Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2013 (4) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (4) TMI 437 - HC - VAT and Sales TaxGranting of licence notice issued by Collector and District Excise Officer Kanpur, inviting applications for grant of licence to the shops of which licenses were not renewed and 40 new shops foreign liquor and 2 new model shops. Petitioners challenged this notification on following grounds. Petitioner contention - opening of new liquor shops is contrary to Article 47 of Constitution of India as well as preamble of U.P. Excise Act, 1910. - held that - Supreme Court has clearly held that in Khodey Distilleries Ltd. Vs. State of Karnakata, 1994 (10) TMI -269 law has created monopoly in State to regulate the business of liquor. In exercise of such privilege, State has right to open new liquor shop to raise revenue. However the Court can examine as to whether the State is exercising it s privilege in a reasonable manner or in arbitrary manner. Accordingly other arguments of the counsel for the petitioners are required to be examined. Petitioners contended that opening new liquor shop was arbitrary held that - The arguments in this respect is not liable to accepted. The report of November, 2012 is not a proof that quantity of sale of liquor has been decreased from the sale of the previous year. The petitioners have deliberately not filed the report relating to the actual quantity of sale for the previous year as well as for the year 2012-13. Excise policy merely authorise the Excise Commissioner to increase new shops up to 15% and with the approval of the Government more than 15%. The actual number of new shops are increased on the basis of the report of the Collector of the district and not at the level of Excise Commissioner. Petitioner contention - there is a violation in the excise policy, it has been advertised that new shops will be increased up to 15% of the existing shops, but 40 new shops have been opened - held that - arguments that number of shops cannot be increased more than 15% is not liable to be accepted. In addition, a reading of the excise policy would show that the limit of 15% increase is not district wise but is applicable to whole State of U.P. Petitioner contention - the new shops have been located within a radius of 500 meters from the existing shops in violation of the provisions of Rules held that - The Standing Counsel however submitted that till today, only the locality of new shops have been allotted, and it s boundary have not been fixed. Therefore, the argument of the counsel for the petitioner in this respect is misconceived. Petitioners contention - no notice of opening new shops has been given before inviting applications for renewal. - held that - extensive survey was made by the Excise Inspectors of different localities and they submitted their reports for opening 40 new foreign liquor shops. The petitioners are in the excise business and all these facts were through out in their knowledge. The entire policy was available on the website as well as in the Office of the Excise Commissioner, U.P. In this policy itself, three phases of the renewal /allotment have been prescribed, fixing their time schedule. Accordingly, the argument of counsel for the petitioner is not liable to be accepted. Petitioner contention - Section 24-A (3) of the Act provides that where more licences than one of foreign liquor shop are proposed then advance intimation of the proposal was required - held that - Under this provision advance intimation is required to be given to the prospective applicants. Thus this section contemplate for wide publicity and not for individual notice. The Collector has published notice in the news papers for settlement of the new shops. writ petitions are dismissed.
Issues Involved:
1. Validity of opening new liquor shops in light of Article 47 of the Constitution and the preamble of the U.P. Excise Act, 1910. 2. Alleged arbitrariness in the decision to open new liquor shops. 3. Compliance with excise policy regarding the percentage increase in new liquor shops. 4. Violation of the rule prohibiting new shops within a 500-meter radius of existing shops. 5. Adequacy of notice given to existing license holders regarding the opening of new shops. 6. Requirement for advance intimation under Section 24-A (3) of the U.P. Excise Act. Issue-wise Detailed Analysis: 1. Validity of Opening New Liquor Shops: The petitioners argued that opening new liquor shops contravenes Article 47 of the Constitution and the preamble of the U.P. Excise Act, 1910, which promotes prohibition. However, the court referred to the Supreme Court's decision in Khodey Distilleries Ltd. Vs. State of Karnataka, which held that the State's power to regulate and restrict the business in potable liquor includes the power to carry on such trade to the exclusion of others. The State can regulate the production, supply, and consumption of liquor in the interests of public health and welfare. The court concluded that the State has the right to open new liquor shops to raise revenue, and this action does not violate Article 47. 2. Alleged Arbitrariness in Decision: The petitioners claimed that the decision to open new liquor shops was arbitrary, citing a report from November 2012 indicating that sales targets were not met. The court found this argument unconvincing, noting that the report did not prove a decrease in liquor sales and that the decision was based on extensive surveys and reports from Excise Inspectors and Collectors. The excise policy authorized the Excise Commissioner to increase the number of shops up to 15%, with additional increases requiring State Government approval. The court found no arbitrariness in the decision-making process. 3. Compliance with Excise Policy: The petitioners contended that the increase in new shops exceeded the 15% limit specified in the excise policy. The court clarified that the 15% limit applies to the entire state, not individual districts. The increase in Kanpur Nagar was approved by the State Government, and there was no evidence that the overall increase in the state exceeded 15%. Thus, the court found no violation of the excise policy. 4. Violation of 500-Meter Rule: The petitioners argued that new shops were located within a 500-meter radius of their existing shops, violating U.P. Number and Location of Excise Shop Rules, 1968, and U.P. Excise Settlement of Foreign Liquor Rules, 2001. The court noted that the exact locations of the new shops had not been finalized, and the petitioners could raise objections during the boundary-fixing process. The court found this argument premature. 5. Adequacy of Notice to Existing License Holders: The petitioners claimed they were not given prior notice of the new shops before renewing their licenses. The court found that the excise policy was published in newspapers and available on the Excise Commissioner's website. The policy outlined three phases for renewal and allotment, and the petitioners, being in the excise business, were expected to be aware of these developments. The court concluded that adequate notice was given. 6. Requirement for Advance Intimation: The petitioners argued that Section 24-A (3) of the U.P. Excise Act required advance intimation of new licenses. The court clarified that this provision mandates wide publicity, not individual notice. The Collector's notice in newspapers fulfilled this requirement, and the court found no violation of Section 24-A (3). Conclusion: The court dismissed the writ petitions, finding no merit in the petitioners' arguments. The decision to open new liquor shops was deemed lawful, non-arbitrary, and in compliance with relevant rules and policies.
|