IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE THIRTY FIRST DAY OF MARCH TWO THOUSAND AND FIVE PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITON NOS.16648, 16676, 17038 OF 2003, 5670, 5882 and 5900 of 2004 WRIT PETITION NO : 16648 of 2003 Between: M/s. Tirumala Wines, China Mushidivada, Pendurthi Mandalam, Visakhapatnam, District, rep. by its Proprietor V. Ramakrishna Naidu, S/o. Chinam Naidu ..... PETITIONER AND 1 The Government of Andhra Pradesh, rep. by Commissioner of Prohibition & Excise, Exhibition Grounds Road, Hyderabad 2 The Prohibition & Excise Superintendent, Visakhapatnam, Visakhapatnam District .....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 Orders, Direction or Direction declaring the action of the respondents in rejecting the claim of the petitioner for refund of the excess licence fee illegally collected for the period 1998- 99 up to 2003-04 as unconstitutional and illegal and to issue a consequential direction to the respondents to refund the said amount. Counsel for the Petitioner: MR.V.SRINIVAS Counsel for the Respondents: GP FOR PROHIBITION & EXCISE AND WRIT PETITION NO : 5670 of 2004 Between: M/s Tirumala Wines, China Mushidivada, Pendurthi Mandalam, Visakhapatnam District, Rep. by its Proprietor V. Ramakrishna Naidu, S/o Chinam Naidu. ..... PETITIONER AND 1 The Government of Andhra Pradesh, Rep. by Commissioner of Prohibition and Excise, Exhibition Grounds Road, Hyderabad. 2 The Prohibition and Excise Superintendent, Visakhapatnam, District Visakhapatnam. .....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 Orders , Direction or Directions declaring the action of the Respondents in not renewing the licence of the Petitioner for the excise year 2004-2005 by treating the shop of the Petitioner as located at a distance beyond 5 K.Ms. from the limits of Municipal Corporation of Visakhapatnam as illegal, arbitrary and unconstitutional and to issue a consequential direction to the Respondents to renew the Excise Licence of the petitioner by collecting appropriate licencee fees as applicable to the shop situated in a Gram Panchayat Area beyond the distance of 5 KMs from the Municipal Corporation Limits of Visakhaptnam. Counsel for the Petitioner: MR.V.SRINIVAS Counsel for the Respondents: GP FOR PROHIBITION & EXCISE AND WRIT PETITION NO : 17038 of 2003 Between: M/s.Steel City Beer &Wines II-24, rep. by its proprietor, B.Ramakrishnam Raju, S/o. Varahala Raju, Desapathrinipalem Village, Visakhapatnam District ..... PETITIONER AND 1 The Commissioner of Prohibition and Excise, Govt. of A.P., Hyderabad 2 The Prohibition &Excise Superintendent Visakhapatnam .....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 will be pleased to issue a Writ of Mandamus declaring the Order of the 1st respondent dated 8.7.2003 by which the request of the petitioner for refund of proportionate licence fee from the lease years 1998-99 to 2002-2003 was rejected as illegal and arbitrary and consequently direct the respondents to refund the proportionate licence fee, from the lease years 1998-99 to 2003 – 2004. Counsel for the Petitioner: MR.P.SRI RAGHU RAM Counsel for the Respondents: GP FOR PROHIBITION & EXCISE WRIT PETITION NO : 5900 of 2004 Between: M/s Steel City Beer & Wines IL-24, rep.by its Proprietor B.Ramakrishnam Raju, S/o Varahala Raju, Desapathrini Palem Village, Visakhapatnam District. ..... PETITIONER AND 1 The Commissioner of Prohibition and Excise, Govt.of A.P., Hyderabad. 2 The Prohibition & Excise Superintendent, Visakhapatnam. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Order or Orders or Direction more especially one in the nature of Writ of Mandamus declaring the action of the respondents in not renewing the licence of the petitioner for the excise year 2004-2005 by treating the shop of the petitioner as located within 1 K.M. periphery distance from the limits of Gajuwaka Municipality as arbitrary, unconstitutional and to issue a consequential direction to the respondents to renew the excise IL 24 licence of the petitioner by collecting the appropriate licence fee as applicable to the shop situated at Desapathrini Palem Village beyond the distance of 2 K.M. from the Gajuwaka Municipal Periphery. Counsel for the Petitioner: MR.P.SRI RAGHU RAM Counsel for the Respondents: GP FOR PROHIBITION & EXCISE WRIT PETITION NO : 16676 of 2003 Between: Ch. Jyothi Srinivas, S/o. Krishna Rao, Licensee of M/s. Durga Wines License no. 182/99, R/o.D.No.C-145,Dasaputrinapalem Village, Parwada Mandal, Visakhapatnam District. ..... PETITIONER AND 1 The Commissioner for Prohibition and Excise, Hyderabad. 2 The Deputy Commissioner for Prohibition and Excise, Visakhapatnam. 3 The Prohibition and Excise Superintendent, Visakhapatnam. .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Mandamus or any other appropriate writ or direction declaring the order of the 1st respondent passed in Cr. No. 976/2002/CPE/G2 dated 8.7.2003 as illegal arbitrary and contrary to the rules and consequently direct the respondent to refund the excess licence fee paid forthwith to the petitioners with interest @ 18%. Counsel for the Petitioner: MRS.G.JHANSI Counsel for the Respondents: GP FOR PROHIBITION & EXCISE WRIT PETITION NO : 5882 of 2004 Between: Ch.Jyothi Srinivas S/o Krishna Rao D.No.C-145, Dasapurtinapalam Village, Parawada mandal, Visakhapatnam Dist Licencee of M/S Durga wines Licence No.182/99 ..... PETITIONER AND 1 The Commissioner of Prohibition and Excise, Hyderabad 2 The Deputy Commissioner for Prohibition and Excise, Visakhapatnam 3 The Prohibition and Excise Superintendent , Visakhapatnam .....RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue writ of Mandamus or any other appropriate writ or direction declaring the action of the respondents in not renewing the licence of the petitioner for the excise year 2004-05 by treating the shop of the petitioner as located at a distance beyond 2 kms from limits of Gajuwaka Municipality as illegal, arbitrary and unconstitutional and to issue consequential direction to the respondent to renew the excise licence of the petitioner by collecting appropriate licence fee as applicable to the shop situatated beyond 2 Kms from limits of Gajuwaka municipality as illegal, arbitrary and unconstitutional andto issue consequential direction to the respondents to renew the excise licence of the petitioner by collecting appropriate licence fee as applicable to the shop situated beyond 2 kms distance fromthe Gajuwake municipality. Counsel for the Petitioner: MRS. G.JHANSI Counsel for the Respondents: GP FOR PROHIBITION & EXCISE The Court made the following COMMON ORDER: M/s.Tirumala Wines filed W.P.No.16648 of 2003 (hereinafter referred to as Tirumala Wines) seeking to issue a Writ of Mandamus declaring the action of the 1st respondent-the Commissioner of Prohibition and Excise, Exhibition Grounds Road, Hyderabad, and the 2nd respondent-the Prohibition and Excise Superintendent, Visakhapatnam, in rejecting its claim for refund of the excess licence fee illegally collected for the period from 1998-99 to 2003-04 as unconstitutional and illegal, and to direct the respondents to refund the said amount. Tirumala Wines also filed W.P.No.5670 of 2004 to declare the action of the respondents in not renewing its licence for the year 2004-05 by treating the shop of the Tirumala Wines as located at a distance beyond 5 kms from the limits of the Municipal Corporation of Visakhapatnam, as illegal and arbitrary, and to direct the respondents to renew its licence by collecting the appropriate licence fee as applicable to the shops situated in a Gram Panchayat area since it is also situated in Gram Panchayat Area and it is beyond a distance of 5 Kms from the limits of Municipal Corporation of Visakhapatnam. Similarly, M/s.Steel City Beer & wines IL-24 filed W.P.No.17038 of 2003 (hereinafter referred to as Steel City Wines) to declare the order of the 1st respondent in rejecting its request for refund of the proportionate licence fee for the lease years from 1998- 99 to 2002-03, and to direct the respondents to refund the excess licence fee paid by it for the lease years 1998-99 to 2003-04. It also filed W.P.No.5900 of 2004 to declare the action of the respondents in not renewing its licence for the excise year 2004-05 by treating its shop as located within 1 km peripheral distance from the limits of Gajuwaka Municipality as illegal and arbitrary, and to direct the respondents to renew the excise IL 24 licence of the Steel City Wines by collecting the appropriate licence fee as applicable to the shops situated at Desapathrini Palem Village, which is beyond the distance of 2 kms from the Gajuwaka Municipal limits. Ch.Jyothi Srinivas, licensee of M/s Durga Wines filed W.P.No.16676 of 2003, to declare the order of the 1st respondent, dated 08.07.2003, as illegal, arbitrary and contrary to the rules, and to direct the respondents to refund the excess licence fee paid by it. It also filed W.P.No.5882 of 2004, to declare the action of the respondents in not renewing its licence for the excise year 2004-05 by treating the shop of Durga Wines as located at a distance beyond 2 kms from the limits of Gajuwaka Municipality as illegal and arbitrary, and to direct the respondents to renew the excise licence of Durga Wines by collecting appropriate licence fee as applicable to the shops situated beyond 2 kms distance from the Gajuwaka Municipality. The 1st respondent- Commissioner for Prohibition and Excise, Hyderabad, rejected the request of the Tirumala Wines for refund of the proportionate licence fee for the lease years 1998-99 to 2003-04. The 1st respondent also rejected the request of the Steel City Wines for refund of the proportionate licence fee for the lease year 1998-99 to 2002-03. Insofar as Durga Wines is concerned, its request for refund of the proportionate licence fee for the lease years 2000-01 to 2002-03 was rejected by the 1st respondent. The 1st respondent through different proceedings dated 08.07.2003, issued the rejection orders, in respect of Tirumala Wines, Steel City Wines and Durga Wines. The case of Tirumala wines is that IL-24 licence was granted to it for the excise year 1998-99, and later on, it was being renewed for the subsequent years up to 2001-02, by treating the location of Tirumala Wines as situated within 5 kms., from the Municipal Corporation limits of Visakhapatnam. Later, Tirumala Wines has realized that the distance between the Tirumala Wines and the Municipal Corporation limits of Visakahpatnam is more than 5 kms, and therefore, it made a representation to the 2nd respondent on 20.10.2001, seeking refund of the excess licence fee collected from it by the authorities, since the actual distance between the shop and the outer limits of the Municipal Corporation of Visakhapatnam is 5.63 kms, and that according to Tirumala Wines, it is entitled for refund of the excess amount collected from it. The 2nd respondent vide his letter dated 15.11.2001, reported to the 1st respondent that the enquiry conducted by him revealed that the distance between Tirumala Wines and the peripheral limits of Municipal Corporation of Visakhapatnam is 5.63 kms. The Deputy Commissioner of Prohibition and Excise, Visakhapatnam, also addressed a letter, dated 07.12.2001, to the 1st respondent, stating that the claim of Tirumala Wines for refund of the excess licence fee is genuine. Thereafter, the 1st respondent vide his letter, dated 25.01.2002, asked the 2nd respondent to clearly indicate the belt area from shops to the Municipal Corporation periphery in blue print showing the distance from point to point along with the route. The 2nd respondent vide his reply, dated 17.12.2002, furnished the required sketch to the 1st respondent. But, however, the 1st respondent addressed another letter, dated 15.03.2002, to the 2nd respondent requiring him to furnish further particulars regarding the alternative road connecting the Corporation to the licenced premises of Tirumala Wines. The 2nd respondent replied on 21.03.2002, enclosing all necessary certificates obtained by him from the revenue officials showing the distance between the Tirumala Wines and the limits of Municipal Corporation of Visakhapatnam as beyond 5 kms. Subsequently, the 1st respondent addressed a letter, dated 11.09.2002, to the 2nd respondent seeking a report from him regarding the total number of shops existing in Visakhapatnam City and also directed to obtain a sketch from the ‘VUDA’, for which a reply was given on 14.09.2002. When the 1st respondent called upon the 2nd respondent to furnish further particulars in order to settle all such cases of refund, the 2nd respondent submitted his reply on 20.03.2003, giving statistical details of all the shops which are seeking refund of excess licence fee, and also submitted that in respect of M/s Supraja Wines and M/s Prabha Wines, the excess licence fee was refunded, as the said shops were situated at a distance beyond 5 kms from the periphery of Municipal Corporation of Visakhapatnam and that the Tirumala Wines is also entitled for refund of the excess licence fee paid by it. Thereafter, the Deputy Commissioner of Prohibition and Excise sent his remarks stating that the sale of liquor by the Tirumala wines has been more or less on par with the shops situated in the Municipal Corporation Limits, and on that ground the excess licence fee may not be refunded. Basing on the remarks of the Deputy Commissioner of Prohibition and Excise, the 1st respondent through impugned proceedings, dated 08.07.2003, rejected the request of Tirumala Wines for refund of the excess licence fee paid by it for the years 1998-99 to 2003-04, and also on the grounds that Tirumala wines has signed the counterpart Agreement in Form 28-A every year while taking the licence, agreeing to pay the licence fee as demanded from year to year and that it has also agreed that it will not cause any loss to the Government Revenue. The Steel City wines appeared to have made an application before 01.04.2001, for refund of the excess licence fee, on the ground that its licenced premises is situated 1 km away from the Gajuwaka Municipality, and therefore, it is not liable to pay the licence fee payable in respect of Gajuwaka Municipality, but it is liable to pay the licence fee as per the population of the Desapathrunipalem Gram Panchayat. The request of the Steel City Wines for refund of the excess licence fee for the excise years 1998-99 to 2002-03 was also rejected on similar grounds as in the case of Tirumala Wines. Further, it is stated that under Section 29 (b) of the A.P. Excise Act, 1968, the licensee has executed a counterpart agreement in conformity with the tenor of his licence and that it has also agreed to safeguard the revenue of the State. Despite the same, the licensee has come up with a plea for refund of the excess licence fee paid, only in the year 2003. Therefore, Steel City Wines is not entitled for refund of the proportionate licence fee. The case of Durga Wines is that it made a representation on 05.02.2001, for refund of the excess licence fee paid by it for the excise years 2000-01 to 2002-03, stating that its location at Desapathrunipalem Village is 1 km away from the periphery of the Gajuwaka Municipality and therefore, the licence fee applicable in respect of shops situated at Gajuwaka Municipality, is not liable to be paid by it, since its shop is situated at Desapathrunipalem Village, which is 2.8 kms away from the Gajuwaka Municipality. But the said application was also rejected by the impugned order dated 08.07.2003. Learned counsel for the petitioners submits that the said acts of the Commissioner rejecting the request of the petitioners to refund the excess licence fee is illegal, arbitrary and against the principles of natural justice, and the fact that licence fee is refunded to some other licensees itself shows that the petitioners were discriminated by the 1st respondent in respect of the same claim. Further, the learned counsel submits that the respondents have collected excess licence fee even in respect of renewal for the year 2003-04 in spite of the fact that the shops of the petitioners were situated beyond 5kms and l km from the limits of Municipal Corporation of Visakhapatnam and Gajuwaka Municipality respectively, and the same is illegal. Therefore, the petitioners are entitled for refund of the excess licence fee illegally collected from them for the excise years 1998-99 to 2003-04. Counter affidavits have been filed by the respondents stating that the Government introduced a new excise policy for grant of IL-24 (Retail) licences for the year 1998-99 onwards commencing from 01.04.1998 to 31.03.1999 in order to allot retail outlets to the eligible applicants on payment of the prescribed fee and on completion of other formalities as laid down in the rules. As per the said Government Policy, all the petitioners herein have applied for grant of IL-24 licence, and on fulfillment of all the formalities, IL-24 licenses have been granted to them for the excise year 1998-99. The petitioners themselves have paid the licence fee assuming that their shops are situated within 5kms and 1 km from the periphery of Municipal Corporation of Visakhapatnam and Gajuwaka Municipality respectively, and that they themselves have applied for renewal of the same for the subsequent years, and accordingly, the renewals were also granted for the excise years 1999-2000, 2000-2001 and 2001-2002. Tirumala Wines filed an application for the first time on 20.10.2001, requesting for refund of the proportionate licence fee paid by it stating that it is situated beyond 5 kms from the periphery of the Municipal Corporation of Visakhapatnam, and the population of Chinamusidiwada, where Tirumala Wines is situated, is 3930 as per 1991 census, which is below 10,000, and therefore, the licence fee applicable in respect of Gram Panchayat having population below 10,000 is only liable to be paid by it. Insofar as Durga Wines is concerned, its licensee Ch.Jyothi Srinivas, filed an application on 05.02.2001, requesting for refund of proportionate licence fee paid by it stating that its shop is actually situated beyond 1 km from the periphery of Gajuwaka Municipality. As far as Steel City wines is concerned, it filed an application for refund of the proportionate licence fee after a period of 3½ years of sanction of the licence, which cannot be taken into account, as the said application is time barred. It is stated that the petitioners themselves have executed a counterpart agreement with the department agreeing to pay the licence fee every excise year, and thus, as per the counterpart agreement, the licence fee is not liable to be refunded. It is further stated that the petitioners were granted the licences in respect of the premises selected by them and they have not sustained any losses. Therefore, it is not open for them to seek any refund of the licence fee. As regards the location of the shop of Tirumala Wines is concerned, there is no dispute that the shop of Tirumala wines is situated 5 kms away from the periphery of the Municipal Corporation of Visakhapatnam. Similarly, the shops of Steel City Wines and Durga Wines are situated in the limits of Gram Panchayat, i.e., 1 km away from the periphery of the Gajuwaka Municipality. The only question that arises for consideration in these batch of petitions is as to whether the petitioners herein are entitled for refund of the licence fee, in respect of excise years 1998-99 to 2003- 04 or from the date of filing of such applications seeking refund of the excess licence fee. To determine the issue in question, it is required to notice the relevant provisions of the A.P. Excise Act, 1968. Section 2 (12) of the Act defines ‘excise revenue’, which means revenue derived or derivable from any duty, fee, tax, rent, fine, penalty or confiscation levied, imposed or ordered under the provisions of this Act or any other law for the time being in force relating to intoxicating liquors or intoxicating drugs. According to Section 13 of the Act, no person is entitled to sell liquor without obtaining any licence under the Act. Under Section 15 of the Act, a person is entitled to sell liquor within the district, if the licence is granted to him by the Prohibition and Excise Superintendent. Under Section 17 of the Act, a person is entitled for grant of exclusive privilege of selling the liquor, subject to the provisions of Section 28 and any rules made in this behalf and subject to such other conditions as they deem fit to impose, grant for a fixed period to any person at any place a lease or licence or both either jointly or severally for the exclusive privilege. To grant licence for exclusive privilege in a district, the competent officer is Prohibition and Excise Superintendent. Section 23 of the Act deals with payment of excise duty or fee in addition to the excise duty or fees leviable under Sections 21 and 22, for grant of licence, as a consideration for grant of exclusive privilege in respect of sale of liquor granted under Section 17. Section 28 deals with Form and conditions of licence. Every licence granted under this Act shall be granted or issued on payment of such fees, for such period, subject to such restrictions and conditions and shall be in such form and shall contain such particulars, as may be prescribed. Under Section 29 of the Act, the excise authorities are empowered to take security and counterpart agreement requiring the licensee to give security for the observance of the terms of his licence and to execute a counterpart agreement in conformity with the tenor of his licence. As per Section 30, no licence granted under this Act shall be deemed to be invalid by reason merely of any technical defect, irregularity or omission in the licence or in any proceedings taken prior to the grant thereof. Section 31 of the Act prescribes that If the licensee violates any of the conditions of the A.P. Excise Act and the Rules made thereunder and the terms and conditions of the licence, it is liable to be cancelled or suspended and that the licensee is not entitled for refund of the licence fee, on account of such suspension or cancellation. If the licence is ordered to be withdrawn under Section 32 of the Act, the licensee is entitled to the proportionate licence fee for the unexpired portion of the term of the licence from the Government. Admittedly, licence shall be granted by the competent authority in exercise of the powers conferred under Section 17 (2) of the Act and the relevant Rules made thereunder i.e., A.P. Indian Liquor and Foreign Liquor Rules, 1970 (hereinafter referred to as ‘the Rules’). Therefore, in respect of the licence granted under Section 17, the licensee is not entitled to surrender the licence, and even if the licence is surrendered, he is liable to pay the entire licence fee. Admittedly, IL-24 licences are granted as per the Rules. Rule 3 (ee) defines ‘lease year’, which means the period of twelve months beginning from the first day of April of the year and ending with the 31st March of the following Year. Rule 3 (f) defines ‘licence’, which means a licence granted under these rules. Rule 3 (h) defines ‘off licence’, which means a licence granted under these rules for sale of the liquor in sealed or capsuled bottles without permitting consumption on the licensed premises. Under Rule 23 different kinds of licences are specified. As per Rule 24 the period of licence will be from 1st April of that year and ending with 31st March of the succeeding year, subject to payment of annual licence fee in one lumpsum. According to Rule 25, the licence fee has to