Rakesh Pandey {Excise} vs State Of U.P. Thru Secy. Excise & 3 ...
2014 Latest Caselaw 9268 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
 
 

AFR
 
Reserved on 25.11.2014
 
Delivered on 27.11.2014
 
Court No. 17
 

 

 
Case :- MISC. SINGLE No. - 6265 of 2005 
 

 
Petitioner :- Rakesh Pandey 
 
Respondent :- State Of U.P. Thru Secy. Excise & 3 Ors. 
 
Counsel for Petitioner :- Mukesh Prasad,S.M.K. Choudhary 
 
Counsel for Respondent :- C.S.C. 
 

 
Hon'ble Sudhir Agarwal,J. 

1. This writ petition is directed against the order dated 06.01.2005 (Annexure-1 to the writ petition) passed in Revision No. 41 of 2003, by respondent no. 1, rejecting petitioner's revision against Excise Commissioner's order dated 07.04.2003.

2. The fact, in brief, giving rise to present dispute, as stated in the writ petition, are as under.

3. The settlement of country liquor licence in State of U.P. was governed by U.P. Settlement of Country Liquor Licence (Tender-cum-Auction) Rules, 1985 (hereinafter referred to as the 'Rules, 1985"). The Excise Commissioner fixed minimum guaranteed quota for the entire country liquor group of shops of Kanpur Nagar for excise year 1988-89 as 55,11,750 bulk litres. The minimum guaranteed quota/ quantity is defined under Rules 2(f) of Rules, 1985 and reads as under:

"Minimum guaranteed quantity means the minimum quantity of country liquor as fixed by the Collector of the district guaranteed by the auction-purchaser to be lifted by him from the country liquor Bonded Warehouse, specified by the Excise Commissioner, for the purpose of being sold by retail in his country liquor shop or group of shops during the Excise year or part of the excise year for which he has obtained the licence. However, that the total minimum guaranteed quantity for district shall not be less than the quantity fixed by the Excise Commissioner for the whole district." (emphasis added)

4. For the purpose of settlement of country liquor group of shops District Kanpur Nagar was divided in six groups, i.e., from groups No. 1 to 6. The initial efforts made by respondents to settle country liquor shops of Kanpur Nagar, prior to commencement of excise year 1988-89, failed, since adequate bids were not received. Hence the country liquor group of shops were settled on daily basis. It is not in dispute that the shops in dispute between the 10.04.1988 to 27.05.1988 were run by a licensee other than petitioner, on daily basis. On 27.05.1988 re-auction took place wherein petitioner alongwith one Shanker Prasad Jaiswal offered highest bid for shops of Group No. 1. They were granted licence for excise year 1988-89, i.e., from 29.05.1988 to 31.03.1989, on the bid amount of Rs. 92,00,000/-. Group no.1 consisted of seven shops. The petitioner was accorded permission, to run the aforesaid shops, by District Excise Officer, Kanpur Nagar, with effect from the date of settlement, pending approval by Excise Commissioner. It is alleged that at the time of auction, the District Excise Officer announced minimum guaranteed quota fixed for entire excise year of 1988-89 as 55,11,750 bulk litres and, therefore, petitioner participated in the auction held on 27.05.1988 with the impression that he would be required to lift minimum guaranteed quota for the period he would be running his country liquor shop on pro-rata basis. The petitioner was granted licence to run the shops from 29.05.1988 to 31.03.1989. The maximum days for which country liquor shops are given during excise year is about 338 days for which quota was fixed by Excise Commissioner which would have run in 338 days. Since petitioner was granted licence not for the entire excise year but from 29.05.1988 to 31.03.1989, therefore, taking it on pro-rata basis, reducing the period of 57 days, the maximum quota ought to have been lifted by petitioner should have come to 8,43,558 bulk litres and not 10,36,900 bulk litres. However, District Excise Officer informed petitioner in the last week of July, 1989 that minimum guaranteed quota for country liquor shops of group 1 was 10,36,900 bulk litres.

5. The petitioner's partner, Shanker Prasad Jaiswal moved an application on 04.08.1988 requesting District Excise Officer to fix minimum guaranteed quota on pro-rata basis for the months of June, 1988 to March, 1989. The Collector, Kanpur Nagar vide letter dated 24.11.1988 informed petitioner's partner that as per auction held, the consideration payable by petitioner on liquor quota was Rs. 1,02,69,448/- which was already informed to petitioner by Excise Inspector's letter dated 16.09.1988 and, therefore, request made otherwise by petitioner has to be rejected.

6. The petitioner then filed an objection dated 25.01.1989 (Annexure-8 to the writ petition) before Collector and then filed Writ Petition No. Nil of 1988, which was disposed of vide Court's order dated 30.01.1989 observing that since petitioner has made a representation before Excise Commissioner, the same would be decided by him within two weeks.

7. The Excise Commissioner ultimately passed order on 13.03.1989 rejecting petitioner's representation. Again petitioner came to this Court in Writ Petition No. 414 of 1989 and Writ Petition No. 724 of 1989. Both were decided vide judgment dated 07.11.1997 directing petitioner to avail remedy of revision before State Government. The revision preferred by petitioner was allowed by Special Secretary (Excise) on 16.03.1989, on the ground that contention of petitioner that announcement was made by Excise Commissioner at the time of auction regarding minimum guaranteed quota may be verified from record and thereafter fresh order should be passed. It is said that without giving opportunity of hearing, Commissioner decided matter on 07.04.2003, whereupon a recall application was filed and this was also decided without hearing on 08.08.2003, whereupon petitioner filed Revision No. 41 of 2003. On 10.11.2004 the respondent no. 1 directed District Excise Officer to show record with respect to petitioner's claim regarding announcement of quota at the time of auction but thereafter petitioner's came to know that his revision has been rejected vide order dated 06.01.2005.

8. It is first contended that the impugned order, therefore, has been passed in utter violation of principle of natural justice. It is then contended that minimum guaranteed quota was fixed for the entire excise year and since licence was granted for a period less than that, therefore, it should have been reduced on pro-rata basis.

9. A counter affidavit has been filed on behalf of State disputing the claim of petitioner for reduction of liability on pro-rata basis. It is stated that on re-auction, country liquor shops of group 1 were settled in favour of petitioner for a bid money of Rs. 92 lacs on 27.05.1988. It is not disputed that prior thereto the shops were run by licensees other than petitioner on daily basis. It is also said that minimum guaranteed quota as well as Nirgam Mulya, i.e., Issue Price, and terms and conditions of auction for excise year 1988-89 were announced at the time of auction. All the bidders were present in auction pandal and signed the same. For Group-1, minimum guaranteed quota for the period of 28.05.1988 to 31.03.1989 was fixed as 9,68,816 bulk litres. The monthwise distrubution of Nirgam Mulya (Issue Price) was approved by Collector subsequently on 13.09.1988. Since petitioner had agreed to the quota disclosed at the time of auction as 9,68,816 bulk liters for Group-1, it cannot go back and claim pro-rata reduction by relying on determination of minimum guaranteed quota made by Excise Commissioner before excise year 1988-89.

10. This factom that quota was disclosed at the time of auction and signed by bidders, I do not find to have been denied in para 9 of rejoinder affidavit, wherein para 6 of the counter affidavit has been replied.

11. In the context of denial of opportunity, Sri S.M.K. Chowdhary, learned Senior Advocate, drew my attention to the pleadings in para 33 and 34 of writ petition and contended that Excise Commissioner passed order in absence of petitioner's counsel and without giving any opportunity of hearing to him, therefore, the appellate order of Excise Commissioner is patently illegal.

12. However, I find that it is not the order of Excise Commissioner which is under challenge but the revisional order passed by State Government is under challenge in this petition. There is nothing on record to show that the facts pleaded in paras 33 and 34 of the writ petition were taken as ground for challenging the order of Excise Commissioner before State Government. Petitioner has not brought on record the memo of revision and despite repeated query learned counsel for the petitioner did not supply even a copy of memo of revision to show that this plea was addressed before Revisional Authority also so as to allow this Court to examine correctness of dispute raised by petitioner regarding factum of denial of opportunity to him. In these circumstances, I do not find any justification to allow petitioner to raise a pure question of fact, for the first time, before this Court in writ jurisdiction under Article 226 of the Constitution.

13. So far as revisional order is concerned, I do not find that anything has been substantiated to suggest that revisional order has been passed by State Government without giving opportunity of hearing to petitioner. The order itself shows that after hearing counsel for parties and perusing the record, the order has been passed. Even in the review/ recall application filed before State Government, copy whereof has been placed on record as Annexure-16 to the writ petition, I find that one of the ground is that no notice or opportunity was given to counsel for petitioner to rebut oral submissions advanced by District Excise Officer, Kanpur Nagar. When the matter was heard and argued before Revisional Authority, the oral submissions could have been rebutted at the same stage. No further date is supposed to be fixed for this purpose. The Revisional Authority has referred to documentary evidence/ file produced by District Excise Officer, Kanpur Nagar which has been taken note in the impugned order and there is nothing to show that he has examined any ex parte oral submissions and District Excise Officer. This has been reiterated by Revisional Authority while rejecting review/ recall application and, therefore, I do not find any substance on this aspect also.

14. Now the only question is, whether in the above facts and circumstances, or even otherwise, claim of petitioner for reduction of pro-rata basis in minimum quota relying on quota determined by Excise Commissioner earlier, by ignoring what has actually happened at the time of auction, is sustainable or not.

15. In the impugned order the State Government has explained that minimum guaranteed quota as also the price money was determined after deducting consideration, already received by State, and also the quantity lifted by operating agent till the date of settlement of auction for excise year 1988-89, and that is how the minimum guaranteed quota for Group 1 was announced on the date of auction. The bid sheet was duly signed by all the bidders including petitioner mentioning aforesaid quantity. That being so, it is clear that petitioner had participated in the auction with open eyes, knowing it will as to what was the minimum quota determined for auction of Group 1 shops for the remaining excise year and had not raised any objection at that time. He cannot be allowed to subsequently retract and claim for pro-rata basis so as to shirk from his liability as per auction itself. He also could not show that there was any representation on the part of authorities to suggest that any pro-rata reduction in quota would be made or allowed.

16. Even otherwise I find lack of substance in what has been argued by Sri Choudhary. A bare perusal of Rule 2(f) of Rules, 1985 shows that minimum guaranteed quantity fixed by Excise Commissioner in all the cases would not be the only quota which is to be lifted by licensee in the excise year concerned but it can be more than that. The quota is fixed by Collector in the light of specifications made by Excise Commissioner and second clause of Rule 2(f) clearly shows that minimum guaranteed quantity for district concerned shall not be less than the quantity fixed by Excise Commissioner for whole year. Meaning thereby it can be more but not less. Therefore, the quota specified by Excise Commissioner for excise year is a limit below which the Collector cannot fix the minimum guaranteed quantity for district concerned but reverse is not prohibited by the rule. Meaning thereby, it can be more than that.

17. In the present case, the district level authorities, however, have not made any serious deviation from what has been fixed by Excise Commissioner for the excise year 1988-89, but what they have done is, the quantity which was lifted on daily wage basis till 27.05.1988 has been deducted from the quota fixed for entire excise year and that was made the basis for auction. It is not the case of petitioner nor he could substantiate it that district level excise authorities, at the time of auction, made any representation that the minimum guaranteed quota, as determined by Excise Commissioner, would apply on pro-rata basis for the period of auction. The petitioner claimed that he got this impression but no basis therefor could have been substantiated. It is the own misconception of petitioner, without any basis and substance, which cannot bind the authorities in any manner. The authorities have categorically said that minimum guaranteed quota determined by Collector for auction period in district was disclosed and announced at the time of auction and the bids were made accordingly and all bidders signed bid sheet. This determination of quota by Collector, being not lower than what was specified by Excise Commissioner, cannot be said to be in contravention of Rule 2(f) in any manner. Therefore, the theory of pro-rata basis applied by petitioner from his own surmises, having neither any factual basis nor legal sanction, cannot help him in any manner.

18. Even otherwise, I find that the similar issue has already been considered and decided by a Division Bench of this Court in Gavendra Pal Singh and others Vs. Commissioner, U.P. Excise, Allahabad and others, 2003 (3) AWC 2218 and this Court has said as under:

"3. The petitioners are licensees for retail sale of country liquor under the U. P. Excise (Settlement of Licences for Retail Sale of Country Liquor) Rules, 2002, in district Aligarh. Copies of their licences have been annexed as Annexure-1 to the writ petition. These licences have been granted for the period from 1.4.2002 to 31.3.2003.

4. In paragraph 12 of the writ petition the petitioners have given various reasons for not lifting the minimum guaranteed quantity of country liquor. It is alleged in paragraphs 13 and 14 of the writ petition that the fixation of minimum guaranteed quantity and the licence fee for the same is arbitrary and illegal.

5. The respondents have filed a counter-affidavit. In paragraph 3 (B) of the same it is mentioned that in pursuance of the advertisement dated 18.3.2002, for settlement of retail country liquor shops in district Aligarh, the petitioners voluntarily made offers with their eyes wide open and well looking into the terms and conditions of the licence and minimum guaranteed quantity, etc. and their offers were accepted by the respondents resulting in a concluded contract. The petitioners started running the shops in question in terms of the licence/contract but now they want to withdraw from their contractual obligations.

6. In paragraph 3 (C) of the counter-affidavit, it is stated that the annual minimum guaranteed quantity is defined as the quantity of country liquor as fixed by the licensing authority in accordance with the general or specific instructions issued by the Excise Commissioner and guaranteed by the licensee to be lifted by him for his retail shop during an excise year for the purpose of retail sale. In paragraph 3 (D) of the counter-affidavit it is stated that the minimum guaranteed quantity as fixed by the Excise Commissioner has been taken to be the basis for calculation of the licence fee which is the consideration for parting with the exclusive privilege in favour of the petitioners.

7. The respondents have relied on the decisions of the Supreme Court in State of Orissa and Ors. v. Narain Prasad, (1996) 5 SCC 740. They have also relied on the decision in State of U. P. v. Sheopat Rai, 1994 Supp (1) SCC 8, where it was held that the licence fee or fixed fee cannot partake the character of either regulatory fee or compensatory fee. In paragraph 5 of the counter-affidavit it is stated that the minimum, guaranteed quantity has been fixed by the Excise Commissioner on the basis of the report submitted by the Excise Authorities concerned in response to the letter dated 15.2.2002. A copy of the said letter has been annexed as Annexure-C.A. 1 to the counter-affidavit. It is stated that the Excise Commissioner, U. P.. has got power under Section 41 (c) for prescribing the scale of fee or manner of fixing the fee payable for any licence, permit or pass including any consideration for the grant of any exclusive or other privilege.

8. Learned counsel for the petitioners have relied on the Supreme Court decisions in Bimal Chandra Banerjee v. State of Madhya Pradesh, AIR 1971 SC 517 and Excise Commissioner, U. P., Allahabad v. Ram Kumar etc., AIR 1976 SC 2237, It was held in these decisions that even if the minimum quantity of liquor has not been lifted, no excise duty can be charged and the legal provisions which permits it would be invalid. However, these decisions have been considered and distinguished by the Supreme Court in State of Orissa and Ors. v. Narain Prasad and Ors. (supra).

9. In paragraph 19 of the aforesaid decision it was held that in Bimal Chandra Banerjee's case (supra) ; Ram Kumar's case (supra), the decision approached the question from the point of view of levy of excise duty, but no argument appears to have been put forward that the State is merely seeking to recover the consideration for the grant of exclusive privilege/licence as per the terms and conditions of, and as undertaken in the agreement. In paragraph 33 of the same decision, it was observed ;

"A review of the decided cases of this Court on the subject indicates a clear shift in the way this matter has been looked at. Initially, the matter was looked at from the point of view of the levy of excise duty. But then a different view point emerged with the Constitution Bench decision in Hari Shankar v. Dy. Excise Commissioner, AIR 1975 SC 1121, which was carried forward in Panna Lal v. State of Rajasthan, AIR 1975 SC 2008, and other decisions which approached the matter from the point of view of grant of privilege."

10. In Solomon Antony and Ors. v. State of Kerala and Ors., JT 2001 (3) SC 100, a similar view was taken by the Supreme Court and it was held that the kist amounts have to be paid by the contractors as the contractors with their eyes wide open have accepted the terms of payment of consideration of the Kist.

11. The petitioners voluntarily entered into the contract after knowing about the terms and conditions and hence they cannot now challenge the same, as held in Hari Shanker's case (supra).

12. There is no merit in this petition and it is dismissed. Interim order if any is vacated."

19. In view of the above decision and the for the reasons stated therein, which squarely applies in the present case also, I do not find that the view taken by respondents for rejecting petitioner's claim can be faulted legally, factually or otherwise. No interference, therefore, is called for.

20. The writ petition lacks merit. Dismissed. Interim order, if any, stands vacated.

21. Petitioner shall also pay cost to respondent-State, which I quantify to Rs. 10,000/-.

Order Date :-27.11.2014

AK