the said Act. The petitioner submitted two separate replies on 17.06.2015 (Annexures 4 and 5) respectively to the Excise Commissioner praying to drop the proceedings, registered against him under Section 58(c) of the said Act. The Excise Commissioner i.e. the respondent No. 2 vide the impugned order 17.06.2015 suspended the licence of the petitioner for one month in lieu of compounding of the offences registered against the petitioner, exercising powers under Section 70 of the said Act. Being aggrieved by the said order, the present petition has been filed.

The petition has been resisted by the respondents by fling the reply, raising objections with regard to the maintainability of the petition and also on merits.

Learned counsel Mr. R.B. Mathur for the respondents has raised preliminary objection with regard to the maintainability of the petition by submitting that alternative remedy of filing the Revision under the said Act before the Rajasthan Tax Board being available to the petitioner, this petition is not maintainable. He also submitted that the petitioner having committed breach of the conditions of licence, his licence was liable to be cancelled or suspended, and the respondent No. 2 considering the facts of the case has rightly suspended the licence for one month. However, learned senior counsel Mr. A.K. Bhandari for the petitioner submitted that the licence of the petitioner having been suspended only for one month and the Tax Board being not available at the time of fling of the petition and even otherwise the Tax Board would hear the matter after 15 days only, the very purpose of fling the revision petition would have frustrated. He also submitted that the order passed by the respondent No. 2 being without jurisdiction, the existence of alternative remedy would not be bar to filing the petition under Article 226 of the Constitution of India. He also submitted that the petitioner had not committed any breach of condition of the licence and no irregularity as alleged was committed by him and even otherwise the petitioner having urged to compound the offences registered against him, the respondent No. 2 could not have suspended the licence while exercising powers under Section 70 of the said Act.

Having regard to the submissions made by the learned counsels for the parties and to the documents on record, as also the relevant provisions contained in the said Act, it appears that the licence of the petitioner for the shop Nos. 1 and 3 has been suspended vide the impugned order dated 17.06.2015 for one months by the respondent No. 2 while exercising power under Section 70 of the said Act. It is not disputed that two cases have been registered against the petitioner under Section 58(c) for the said Act and that the petitioner had submitted the replies to the show cause notices issued by the respondent No. 2, and requested to drop proceedings under Section 70 of the said Act. At this juncture, the relevant part of Section 70 is required to be reproduced as under:-

"Section 70. Power of Excise Officers to compound offences. - (1) Subject to such conditions and restrictions as may be prescribed, the Excise Commissioner or any other Excise Officer specially empowered by the State Government in that behalf may accept from any Government in that behalf may accept from any person whose licence, permit or pass is liable to be cancelled or suspended under this Act, or who is reasonably, suspected of having committed an offence punishable under this Act, a sum of money not less than Rs. 5,000/- but not exceeding 10 times of the annual licence fee in respect of manufacturing units/bonds and wholesale vends etc. and not more than two times of exclusive privilege amount in case of liquor and beer shops alongwith other levies applicable from time to time in lieu of such cancellation of suspension or by way of composition for such offence which may have been committed, as the case may be, and in all cases whatsoever in which any property has been seized as liable to confiscation under this Act may release all such property except an excisable article on payment of the value thereof as estimated by such officer and may confiscate the excisable article]:"

From the bare reading of Section 70 it clearly appears that the Excise Commissioner may accept from the person whose licence is liable to be cancelled or suspended under the said Act or who is reasonably suspected of having committed an offence punishable under the said Act, the amount, as mentioned therein, in lieu of such cancellation or suspension, or by way of composition of such offence which may have been committed. However, the Excise Commissioner while exercising powers under Section 70 could not have cancelled or suspended the licence, while refusing to compound the offence registered against the licence holder. The Commissioner while exercising the powers under Section 70 of the said Act could have either accepted the amount as mentioned therein or could have refused to compound the offence, but could not have suspended the licence of the licence holder as sought to be done in the present case.

It is also pertinent to note that at this juncture that the power to cancel or suspend the licence is provided under Section 34 of the said Act, which states inter alia that the authority granting any licence, permit or pass under the said Act may cancel or suspend it on any of the grounds mentioned in the said provision. As transpiring from the impugned order itself, the respondent No. 2 has not exercised the powers under Section 34 but have exercised the powers under Section 70, which does not empower him to cancel or suspend the licence of the petitioner.

The Court therefore is of the opinion that the respondent No. 2 having wrongly exercised the powers under Section 70 for suspending the licence of the petitioner for one month, while refusing to compound the offences registered against him, the said order deserves to be set-aside. It is needless to say that the powers under Section 34 for cancellation or suspension of licence are different from the powers to compound offence under Section 70 by accepting the amount as mentioned therein. If the respondent No. 2 was not inclined to compound the offence, he could have rejected the prayer of the petitioner and in that case the necessary proceedings, as permissible under the Act would have followed, however the respondent No. 2 under no circumstances could have suspended the licence while exercising powers under Section 70 of the said Act.

Learned counsel Mr. R.B. Mathur for the respondents has also failed to point out as to which of the conditions of licence was not complied with by the petitioner. However without expressing any opinion on the merits of the case, it is held that the impugned order dated 17.06.2015 passed by the respondent No. 2 having been passed without proper application of mind and by wrongly exercising the powers under Section 70 of the said Act, the same is liable to be set-aside, and is accordingly set-aside. It is clarified that the respondents shall be at liberty to proceed against the petitioner as may be permissible under the law for the alleged offences or for cancellation or suspension of the licence in accordance with law.

In that view of the matter, the petition stands allowed. By this order, the stay application also stand disposed of.