Karmaveer Shankarro Kale ... vs The Commissioner , State Excise ...
2017 Latest Caselaw 7548 Bom

Sudhir Rane                        1                    902-WP-10693-2017 (+2)


          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                  CIVIL APPELLATE JURISDICTION
                      WRIT PETITION NO.10693 OF 2017

Karmaveer Shankarrao Kale
Sahakari Sakhar Karkhana Ltd.                     ... Petitioner.
         Versus
The Commissioner,
State Excise and another                          ... Respondents.
                                  WITH
                      WRIT PETITION NO.10694 OF 2017

Karmaveer Shankarrao Kale
Sahakari Sakhar Karkhana Ltd.                     ... Petitioner.
         Versus
The Commissioner,
State Excise and another                  ... Respondents.

                                  WITH
                      WRIT PETITION NO.10695 OF 2017

Karmaveer Shankarrao Kale
Sahakari Sakhar Karkhana Ltd.                     ... Petitioner.
         Versus
The Commissioner,
State Excise and another                          ... Respondents.

                                   ....

Mr. Y.S. Jahagirdar, Senior Advocate a/w Vaibhav V. Goglekar and
Mr. Rohan Sathaye i/b, Mr. S.S. Kanetkar for the Petitioner in all
Writ Petitions.
Mr. Sakhardande, Special Counsel  a/w Pralhad Paranjape and Ms.
Shubhra Paranjape i/b. Ms. R.A. Salunke for Respondents.
                               ....




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 Sudhir Rane                             2                       902-WP-10693-2017 (+2)


                            CORAM : NARESH H. PATIL AND
                                    Z.A. HAQ, JJ.

26th September, 2017.

JUDGMENT: (Per: Z.A. Haq, J.)

1. Rule. Rule made returnable forthwith.

2. These Writ Petitions are being disposed of by this Judgment

order as the common order passed by the Respondent-

Commissioner of State Excise in three matters is challenged in the

three Petitions.

3. By the impugned order, the Respondent-Commissioner of

State Excise has suspended the license in form CL-I and the license

in form RS-II of the Petitioner, exercising powers / authority

under section 54(1)(c) of the Maharashtra Prohibition Act, for a

period of one month from the date of issuance of order. The

Respondent-Commissioner of State Excise has directed the

petitioner to rectify the breaches within the period of one month.

It is recorded that, further appropriate necessary action may be

taken if the breaches are not rectified within the given period.

4. Undisputedly the Petitioner is running a distillery division

since last about four decades. Before the competent authority

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granted permission to the Petitioner on 18th October, 2007 to

construct the spirit storage tank with capacity of 4.0 lakh liters, the

Petitioner was granted permission to have two spirit storage tanks

with capacity of 31,000 liters each. On 18 th October, 2007, the

competent authority granted permission to the Petitioner to

construct spirit storage tank with capacity of 4.0 lakh liters.

According to the Respondent-Commissioner of State Excise, the

Petitioner installed / constructed a spirit storage tank (here-in-

after referred as "tank No. RS-4") having storage capacity of 4.5

lakh liters and on noticing this, the impugned order is passed.

5. According to the Respondents, the Petitioner has installed /

constructed the RS-4 tank in breach of the conditions of license

granted to it and therefore the Respondent No.1-Commissioner of

State Excise has rightly exercised her powers / authority and has

suspended the license. Further, it is the case of the Respondents

that the Petitioner is granted permission in 2015 to install /

construct three bottling lines with three holding tanks in the

extended bottling section of CL-I license premises, however, the

Petitioner has constructed five bottling tanks i.e. two additional

tanks in the license premises without obtaining permission from

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the competent authority. According to the Respondents, again this

is breach of conditions of license and therefore the impugned order

is passed.

6. The grievance of the Petitioner is that, the Respondent-

Commissioner of State Excise has only directed suspension of

license of the Petitioner, however, the authorities have acted in

high handed manner and on 17th September, 2017 i.e. the next day

of the passing of the impugned order and though it was a Sunday,

the premises of the unit of the Petitioner have been sealed. The

learned Advocate representing the Petitioner in Writ Petition

No.10695/2017 has submitted that, the tank in question i.e. RS-4

tank was constructed after the petitioner got permission for

installing / constructing spirit storage tank with capacity of 4.0

lakh liters, however, there was slight error in the dimensions

because of which the storage capacity of the tank turned out to be

4.5 lakh liters. It is submitted that the Petitioner had not

suppressed from the concerned authorities that the storage

capacity of Rs-4 tank is 4.5 lakh liters and to substantiate this,

certain documents / communications sent by the Petitioner to the

authorities are relied upon. It is submitted that, the concerned

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authorities verified / inspected the premises after installation of

the RS-4 tank in 2008. It is submitted that the concerned

authorities had also undertaken the calibration of RS-4 tank. It is

the case of the Petitioner that though RS-4 tank with storage

capacity of 4.5 lakh liters is installed / constructed, except on one

occasion the storage of spirit in the tank has not been above 4 lakh

liters. It is submitted that even according to the Respondents there

is no loss of revenue of the State Government and the Petitioner

has not misused the additional storage capacity of RS-4 tank.

It is further submitted that the two additional holding tanks

which are installed / constructed are not in use as the conveyer

belts are not installed / constructed and therefore only because

two additional tanks are constructed it cannot be said that the

Petitioner has committed breach of license.

7. The learned Advocate appearing for the Petitioner in Writ

Petition No.10693/2017 and Writ Petition No.10694/2017 has

adopted the submissions made by the learned Senior Advocate

appearing in Writ Petition No.10695/2017. In these two Petitions

the only difference is that the RS-5 and RS-6 tanks are installed by

the Petitioner with storage capacity more than what is permitted

Sudhir Rane 6 902-WP-10693-2017 (+2)

by the authority while granting license.

8. The learned Special Counsel appearing on behalf of the

Respondents took a preliminary objection that the Petitioner has

alternate statutory remedy available under section 137 of the

Maharashtra Prohibition Act. Though the petitioner can avail the

remedy of appeal, considering the fact that the Respondent-

Commissioner of State Excise has directed suspension of the

license for the period of only one month and out of which almost

ten days have passed, in our view relegating the Petitioner to the

remedy of appeal will not be appropriate as it will not be an

efficacious remedy in the facts of the case. Moreover consequent

to the impugned order, the authorities have sealed the unit of the

Petitioner because of which the running factory / industry of the

Petitioner is closed down. Therefore, we are not inclined to

relegate the Petitioner to the alternate remedy.

9. The Petitioner has admitted that the capacity of RS-4, RS-5

and RS-6 tanks is more than what is permitted by the competent

authority while granting license. Therefore, it cannot be said that

the Respondent-Commissioner of State Excise is not entitled to

take action against the Petitioner. However, in the present case,

Sudhir Rane 7 902-WP-10693-2017 (+2)

the question is whether the order passed by the Respondent-

Commissioner of State Excise suspending the license of the

Petitioner for one month is proper and justified.

Admittedly, the Petitioner constructed the RS-4 tank in 2008,

it is calibrated by the concerned authorities and is inspected by the

competent authority. The storage of spirit in the RS-4 tank is

regularly monitored on daily basis by the manufactory officer. It is

the case of the Respondent-Commissioner that the Petitioner has

carried on any addition or alteration in the room or the

compartment or the permanent fixtures of the manufactory. The

RS-4 tank with the capacity of 4.5 lakh liters is installed /

constructed in 2008 and is being used by the Petitioner since then.

There is no allegation of loss of revenue by the Petitioner.

Similarly, the additional two holding tanks which are

constructed by the Petitioner without there being permission for

their construction, are admittedly not being used by the Petitioner.

The Petitioner has not installed the conveyer belt and without the

conveyer belt the two additional tanks are of no use.

Similarly, the Petitioner has installed / constructed RS-5 and

RS-6 tanks with storage capacity more than what is permitted,

Sudhir Rane 8 902-WP-10693-2017 (+2)

however, again the Respondents have not been able to point out

that the Petitioner has misused those tanks.

The Petitioner has submitted that the distillery is running

successfully and there are about 1,500 employees / labourers with

about 6000-7000 family members of such employees / labourers

dependent for their livelihood from the employment in the unit

and about 20,000 agriculturists, agriculture labourers, small

traders and suppliers of raw material are also dependent on the

unit of the Petitioner. These facts are not controverted by the

Respondents.

10. Considering the facts of the case, we are of the view that the

impugned order passed by the Respondent-Commissioner of State

Excise is harsh and unjustified. The Advocates appearing for the

Petitioner in these three Petitions have made a categorical

submission that the two additional holding tanks which are not

used will not be put to use unless appropriate permission is

granted by the competent authority. The learned Advocates have

further submitted that the RS-4, RS-5 and RS-6 tanks will not be

used for storage of spirit beyond the limit as permitted by the

authority. Accepting the submission made on behalf of the

Sudhir Rane 9 902-WP-10693-2017 (+2)

Petitioner, the following order is passed.

ORDER

(A) The impugned order passed by the Commissioner of State Excise on 16th September, 2017 is set aside.

(B) The Respondents are directed to remove the seal / seals put on the unit of the Petitioner pursuant to the impugned order, forthwith.

11. Rule made absolute in the above terms. In the

circumstances, the parties to bear their own costs.

12. At this stage, the learned Special Advocate appearing for the

Respondents prayed for keeping this judgment in abeyance for one

week to enable the Respondents to take appropriate steps to

challenge the judgment. The request made by the learned Special

Advocate appearing for the Respondent is opposed by the learned

Advocates appearing for the Petitioner. Considering the reasons

recorded by us and the facts of the case, the request made on

behalf of the Respondents is rejected.

13. The parties to act upon the authenticated copy of this order.

           (Z.A. HAQ, J)                           (NARESH H. PATIL, J)