Wp(C) No.723/202 vs State Of Tripura
2021 Latest Caselaw 756 Tri

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                     HIGH COURT OF TRIPURA
                           AGARTALA

                         1. WP(C) No.723/2020

Sri Abhishek Dahiya, S/o Sh. Jagbir Singh, R/o House No. 2539, Sector
19C, Chandigarh-160019.
                                                      ----Petitioner(s)
                                   Versus

1. State of Tripura, Through the Chief Secretary, Govt. of Tripura, New
Secretariat Complex, PO- Secretariat-799010, Agartala, West Tripura.
2. Commissioner of Taxes & Excise, Govt. of Tripura, 3rd Floor, Khadya
Bhavan, P.N. Complex, Gurkhabasti, Agartala, Tripura West-799006.
3. Collector of Excise, Govt. of Tripura, West Tripura District, Agartala,
Tripura.

4. Collector of Excise, Govt. of Tripura, Sepahijala District, Bishramganj,
Tripura-799103.

                                                        -----Respondent(s)

                               Along with

                         2. WP(C) No.724/2020

Sri Ankush Bajoria, S/o Sh. Mahinder Gopal Bajoria, Ganganagar,
Rajasthan.
                                                 ----Petitioner(s)
                              Versus

1. State of Tripura, Through the Chief Secretary, Govt. of Tripura, New
Secretariat Complex, PO- Secretariat-799010, Agartala, West Tripura.
2. Commissioner of Taxes & Excise, Govt. of Tripura, 3rd Floor, Khadya
Bhavan, P.N. Complex, Gurkhabasti, Agartala, Tripura West-799006.
3. Collector of Excise, Govt. of Tripura, West Tripura District, Agartala,
Tripura.
                                                       -----Respondent(s)
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                           3. WP(C) No.726/2020

Sri Rajib Datta, S/o Sh. Binod Behari Datta, Rajarbagh, P.S-R.K Pur,
Udaipur-799120.
                                                      ----Petitioner(s)
                                 Versus

1. State of Tripura, Through the Chief Secretary, Government of Tripura,
New Secretariat Complex, PO- Secretariat-799010, Agartala, West Tripura.
2. Commissioner of Taxes & Excise, Government of Tripura, 3rd Floor,
Khadya Bhavan, P.N. Complex, Gurkhabasti, Agartala, Tripura West-
799006.
3. Collector of Excise, Government of Tripura, West Tripura District,
Agartala, Tripura.
                                                   -----Respondent(s)

For Petitioner(s)                  : Mr. P. Dahiya, Advocate.
For Respondent(s)                  : Mr. Debalay Bhattacharjee, G.A.

        HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI
         HON'BLE MR. JUSTICE S.G. CHATTOPADHYAY

       Date of hearing                   : 26th July, 2021.
       Date of judgment                  : 10th August, 2021.

       Whether fit for reporting         : NO.


                          JUDGMENT & ORDER

(Akil Kureshi, C.J.)

              These petitions arise in common background. The petitioners

have challenged an order dated 29.07.2020 passed by the Collector of

Excise, West Tripura rejecting the request of the petitioners for exemption
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from payment of license fee for the period during which the petitioners'

liquor shops remained closed under orders passed by the respondents on

account of spread of Covid-19 virus across the country. Further request of

the petitioners is to adjust the license fee already paid for the first and

second quarter of the license period towards the fee payable for the next

quarters.


2.          Facts

being substantially similar in all petitions we may record

them as narrated in WP(C) No.723 of 2020. Petitioner is an individual. In

the month of January, 2020 the State authorities initiated the process for

issuance of licenses for running shops for sale of foreign liquor and country

liquor in West Tripura and Sepahijala districts. The petitioner submitted his

bid for Ranirbazar country liquor shop in West Tripura district and

Bishalgarh New Market foreign liquor shop in Sepahijala district. The bid of

the petitioner was accepted for both locations. Under an office memorandum

dated 31.03.2020 the Collector of Excise, West Tripura conveyed to the

petitioner acceptance of the bid for the said two locations for the financial

year 2020-21 to 2022-23. This memorandum also provided the breakup of

the license fee payable every quarter during this period. The petitioner also

deposited the license fee for a quarter and 20% of the bid amount by way of

security deposit as required by the authorities, however, somewhat belatedly

on account of the Corona pandemic and consequential lockdown orders

issued by the Government of India.

3. The petitioner would point out that Secretary, Ministry of

Home Affairs, Government of India had issued an order dated 24.03.2020 in

exercise of powers under the Disaster Management Act, 2005 imposing

nationwide restrictions on movement of citizens and goods in view of the

spread of coronavirus. These lockdown restrictions were continued from

time to time.

4. On 25.03.2020 Collector of Excise, Sepahijala District had

issued an order that all foreign liquor and country liquor shops under

Sepahijala district shall remain closed up to 31 st March, 2020. This order

was passed in exercise of powers under sub-section (1) of Section 24 of the

Tripura Excise Act, 1987. On 15.04.2020 Collector of Excise, Sepahijala

District issued a notification ordering that all liquor shops within Sepahijala

District shall remain closed for the period between 15.04.2020 to

03.05.2020. On 04.07.2020 Collector of Excise, Sepahijala District passed

an order providing that for 24 hours from 5 a.m. of 5th July to 5 a.m. of 6th

July, 2020 all foreign liquor and country liquor shops within the district shall

remain closed.

5. The petitioners desire that the period during which the liquor

shops under various orders passed by the State authorities and the Central

Government remained closed, the license fee should be waived and they

should be compensated as per the provisions made under the Tripura Excise

Act and the Rules made thereunder. The petitioners, therefore, approached

this Court by filing WP(C) No.395 of 2020 and connected petitions. These

petitions were disposed of by a common order dated 02.07.2020 passed by

the Division Bench of this Court. The Division Bench was of the view that

the petitioners should first approach the licensing authority, i.e. the Collector

of Excise of the concerned district for exemption of the license fee by

making representations. The petitioners were allowed to make such

representations within 7 days which would be decided by the concerned

Collector. Though copies of such representations are not on record, it is

undisputed that the petitioners did make the representations. Collector of

Excise, West Tripura passed order dated 29.07.2020 and disposed of the

representations. The prayer for exemption from payment of license fee was

rejected observing that as per Tripura Excise Act and the Rules made

thereunder there is no provision for allowing exemption of the license fees.

It was observed that due to nationwide lockdown in view of Covid-19

situation sale of liquor all over the country was completely stopped between

24.03.2020 to 03.05.2020 as per the prohibitory orders issued by the

Ministry of Home Affairs, Government of India which was a factor beyond

the control of the Government of Tripura. It was observed that if exemption

from payment of license fee is allowed the State revenue would have to

waive similar charges in cases of retail vendors, wholesale vendors,

manufacturing units etc.

6. The petitioners have approached this Court in background of

such facts. The case of the petitioners is simple namely that Section 24 of

the Tripura Excise Act empowers the District Magistrate to require any shop

selling intoxicant to be closed for such period as he thinks necessary for

preservation of public peace and maintenance of law and order. Rule 193 of

the Tripura Excise Rules, 1990 provides inter alia that when any shop

selling intoxicant is closed under Section 24 of the Act for specified reasons,

compensation for such closure may be paid to the licensee which shall be

calculated on the basis of monthly fee payable for the license plus 10%

towards loss of profit. In such background, learned counsel for the

petitioners vehemently contended that the Collector of West Tripura

committed a serious error in rejecting the request of the petitioners for

waiver of license fee and the payment of compensation in terms of Rule 193

of the said Rules. He drew our attention to the decision of the Supreme

Court in case of Secretary, Department of Excise & Commercial Taxes and

others vrs. Sun Bright Marketing (P) Ltd., Chhattisgarh and another

reported in (2004) 3 SCC 185. Counsel submitted that on account of the

spread of coronavirus and resultant restrictions imposed by the Central and

the State Governments and orders passed by the Excise Collectors, the

petitioners were forced to shut down the shops for extended periods. On

account of zero sales during such period, the petitioners were unable to

generate any revenue whatsoever. Asking the petitioners to pay license fees

to the Government when during such period the petitioners could not

transact any business on account of orders passed by the Government would

be wholly inequitable.

7. On the other hand, learned Government Advocate Mr. Debalay

Bhattacharjee opposed the petitions. He relied on the replies filed by the

respondents pointing out that on account of Covid-19 pandemic for the

period between 25.03.2020 to 03.05.2020 all liquor shops in the State of

Tripura had remained closed for which no compensation can be paid to the

vendors. The State Government was merely implementing the orders and

directives issued by the Ministry of Home Affairs, Union of India. Such

cases would not fall within Rule 193 of the said rules allowing waiver of

license fee in favour of the petitioners which would have a cascading effect.

8. In the background of such materials on record we may first

refer to the statutory position. Section 24 of the Tripura Excise Act pertains

to power to close down shops temporarily and reads as under:

"24. Power to close shops temporarily:-

(1) The District Magistrate or a Sub-Divisional Magistrate, may by notice in writing to the licensee require that any shop in which any intoxicant is sold shall be closed at such time or for such period as such Magistrate may think necessary for the preservation of the public peaces and maintenance of law and order.

(2) If any riot or unlawful assembly is apprehended or occurs in the vicinity of any shop in which any intoxicant is sold, any Magistrate or any Police Officer of or above the rank of Sub-Inspector present, may require such shop to be kept closed for such period as he may think necessary.

(3) When any Magistrate or Police Officer makes a direction under sub-section (1) or sub-section (2) he shall forthwith inform the Collector of his action and the reason therefor."

9. Under sub-section (1) of Section 24 thus the District Magistrate

or a Sub-Divisional Magistrate has the power to require that any shop in

which any intoxicant is sold shall be closed at such time or for such period

as he thinks necessary for preservation of public peace and maintenance of

law and order.

10. Rule 193 of the Tripura Excise Rules, 1990 reads as under:

"193. When any shop for the vend of any intoxicant is closed, under section 24 of the Act, for the preservation of the public peace, or under Rule 173 on account of the march of troops, compensation for such closure may be paid in cash to the licensee, as stated below--

(1) The compensation will be paid by the Collector with the previous sanction of the Excise Commissioner.

(2) No compensation shall be paid when a shop remains closed for less than six hours. Closure for six hours or more shall be held to be closure for the whole day.

(3) When a shop licensed for the vend of an intoxicant upon which no duty is imposed under section 25 of the Act, is closed the compensation shall be calculated on the monthly fee payable for the license, and shall be a sum equivalent to the amount payable for the days during which the shop remains closed plus 10 per cent of that amount for loss of profits.

(4) When a shop licensed for the vend of an intoxicant upon which duty is imposed under section 25 of the Act or under the Indian Tariff Act, 1894, is closed, the Collector shall calculate the average daily sale in the shop, based on the sales during the previous months of the year, and the profit of the vendor on such daily sales after deducting from the average total sale-proceeds the amount of the average daily license fees the duty, the cost price and contingent expenses at 6 ½ per cent, of the sale-proceeds Compensation shall then be

granted at the rate of such daily profit for the number of days during which the shop remains closed."

11. As per this rule when any shop vending any intoxicant is closed

under Section 24 of the Act for preservation of public peace, or under Rule

173 on account of the march of troops, compensation for such closure may

be paid to the licensee as mentioned in the said rule. The three sub-clauses

of Rule 193 are that (i) the compensation will be paid by the Collector with

the previous sanction of the Excise Commissioner; (ii) no compensation

shall be paid when a shop remains closed for less than six hours; and (iii)

when a shop vending intoxicant is closed, compensation shall be calculated

on the monthly fee payable for the license and which will be equivalent to

the amount payable for the days during which the shop remains closed plus

10 per cent of the amount for loss of profit. In plain terms thus whenever a

shop vending intoxicant is ordered to be closed under Section 24 of the Act

for preservation of public peace, the licensee for any closure in excess of six

hours would be compensated for the period of closure at the rate of the

monthly license fee plus 10 per cent towards loss of profit.

12. We may recall the Collector of Excise, Sepahijala District had

passed an order on 25.03.2020 ordering that all liquor shops within his

district shall remain closed up to 31.03.2020. This order reads as under:

"In pursuance of letter of the Commissioner of Excise, Government of Tripura, Vide No.F.VI-(II)-EX/2020/1271-78 dated 25/03/2020 owing to wake spread of COVID-19 throughout the Country, the undersigned in exercise of power conferred under sub-section (1) of section 24 of the Tripura Excise Act, 1987 hereby ordered that, all the Foreign liquor and Country liquor shops under Sepahijala District shall remain closed up to the 31st March 2020.

Any violation of the aforesaid order shall invite stern action against the violators."

13. On 15.04.2020 the Collector of Excise, Sepahijala District

passed yet another notification providing for closure of liquor shops within

the district between 15.04.2020 to 03.05.2020. This notification reads as

under:

"WHEREAS, in view of management of the COVID- 19 epidemic, nationwide lock down is in force from 24th March 2020 and now extended up to 3rd May, 2020.

AND WHEREAS, there should be strict ban on sale of liquor as per National Directives for COVID-19 Management.

AND WHEREAS, it is felt necessary to remain all the liquor shops closed under Sepahijala District for the preservation of the public peace and maintenance of law and order till 3rd May, 2020.

NOW, THEREFORE, in exercise of power conferred upon me by Sub-Section (1) of 24 of the Tripura

Excise Act, 1987 and in compliance with the provision of Rule 174 of Tripura Excise Rules 1990, I, Sri C.K Jamatia, IAS, District Magistrate & Collector (Collector of Excise), Sepahijala District, Bishramganj do hereby declare that all Foreign Liquor and Country liquor Shops under Sepahijala District shall remain closed from 15.04.2020 to 03.05.2020 for strict observance of "Dry Days"."

14. On 04.07.2020 once again District Collector, Sepahijala

ordered that all liquor shops within the district shall remain closed for 24

hours from 5 a.m. of 5th July to 5 a.m. of 6th July 2020. This order reads as

under:

"In pursuance of Order issued by the Chief Secretary, Government of Tripura vide No.F.2(1) CS/H&FW/Mask/2020 dated 03.07.2020 regarding the notice of the State Government that there is spread of COVID-19 occurring in different parts of the state which has posed as a major threat to public, hygiene and safety of the people.

It is also felt that unless stringent measure is put in place to contain the spread of the pandemic, there is chance of large scale spread of COVID-19 in the population which is likely to cause loss of human lives.

Therefore, in the capacity of the Chairman of the State Executive Committee of Tripura State Disaster Management Authority, in exercise of the power conferred under section 22(h) of the Disaster Management Act, 2005 direct enforcement of "Total Lockdown" in the entire area

of the State of Tripura for 24 hours w.e.f 5 A.M. of 5th July (Sunday) to 5 A.M of 6th July 2020.

In this regard, all Licenses of Foreign shops under Sepahijala District are hereby directed to keep their FL/CL shops closed for 24 hours w.e.f 5 A.M. of 5th July (Sunday) to 5 A.M of 6th July 2020.

Any violation of the aforesaid order will be liable to be proceeded against as per provision of 51 to 60 of the Disaster Management Act, 2005, besides legal section Under Section 188 of the I.P.C., other legal provisions as applicable and relevant provision of the Tripura Excise Act & Rules."

15. Perusal of these three orders passed by the District Collector,

Sepahijala would clearly reveal that in all orders except one dated

04.07.2020 he was ordering closure of the liquor shops within his district in

exercise of powers under Section 24 of the Tripura Excise Act. In the

notification dated 15.04.2020 he has specifically recorded his satisfaction

that it was necessary to keep all liquor shops closed "for preservation of

public peace and maintenance of law and order". In his order dated

04.07.2020 however he referred to the lockdown restrictions imposed by the

State authorities under the Disaster Management Act, 2005 and ordered that

all liquor shops within his district will remain closed for a period of 24

hours. In view of the closure orders passed by the District Collector,

Sepahijala on 25.03.2020 and 15.04.2020 under Section 24 of the Tripura

Excise Act, the provisions of Rule 193 of the said rules would become

applicable. We have noticed that as per this rule for the period during which

the liquor shops are ordered to remain closed under Section 24 of the Act,

compensation would be paid to the licensee at the rate specified therein

which would be essentially in terms of waiver of the license fee for the

period in question plus 10 per cent towards loss of profit. The statutory

scheme thus clearly envisages compensating the licensees of the State

Government engaged in the business of liquor vending when on account of

grounds mentioned in Section 24 of the Tripura Excise Act, their shops have

to remain closed upon order passed by the District Magistrate. When the

statute itself provides for such compensation, the respondents cannot refuse

to pay the same. This situation has statutory as well contractual implications.

A licensee enters into a contractual relationship with government for sale of

liquor at a specified location for a specified period for which he agrees to

pay certain royalty to the government referred to as license fee. On its part,

the government authorizes the licensee to sale liquor for which it collects

royalty from the vendor. Willingness of the licensee to suffer a certain

amount of license fee would be based on market conditions. He assesses his

position and accordingly makes a bid in response to the tender invited by the

government. One of the considerations that would definitely go into this

process is the statutory scheme emerging from Section 24 of the Act read

with Rule 193 according to which, upon of closure of liquor shop ordered by

the District Magistrate for a period exceeding 6 hours, the licensee would be

compensated by waiver of license fee for such period plus 10 p.c. thereof. If

this basis of statutory assurance is removed, the very foundation of the

agreement between the government and the licensee will become shaky.

Even on the principal of promissory estoppel, the respondents cannot be

allowed to escape the liability.

16. The learned Government Advocate had argued that there was

nationwide lockdown imposed by the Government of India and on account

of which the petitioners could not have even otherwise operated their shops

during the period in question. This argument, however, ignores the reality

that the District Collector, Sepahijala had passed specific orders with respect

to shops vending intoxicants to remain closed within the district and these

orders were passed in exercise of powers under Section 24 of the Tripura

Excise Act. What would have been the consequence if no such orders were

passed by the District Collector in view of general lockdown provisions

declared by the Central and the State Governments is a separate matter

altogether. If for any reason other than the order passed by the District

Collector in exercise of powers under Section 24 of the Tripura Excise Act

the shops had to remain closed, no compensation would be payable since

Rule 193 of the said rules is specific and envisages payment of

compensation only under specific circumstances.

17. Our conclusion, therefore, is that the period during which the

liquor shops of the petitioners had to remain shut on account of orders

passed by the District Collectors under Section 24 of the Tripura Excise Act,

compensation as envisaged under Rule 193 of the rules is payable. However,

if the shops had remained closed for any periods beyond the periods covered

by the orders under Section 24 of the Tripura Excise Act, in absence of any

statutory provision, such compensation cannot be claimed. We may clarify

that the order dated 4.7.2020 passed by the Collector Shipaijala was not

under Section 24 of the Act but merely recorded the restrictions imposed byt

eh State Disaster Management Committee under the Disaster Management

Act and therefore, no compensation would be payable for the period covered

under the said order.

18. The petitioners have produced orders passed by the District

Collector, Sepahijala under Section 24 of the Tripura Excise Act. It is not

clear whether the District Collector, West Tripura had passed similar orders.

However, our conclusion will remain the same namely that for the period

during which the District Collector be it of Sepahijala or West Tripura, had

ordered under Section 24 of the Tripura Excise Act that the liquor shops

within the district shall remain closed, the petitioners would be entitled to

compensation as specified in Rule 193 of the rules.

19. In the result, the petitions are partially allowed. The

respondents are directed to pay compensation to the petitioners as provided

in Rule 193 of the Tripura Excise Rules, 1990 for the period during which

their liquor shops remained closed on account of orders passed by the

respective District Collectors under Section 24 of the Tripura Excise Act.

This entire exercise shall be completed within a period of four months from

today.

20. Petitions disposed of accordingly.

Pending application(s), if any, also stands disposed of.

   (S.G. CHATTOPADHYAY), J                       (AKIL KURESHI), CJ




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