2013 (7) TMI 858 - HC - Indian Laws

Compounding of an offence under Section 74 of U.P. Excise Act, 1910 Petitioner was granted licence for retail sale of country liquor in accordance with the provisions of U.P. Excise (Settlement of Licenses for Retail Sale of Country Liquor) Rules, 2002 for the execise year 2010-2011 - Petitioner in fact was selling country liquor, which was issued for sale for the previous excise year i.e. 2009-2010. Under the provisions of Rules, 2002, it is mandatory that the outgoing licencee at the end of the excise year shall surrender all the stocks pertaining to that year and is not entitled to sale the liquor of the previous year, under the licence for current year - Petitioner more or less admitted sale of liquor of the previous year and on that basis the Collector proceeded to cancel the licence of the petitioner Held that - Court finds that absolutely no application was made by the petitioner at any point of time under Section 74 of U.P. Excise Act, 1910 for the offence being compounded. Compounding of an offence under Section 74 of Act, 1910 is at the discretion of the licencing authority. If the petitioner has failed to avail the remedy so provided and has contested the proceedings on merit, he cannot now be permitted to turn around and contended that the offence should have been compounded instead of cancelling his licence Decided against the Petitioner. Forfeiture of security money of licence Held that - No such plea had been raised before the State Government. Order of statutory authority cannot be challenged on a ground not raised/pressed before the authority concerned Decided against the Petitioner

Summary

Issues: Challenge to order of State Government under U.P. Excise Act, 1910 for cancellation of liquor license due to selling previous year's stock, contention of compounding offense under Section 74, and forfeiture of security money.

Challenge to State Government's Order:
The petitioner challenged the State Government's order dated 14th October, 2010, under Section 11 (2) of the U.P. Excise Act, 1910, which dismissed the revision filed by the licensee-petitioner. The petitioner contended that the offense of selling liquor from the previous year under the current year's license could have been compounded under Section 74 of the Excise Act. However, the court noted that the petitioner did not apply for compounding the offense at any stage of the proceedings. The court emphasized that compounding of an offense under Section 74 is at the discretion of the licensing authority, and since the petitioner did not avail this remedy and contested the proceedings on merit, they could not now argue for compounding instead of license cancellation.

Forfeiture of Security Money:
The petitioner also argued that the security money should not have been forfeited when canceling the license. However, the court observed that this plea was not raised before the State Government. The court held that an order of a statutory authority cannot be challenged on a ground that was not raised or pressed before the authority concerned. Therefore, the court found no merit in the argument regarding the forfeiture of security money.

Conclusion and Dismissal of Writ Petition:
After considering the submissions and examining the records, the court concluded that there was no basis for interference under Article 226 of the Constitution of India. Consequently, the court dismissed the writ petition challenging the State Government's order, upholding the decision to cancel the liquor license due to the sale of previous year's stock and rejecting the arguments related to compounding the offense under Section 74 and forfeiture of security money.