2003 (3) TMI 728 - HC - Central Excise

Summary

Issues Involved:
1. Liability of the licensee under Section 57(a) of the Kerala Abkari Act for excess alcohol content in toddy.
2. Reasonableness and enforceability of Rule 9(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 2002.
3. Applicability of Section 56(b) of the Kerala Abkari Act for breach of license conditions.
4. Power of the High Court to quash criminal proceedings.

Issue-wise Detailed Analysis:

1. Liability of the licensee under Section 57(a) of the Kerala Abkari Act:
The court examined whether the licensee of a toddy shop could be prosecuted under Section 57(a) of the Kerala Abkari Act if the toddy contained alcohol exceeding the permissible limit. The sample of toddy from the licensee's shop contained 9.5% ethyl alcohol, above the permissible 8.1%. However, the court noted that the report of the Chemical Examiner did not indicate any adulteration or presence of noxious ingredients. The court concluded that since there was no evidence of mixing any foreign ingredient to increase the intoxicating quality, the licensee could not be prosecuted under Section 57(a).

2. Reasonableness and enforceability of Rule 9(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 2002:
The court scrutinized Rule 9(2), which set the maximum ethyl alcohol content in toddy at 8.1%. The court acknowledged that the alcohol content in toddy could vary due to natural fermentation processes and other factors like season and time of tapping. It was noted that the maximum self-generated alcohol content in toddy could reach 12% without external agents. The court found Rule 9(2) to be arbitrary and unreasonable as it did not account for these natural variations, thus declaring it illegal and unenforceable.

3. Applicability of Section 56(b) of the Kerala Abkari Act:
Section 56(b) addresses misconduct by licensees, specifically breaches of license conditions. Given the court's ruling that Rule 9(2) was unreasonable and unenforceable, the licensee could not be held liable for breaching this rule. Consequently, the court held that the petitioners could not be prosecuted under Section 56(b) either.

4. Power of the High Court to quash criminal proceedings:
The court emphasized its authority under Articles 226 and 227 of the Constitution to quash criminal proceedings when the complaint does not make out a case against the accused. Citing the Supreme Court's decision in Pepsi Foods Ltd. v. Special Judicial Magistrate, the court asserted that it could intervene to prevent the accused from undergoing the agony of a criminal trial when no case is made out. Accordingly, the court quashed the proceedings against the petitioners.

Conclusion:
The court quashed the criminal proceedings initiated against the petitioners under Sections 56(b) and 57(a) of the Kerala Abkari Act, holding that Rule 9(2) of the Kerala Abkari Shops (Disposal in Auction) Rules, 2002, fixing the ethyl alcohol content in toddy at 8.1%, was arbitrary, unreasonable, and unenforceable. The Original Petition was allowed in these terms.