2014 (3) TMI 673 - HC - Indian Laws

Suspension of license - Adulteration in foods - Held that - No where the impugned order would record the factum that Sri G. Yadaiah was the nowkarnama holder of the licensee. It is rather surprising that an Enforcement wing official of the Prohibition & Excise Department missed out to record such a factum. If Sri G. Yadaiah was not the nowkarnama holder of the licensee, he could not have applied for analysis of the second sample within three days period. The absence of the licensee or his nowkarnama holder, at the time of drawl of sample, therefore, requires the respondents to communicate, in writing, the factum of drawl of sample from the shop of the licensee, but the impugned order does not make any reference to any such communication. In my opinion, this is a failure on the part of the respondents. Therefore, the suspension order dated 03.02.2014, at best, can be understood as the notice delivered to the licensee that the sample has been drawn from out of his licensed shop premises. In such cases where no intimation relating to drawl of sample has been delivered to the licensee, the seven-day period built into the aforementioned portion of Rule 27(1) of the Rules, commences with the date of receipt of the order of suspension. Moment an order of suspension pending enquiry is passed, appropriate action must be initiated for conducting the enquiry. Enquiry will have to be completed within a time frame of 30 days. If the licensee were to ask for time, it would be a different matter, but any failure on the part of the officials to complete the enquiry in quick time is likely to degenerate into a punitive measure by itself, as was already pointed out. If suspension as a punitive measure is to be imposed upon a licensee, the requirement of providing an opportunity of hearing to him as built in under Section 31 has got to be complied with. Therefore, the respondents shall conclude the entire enquiry within 30 days and based upon their findings, action considered appropriate shall be taken - Decided in favour of assessee.

Summary

Issues:
1. Suspension of toddy shop license pending enquiry without prior notice to the licensee.
2. Legal validity of the suspension order under Section 31 of the Andhra Pradesh Excise Act, 1968.
3. Compliance with Rule 27 of the Andhra Pradesh Excise (Grant of Licence to Sell Toddy, Conditions of Licenses Tapping of Excise Trees) Rules, 2007 regarding sample drawing procedures.

Issue 1: Suspension of toddy shop license pending enquiry without prior notice to the licensee

The petitioner contended that the Prohibition & Excise Superintendent did not provide an opportunity for the licensee to make representations before suspending the license, as mandated under Section 31 of the Act. Citing previous judgments, the petitioner argued that any suspension without prior notice is illegal. However, the Assistant Government Pleader opposed, referring to a Full Bench judgment stating that suspension pending enquiry is a natural adjunct to the power of granting a license. The court upheld the suspension, emphasizing that it was not a punitive measure but a preventive action due to the seriousness of the violation of adulteration.

Issue 2: Legal validity of the suspension order under Section 31 of the Andhra Pradesh Excise Act, 1968

The court clarified that Section 31 deals with cancellation or suspension of a license as a punitive measure based on the gravity of violations. It explained that suspension pending enquiry is not punitive but preventive, aiming to ensure compliance with the law. The court highlighted the need for judicious exercise of power by authorities to address violations effectively, especially in cases of serious offenses like adulteration.

Issue 3: Compliance with Rule 27 of the Andhra Pradesh Excise Rules, 2007 regarding sample drawing procedures

The court noted a discrepancy in the enforcement officials' failure to communicate the sample drawing to the licensee as required by Rule 27. It highlighted the importance of timely communication to prevent undue advantage to the licensee. The court directed the Excise Superintendent to allow the licensee to send the second sample for independent analysis and emphasized the need for prompt completion of the enquiry within 30 days to ensure fairness and compliance with procedural requirements.

In conclusion, the court dismissed the writ petition, upholding the suspension order pending enquiry but directed the authorities to adhere to procedural requirements, especially regarding communication of sample drawing to the licensee and timely completion of the enquiry process.