2018 (7) TMI 2056 - HC - Indian Laws

Refund of License fee - refund of proportionate amount of license fee calculated at the rate of Re. 1.00 L.P. Litre on the Minimum Guarantee Quantity (MGQ) of country liquor - unlawful closure of its/their manufacturing and bottling plant - HELD THAT - One thing is admitted that prior to sealing of the premises on various occasions the license of the petitioner was neither suspended nor cancelled by the authorities of the Excise Department, on one occasion when the Excise Commissioner passed an order dated 20.01.2016 (Annexure-11) suspending the license of the petitioner for a period of 90 days which was beyond the actual period of license of the petitioner, the Board of Revenue was pleased to grant interim stay of the order dated 20.01.2016 and it was directed that the petitioner shall be permitted to operate its licensed premises. Considering the pleadings available on the record, we find that in the case of M/s Welcome Distilleries also the premises of the petitioner was sealed on different occasions as stated in the writ application without affording the petitioner a reasonable opportunity to show cause. There is no denial of the statement of the petitioner that the order of suspension was passed without show cause notice to the petitioner by the Excise Commissioner and that the Excise Commissioner was not competent in law to pass such order of suspension. The prayer made by the petitioner to hold and declare that the repeated sealing and closure of the licensed premises of the petitioner for a total period of 95 days is wholly without any authority in law, and therefore has no liability for payment of the differential amount and license fee for the period of unlawful and illegal closure is fit to succeed and be allowed. The Principal Secretary, Registration, Excise and Prohibition Department, Government of Bihar and the Excise Commissioner, Government of Bihar, are directed to consider the quantum of the license fee and the excess differential amount recovered from the petitioner(s) in all these cases for the period their premises remained unlawfully sealed/closed and refund the entire excess amount to the petitioner(s) within a period of three months from the date of receipt/production of a copy of this orders. Application disposed off.

Summary

Issues Involved:
1. Refund of license fee and differential amount for unlawful closure periods.
2. Legality of sealing manufacturing premises without suspension or cancellation of licenses.
3. Compensation for destroyed stock due to prohibition policy.

Issue-wise Detailed Analysis:

1. Refund of License Fee and Differential Amount for Unlawful Closure Periods:
The petitioners sought a writ of mandamus for the refund of the proportionate license fee and differential amount calculated on the Minimum Guarantee Quantity (MGQ) of country liquor for periods during which their manufacturing and bottling plants were unlawfully closed. The petitioners argued that their premises were sealed without legal authority and without suspending or canceling their licenses. The court noted that in three of the four writ applications, there were clear findings and judgments from competent courts declaring the actions of the respondent authorities as illegal and arbitrary. Consequently, the court held that the petitioners were not liable for the differential amount and license fee for the periods of unlawful closure and directed the respondents to refund the excess amounts within three months.

2. Legality of Sealing Manufacturing Premises Without Suspension or Cancellation of Licenses:
The court examined the legality of the actions taken by the Excise authorities in sealing the manufacturing premises of the petitioners without suspending or canceling their licenses. The court found that the premises were sealed on various occasions without affording the petitioners a reasonable opportunity to show cause, and in some instances, the orders were passed without any show cause notice. The court referred to previous judgments, including those of the Hon’ble Supreme Court and Division Bench of this court, which supported the contention that the government cannot enforce payment through extra-legal steps and must follow due process. The court concluded that the repeated sealing and closure of the licensed premises were wholly without authority in law.

3. Compensation for Destroyed Stock Due to Prohibition Policy:
The petitioners also sought compensation for the value of finished goods and raw materials, including packaging materials, which could not be liquidated due to the unlawful closure of their manufacturing premises. The court directed the Principal Secretary, Registration, Excise and Prohibition Department, Government of Bihar, and the Excise Commissioner to consider the petitioners' claims for compensation, examine the materials brought before them, and take a decision in accordance with law within six months. The court noted that if the petitioners were not satisfied with the decision regarding compensation, they could seek remedy before a competent court or forum.

Conclusion:
The court allowed the writ applications and interlocutory applications, directing the respondents to refund the excess license fee and differential amounts for the periods of unlawful closure and to consider the claims for compensation for destroyed stock. The court emphasized that the State must suffer for the wrongs committed by its functionaries and that the petitioners were entitled to refunds and consideration of their compensation claims due to the unlawful actions of the Excise authorities.