Rajasthan High Court - Jodhpur
M/S Shree Mahamaya Liquor ... vs State Of Rajasthan on 15 November, 2021
Bench: Pushpendra Singh Bhati
(1 of 24) [CW-17772/2019]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
(1) S.B. Civil Writ Petition No. 17772/2019
M/s Shree Mahamaya Liquor Industries, Having Its Registered
Office At F-320, Road No. 6, Industrial Area, Kaladwas, Udaipur-
313003 (Raj.). Through Its Sole Proprietor, Shri Lalit Suhalka
S/o Shri Laxmi Lalji Suhalka, Aged About 56 Years, Resident Of
30, Kashtkala Marg, Udaipur.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Distillery, Udaipur, Rajasthan.
----Respondents
Connected With
(2) S.B. Civil Writ Petition No. 17402/2019
United Spirits Ltd., A Company Incroporated And Registered In
India Under The Companies Act, 1956 And Having Its Registered
Office At Ub Tower, 24 Vittal Mallya Road, Banglore-560001,
Through Its General Manager- Manufacturing And Authorized
Signatory Mr. Sundeep Mehta.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Bikaner Circle, Bikaner, Rajasthan.
----Respondents
(3) S.B. Civil Writ Petition No. 17754/2019
M/s Shree Mahamaya Liquor Industries, Having Its Registered
Office At F-320, Road No. 6, Industrial Area, Kaladwas, Udaipur-
313003 (Raj.), Through Its Sole Proprietor, Shri Lalit Suhalka
S/o Shri Laxmi Lalaji Suhalka, Aged About 56 Years, Resident Of
30, Kashtkala Marg, Udaipur.
----Petitioner
Versus
(2 of 24) [CW-17772/2019]
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Distillery, Udaipur, Rajasthan.
----Respondents
(4) S.B. Civil Writ Petition No. 18290/2019
M/s Globus Spirits Limited, A Public Limited Company
Incorporated And Registered Office At F-O, Gf, The Meera
Corporate Suities, Plot No. 1 And 2, Ishwar Nagar, Mathura
Road, New Delhi And Its Distillery Unit Situated At Village
Shyampur, P.o.- Gunti, Tehsil- Behror, District- Alwar, Rajasthan,
Through Its Authorized Representative Tapan Kishore Pandey.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur.
2. The Excise Commissioner, Rajasthan, Udaipur.
3. The District Excise Officer, Jhalawar.
4. The Excise Inspector, Circle Bhawanimandi, Dist.
Jhalawar.
----Respondents
(5) S.B. Civil Writ Petition No. 3250/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore
560001, Through Its General Manager And Authorized Signatory
Mr. Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Churu, Rajasthan.
4. The Excise Inspector, Rajgarh, Churu District, Rajasthan.
----Respondents
(6) S.B. Civil Writ Petition No. 3276/2020
United Spirits Limited, A Company Incorporated And Registered
(3 of 24) [CW-17772/2019]
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore-
560001, Through Its Through Its General Manager And
Authorized Signatory Mr. Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, District Ajmer, Rajasthan.
----Respondents
(7) S.B. Civil Writ Petition No. 3277/2020
United Spirits Ltd, A Company Incorporated And Registered In
India Under The Companies Act, 1956 And Having Its Registered
Office At Ub Tower, 24 Vittal Mallya Road, Bangalore-560001,
Through Its General Manager And Authorized Signatory
Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Circle Pugal, Khajuwala, Rajasthan.
----Respondents
(8) S.B. Civil Writ Petition No. 3278/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore-
560001, Through Its Through Its General Manager And
Authorized Signatory Mr. Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Dungarpur Circle, Rajasthan.
----Respondents
(4 of 24) [CW-17772/2019]
(9) S.B. Civil Writ Petition No. 3279/2020
Jagatjit Industries Limited, A Company Incorporated And
Registered In India Under The Companies Act, 1956 And Having
Its Registered Office At Jagatjit Nagar, District Kapurthala,
Punjab-144802 Through Its Deputy General Manager - Legal And
Authorized Signatory Mr. Anand Shri Kaushik.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Dungarpur.
4. The Excise Inspector, Dungarpur Circle, Dungarpur,
Rajasthan.
----Respondents
(10) S.B. Civil Writ Petition No. 3280/2020
United Spirits Ltd, A Company Incorporated And Registered In
India Under The Companies Act, 1956 And Having Its Registered
Office At Ub Tower, 24 Vittal Mallya Road, Bangalore-560001,
Through Its General Manager-Manufacturing And Authorized
Signatory Sundeep Mehta.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Barmer, Rajasthan.
----Respondents
(11) S.B. Civil Writ Petition No. 3287/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore
560001, Through Its General Manager And Authorized Signatory
Mr. Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
(5 of 24) [CW-17772/2019]
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Udaipur Circle (East), Udaipur,
Rajasthan.
----Respondents
(12) S.B. Civil Writ Petition No. 3288/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore-
560001, Through Its Through Its General Manager
Manufacturing And Authorized Signatory Mr. Sundeep Mehta.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Sardarshahar, District Churu,
Rajasthan.
----Respondents
(13) S.B. Civil Writ Petition No. 3289/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore
560001, Through Its General Manager And Manufacturing And
Authorized Signatory Mr. Sundeep Mehta.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Bikaner, Rajasthan.
4. The Excise Inspector, Circle Bikaner City, Bikaner,
Rajasthan.
----Respondents
(14) S.B. Civil Writ Petition No. 3290/2020
Jagatjit Industries Limited, A Company Incorporated And
Registered In India Under The Companies Act And Having Its
Registered Office At Jagatjit Nagar, District Kapurthala, Punjab-
144802 And Its Deputy General Manager - Legal And Authorized
(6 of 24) [CW-17772/2019]
Signatory Mr. Anand Shri Kaushik.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Kota.
4. The Excise Inspector, Kota Circle, Kota, Rajasthan.
----Respondents
(15) S.B. Civil Writ Petition No. 3291/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore-
560001, Through Its Through Its General Manager And
Authorized Signatory Mr. Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The District Excise Officer, Udaipur, Rajasthan.
4. The Excise Inspector, Udaipur Circle (East), Udaipur,
Rajasthan.
----Respondents
(16) S.B. Civil Writ Petition No. 3297/2020
United Spirits Limited, A Company Incorporated And Registered
In India Under The Companies Act, 1956 And Having Its
Registered Office At Ub Tower, 24 Vittal Mallya Road, Bangalore
560001, Through Its General Manager And Authorized Signatory
Mr. Bhupendra Singh.
----Petitioner
Versus
1. State Of Rajasthan, Through Principal Secretary, Finance
Department, Secretariat, Jaipur, Rajasthan.
2. The Excise Commissioner, Udaipur, Rajasthan.
3. The Excise Inspector, Girwa-Gogunda Circle , District
Udaipur, Rajasthan.
----Respondents
(7 of 24) [CW-17772/2019]
(17) S.B. Civil Writ Petition No. 4413/2020
United Spirits Limited
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(18) S.B. Civil Writ Petition No. 17624/2019
Jagatjit Industries Limited
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(19) S.B. Civil Writ Petition No. 17963/2019
Solkit Distillery And Brewery Pvt. Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(20) S.B. Civil Writ Petition No. 2378/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(21) S.B. Civil Writ Petition No. 2381/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(8 of 24) [CW-17772/2019]
(22) S.B. Civil Writ Petition No. 2507/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(23) S.B. Civil Writ Petition No. 2508/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(24) S.B. Civil Writ Petition No. 3197/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(25) S.B. Civil Writ Petition No. 3255/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(26) S.B. Civil Writ Petition No. 3265/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(9 of 24) [CW-17772/2019]
(27) S.B. Civil Writ Petition No. 3269/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(28) S.B. Civil Writ Petition No. 3272/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(29) S.B. Civil Writ Petition No. 3295/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(30) S.B. Civil Writ Petition No. 3296/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(31) S.B. Civil Writ Petition No. 3309/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(32) S.B. Civil Writ Petition No. 3332/2020
United Spirits Ltd.
(10 of 24) [CW-17772/2019]
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(33) S.B. Civil Writ Petition No. 3339/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(34) S.B. Civil Writ Petition No. 3347/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(35) S.B. Civil Writ Petition No. 3348/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(36) S.B. Civil Writ Petition No. 3357/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(37) S.B. Civil Writ Petition No. 3363/2020
United Spirits Ltd.
----Petitioner
Versus
(11 of 24) [CW-17772/2019]
State of Rajasthan & Ors.
----Respondents
(38) S.B. Civil Writ Petition No. 3364/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(39) S.B. Civil Writ Petition No. 3498/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(40) S.B. Civil Writ Petition No. 3500/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(41) S.B. Civil Writ Petition No. 3746/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(42) S.B. Civil Writ Petition No. 3750/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(12 of 24) [CW-17772/2019]
(43) S.B. Civil Writ Petition No. 3751/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(44) S.B. Civil Writ Petition No. 4008/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(45) S.B. Civil Writ Petition No. 4009/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(46) S.B. Civil Writ Petition No. 4013/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(47) S.B. Civil Writ Petition No. 9902/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(48) S.B. Civil Writ Petition No. 10711/2020
United Spirits Ltd.
(13 of 24) [CW-17772/2019]
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(49) S.B. Civil Writ Petition No. 2445/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(50) S.B. Civil Writ Petition No. 3283/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(51) S.B. Civil Writ Petition No. 3294/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(52) S.B. Civil Writ Petition No. 3333/2020
Jagatjit Industries Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(53) S.B. Civil Writ Petition No. 3337/2020
United Spirits Ltd.
----Petitioner
Versus
(14 of 24) [CW-17772/2019]
State of Rajasthan & Ors.
----Respondents
(54) S.B. Civil Writ Petition No. 3345/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(55) S.B. Civil Writ Petition No. 3352/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(56) S.B. Civil Writ Petition No. 3353/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(57) S.B. Civil Writ Petition No. 3361/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(56) S.B. Civil Writ Petition No. 3365/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(15 of 24) [CW-17772/2019]
(59) S.B. Civil Writ Petition No. 3366/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(60) S.B. Civil Writ Petition No. 3499/2020
Jagatjit Industries Limited
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(61) S.B. Civil Writ Petition No. 3501/2020
Jagatjit Industries Limited
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
(62) S.B. Civil Writ Petition No. 4007/2020
United Spirits Ltd.
----Petitioner
Versus
State of Rajasthan & Ors.
----Respondents
For Petitioner(s) : Mr. Vikas Balia with Mr. Kunal Bishnoi
Mr. Shailesh Gwala for
Mr. Vineet Dave
For Respondent(s) : Mr. Sandeep Shah, AAG assisted by
Mr. Abhimanyu Singh, Ms. Akshiti
Singhvi
Mr. Girish Sankhla
HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI
Order
(16 of 24) [CW-17772/2019]
15/11/2021
1. In wake of second surge in the COVID-19 cases,
abundant caution is being maintained, while hearing the matters
in Court, for the safety of all concerned.
2. The controversy is common in all the writ petitions, and
for the sake of convenience, the facts are being taken from the
leading case being Writ Petition No.17402/2019 in which, the
petitioners are claiming the following reliefs:
"I. The respondents may be directed to produce the relevant
record before this Hon'ble Court.
II. The impugned proceedings including the impugned order
dated October 18, 2019 (Annexure-P/22), the Circular dated
August 20, 2015 (Annexure-P/13) and the impugned
communication order dated October 23, 2015 passed by the
Excise Inspector, Bikaner (Annexure-P/12) may kindly be
declared unconstitutional, contrary to provisions of the
Rajasthan Excise Act and the Rules framed thereunder, illegal,
null and void ab initio and may be quashed and set aside.
III. Any adverse order passed or action taken against the
petitioner on the basis of the impugned proceedings and
impugned orders during the pendency of the writ petition may
likewise be declared illegal and unconstitutional and may be
quashed and set aside.
IV. Any other appropriate writ, order or direction, which may be
considered just and proper in the facts and circumstances of
the case may also kindly be issued in favour of the petitioner."
3. Learned counsels for the petitioners-companies submit
that the petitioners-companies are engaged in the business of
manufacture and sale of potable alcohol (Indian Made Foreign
Liquor) and manufacture, distill, blend, compound, prepare,
process and render potable and marketable, and various types of
liquor and spirits.
4. Learned counsels for the petitioners-companies submit
that the issue involved is governed by the Rajasthan Excise Act,
(17 of 24) [CW-17772/2019]
1950 (hereinafter referred to as "the Act of 1950"), as it regulates
the excisable articles.
5. The bone of contention is certain irregularities pointed
out by the Excise Inspector during his inspection at the retail
outlets, which pertained to strength of alcohol.
6. Learned counsels for the petitioners-companies have
shown Annexure-P/3 of the writ petition, in which, the notice has
been issued by the respondents under Section 58(c) of the Act of
1950.
7. Learned counsels have taken this Court through the
Section 58(c) of the Act of 1950, which reads as under:
"58. Penalty for certain acts by Licensee or his servants.-
Whoever being the holder of a licence, permit or pass granted
under this Act or being in the employ of such holder and acting on
his behalf -
(a) .............; or
(b) ............; or
(c) willfully does or omits to do anything in breach of any of the
conditions of the licence, permit or pass not otherwise provided for
in this Act;
shall be punished for each such offence with fine which may extend
to five hundred rupees."
8. Learned counsels for the petitioners-companies have
also taken this Court towards Section 70 of the Act of 1950, where
the power of Excise Officers to compound offences is laid down,
and the same reads as follows:
"70. Power of Excise Officers to compound offences.-
(1) Subject to such conditions and restrictions as may be
prescribed, the Excise Commissioner or any other Excise Officer
specially empowered by the State Government in that behalf may
accept from any person whose licence, permit or pass is liable to be
cancelled or suspended under this Act, or who is reasonably
suspected of having committed an offence punishable under this
(18 of 24) [CW-17772/2019]
Act, a sum of money not less than Rs. 5,000/- but not exceeding 10
times of the annual Licence fee in respect of manufacturing units /
bonds and wholesale vends etc. and not more than two times of
exclusive privilege amount in case of liquor and beer shops
alongwith other levies applicable from time to time in lieu of such
cancellation or suspension or by way of composition for such
offence which may have been committed, as the case may be, and
in all cases whatsoever in which any property has been seized as
liable to confiscation under this Act may release all such property
except an excisable article on payment of the value thereof as
estimated by such officer and may confiscate the excisable article:
Provided that no such composition shall be accepted from any
officer or servant of the Excise Department for any offence under
this Act committed by such officer or servant.
Provided further that no offence of manufacture or possession for
sale of an excisable article punishable under Section 54 shall be
compounded.
(2) On the payment of such sums of money to such officer, the
accused person, if in custody, shall be discharged, the property
seized shall be released and no further proceedings shall be taken
against such person or property in respect of such offence."
9. Learned counsels for the petitioners-companies submit
that virtually the petitioners-companies were persuaded to go for
the compounding of the offences under Section 58(c) of the Act of
1950, for which, the notices have been given and the
compounding orders have levied the amount as compounding fee
to be more than Rs.5,000/-, and it varies from Rs.50,000/- to
Rs.5,00,000/- or even more in various petitions.
10. Learned counsels for the petitioners-companies have
made a straight submission that the petitioners-companies, if
found guilty for the offence under Section 58(c) of the Act of
1950, the same entitles the respondents to impose a maximum
fine of Rs.5,000/- whereas the compounding has been done while
(19 of 24) [CW-17772/2019]
imposing fine manifolds than provided despite the capping done
by the legislature itself.
11. Learned counsels for the petitioners-companies further
submit that the power under Section 70 of the Act of 1950 has to
be exercised after reading it conjointly with Section 58(c) of the
Act of 1950, as the proceedings, including the notice against the
petitioner-companies, was under Section 58(c) of the Act of 1950.
12. Learned counsels for the petitioners-companies have
relied upon the judgment rendered by the Hon'ble Apex Court in
P. Ratnakar Rao and Others Vs. Govt. of A.P. and Others
reported in (1996) 5 Supreme Court Cases 359. The relevant
portion of the judgment reads as follows:
"4. The contention raised before the High Court and repeated
before us by Shri Rajeev Dhavan, learned senior counsel for the
petitioners is that the discretion given in Section 200 [1] of the Act is
unguided, uncanalised and arbitrary. Until an accused is convicted
under Section 194, the right to levy penalty thereunder would not
arise. When discretion is given to the court for compounding of the
offence for the amount mentioned under Section 200, it cannot be
stratified by specified amount. It would, therefore, be clear that the
exercise of power to prescribe maximum rates for compounding the
offence is illegal, arbitrary and violative of Article 14 of the
Constitution. We find no force in the contention. For violation of
Sections 113 to 115, Section 194 accords penal sanction and on
conviction for violation thereof, the Section sanctions punishment
with fine as has been enumerated hereinbefore. Section would give
guidance to the State Government as a delegate under the statute
to specify the amount for compounding the offences enumerated
under sub-section [1] of Section 200. It is not mandatory that the
authorized officer would always compound the offence. It is
conditional upon the willingness of the accused to have the
offences compounded. It may also be done before the institution of
the prosecution case. In the event of the petitioner's willing to have
the offence compounded, the authorized officer gets jurisdiction and
authority to compound the offence and call upon the accused to pay
the same. On compliance thereof, the proceedings, if already
(20 of 24) [CW-17772/2019]
instituted, would be closed or no further proceedings shall be
initiated. It is a matter of volition or willingness on the part of the
accused either to accept compounding of the offence or to face the
prosecution in the appropriate court. As regards canalization and
prescription of the amount of fine for the offences committed
Section 194, the penal and charging section prescribes the
maximum outer limit within which the compounding fee would be
prescribed. The discretion exercised by the delegated legislation,
i.e., the executive is controlled by the specification in the Act. It is
not necessary that Section 200 itself should contain the details in
that behalf. So long as the compounding fee does not exceed the
fine prescribed by penal section, the same cannot be declared to be
either exorbitant or irrational or bereft of guidance.
13. Learned counsels for the petitioners-companies submit
that once the compounding process would have been completed,
Section 70 (2) of the Act of 1950, which has been reproduced
above, absolves the petitioners of all the proceedings concerned,
as a result of which the person shall be discharged from the
custody and the property shall be released, and thereafter, no
further proceedings could be carried on.
14. Learned Additional Advocate General Mr. Sandeep Shah
alongwith Mr. Girish Sankhla, appearing on behalf of the
respondents have vehemently opposed the submissions on the
ground that Section 70 of the Act of 1950 is very clear and it gives
leverage to the respondents to impose penalty of sum of money
not less than Rs.5,000/-, but not exceeding ten times of the
annual license fee in respect of the manufacturing units/bonds and
wholesale vends etc. and not more than two times of exclusive
privilege amount in case of liquor and beer shops alongwith other
levies applicable from time to time in lieu of such cancellation or
suspension or by way of composition for such offence, which may
have been committed.
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15. Learned counsels for the respondents submit that the
ambit of Section 70 of the Act of 1950 is very wide, and the order
impugned, which has been passed under Section 70 of the Act of
1950 is absolutely legal and computation has been done strictly in
accordance with the same.
16. Learned counsels for the respondents also submitted in
their reply, in one of the petitions, answering the question that the
petitioners-companies have wide powers to act for loss of revenue
and this is a clear case where their loss of revenue has been
caused by the petitioner-companies by reducing the strength of
the liquor in question, and thus, making it amenable to production
of more liquors then what they are authorized to do.
17. Learned counsels for the respondents have also
submitted that there are wide powers under Section 34 of the Act
of 1950, and thus, the action taken commensurates with revenue
loss caused by the petitioners.
18. Learned counsels for the petitioners have also referred
to the earlier order passed by this Hon'ble Court in United Spirits
Limited Vs. State of Rajasthan & Ors. (S.B. Civil Writ
Petition No.369/2016) decided on 11.03.2019, in which, the
same controversy was adjudicated and it was directed that the
respondents shall again undertake the exercise of deciding the
penalty in question. The relevant portion of the order is
reproduced hereunder:
"12. Accordingly, let the exercise be done for fixing the amount of
compounding fees as well as the amount for the revenue loss
caused and the Excise Commissioner would be free to reach to a
particular conclusion. The amount so calculated would be strictly in
terms of provisions of Section 70 of the Act of 1950 (quoted
hereinabove). However, the Excise Commissioner would also taken
(22 of 24) [CW-17772/2019]
into consideration the law as laid down by the Apex Court, various
High Courts and other provisions relating assessment of fees for
compounding and the value to be arrived at.
13. Thus, this Court leaves it exclusively for the Excise
Commissioner to take a decision, after examining all the aspects of
the matters. It is made clear that once the Excise commissioner
takes a decision under Section 70 of the Act of 1950, it would be t
the option of the petitioners to accept the order and deposit the
amount so assessed by the Excise Commissioner; failing which, the
Excise Commissioner shall be free to take further proceedings in
terms of Section 34(C) of the Act of 1950. The decision would be
taken by the Excise Commissioner within a period of two months
henceforth.
14. Accordingly, the impugned orders in all these writ petitions are
set aside, with fresh orders to be passed on the applications under
Section 70 of the Act of 1950 which are already pending before the
Excise Commissioner. In all those cases where there is no
application moved for compounding, the petitioners would be free to
move appropriate application for compounding. However, if no
application is moved by the petitioners in the said cases within 15
days henceforth and where only show cause notices under Section
58 have been given, the Excise Commissioner would be free to
proceed further in terms of Section 34(C) of the Act of 1950 and the
Rules of 1956.
15. Accordingly in view of the above, all the writ petitions stand
disposed of in terms of the directions and observations, as above."
19. After hearing learned counsel for the parties at length
as well as perusing the record of the case alongwith the precedent
law cited at the Bar including the previous order, which virtually
remanded the matter back to the excise authorities, this Court is
of the opinion that the only proceeding on record against the
petitioners-companies is under Section 58(c) of the Act of 1950 as
mentioned in the notice.
20. Learned counsels for the petitioners limited their
submissions to the point that the proceeding under Section 58(c)
of the Act of 1950 could have resulted into a maximum fine of
Rs.5,000/-, if the person is found guilty of the offence, whereas in
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the present matters, the petitioners themselves opted for
compounding of such offence under Section 58(c) of the Act of
1950 and have been levied with fine in excess of Rs.5,000/-,
which is unacceptable.
21. The ambit of Section 70 of the Act of 1950 is for the
whole act, and thus, they could have easily imposed a fine
exceeding Rs.5,000/-, if they were using the other provisions. But
in this case, where the sole provision invoked by the respondents
was Section 58(c), therefore, the respondents could not have
travelled beyond Section 58(c) of the Act of 1950 and in any case,
the compounding fee cannot exceed the fine prescribed by the
penal section, and the same has to be within such limits.
22. This Court has taken note of the submission made
pertaining to Section 70(2) of the Act of 1950 by learned counsels
for the petitioners-companies, which clearly envisages that a
person and his property shall be completely discharged, released
and no further proceedings shall lie against them once the offence
is compounded, and thus, even if the acceptance of the offence
under Section 58(c) of the Act of 1950 is taken at its face value
and is compounded, then the petitioners cannot be subjected to
any other proceeding as the same is barred by Section 70(2) of
the Act of 1950 itself.
23. The arguments made by learned counsels for the
respondents that Section 70 of the Act of 1950 has a large ambit
is not denied and certainly Section 70 of the Act of 1950 has a
large ambit of imposing cost, but when Section 70 read with
Section 58(c) of the Act of 1950, in which, the proceedings have
been exclusively maintained then the upper capping of Rs.5,000/-
is writ large in the provision of law itself, and then, the application
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of Section 70 of the Act of 1950 has to be done as per the conjoint
reading of Section 58(c) and Section 70 of the Act of 1950.
24. In view of the above discussion, the present petitions
are allowed and while quashing the impugned orders, the
respondents are directed to impose compounding fee upto
Rs.5,000/- in each case in pursuance of the notice given under
Section 58(c) of the Act of 1950.
All pending applications stand disposed of accordingly.
(DR.PUSHPENDRA SINGH BHATI),J.
57-72, C1-C46 Zeeshan
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