1967 (3) TMI 103 - SC - Central Excise

Whether the appellants had a fundamental right to do business in liquor? Held that - Dealing in liquor is business and a citizen has a right to do business in that commodity; but the State can make a law imposing reasonable restrictions on the said right, in public interests. We cannot agree with the learned counsel that S. 22 controls s. 20 of the Act for the former deals with the cancellation of a licence and the latter with the issuance of a fresh licence they deal with two different subject-matters. Lastly, the learned counsel for the appellants contended that the order was mala fide. But this point was not pressed before the High Court and we cannot allow it to be raised for the first time before us. Appeal dismissed.

Issues Involved:
1. Constitutional validity of Section 20 of the Excise Act, 1958.
2. Renewal of liquor licenses and discretion of the Excise Commissioner.
3. Fundamental right to do business in liquor under Article 19 of the Constitution.
4. Allegations of arbitrariness and violation of natural justice principles.
5. Complaints against the locality of liquor shops.

Issue-wise Detailed Analysis:

1. Constitutional Validity of Section 20 of the Excise Act, 1958:
The appellants contended that if Section 20 of the Act conferred absolute discretion on the Commissioner of Excise and Taxation to issue or not to issue a liquor license, it would be void as it infringed Article 19 of the Constitution. However, this point was not raised in the High Court, and thus, the Supreme Court did not permit it to be raised for the first time before them. The Court clarified that it did not express any view on this question.

2. Renewal of Liquor Licenses and Discretion of the Excise Commissioner:
The appellants argued that the licenses were renewable as a matter of course, and the Commissioner could not refuse renewal on grounds other than those specified in Section 22 of the Act. The respondents countered that the issuing of licenses was at the discretion of the Excise Commissioner, who refused renewal based on complaints about the locality. The High Court upheld the Commissioner's discretion, noting that the refusal was based on a bona fide exercise of discretion considering the complaints received.

3. Fundamental Right to Do Business in Liquor under Article 19 of the Constitution:
The appellants claimed a fundamental right to do business in liquor under Article 19(1)(g) of the Constitution. The Court clarified that a citizen has a fundamental right to carry on any trade or business, including dealing in liquor, but the State can impose reasonable restrictions in the public interest. The Court rejected the broad argument that dealing in liquor was not a business or trade, noting that while the morality of dealing in liquor could justify restrictions, it did not negate the fundamental right to conduct such business.

4. Allegations of Arbitrariness and Violation of Natural Justice Principles:
The appellants argued that the Commissioner's order was arbitrary and violated principles of natural justice, as they were not given an opportunity to explain why their licenses should be renewed. The Court examined the correspondence and found that the Commissioner had conducted a bona fide inquiry and determined that the locality was unsuitable for liquor business. The High Court's finding that the Commissioner's decision was neither arbitrary nor unreasonable was upheld.

5. Complaints Against the Locality of Liquor Shops:
The respondents justified the refusal to renew licenses based on complaints from inhabitants about the location of the liquor shops in congested and frequented parts of the city. The High Court held that the Commissioner's decision was based on genuine complaints and was a reasonable exercise of discretion. The Supreme Court agreed with this finding and did not interfere with the High Court's determination.

Conclusion:
The Supreme Court dismissed the appeals, upholding the High Court's judgment that the refusal to renew the liquor licenses was a bona fide exercise of discretion by the Excise Commissioner, based on genuine complaints about the locality. The Court affirmed that dealing in liquor is a business, and while citizens have a fundamental right to conduct such business, the State can impose reasonable restrictions in the public interest. The appellants' claims of arbitrariness and violation of natural justice were rejected, and the appeals were dismissed with costs.

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