IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE SEVENTH DAY OF JULY TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No: 6018 of 2004 BETWEEN: K. Siva Sai Kumar, S/o Atchuta Rao, R/o Vitluru, West Godavari District, Licencee of M/s Siva Sai Wines at Satrampadu, West Godavari District. ... PETITIONER AND 1 Government of Andhra Pradesh, rep. by its Secretary, Prohibition & Excise Department, Secretariat, Hyderabad. 2 The Commissioner, Prohibition and Excise, Nampally, Hyderabad. 3 The Prohibition and Excise Superintendent, West Godavari District at Eluru. ...RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue a Writ of Mandamus or any other appropriate Writ, Order or Direction, declaring the impugned notice in Rc.No.90/2004/A2 dated 19-3- 2004 issued by the 3rd respondent as illegal, arbitrary and contrary to the A.P. Indian Liquor & Foreign Liquor Rules, 1970 and consequently set aside the same. Counsel for the Petitioner: MR.A.JAGANNATHA RAO Counsel for the Respondents: GP FOR PROHIBITION & EXCISE The Court made the following: ORDER: Petitioner questions the notice issued by the Prohibition & Excise Superintendent at Eluru in Rc.No.90/2004/A2 dated 19.03.2004 in demanding to pay the differential licence fee in respect of IL-24 licence shop of M/s. Siva Sai Wines situated at Indira Colony, Venkatapuram Gram Panchayat of Eluru Rural Mandal for the excise year 2001-2002 the balance amount of Rs.4,50,00/- and for the excise year 2002-2003 the balance amount of Rs.3,75,000/- and total amount of Rs.8,25,000/- as illegal and arbitrary and contrary to the Andhra Pradesh Excise Act (for short ‘the Act’) and the Andhra Pradesh Indian Liquor and Foreign Liquor Rules, 1970 (for short ‘the Rules’) and the schedule made thereunder. 2. Petitioner submits that he was granted IL-24 licence at Indira Colony, Venkatapuram Gram Panchayat on the annual licence fee of Rs.2,85,000/- for the excise year 2001-2002 and the said licence was also renewed for the excise year 2002-2003 on the enhanced annual licence fee of Rs.4,50,000/-, which was also paid. He further submits that there is no dispute with regard to the payment of licence fee for the excise year 2003-2004 amounting to Rs.8,25,000/- as the Venkatapuram Gram Panchayat/village was coming within the belt area of 2 KMs and therefore, he paid the licence fee applicable to the Eluru Municipality. During the end of the licence period for the excise year 2003-2004 the impugned notice dated 19.03.2004 has been issued contending that the licence was granted to the petitioner in the month of June 2001 originally at Venkatapuram, presently at Satrampadu, and the population of the Venkatapuram is also included in the population of Eluru Municipality shown as outer growth of Eluru Municipality and the total population of Eluru Municipality including outer growth is 2,15,804, therefore, the licence fee payable by the petitioner is also on par with the Eluru Municipality as the population of Venkatapuram is also included in the Eluru Municipality. 3. It is pertinent to note that after expiry of licence period for the excise years 2001-2002 and 2002-2003 and during the fag end of the licence period for the excise year 2003-2004, the impugned notice has been issued demanding to pay the differential licence fee based on the population figures of the Eluru Municipality. It is not in dispute that the petitioner shop situated at Indira Colony of Venkatapuram Gram Panchayat is not within the Eluru Municipality limits or within the belt of 1 KM of Eluru Municipality. Venkatapuram is a notified Grade.II Gram Panchayat. According to the petitioner the population of Venkatapuram Gram Panchayat area is 23,652 as per 2001 census as is evident from the certificate issued by the Secretary, Gram Panchayat Venkatapuram and the Venkatapuram consists of eight hamlets and Indira Colony is one of the hamlet of Venkatapuram Gram Panchayat. 4. As per the counter it is not in dispute that the outer growth population of Eluru Rural, Satrampadu etc. has been included in the Eluru Municipality. Even according to the counter the population of outer growth of Satrampadu is 5,225 and the outer growth of Eluru Rural is 6,028. According to the petitioner, the population of Venkatapuram Gram Panchayat is 23,652. As per the schedule under Rule 25 of the Rules, if the population of a revenue village and its hamlets is not exceeding 50,000 but exceeds 10,000 the annual licence fee is Rs.2,85,000/- for the excise year 2001-2002 and Rs.4,50,000/- for the excise year 2002-2003. There is no dispute that the licence fee was paid as per the population figures of the Eluru Revenue Village. 5. Counter affidavit does not indicate separate census figures of Eluru Rural revenue village i.e. the population of the concerned revenue village where the shop of the petitioner is situated. It only states that the population of the outer growth of Eluru Municipality is 1,90,062 but after clubbing five villages the outer growth population of Eluru Municipality was taken into account as 2,15,804. 6. I am of the opinion that though the shop of the petitioner at Indira Colony was shown as outer growth to Eluru Municipality but the population of Indira Colony, Venkatapuram, Eluru Revenue Village was included in the Eluru Municipality. The shop of the petitioner is not situated within the Eluru Municipality limits and the population of outer growth of the Eluru Municipality, where certain IL-24 shops are situated outside 1 KM belt of Eluru Municipality, cannot be taken into account as the population of Eluru Municipality area. Therefore, there cannot be any justification in raising an audit objection said to have been taken during the course of the audit after expiry of the licence periods i.e. 2001-2002 and 2002-2003. The demand notice has been issued based on the audit objection alone though the Prohibition and Excise Superintendent has correctly understood the same with reference to the population of the respective revenue villages situated 1 KM outside the belt area of Eluru Municipality and collected the same in accordance with law. 7. I am of the opinion that the licence fee shall be payable as per the schedule appended to the Rules and as per the population of the respective revenue villages, municipalities and corporations alone, therefore, the action of the respondents in clubbing the population of the revenue village of the petitioner with the Eluru Municipality area and demanding to pay the differential licence fee is illegal, arbitrary and contrary to the schedule appended to the Rules. For the aforesaid reasons, the impugned order is set aside. The writ petition is accordingly allowed as prayed for. There shall be no order as to costs. ______________ V. ESWARAIAH, J July 7, 2008 DSK