2010 (3) TMI 1143 - HC - VAT and Sales Tax

Summary

Issues Involved:
The judgment deals with the issue of stay of prosecution in a criminal case registered against an abkari contractor under S.57(a) of the Kerala Abkari Act and its impact on the preferential right for the allotment of toddy shops under R.5(1)(a) of the Kerala Abkari Shops Disposal Rules, 2002.

Issue 1: Stay of Prosecution and Preferential Right for Allotment of Toddy Shops

The respondent, a toddy shop licensee, faced prosecution for selling toddy with a high alcohol content, leading to the registration of a criminal case against him. Seeking preferential rights for toddy shop allotment, the respondent argued that the stay of prosecution granted by the Supreme Court entitled him to such preference under R.5(1)(a) of the Rules. The Single Judge granted interim relief based on the stay order, allowing the respondent to continue operating the toddy shop. However, the appellants contended that the registration of the crime disqualified the respondent from receiving preference for shop allotment. The Court considered the arguments and the impact of the stay order on the respondent's eligibility for preferential treatment.

Issue 2: Interpretation of Rule 5(1)(a) and Impact of Stay Order

The Court examined the relevant provision, R.5(1)(a) of the Rules, which grants preference to licensees without registered abkari cases other than under S.56 of the Abkari Act. Despite the stay of further proceedings in the criminal case against the respondent, the Court held that the registration of the crime itself disqualified him from claiming preference under R.5(1)(a). The Court disagreed with the view that a stay of prosecution equated to exoneration, emphasizing that the respondent's registration in a criminal case prevented him from receiving preferential treatment for toddy shop allotment. Consequently, the interim relief granted by the Single Judge was deemed unsustainable, leading to the allowance of the Writ Appeal.

Separate Judgment: W.A.Nos.514, 515 & 516/2010

The issues raised in these appeals were similar to those addressed in W.A.No.513/2010. Following the decision in the main appeal, the Court allowed these appeals as well, vacating the interim orders granted by the Single Judge.