Allahabad High Court
Mayoor Ahuja vs State Of U.P. Thru. Prin. Secy. ( Excise) ... on 23 April, 2025
Author: Pankaj Bhatia
Bench: Pankaj Bhatia
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
AFR
Neutral Citation No. - 2025:AHC-LKO:23271
Court No. - 6
Case :- WRIT - C No. - 3684 of 2024
Petitioner :- Mayoor Ahuja
Respondent :- State Of U.P. Thru. Prin. Secy. ( Excise) Lko. And 2 Others
Counsel for Petitioner :- Pranjal Krishna
Counsel for Respondent :- C.S.C.
AND
Case :- WRIT - C No. - 3683 of 2024
Petitioner :- Mayoor Ahuja
Respondent :- State Of U.P. Thru. Prin. Secy. Home Lko. And 2 Others
Counsel for Petitioner :- Pranjal Krishna
Counsel for Respondent :- C.S.C.
Hon'ble Pankaj Bhatia,J.
1. Heard learned Counsel for the petitioner as well as learned Standing Counsel.
2. The petition being Writ-C No.3684 of 2024 has been filed challenging the order dated 27.03.2021 whereby, the license of the petitioner for wholesale vend of country liquor in District Budaun has been cancelled and the order dated 23.02.2024 whereby, the revision filed against the cancellation order has also been dismissed.
3. The Writ-C No.3683 of 2024 has been filed challenging the order dated 31.03.2021 whereby, the license of the petitioner for wholesale vend of country liquor in District Sambhal has been cancelled and the order dated 23.02.2024 whereby, the revision filed has also been dismissed.
4. Both the petitions arise out of the similar orders, as such, both are being decided by means of this common judgment.
5. For the brevity, the facts of Writ-C No.3684 of 2024 are noted. The petitioner is the CL-2 License Holder (Wholesaler) for the District Badaun for the calendar year 2020-21 and similarly for the District Sambhal for the same calendar year and was operating in terms of the Rules which are known as The Uttar Pradesh Excise (Settlement of Licences for Wholesale of Country Liquor) (Thirteenth Amendment) Rules, 2020 (in short 'the Rules 2020'). It is claimed that a confidential trip was received with regard to some of the trucks going to Unnao carrying country made liquor with a gate-pass. On investigation, certain statements were made by the drivers of the said truck and on the basis of the said statements, a search was conducted at the premises of the petitioner and a prima facie report was given on 04.03.2021 (Annexure-2 to the writ petition), wherein as many as four discrepancies were noticed. In the terms of the said inspection carried out, the petitioner was served with a show cause notice on 05.03.2021, wherein, it was indicated that on the basis of the search carried out on 04.03.2021, following discrepancies were noticed:
"1- साइनबोर्ड नियमानुसार नहीं लगा पाया गया।
2- अभिलेखानुसार स्टाक से 3670 V/V तीव्रता व 200 मिली0 धारिता के 1980 पौवे कम पाए गए।
3- गोदाम कक्ष के अन्दर कैमरे नहीं लगे पाये गए। बाहर लगे दोनों कैमरो की रिकार्डिंग का बैक-अप नहीं रखा गया है। कैमरे की मेमोरी में दिनांक 12.02.2021 से अद्यतन रिकार्डिंग सुरक्षित है। कैमरे का I.P. एड्रेस विक्रेता द्वारा उपलब्ध नहीं कराया गया। सम्बन्धित निवास संलग्न है।
4-अग्नि सुरक्षा हेतु आवश्यक अग्निशमक यन्त्रों का प्रबन्ध नहीं पाया गया ।"
6. It was also stated that on the interception of the truck, some information were received by the driver of the said truck, wherein, he had indicated certain irregularities committed by the manufacturer of the liquor. It was also noticed that the irregularities were noticed in the books of account of the manufacturer. It was also noticed that in terms of the first information reports registered with FIR No.97 of 2021, under Section 60 of the Excise Act and FIR No.98 of 2021, under Section 420, 467, 468, 471, 477-A IPC, it was noticed that the liquor was being transported to CL-2 godowns illegally and based upon the said, a view was formed that the liquor manufactured by the manufacturer was being transported, which resulted into loss of revenue to the State. It was also alleged that in collusion with the manufacturer of liquor, the illicit liquor was affixed with forged barcodes and with one gate pass, the liquor was transported twice, which was illegal and resulted into the loss of the revenue of the State Government.
7. It was also alleged that the action was proposed against the petitioner in terms of the provisions contained in Rule 16 of the Rules 2000. The petitioner gave a reply to the said show cause notice, denying the allegations and specifically stated that the inference drawn based upon the interception of the truck and the statements of the driver, in any way, did not implicate the petitioner or link him with the offence in question. It is also on record that subsequently, the petitioner had approached this Court at Allahabad by filing Writ Tax No.261 of 2021, wherein a plea was taken that the allegations levelled against the petitioner in the show cause notice was compoundable, however, the Court without entering into the merits noticed that the petitioner has already approached the Commissioner (Excise) and directions were issued to take a decision on the application filed by the petitioner. The said order was passed on 25.03.2021. Subsequent to the passing of the said order, an order came to be passed by the Commissioner, U.P. Excise being order dated 27.03.2021, which is on record as Annexure-7. By means of the said order, the Commissioner noticed the order passed by the High Court, the allegations levelled in the show cause notice, the reply submitted by the petitioner and thereafter it was recorded that certain facts were relevant for adjudication. While doing so, in para 4, it was recorded that some report have been submitted by the SIT as a preliminary report, wherein, it is alleged that liquor is being transported by violating the relevant rules. On the basis of the said report, an order came to be passed holding that the petitioner was found guilty of violating conditions 1, 4, 10, 21, and 23 and consequently, the license of the petitioner was cancelled and the security deposit was forfeited in the State Government. The petitioner challenged the said order by preferring revision before the State Government, which too was dismissed by means of the impugned order dated 23.02.2024. The said orders are under challenge before this Court.
8. The Counsel for the petitioner argues that the show cause notice was vague. No allegation specific to the petitioner was levelled. He argues that the inference drawn based upon the FIR and the statements of the drivers were whimsical. It is further argued that none of the conditions of the license granted to the petitioner as noticed in the order were violated, even if for the sake of the argument, all the allegations are treated to be correct. It is further argued that in terms of the Rule 2020 all the offences alleged against the petitioner, even though are not admitted, would be compoundable and thus the action of forfeiting the security are bad in law. He further argues that the power exercise for cancelling the license is contrary to the mandate of Section 16 and as of the infractions mentioned in Section 16, which can lead to cancellation, ever existed in the case of the petitioner. He places reliance on the judgment of this Court in the case of Ajay Pratap Singh vs State of U.P. and others (Writ-C No.5098 of 2017), decided on 06.07.2022. He thus argues that the order of confiscating the sureties deserves to be quashed, inasmuch as, the license already come to an end cannot be renewed.
9. The Counsel for the petitioner also argues that copy of the SIT report heavily relied upon was never made available to the petitioner and are never supplied to him and in fact, the said SIT report was filed after the cancellation order was passed.
10. Learned Standing Counsel, on the other hand, justifying the order impugned argues that after the detailed analysis of the allegations levelled, an order has been passed. He further argues that as huge loss has been caused to the State exchequer by unscrupulous people, in which the petitioner was also engaged, the steps were rightly taken to protect the interest of the State Government. He further argues that even certain Officer, who are also alleged to be involved, are under suspension and departmental proceedings are going on. In the light of the said, he argues that the writ petitions deserve to be dismissed.
11. Considering the submissions raised by the parties and recorded above, it is clear that the license was granted to the petitioner subject to the conditions mentioned in the license, which are contained as Annexure-1 in both the writ petitions, as well as the Rules, which are framed and applicable and from time to time and The Uttar Pradesh Excise (Settlement of License for wholesale of Country Liquor) Rules, 2020.
12. A perusal of the license cancellation order in the context of the show cause notice reveals that the show cause notice was confined to four allegations as recorded above and were said to be in violation of Rule 16 (ka), (kha), (da) and (chha) of the Rules 2020. The five allegations levelled do not entail cancellation of license and are mere infractions, which are referable to the list of compoundable breach as mentioned in Clause nos.4, 5, 7 and 17 of the Rules. Even the other allegation with regard to the transportation of goods and the interception of the goods, which are carrying the goods of a Company and the statements made therein, no specific allegation was levelled against the petitioner so as to warrant the invocation of any of the clauses mentioned in Rule 16(1) which can lead to cancellation of the license.
13. It is also worthwhile to note that the order of cancellation, which records that there was a violation of condition no.4. The order records that the wholesale country liquor was to be supplied through pass P.D.-25A and the records thereof shall be kept, a finding was recorded that the goods were transported without a valid P.D.-25A, which was in violation of condition no.4 of the license. In terms of the show cause notice, there was no allegation levelled to that effect and thus, the finding is without any allegation in the show cause notice or maligned to allege the same.
14. The impugned order further records that there was a violation of Condition No.10 of the condition of the license, which prescribes that the licensee shall prepare and issue computer generated transport pass in triplicate in the form prescribed by the Excise Commissioner in accordance with the provisions of Rule 11, in which name of the retailer, date of issue, purchased quantity and the consideration fee involved shall be entered, whereas the same was violated by the petitioner. The said reasoning is also bereft of any allegation levelled in the show cause notice and without there being any material either alleged or recorded in the impugned order.
15. The third reasoning for passing the cancellation order is the violation of Condition No.21, which prescribes that the licensee shall install active C.C.T.V. Cameras near opening gate and within godown of licensed premises which could easily be monitored from Excise Headquarters, which has been found to be violated in the case of the petitioner. The said allegation was also not even levelled in the show cause notice. In the absence of any allegation to that effect and there being any material to establish the violation on that count, the order impugned cannot be sustained.
16. The next reasoning recorded was that there was a violation of Condition No.23, which prescribed that the consignments of country liquor from distilleries of U.P. or BWCL-1 licenses of other states settled in Uttar Pradesh other states shall be transported only through the vehicle fitted with Global Positioning System (GPS). It was recorded that the petitioner has violated as he has received the liquor from the vehicle which did not have GPS. The said finding is also perverse and without there being any allegation in the show cause notice or any material whatsoever to allege and establish the violation against the petitioner and thus in absence of any allegation levelled in the show cause notice and without there being any material to allege and establish the contravention at the instance of the petitioner, the said order could not have been sustained.
17. All the above reasoning as recorded in the cancellation order appears to have been taken in the inspection carried out in the petitioner's premises, however, the same was never made a part of the show cause notice and thus the finding recorded based upon the infractions is wholly arbitrary.
18. The order passed by the revisional authority, does not consider these aspects in totality. The entire case against the petitioner is based upon the interception of a truck belonging to the Co-operative Company Limited, Saharanpur and the statement made by the driver of the said vehicle without there being any material either alleged by the driver against the petitioner or there being any allegation to that effect in the show cause notice. In the absence of any allegation, the cancellation of the license is wholly arbitrary and illegal. Thus, the order dated 27.03.2021 & 23.02.2024 challenged in Writ-C No.3684 of 2024 and the orders dated 31.03.2021 & 23.02.2024 challenged in Writ-C No.3683 of 2024, cannot be sustained and are accordingly quashed.
19. The forfeiture of the security deposit as has been done by means of the impugned order shall be returned to the petitioner within a period of two months from the date of petitioner moving an appropriate application.
20. The amount payable to the petitioner on account of wrongful seizure of the goods at the time of cancellation of the license shall be returned to the petitioner in accordance with the Rules.
21. The petitioner may move an appropriate application before the Commissioner, Central Excise for refund of the money payable in terms of the Rules for the goods that were seized at the time of cancellation which shall be decided and if found payable, shall be paid to the petitioner within a further period of three months.
22. The writ petitions stand allowed in the above terms.
Order Date:23.04.2025
akverma (Pankaj Bhatia,J.)
