1994 (12) TMI 335 - HC - Central Excise

Summary

Issues:
1. Suspension of license under Section 31(1) of the Andhra Pradesh Excise Act pending further investigation.

Analysis:
The petitioner challenged the suspension of his shop license under Section 31(1) of the Andhra Pradesh Excise Act, questioning the authority's power to suspend the license "pending further investigation." The petitioner argued that the suspension order was akin to punishment without following principles of natural justice and statutory requirements. The Excise Sub-Inspector registered a case under Section 36(b) of the Act due to the petitioner's purchase of liquor from an unauthorized source. The petitioner contended that the suspension order was routine and premature, lacking a formal enquiry initiation against him. The court noted that no show cause notice was given to the petitioner, and the suspension order was made without statutory backing for suspension pending investigation.

2. Legal basis for suspension pending investigation.

The Excise Superintendent justified the suspension as a measure to facilitate investigation and prevent tampering with evidence. However, the court found that the Act did not explicitly authorize suspension pending investigation under Section 31(1). The court referenced a Full Bench decision emphasizing that suspension pending enquiry should not be a routine practice and must be based on reasonable grounds, urgency, and the nature of the breach. The court highlighted that no formal enquiry had been initiated despite the suspension order being in place, indicating a lack of justification for the suspension.

3. Violation of license conditions and malpractices.

The suspension order accused the petitioner of willfully violating license conditions and rules, leading to malpractices under Section 36(b) of the Act. The court observed that the Excise Superintendent had already concluded that the petitioner breached licensing rules, raising doubts about the necessity of further investigation for potential criminal prosecution. The court noted that the suspension order lacked a legal basis under the Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970, as it did not align with the provisions for suspension, withdrawal, or cancellation of licenses.

In conclusion, the court allowed the writ petition, setting aside the suspension order and emphasizing the importance of providing the licensee with an opportunity to represent against proposed actions. The court highlighted that the suspension order, without following due process, violated the statutory requirements and principles of natural justice. The judgment clarified that the decision did not prevent authorities from initiating a formal enquiry against the petitioner in the future, but the officer who issued the suspension order could not conduct such an enquiry due to prejudgment.