Aether Breweries Llp vs The State Of Assam And 3 Ors
2026 Latest Caselaw 3046 Gua

Gauhati High Court

Aether Breweries Llp vs The State Of Assam And 3 Ors on 2 April, 2026

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GAHC010067482026




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                              THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                                 Case No. : WP(C)/1932/2026

            AETHER BREWERIES LLP
            2ND MILE, NAMSAI, DISTRICT- NAMSAI, ARUNACHAL PRADESH, 792103,
            REPRESENTED BY ONE OF ITS PARTNERS



            VERSUS

            THE STATE OF ASSAM AND 3 ORS
            REPRESENTED BY THE CHIEF SECRETARY TO THE GOVERNMENT OF
            ASSAM, ASSAM SECRETARIAT, DISPUR, ASSAM- 781006

            2:THE COMMISSIONER AND SECRETARY
             GOVERNMENT OF ASSAM
             EXCISE DEPARTMENT
             GOVERNMENT OF ASSAM
            ASSAM SECRETARIAT
             DISPUR- 781006

            3:THE COMMISSIONER OF EXCISE
             GOVERNMENT OF ASSAM
             EXCISE DEPARTMENT
             HOUSE-FED COMPLEX
             DISPUR
             GUWAHATI- 781006

            4:ELECTION COMMISSION OF INDIA
             NIRVACHAN SADAN
            ASHOKA ROAD
             NEW DELHI- 11000

Advocate for the Petitioner   : DR. ASHOK SARAF, MR. N SARMA,MR. S P SHARMA,S DAS

Advocate for the Respondent : GA, ASSAM, SC, ECI,SC, EXCISE DEPTT.
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                                    BEFORE
                    HONOURABLE MR. JUSTICE ANJAN MONI KALITA

                                       ORDER

Date : 02.04.2026

Heard Mr. A. Saraf, learned Senior Counsel, assisted by Mr. S. P. Sharma, learned counsel appearing on behalf of the petitioner. Also heard Mr. P. N. Goswami, learned Addl. Advocate General, representing the State respondent nos. 1, 2 & 3 and Mr. A. I. Ali, learned Standing Counsel, representing the Election Commission of India (ECI).

2. The instant petition, under Article 226 of the Constitution of India has been filed by the petitioner, which is a registered Limited Liability Partnership firm in the State of Arunachal Pradesh, being aggrieved by the impugned order dated 24.03.2026, issued by the Excise Commissioner, Govt. of Assam, whereby, issuance of Transit Pass has been completely prohibited for movement of liquor consignments originating from outside the State of Assam, destined to other States, passing through the State of Assam during the operation of the Model Code of Conduct (MCC) for the election of Assam Legislative Assembly, 2026.

3. The petitioner's case is that the petitioner is engaged in the business of manufacturing, bottling, packaging and manufacturing-export of beer or beer related drinks and as the petitioner's factory is located at Namsai, Arunachal Pradesh, the petitioner is required to transit, cross Assam border for delivering it's manufactured goods in different States of India. In usual course, for travelling to the Consignee State (importer) via Assam, a Transit Pass is required to be issued to the petitioner by the Assam Excise Department in terms of Rule 338 (a) of Assam Excise Rule, 2016. On issuance of such Transit Pass, once the vehicle enters the Page No.# 3/15

designated entry check gate of Assam Excise Department, the same is checked and endorsed digitally and manually by the officers of the Excise Department and it is sealed and signed by them and when the said vehicle exits Assam, then the said exit post of Assam Excise Department, the Excise Department officers, redo the entire exercise for ensuring that no tampering has been done to the seal that was endorsed in the entry check gate. It is also stated that for ensuring that no unauthorized liquor is being sold in the State of Assam while transporting the liquor, the State Excise Department of Arunachal Pradesh, as per the requirements of Rule 338 (a) of the Assam Excise Rule ensures that only container vehicle which is closed from all sides and having single rebated door are being used along with digital lock and this lock can only be opened via an OTP, which is generated once the vehicle reaches the consignee destination.

4. It is the case of the petitioner that the petitioner is in receipt of import permits for delivering liquor beverages issued by different consignee located in different States of India and those import permits which are issued to the consignee have their own validity dates and in the event of expiry of those validity dates, the petitioner will suffer irreparable loss and injury. Against the aforesaid import permits, the petitioner applied for export permits to the Excise Department of Arunachal Pradesh and after due verification of the import permits, the export permits were issued to the petitioner, which too have their respective expiry dates. In this connection, 2(two) charts, one for import permits and other for export permits are provided in the writ petition. It is also contended that the export permits so issued, the route from origin to destination is mentioned and it is mandatory for the vehicle carrying the liquor beverages to follow the aforesaid routes and in case, the vehicle fails to follow the specified routes as mentioned in the export permit, the vehicle is liable to be detained and the goods are liable to be confiscated by the Excise department of the concerned state.

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5. In view of the aforesaid issuance of the import and export permits, the petitioner had applied for Transit Passes, under Rule 338 (a) of the Assam Excise Rules, 2016, to the Excise Department of Assam for crossing and entering the border of Assam. However, the petitioner was denied of such Transit Passes by the Excise Department, Govt. of Assam, in view of the order dated 24.03.2026, which has been impugned in the instant writ petition. The impugned order dated 24.03.2026, provides that no Transit Pass shall be issued for movement of any liquor consignment meant for other States through the State of Assam during the period of MCC for the election of the Assam State Legislative Assembly, 2026, being in force.

6. Mr. A. Saraf, learned Senior Counsel, appearing for the petitioner submits that the denial of Transit Pass, in view of the order dated 24.03.2026, is in gross violation of the mandates of the Constitution of India, being violative of Article 301 of the Constitution, which guarantees freedom of trade, commerce and intercourse throughout India. He submits that the impugned order has been issued by the Assam Excise Department in violation of Rule 338 (a) of the Assam Excise Rules, 2016 (as amended). He submits that the Rule 338 (a) has been brought in for providing safe transit of liquor though the State by issuing Transit Pass with due compliance to the aforesaid provision. He submits that the Rule 338 (a) is a very detailed and complete rule, which stipulates the terms and conditions under which the Transit Pass will be issued to a party. Therefore, if the aforesaid terms and conditions as laid down in Rule 338 (a) are being complied with by a party, there is no question of any further restrictions in the movement of the vehicle of the party. He submits that since the provisions are detailed and exhaustive, the same protects the concern of the Assam Excise Department about illegal selling of liquor in the State of Assam, while transporting the same.

7. The learned Senior Counsel submits that the impugned order is in violation of Page No.# 5/15

Article 301 of the Constitution of India, which guarantees freedom in its widest amplitude, freedom of prohibition, control, burden or impediment in commercial intercourse. He submits that any restrictions of such free trade, commerce and intercourse, the validity of such restrictions can only be sustained if it satisfies the requirements of Article 302 and 304 of the Constitution of India. He submits that for a restriction to be reasonable, it has to satisfy that such restrictions has been done in the public interest or for levy of tax on goods manufactured in the State or likewise and that can only be done by the Parliament or the State Legislature. He submits that the impugned order is neither passed by the Parliament or a State Legislation and the same is simply an administrative order and therefore, the same cannot be sustained under the law. He further submits that the impugned order is in violation of fundamental rights of the petitioner guaranteed under Article 19(1)

(g) of the Constitution. He submits that the restriction by a State is permitted under Article 19(6) of the Constitution of India. However, the same restriction is to be reasonable, striking a proper balance between the freedom of Article 19(1) (g) and the restriction under Article 19(6) of the Constitution. He submits that the total ban on issuance of Transit Pass to the petitioner in the instant case whose huge consignments destined to other States are being stranded and since the consignments were issued against the export permits, which have their respective validity dates and in the event of expiry of such validity dates, the petitioner will suffer irreparable loss, which cannot be compensated on a later stage. He submits that the MCC issued by the ECI provides for monitoring of certain activities involving liquor with the State of Assam is having it's Assembly Election. However, it does not provide any specific instructions for any such restrictions on transit of liquor through the State of Assam before or during the election. Therefore, he submits that though the impugned order seems to have been passed under the instructions of the ECI, without any such instructions of ECI backed by any Page No.# 6/15

particular law and the same being not placed before this Court, the impugned order cannot be sustained.

8. The learned Senior Counsel appearing for the petitioner has referred to the case of Indian Cement and Others Vs. State of Andhra Pradesh and Others, reported in (1998) 1 SCC 743, to support his argument that any restrictions on the rights under Article 301 of the Constitution of India can be made by the Parliament or the State Legislature. No power is vested in the Executive authority to act in any manner which effects or hinders the very essence and thesis contained in the scheme of Part XIII of the Constitution. The Hon'ble Supreme Court observed in the case that the declaration contained in Part XIII of the Constitution is against creation of economic barriers and/or pockets which would stand against the free flow of trade, commerce and intercourse. The learned Senior Counsel emphasized the aspect that the petitioner's rights under Article 301 for freedom of trade, commerce and intercourse throughout the territory of India has been curtailed without being backed by any law enacted by the Parliament or the State Legislature.

9. Mr. P. N. Goswami, learned Addl. Advocate General, appearing for the Excise Department, Assam, at the outset, on instructions, submits that the impugned order, though mentioned that the order will be in effect during the period of MCC for the election of the Assam Legislative Assembly, 2026, however, the same will be

in effect only till 9th April, 2026, when the polling of votes for the said election will complete. Therefore, he clarified that the impugned order will be in effect only till

9th of April, 2026.

10. Mr. Goswami, learned AAG, submits that the impugned order has been passed in pursuance of special instructions, issued by the ECI in the Inter State Border Meeting held through video conferencing on 24.03.2026. He submits that in the aforesaid video conferencing, various aspects of movement of liquor to other States Page No.# 7/15

during the Assembly election, 2026, was discussed and thereafter, a conscious decision was taken for not issuing any Transit Pass for the movement of any liquor consignments meant for other States through the State of Assam during the period of in force of MCC for the Assam Legislative Assembly election, 2026.

11. The learned AAG submits that there is no violation of Article 301 of the Constitution of India in the instant case by issuance of the impugned order by the Excise Department of Assam. He submits that liquor is a commodity which falls under the category of "Res Extra Commercium" and therefore, there is no fundamental right to do trade or business in liquor. Therefore, he submits that the impugned order which was passed in terms of the instructions of the ECI, due to the Assam Legislative Assembly election, 2026, is issued only for a temporary restriction in the transit for conducting the election in a free, fair and lawful manner. He submits that the action of issuance of the impugned order has been taken because of the fact that huge quantities of seizure of liquor not meant for sell in Assam by the Excise Department, Assam. He submits that the surge in such recovery and seizure of illicit liquor not meant for sell in Assam is due to the fact of selling of such liquors by various parties transporting liquor through the State of Assam to other States. In this connection, the learned AAG has submitted a chart providing some details of such recovery in recent times.

12. The learned AAG has also referred to the provisions of Section 8, 9 & 10 of the Assam Excise Act, 2000, which provides for restriction on import, restriction on import and transport and prohibition of import, export and transport respectively. He specifically emphasized on Section 10(b) which provides for prohibition to transport of any intoxicant. In view of the provisions prescribed under the aforesaid Sections, the learned AAG submits that the State Government has the power to restrict or prohibit the transport of any intoxicant in the State of Assam. He submits that since the Act 2000 specifically provides for a right to the State to Page No.# 8/15

restrict or prohibit the transport of any intoxicant which includes liquor, the restriction put on Transit Pass, vide the order dated 24.03.2026 is in consonance with the provisions of the Assam Excise Act, 2000, and therefore, the same cannot be challenged by the writ petitioner by filing the instant writ petition. He further submits that the restriction is only temporary in nature which will come to an end

on 9th of April, 2026, after completion of polling in the said election. Therefore, it is submitted that there will be no harm caused to the petitioner by such temporary restrictions.

13. The learned AAG, in support of his submission that there is no fundamental right in doing trade, commerce and intercourse in liquor and such rights under Article 301 of the Constitution can be restricted by the State Government, has referred to the case of Khoday Distilleries Limited and Others Vs. State of Karnataka and Others, reported in (1995) 1 SCC 574 and Sat Pal and Co. and Others Vs. Lt. Governor of Delhi and Others, reported in (1979) 4 SCC 232. Relying on the ratios laid down in the aforementioned two cases, the learned AAG submits that if there is not fundamental right to carry on trade or business of liquor, there is no question of its abridgement by any restriction which is reasonable. He submits that State, under its regulatory power has a right to control or even to prohibit absolutely every form of activity in relation to intoxicants apart from anything else, its import and transportation too. He submits that the restriction that has been brought in by way of the impugned order is only for the limited purpose of conducting a free and fair election without being influenced by any external factors like distribution of illicit liquor. In view of the aforesaid, the learned AAG submits that the instant writ petition does not have any merit for any interference by this Court and taking into account the welfare of general public and for completion of a free and fair election, this Court may not grant any interim relief to the petitioner at this stage.

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14. Mr. A. I. Ali, learned counsel appearing for the ECI, submits that he does not have any instructions as to whether the impugned order passed by the Excise Department, Govt. of Assam, is, in fact, passed on instructions of the ECI as stated in the impugned order. However, he submits that the MCC issued by the ECI, provides for restriction during 48 hours and the day of poll and re-poll. But, he could not submit any provision in the MCC, which actually provides for any provision of restrictions prior to the election as regards transit of vehicle carrying liquor through the State of Assam.

15. It is seen from the impugned order dated 24.03.2026, issued by the Commissioner of Excise Department, Assam, that the order was passed in pursuance of instructions issued by the ECI in the Inter State Border Meeting held through video conferencing on 24.03.2026, whereby, it was decided not to issue any Transit Pass for movement of any consignment of liquor during the period the MCC for the Assam Assembly election, 2026, being in force. Neither the counsel appearing for the ECI nor the learned AAG appearing for the Excise Department could produce any document to show that any such instructions, as mentioned in the impugned order has been received by the Excise Department, Assam from the ECI. It is also could not be ascertained as to under which provision of MCC, the ECI has issued such instructions to the Excise Department, Assam.

16. Be that as it may, the facts of the instant case is that huge number of consignments of liquor of the petitioner which are ready for delivery of their consignments to the consignee, could not be done due to the ban on issuance of Transit Pass by the Excise Department, Govt. of Assam. From the chart provided in Paragraph-8 & 9 of the writ petition, it could be seen that in respect to many consignments, the validity of export permits have already expired and some of them are due to be expired soon. Therefore, there is no denial of the fact that the export permits for delivering the liquor beverages of the petitioner will be expiring Page No.# 10/15

soon and the same may cause some loss to the petitioner.

17. This Court has also gone through the provisions as referred to by the learned AAG of the Assam Excise Act, 2000. Section-8 refers to restriction on import and therefore, the same will not be applicable in the instant case as there is no import of liquor from the instant petitioner. Section-9 provides that no intoxicant shall be exported or imported unless the duty, if any, payable under Chapter-V has been paid or a bond has been executed for the payment thereof. This will also be not applicable in the instant case. As far as Section-10 is concerned, it provides for prohibition of import, export and transport. It provides that the State Government may, by notification, (a) prohibit the import or export of any intoxicant into or from the territories to which this Act applies or any part thereof or (b) prohibit the transport of any intoxicant.

18. It is seen that Section-10(a) shall not be applicable in the instant case as there is no issue of any import or export of any intoxicant in the instant case. As far as Section-10(b) is concerned, there is no transport of any intoxicant in the instant case. It is seen that though transport has not been defined in the Assam Excise Act, 2000, but, the same is defined under the Assam Excise Rules, 2016, under 1A of the definitions at (xxxiii). "Transport" has been defined, which provides that "Transport" means to move from one place to another within the territories to which this Act applies. Therefore, it refers to any transportation of liquor to one place to another within the State of Assam, but the same seems, cannot be applied to any act of transportation from one State to another State through the State of Assam. Apparently, it does not refer to any transit through the State of Assam. Therefore, prima facie, it seems that the transit of vehicle carrying liquor may not come under the definition of such transport as mentioned under Section-10(b) of the Assam Excise Act, 2000. However, without proper examination of the provisions of the Assam Excise Act, 2000 and Rules made there under in 2016, it cannot be Page No.# 11/15

said with certainty that the provisions of Section-10(b) will be applicable in the instant case.

19. It is also seen that Rule 338 (a) of the Rules, 2016, provides for establishment of check post or barrier and inspection of liquor while in transit etc., the same being relevant is extracted herein below: -

"338. (a) Establishment of check post or barrier and inspection of liquor while in transit etc.:-

(1) The State Government may, by notification, direct the setting up of check post or the erection of a barrier or both at strategic point combined with other commercial check post or gate with a view to preventing leakage of revenue.

(2) At every vigilance check gate or check post or barrier mentioned under sub-

rule (1) or at any other place when so required the excise officer-in-charge concerned may stop the driver or any other person in charge of animal, vessel, cart or other vehicle as the case may be and keep it stationary as long as may reasonably be necessary and inspect the licence or permit obtained under the provisions of the Act and Rules and may take necessary action as deem fit and proper.

(b) Every officer may be supplied with the following forms:-

(1) Preliminary report to Collector of arrest, seizure or search in Form No. 28 of Schedule XXXI (Section V-Miscellaneous).

(2) Report of Magistrate under the Excise Act in Form No. 29 of the Schedule mentioned above.

(3) Final report to Collector after disposal of a case under the Excise Act of the Schedule mentioned above."

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20. It is discernible from the aforesaid provisions that Rule 338 (a) of the Rules of 2016 is a detailed provision, under which, the Transit Pass can be issued with due compliance of the provisions detailed therein.

21. The learned AAG, appearing for the Excise Department, Assam, did not place any other provision which mandates the transit of vehicle through the State of Assam and available for any restrictions that can be put on such transit other than the aforesaid provision.

22. It is also seen that an order No. 757853/3, dated 17.12.2026, was issued by the Commissioner of Excise Department, Assam, which provides that the ECI has issued detailed instructions in the matter of monitoring cross-border movement of liquor during elections. Therefore, in exercise of the powers conferred, vide Rule 338 (a) of the said Rules of 2016, as amended, the aforesaid Commissioner of Excise Department, Assam, was pleased to issue certain instructions for proper implementation and enforcement of the provisions related to transit of spirit/liquor through the State of Assam for compliance by all concerned. The same being relevant are extracted herein below: -

"1. For the purpose of transit of Spirit/Liquor, only container vehicles which are

closed from all sides and having a single rebated door shall be used, with provision for Lock and key.

2. While entering into the State of Assam, after obtaining Transit Pass under sub- rule (1) of rule 338A, the consignor/Transporter/Driver shall get the vehicle locked by themselves at the designated entry points (as per annexure -1) to the State of Assam.

3. The authorised officer of the Excise Department shall countersign the Transit Pass with an endorsement that the quantity as shown in the Transit Pass have been physically verified and found to be correct. Further he/she shall put a wax Page No.# 13/15

seal on the lock after the verification has been done.

4. Throughout the specified route of the vehicle, any excise officer of the State of Assam or any other officer duly authorized in this regard, may cause verification of the consignment so transited.

5. The stipulated hours of validity period of transit passes as per sub-rule (3) of the rule 338A shall be invariably complied with. Any violation of the time limit shall lead to seizure of the vehicle and the consignment.

6. At the designated exit points, the authorized excise officer shall again physically verify the consignment and shall put an endorsement on the Transit Pass to the effect that the quantity as per the transit pass has been physically checked and found to be correct.

7. After satisfying himself that the transiting consignment is actually crossing over to the destined State, the authorized excise officer shall remove the wax seal at the exit point from the lock that was put at the entry point.

8. All entry into the State of Assam shall be allowed in two time shifts i.e. 9 AM to 12 noon and 3 PM to 6 PM. However the exit shall be allowed between 9 AM to 6 PM.

9. The aforesaid instructions shall also be applicable on all the consignment exported from the manufactories located in Assam under rule 35 to 45 of the Assam Excise Rules, 2016 as amended as well as from the Customs Bonded Warehouses licensed under clause (e), sub-rule (2) of rule 458 of the Assam Excise Rules, 2016 as amended.

10. Any deviation or violation of the aforesaid instructions shall be deemed to violation of the rules and the consignment may be liable to be seized and confiscated as per extant Rules apart from the consignor being liable for penalty Page No.# 14/15

and prosecution as per provisions of the Act.

This order shall come into force w.e.f. 23rd February, 2026."

23. The aforesaid provisions clearly show that detailed instructions have already been issued by the Excise Department, Govt. of Assam for issuance of Transit Pass. The same provides for the power for seizure and confiscation of the consignment and penalty to the consignor if any violation of the instructions contained in the order.

24. This Court has heard the submissions made by the learned counsel appearing for the respective parties as well as perused the relevant provisions and the judicial pronouncements of the Hon'ble Supreme Court cited by the learned counsel for the respective parties.

25. It is seen that the power to issue Transit Pass is available under Rule 338 (a) of the Assam Excise Rules, 2016 and the same provides for detailed provisions that have to be complied with while transporting the consignments through the State of Assam in the usual course. It is also seen that the aforesaid order dated 17.02.2026, issued by the Excise Department, Govt. of Assam, provides detailed instructions and the mechanism for transportation of liquor consignment through the State of Assam during the upcoming elections of Assam Legislative Assembly, 2026. It is also seen that any violation of the instructions, the power is given to the Excise Department, Assam, to seize and confiscate the consignment and levy of penalty and prosecution of the consignor as per the provisions of the Act, 2000 and Rules made there under.

26. Though the learned AAG has submitted that there is huge number of seizure of illicit liquors which were not meant for sell in the State of Assam but, there are no materials to show that such seizure of the liquor belongs to the petitioner.

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Therefore, there is a possibility that since the petitioner's consignments are ready for delivery and if those are not delivered before the expiry of the validity dates provided in the export permits, the petitioner will suffer financial loss.

27. Since the matter will require further detailed consideration, this Court is of the view that notice should go to the respondents, returnable on 21.04.2026. Since parties are duly represented, no formal notice are required to be sent, however, extra requisite number of copies of the petition be made available to the counsel appearing for the respondents by the petitioner.

28. In view of the discussions made above, this Court is of the considered view that the case merits some interim relief. Therefore, it is directed that the impugned order dated 24.03.2026, shall be stayed in respect of the petitioner and the petitioner shall be issued Transit Pass so that the consignments can be transported through the State of Assam till the order dated 24.03.2026 is in force.

29. It is made clear that the order is only in respect of the petitioner's consignments.

30. List this matter again on 21.04.2026.

JUDGE

Comparing Assistant