2014 (10) TMI 719 - HC - Indian Laws

Cancellation of liquor license - Validity of order passed - Mandatory requirements not fulfilled - Held that - section 48 clearly places an obligation upon the authorities prescribed therein to enter inspect any place in which any licensed manufacturer carries on the manufacture of or stores any intoxicant but such entry and inspection can only be made within the hours during which sale is permitted and at any other time during which the same may be open the authority has to record his reasons. In the present case the raid was admittedly conducted during the period when the shop was required to be closed and even if the shop was found open in the middle of the night recording of reasons by the authority was necessary. None of the impugned orders indicate that any reasons were recorded by the competent authority and therefore in my opinion the recording of reasons under Section 48 being absolutely mandatory and the same have not been complied with the entire action in cancelling the liquor license of the petitioner as well as the appellate order and the revisional order are illegal and without jurisdiction - Decided in favour of assessee.

Summary

Issues involved:
1. Challenge to cancellation of liquor license.
2. Validity of raid and seizure of materials.
3. Compliance with statutory provisions under U.P. Excise Act, 1910.

Detailed Analysis:
1. The petitioner challenged the cancellation of his liquor license, which was granted for retail sale of country-made liquor. The cancellation was based on a raid conducted at his shop, resulting in the seizure of illegal and legal liquor, fake holograms, and other materials. The petitioner contended that the raid was conducted during a time when the shop was closed for a holiday, and no valid reasons were recorded by the authorities authorizing the raid. The petitioner argued that the actions taken against him were in contravention of Section 48 of the U.P. Excise Act, 1910, which mandates the recording of reasons for inspections and seizures. The petitioner also disputed that the seized materials constituted offenses under the Act.

2. The respondent, representing the Excise Department, defended the raid and seizure, stating that it was conducted under the authority of the Deputy Excise Commissioner. The seized materials included illegal liquor, fake holograms, and other items, leading to the arrest of an individual and the registration of a criminal case. The respondent contended that the cancellation of the petitioner's license was justified based on the seized items and the violations observed during the raid. Additionally, laboratory tests confirmed that the holograms recovered were fake, supporting the actions taken by the authorities.

3. The court analyzed the provisions of Section 48 of the U.P. Excise Act, 1910, which outline the powers to enter and inspect places of manufacture and sale of intoxicants. The section requires authorities to record reasons for inspections, especially when conducted outside permitted hours. The court emphasized that the mandatory recording of reasons was not complied with in the present case, rendering the actions taken against the petitioner illegal and without jurisdiction. Consequently, the court quashed the orders canceling the liquor license, upholding the petitioner's challenge and allowing the writ petition.