Case Note & Summary
The Petitioner, Manjuben Mukesh Tandel, proprietor of Infinity Traders, held two excise licenses for wholesale sale of Indian Made Foreign Liquor (IMFL) and country liquor in Daman. On 2 and 3 May 2020, the Deputy Commissioner of Excise conducted a surprise check and found a huge discrepancy between physical stock (only 10 cases) and online IERMS records (15,498 cases). A notice was issued on 4 May 2020, and the Petitioner replied on 7 May 2020, attributing the discrepancy to incomplete record-keeping due to the Covid-19 pandemic. The Collector-cum-Commissioner of Excise, Daman, on 19 May 2020, cancelled both licenses, citing violations of Rule 104(1) (appointment of manager without intimation), Rule 103 (lack of sign board), and failure to maintain proper stock records. The Petitioner appealed to the Administrator, who dismissed the appeal on 3 November 2020. The Petitioner then filed Writ Petition No.5697 of 2021, and a Division Bench of the Bombay High Court set aside the Administrator's order on 21 September 2021 for being unreasoned and remanded the matter to the Advisor to the Administrator. After hearing the parties, the Advisor passed a fresh order on 1 February 2022, again dismissing the appeal. The Petitioner again approached the High Court under Article 227. The Court examined the facts and found that the Petitioner had indeed violated the rules; the explanation regarding Covid-19 was not sufficient to justify the massive stock discrepancy. The Court held that the Advisor's order was reasoned and proper, and no interference was warranted. The petition was dismissed.
Headnote
A) Excise Law - License Cancellation - Stock Discrepancy - Goa, Daman and Diu Excise Duty Rules, 1964, Rules 103, 104(1) - The Petitioner's licenses were cancelled due to huge stock discrepancy (10 cases physically found vs. 15498 cases as per IERMS), appointment of manager without intimation, and lack of sign board and CCTV cameras. The Court held that the violations were serious and the Petitioner's explanation of Covid-19 pandemic was insufficient. (Paras 3.1-3.8, 4-6)
B) Administrative Law - Natural Justice - Reasoned Order - Remand - The Division Bench had earlier set aside the Administrator's order for lack of reasons and remanded the matter to the Advisor. The Advisor passed a reasoned order after hearing the parties. The Court held that the Advisor's order was proper and did not suffer from any infirmity. (Paras 3.6-3.8, 5-6)
Issue of Consideration
Whether the cancellation of excise licenses by the Collector and affirmed by the Advisor was legal, proper, and correct, and whether the Petitioner was afforded adequate opportunity of hearing.
Final Decision
The High Court dismissed the Writ Petition, upholding the order of the Advisor to the Administrator dated 1 February 2022 and the cancellation of excise licenses.
Law Points
- Natural justice
- Reasoned order
- Remand
- Excise license cancellation
- Stock discrepancy
- Violation of excise rules
- Covid-19 pandemic as defense
Case Details
2023 LawText (BOM) (09) 87
Writ Petition No.5060 of 2022
Mr. Bhavesh Parmar with Ms. Reshma Nair i/by Devmani Shukla, for Petitioner; Mr. Hiten Venegaonkar, for Respondents
Commissioner of Excise, Daman; Dy. Commissioner of Excise cum Dy. Collector, Daman and Diu; The Administrator, Union Territory of Daman and Diu; The Advisor to Administrator, Union Territory of Daman and Diu; Union of India through Union Territory of Daman & Diu
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Nature of Litigation
Writ Petition under Article 227 of the Constitution of India challenging the order of the Advisor to the Administrator affirming cancellation of excise licenses.
Remedy Sought
Petitioner sought quashing of the order dated 1 February 2022 passed by the Advisor to the Administrator and restoration of her excise licenses.
Filing Reason
The Petitioner's excise licenses were cancelled by the Collector-cum-Commissioner of Excise on 19 May 2020 due to stock discrepancy and other violations, and the appeal was dismissed by the Advisor on 1 February 2022.
Previous Decisions
The Collector-cum-Commissioner of Excise cancelled the licenses on 19 May 2020. The Administrator dismissed the appeal on 3 November 2020. The Division Bench of Bombay High Court set aside that order on 21 September 2021 and remanded to the Advisor, who dismissed the appeal on 1 February 2022.
Issues
Whether the cancellation of excise licenses was justified given the stock discrepancy and other violations.
Whether the Petitioner was afforded adequate opportunity of hearing and whether the Advisor's order was reasoned.
Submissions/Arguments
Petitioner argued that the stock discrepancy was due to incomplete record-keeping during the Covid-19 pandemic and that the violations were minor.
Respondents argued that the Petitioner violated multiple rules, including appointment of manager without intimation, lack of sign board, and huge stock discrepancy, warranting cancellation.
Ratio Decidendi
The cancellation of excise licenses was justified due to serious violations of the Goa, Daman and Diu Excise Duty Rules, 1964, including a massive stock discrepancy (10 cases physically vs. 15498 cases as per records), appointment of manager without intimation, and lack of sign board and CCTV cameras. The Petitioner's explanation of Covid-19 pandemic was insufficient to excuse such gross non-compliance.
Judgment Excerpts
The Collector was of the view that the Petitioner had appointed a Manager for the said outlet without intimation to or knowledge of the Excise Department in violation of the provisions of Rule 104(1) of the Goa, Daman and Diu Excise Duty Rules, 1964.
CCTV cameras were not available and that only 10 cases of different brands of liquor / beer were found physically lying in the godown, whereas IERMS stock details showed the stock of 15498 cases.
Procedural History
On 2-3 May 2020, surprise check revealed stock discrepancy. Notice issued on 4 May 2020, reply on 7 May 2020. Collector cancelled licenses on 19 May 2020. Appeal to Administrator dismissed on 3 November 2020. Writ Petition No.5697 of 2021 filed; Division Bench set aside order on 21 September 2021 and remanded to Advisor. Advisor dismissed appeal on 1 February 2022. Present Writ Petition filed on 13 September 2023.
Acts & Sections
- Goa, Daman and Diu Excise Duty Rules, 1964: Rule 103, Rule 104(1)
- Constitution of India: Article 227
