2019 (5) TMI 326 - HC - VAT and Sales Tax

Scope of SCN - Payment of License fee - refund the security amount deposited by the petitioner with respect to Country Liquor Shop - order of cancellation of License. HELD THAT - The show cause notice issued to the petitioner contained different description of the seized liquor and money - The record clearly reveals that the description of the seized liquor and other materials as mentioned in the seizure memo is different which has been mentioned by the licensing authority in his orders of cancellation of licence of the petitioner. In the opinion of the Court, once such inconsistency was noticed and is found, the proper course was available with the licencing authority to issue fresh show cause notice and to seek petitioner's response before taking a fresh decision. The petitioner was liable to pay the licence fee (for the period with effect from 1.4.2017 till 18.5.17) and, therefore, the licence fee for the remaining period and the total security money deposited by the petitioner has to be refunded to the petitioner - The licencing authority, therefore, is directed to refund the basic license fee as well as security money deposited by the petitioner after deducting the basic licence fee for the period w.e.f. 1.4.2017 to 18.5.2017 - Petition allowed.

Issues Involved:
1. Legality of the seizure and cancellation of the petitioner's liquor license.
2. Discrepancies in the description of seized liquor and money.
3. Failure to provide a personal hearing to the petitioner.
4. Refund of the basic license fee and security money.
5. Harassment by the licensing authority.

Issue-wise Detailed Analysis:

1. Legality of the Seizure and Cancellation of the Petitioner's Liquor License:
The petitioner challenged the order dated 28.09.17 passed by the Collector/licensing authority, District Kushinagar, and subsequent orders dated 20.2.18 and 19.07.18 passed by the Commissioner, Excise, U.P., and Secretary, Excise, U.P. The petitioner argued that the seizure order dated 18.05.17 and the subsequent cancellation of the license were based on discrepancies observed during a search conducted by the excise authorities. The appellate authority had previously set aside the cancellation order and directed a re-examination with a personal hearing, which was not properly adhered to by the licensing authority.

2. Discrepancies in the Description of Seized Liquor and Money:
The petitioner contended that there were inconsistencies in the description of the seized liquor and money between the show cause notice, the seizure memo, and the cancellation order. The show cause notice listed different quantities and brands of liquor compared to the order of cancellation. The court found these discrepancies significant, noting that the proper course would have been to issue a fresh show cause notice and seek the petitioner's response before making a decision.

3. Failure to Provide a Personal Hearing to the Petitioner:
The petitioner asserted that no personal hearing was provided despite being directed by the appellate authority and the High Court. The licensing authority's failure to provide a personal hearing and the discrepancies in the seizure description led to the conclusion that the licensing authority disobeyed higher authorities' orders and acted with malice.

4. Refund of the Basic License Fee and Security Money:
The court acknowledged that the excise license year had expired, and the petitioner could not claim restoration of the license. However, it directed the licensing authority to refund the basic license fee and security money deposited by the petitioner, after deducting the fee for the period from 1.4.2017 to 18.5.17, within one month from the date of the order.

5. Harassment by the Licensing Authority:
The court found that the petitioner had been harassed by the licensing authority, as evidenced by the repeated harsh actions and failure to comply with higher authorities' orders. Consequently, the court imposed a cost of ?20,000 on the respondents, to be paid to the petitioner along with the refunded amounts.

Conclusion:
The writ petition was allowed, and the court directed the licensing authority to refund the basic license fee and security money, deducting the fee for the period the petitioner operated the shop. Additionally, the respondents were ordered to pay ?20,000 as costs for the harassment caused.

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