III il: 1 111 :t 1: iii::i < ^, !T^*?J ^•^*si HIWH fcUUKBT OF .Tl 'hT/'ATI 'OF rMMATrr.e,fi i__^l uwwAvn a ^rfs^&. irfao<=t i i <fc»a^^ 8+i+inn Nn ??A? nf 9f:'n3 i i i 6Vi3 E'i<^. ^&>%i^S» ^i ^ufV^? »( ilii ~TTT"?^kt£ri, OpcpDMhFMT^. PMaliu'i •^ri •Viif^.f ^i l 1u> • Versus Jitendra Kumcr ©upta, S/o Shri Laiita Prasad ©upta, Aged about 31 years, R/o Tilda, Bilsspur (C.6.) State of Chhcttisgarh, Through the Secretary', Department of Exciss, &.K.5. BhcBt'an, Keitpur i,c.&.j Tne Comn'iissioner' (Exeise), Raipur (C.©.) [3» ^A||^;->-f-^^ Q^il^l^ ir'TiS. 5 ;—'ill*i«*1 tdfi ; B^^i^irUt ^Vt\^,j 4. Tn-a District Excise Offiser, Raipur (C.6.) 5. Jhe Excise Sub-Inspector. Circle No.2, Raipur (C.©.) » Ki POST FOR ORDER ON 19ttl August, 200; Sd/- L.C.BHADOO Judge 18A August, 2003 HI61-1 COURT GF JUDICATURE. CHHATTIS6ARH AT BILASPUR Wrlt Petition No.2262 of 2003 PETT-riONER; RESPONDENTS: Versus Jitendra Kumar ©upta, 5/o Shri Lalita Prasad Supta, Aged about 31 yeara, R/o Tilda, Bilaspur (C.&.) 1. State of Chhattisgat+i, Throi^h the Secretary, Oepartmant of Excise, &.K.S. Bhawan, Raipur (C.6.) 2. Tne Commissioner (Excise). Roipur (C.©.) 3. The Coilector, Raipur- (C.6.5 4. The District Excise Officer, Raipur (C.©.) 5. The Excise Sub-Inspector, Circle No.2, Raipur (C.6.) present;- Shri Kanak Tmw's, Shri V.C. Ottalwa" and Shri Rajeev Shrivastava, Advocates; Dr. N.K. Shuk!a, Additional Advocate ©enerai; For the petitioner For the State/respondents Before: Hon'ble Shri L.C. Bhadoo. J. E ith (Passed on 19T" August, 2003) 1. The petitioner, who is a liquor contractor, by this petition under Article 226/227 of the Constitution of India, has questioned the order of the Collector. Raipur (licensing authority), passed on 30.07.2003 canceiling the licence of Mana 6roup of country/foreign liquor shops for the excise year 2003-2004. One of the shops of the petitioner is situated at Urla (Abhanpur). 2. The petitioner's petition is that he was gronted licence for the period froffl 01.04.2003 to 31.03.2004 in the name of AAana Sroup of Country/ Foreign Liquor Shops. One of tiie shops of Mona (?roup is situsted at Urla (Abhcmpur). On 06.07.2003, the Excise Sub-Inspector conducted inspection of the petitioner's shop at 11.40 a.m. At that time, the pstitioner was not present in the shop ond the Inspector obtained the iignature of one Radheyshyam Barik who was present in the shop in the capacity of petitioner's authorized agent. The petitioner's servants and h- authorized agenf-were turned out of the shop and entire inspection was conducted in the back of the petitioner and his servants. The signature of the authorized agent of the petitioner nsmeiy, Radheyshyam Barik was obtained by respondent No.5. 3. It has been further mentioned that show cause notice was serrt by the Coilector, Raipur, on 09.07.2003 based on the alleged inspection report submitted by respondent No.5 alleging that accounts were not kept properly, inspection book was not produced and frorn the box of Royal Master unused hoiograms for the year 2002-2003 bearing Nos.016200001 to 016200101 (total 101) were found. The said show caused notice for cancelling of licence was issued under Section 31 of the Chhatt-isgarh Excise Act, 1915 ftiereinafter referred to as the Act'), a copy of which is Annexure P-1. After completion of the inspection, copy of the inspection report and supporting documents were not supplied to the petitioner. Therefore, before giving reply to the show cause notice, the petitioner demanded the copies of the documents vide his letter dated 11.07.2003 (Annexure P-2) and the copies of the same (Annexures P-3 to P-6) were delivered by the respondents. The endorsement of Radheyshyam Barik was obtained by cosrcive method. There was interpoiation on the word 'seal' in the chargs sheet and seizure Panchanama, and the construction of sentence also shows that the authority' has made certain monipulations while preparing the charge shest ond Panchanama. On 15 July, 2003, reply 3 was submitted by the petitioner to the Co!lector, Raipur, in which all the objections were raised. In spite of the fact that the trial of the offence does not fall within the jurisdiction of the Coliector, even then instead of dropping the proceedings initiated by the Collector under Section 31 of the Act, the Collector proceeded with the matter. The t. act of respondent No.SWAs with mala fide intention against the K. <• petitioner and only motive of respondent No.SUB^to cance! the licence of the petitioner's shop. Apprehending the atti'ftjde of respondent No.3, the petitioner submiti'ed a representation to the Commissioner (Excise), Raipur, but the Commissioner also not exercised his power. The copy of representation dated 25.07.2003 submitted by the petitioner to the Commissioner is Annexure P-8. The action of respondent No.3 issuing show cause notice to the petitioner under Section 31 of the Act on the basis of the charge sheet dated 06.07.2003 is arbitrary, iilegal and contrar/ to the law applicabls to the facts and circumstances of the case. The perusal of the documents reveals that entire report is Q concocted one and the consent of the petitionsr's authorized agent with regard to the departmental decision has been obtained by coercion. Respondent No.3 faiied to see that the holograms are kept in the custody of the Commissioner (Excise) and if unused holograms have been found in any other piace, then it becomes a criminal offence which can be tried by a competent Court. So far as charge regarding non-production of inspection book and non-maintenance of proper account books is concerned, it is not covered under Section 31 or the Aet, but the same [s covered under Section 39 of the Act of which the liability of the licence has been prescribed under Section 44 of the Act. Therefore, it is prayed that the Court may call for the entire record ond quash the show cause notice dated 09.07.2003. The Court may be pleased to quash the order dated 30 July, 2003 and quash the memorandum dated 31.07.2003, issued by the Collector, Raipur, putt-ing the petitioner's shop into auction. /^7) ^^ 4. Return has been filed on behalf of the State/respondents in which it has been mentioned that on 06.07.2003, the Excise Sub-Inspector, Circle No.2, Raipur, inspected the shop of the petitioner and submitted an inspection report. It has been mentioned in the inspection report that the petitioner has not maintained the correct accounts of the foreign liquor, brand-wise. The Sub-Inspector has aiso seized the holograms as mentioned in the petition. The holograms are fixed on the bottles of the foreign liquor to ensure that the liquor containing in the bottle is already excise duty paid as well as to atso ensure that the liquor in the bottle came from !awful sources. The hologram is a 'Security Document' which is being supplied oniy to the manufacturers of foreign liquor and they are required to be kept under the strict security and affixed by maintaining a proper account by the manufacturer concerned. It is not supposed that the hologram may be found in the possession of the petitioner, because it is a securit/ document and being supplied oniy to the manufacturers. Finding of the hologram in the possession of the petitioner shows that he is involved in the illegal trafficking in foreign iiquors. The petitioner was sntitled to make an qapeal before the Excise Comrnissioner, but he has not filed any appeal before the Excise Commissioner and rushed to this Court directiy, which is pre-mature. Therefore, the writ petition be dismissed. 5. I have heard learned counsei for the petitioner and learned Additiona! Advocate Genera\ for the State/respondents. 6. The main argument of the learned counsel for the petitioner \s that no prescribed format was provided by the Excise bepartment, so that the petitioner should maintain daiiy accounts as envisaged in Rule 20 of 'Chhattisgarh Excise Settlement of Licences for Rstail Saie or Country/Foreign Liquor Kules, 2002' (hereinafter referred to as 'the genera! licence conditions'). As far as non-providing of inspection book, the agent md 1'he employees of the petitioner were ousted from the ^ ^kf^ shop, hence there was no occasion for them to provide the inspection note book. On the contrary, whole record was taken by the inspecting team. The learned eounsel further submitt'ed that the bare perusai of the Panchanama, the inspection note, memorondum of charges (Annexure P-3), seizure Panchcxnama (Annexure P-4) and Panchanama (Annexure P-5) shows that there are interpolations in these documents, in which the word 'seal' was written before the word 'box' and iater on this word was interpolated in order to show this word as deleted. This act of the inspection team and the inspector itself shows that these interpoiations were made later on and the copies of these documents were not supplied on the spot to the agent of the petitioner. When the holograms were found in the seaied box which were received by the petitioner from the company, then how the petitioner can be he!d responsible. He further submitted that the leamed licencing authority (the Collector) has not given his findings on these points. 7. On the other hand, the !earned Additional Advocate Seneral appearin; on behalf of the State/respondents supported the impugned order of the Collector and argued that eorrect procedure has been followed by the Collector before cancelting the licence. He submitted that in the writ jurisdiction this Court connot sit as a Court of qapeal to scrutinize and examine the finding of the Collector. 8. After hearing the arguments of both the partiss, I have perused the relevant documents as also the impu9ned order dated 30 Juiy, 2003, cancelling the licence of the petitioner. 9. TTie perusal of the show cause notice and the charge memorandum (Annexure P-3) shows that at the time of inspection of the foreign liquor shop it was found that private account book (ow wr?) was found: brand-wise accounts of foreign liquor ha^tnot been maintained and the inspection book was not provided. Therefore, this violates Rules 20 & 22 of general licence conditions. At the time of inspection, 101 unused 6 hotograms from the carton of Royal Master were found which is violative of Rules 14 and 23 (1) (a) of general licence conditions. "Hie learned Collector after issuing the show cause notice, providing copies of the documents to the petitioner ond after hearing the learned counsel for the petitioner passed the impugned order. 10. If we look into the explanation submitt'ed by the petitioner, in response to the show cause notice regarding the violation of rufe 20 of the general licence conditions, reply has been submitted on behalf of the petitioner that the accounts were maintained as per the directions given by the Department to the licensee and the account book which has been seized is the account book of the shop. It is incorrect to say that it is a private account book. As far as the question of maintaining the accounts book, brcmd-wise, the accounts book has been maintained accor'ding to the dir'ections given by the Department and according to the Act and the general licence conditions. The Department had never directed the petitioner to maintain the accounts book brand-wise/ label-wise. If any such directions are issued by the Department, then a copy of the same be provided to the petitioner in or-der to maintain such accounts in future and to avoid irregutarities. As such the petitioner has not violated the conditions of ftule 9 of ttie general iicence conditions. 11. In para-9 of the explanation given by the petitioner, it has been stated that the inspection team took the inspection book, accounts book and other papers into their possession, the servants of the petitioner- were sent out of the shop, and they took whole control of the shop. Therefore, it is incorrect to say that the inspection book was not handed over to them. Therefore, the petitioner has not violated Rules 20, 22 & 32 of the general licence conditions. In para-15 of the explanation, it has been specifically mentioned that papers regarding the holograms, they have been faisely prepared and the word 'seal' has been interpolated which itself shows that it has been done with mala fide intention. Moreover, these holograms are supposed to remain with the distillers and the same are provided by the Excise Department to the distillery. An enquiry should hsve been instituted as to how these holograms were found in the shop. Moreover, these holograms were found in the sealed box and if these holograms were put in the seated box by the distiller/ before deliver/ to the petitioner, then the petitioner is not responsible for that. 12. A perusa! of the impugned order shows that the learned Collector has simply referred to rules at page 4 of the order. It has been mentioned in the impugned order at para-7 that Rule 6 of the general licence conditions prescribed that regular and correct account shall be maintained and Rule 17 prescribed that the rate list shatl be shown in the shop. Therefore, it is necessary that brand-wise, label-wise account book shou!d be muintained, and the contention of the petitioner is without force. But, the learnsd Collector has not observed anything on the allegations of the petitioner that no special instructions, directions or circulars were ever issued with regard to maintenance of separate accounts brand-wise/label-wise and if such circuiars have been issued, the saffie should be brought to the notice of the petitioner, so that in future, he should maintain accounts book in the prescribed proforma. Similarly, about the hoiograms, the Coiiector has not given his finding with regard to interpolations, on the word 'seal', as to how this has happened and occurred. It creates a iittle doubt because the seizure Pcnchanama (Annexure P-4) was prspared at 11.40 a.m. on 06.07.2003 and in this document the word 'seai' before the word 'box' has been interpohted, whereas, Panchanama (Annexure P-5) was prepared at 5 p.m. on 06.07.2003 i.e. after five hours and 20 minutes and in this document also the word 'seal' has been interpolated. Similarly, charge sheet (Annexure P-3) was issued on 07.07.2003 and in this document aiso the word 'seal' hdS been overwriften. This shows that in all the three documents (Annexures P-3 to P-5), interpolations ^,'- were made at one time i.e. after preparation of aii the three documents on 06.07.2003 and 07.07.2003. The atlegation of the petitioner that the copies of these documents were not deiivered to him at the time of the inspection itself shows that these interpolations had been made on the back of the agent of the petitioner namely, Radheyshyam Barik. It is clear from the order of the Coilector that copies of these documents were made availabie to the petitioner on being asked by hi'm aftsr appearing before the Collector and no finding has been recorded by the Collector on this account as to when and how these interpolations were done. Similarly, the petitioner has specificaily in his explanation stated that his employees wsre sent out of the shop, therefore, there was no question of giving the inspection book to the inspecting team. 13. Thererore, looking to the above irregularities happened in the process of inspection of the shop of the petitioner, the learned Coilector shou!d have after enquiring from the Excise Department by giving 1+iem opportunity to explain about the points which were raised by the petitioner, he ought to have r-ecorded his finding after giving the opportunity to both the parties, which has not been done. Evsn though, a perusal of the order sheets shows that opportunity was given to the petitioner's counsel that if he wants he can call the witness ond cross examine, but the same was not availed of by the petitioner, but the principleof natural justice and the propriety demands •rtiat the Coliector should have passed the order on the points raised by the petitioner. Since the Collector has not recorded the finding on these points, I am of the opinion that the impugned order deseryes to be set asids only on this ground. As far as violation of Rule 23 (1) (a) of the general licence conditions that the rate list was not shown in the shop is concerned, since it has not mentioned in the charge sheet, 1+iis cannot be made a ground. 14. Now coming to the question that alternative remedy was ovailabSe to the petitioner and he should have exhausted that remedy first before }6' fiting this writ petition, as has been observed by the Division Bench of the Madhya Pradesh f-ligh Court, in para-9, in the case of Sukhlai Sen vs. Coltector. bistt. Satna and others reported in AIR 1969 Madhya Pradesh 176, "It is no doubt true that the High Court may refuse to exercise its Jurisdiction under Article 226, if the petitioner did not avail of alternative remedies, but the rule requiring the exhaustion of alternative remedies before the writ wiil be issued is not a rule of law but is a rule of policy. convenience and discretion. The 1-figh Court wil! readily issue a writ of cerTiorari in a case where there has been a denial of natural justice." This was laid down after reiying upon the decision of 1-he Hon'ble Supreme Court in the case of State of U.P. vs. Mohd. Nooh reported in AIR 1958 SC 86. In the case of Sukhla! Sen (supra) the Court further held 1-hat "The Coliector in cancelling the petitioner's iicence, did not follow the requirements of natural Justice. This cfefect is fundamental and it woulcf not be a sound exercise of discretion to refuse to interfere simply on the ground that The petitioner could have gone up in oppeal." 15. Similarly, the Hon'bie Apex Court in the case of Union of India and another vs. State of Haryana and another reported in (2000) 10 SCC 482 held that "Alternative remedy — when not an adequate remedy — ImporTance of question raised — Question of law raised — Union of India in dischar9e of their statutory functions under Teiegraph Act providing telephone connections to subscribers — Respondent State by amending their respective sales tax statutes as a result of which respective assessing authorities under those amended taws assessing sales tax on the rentals being chargecf for suppiy of telephones — Union of India fiiing writ petitions in respective High Courts challenging the levy — Held, High Courts were not justified in doing so — Question raised was legal which required determination of whether provision of tefephone connections and instrument amounted to sale and even so why was Union of India not exempt from payment of sales tax under the respective statutes — 10 Question was of fundamental character which should have been dealt with by the High Courts instead of leaving the matter to statutory appeal." 16. Similarly, the Hon'ble Apex court in the case of J.M. Saxi & Co.. Sujarat vs. Commissioner of Customs. New Kandla and another reported in (2001) 9 SCC 275 has held that "Alternative remedy/exhaustion of remedies — Incapability of rule of alternative remedy — Where recourse +o alternative remedy was onerous involving deposit of huge amount (Rs.46 iakhs) and demand itself was barred by !imiTation, hsld, interference by High Court on merits was necessary despite alternative remedy being available." 17. In view of the above law iaid down by the Hon'bie Apex Court, if we look into the allegations in the present case and the allegations of bias which have been levelled by the petitioner, I am of the opinion that it is a fit case in which this Court shou!d exercise its jurisdiction under Article 226 of the Constitution of India instead of leaving the petitioner at the mercy of the appetlate authority. IS.The other point which has been raised by the petitioner is •t+iat inspection of one shop was conducted by the inspecting team, whereas licence of alt the four shops belonging to the petitioner has been cancelled by the uuthority. It is not disputed that as per Rule 4 of general iicence conditions, licence for the group of four shops was grouited to the petitioner. Rule 4 (i) of the general licence conditions lays down that "Sroups of each of the three !iquor shops, geographicaliy neighbouring shali be formed by the licensing authorit/. Sroupwise licences shail be issued under the rules". Rule 4 (ii) lays down that "Licensing authority shal! be authorized to reduce any one shop or to add one/two shops in the group, with a view to augment of the revenue, but the shops shall not be of the same selling capacit^'." Under this scheme, the licence of four shops was granted to the petitioner including the shop in question, the inspection of which was conducted by the inspecting team. Ruie 8 (b) of the genera! licence conditions ; VI however, lays down that shop-wise licence fee minimum month-wise guaranteed quantity, security amount, and annual quantity of ea.ch shai be separate. Section 31 Of the Act loys down that the authority' granting any licence, permit or pass under this Act may cancel or suspend it. Therefore, the submission made by the learned counsel for the petitioner is that the learned authority was not right in cancelline the licence of other three shops, because iicencs for four shops was granted to the petitioner's group and no irrsgularity was found in other three shops. Therefore, the !icence for those shops should not have been canceiled. 19. The learned Additional Advocate 6eneral appearing on behaif of the State/respondents placed reiiance on Sub-rule (4) of Rule 23 of the general licence conditions and argued that Sub-ruie (4) prescribes that in ccise the iicence is cancelled on the above mentioned grounds the licensee may also be biacklisted and debarred froan holding any excise licence in future. As far as this provision is concemed, the licence has not been cancelled under Rule 23 of the general licence conditions. Therefore, Sub-rule (4) is not appiicable in the present case. Licence has been cancelled under Sub-section (b) (1) of Section 31 of the Act. Since separate licence has been granted for other three shops and no inspection was conducted by the inspecting team of those shops, I am of the opinion that the iearned Coliector was not within his right in cancelling the licence of those other thrse shops. 20.In view of the above, I am of the opinion that the matt-er must be sent back to the Collector to record his finding on ali the points raised by the petitioner after giving opportunity to the Department as well as *o the petitioner. 21. In the result, the order of the learned Coilector dated 30t July, 2003 is quashed. As far as concelling the licence of foreign liquor shop of the petitioner situated at Urla (Abhanpur) is concerned, the matter is being 12 ^' ./s~\ sent back to the Collector with a direction to pass the order afresh after giving opportunity to the petitioner and the Department in the light of the observations made hereinabove, As far as the question of other three shops is concerned, the ticence of those three shops stands restored and the Collector is directed to allow the petitioner to run those three shops. The order of ttie Cotlector dated 31st July, 2003 puti-ing the petitioner'sshop into auction is also quashed. 22.The writ petition stands disposed of. Sd/- L.C.BHADOO JUdge Soma \ 'Y