Case Note & Summary
The petitioner, M/s Vidarbha Bottlers Pvt. Ltd., a company incorporated under the Indian Companies Act, 1956, held a licence for manufacturing country liquor. On 13/05/2016, the Commissioner of State Excise (respondent No.2) passed an order cancelling/refusing to renew the licence under Section 54 of the Maharashtra Prohibition Act, 1949, citing alleged sales tax dues and relying on a Government Resolution dated 03/09/2005. The petitioner challenged this order before the Bombay High Court. On 13/06/2018, a Division Bench of the High Court passed an interim order noting that the respondents could not demonstrate any provision in the Act empowering them to cancel/refuse renewal on the ground of sales tax dues, and directed de-sealing of the establishment and a fresh decision on renewal ignoring the Government Resolution. Pursuant to this, on 28/06/2018, respondent No.2 again refused renewal, and on 05/12/2018, the Minister of State (respondent No.1) dismissed the petitioner's appeal. The petitioner then filed the present writ petition. The High Court examined the provisions of the Maharashtra Prohibition Act and found no power to refuse renewal for sales tax recovery. It held that the authorities cannot act as agents of the Sales Tax Department and that the Government Resolution cannot override the statute. The court quashed the impugned orders and directed the respondents to renew the licence within two weeks, subject to compliance with other statutory requirements.
Headnote
A) Excise Law - Licence Renewal - Sales Tax Dues - Maharashtra Prohibition Act, 1949, Section 54 - The State Excise authorities refused to renew the petitioner's country liquor manufacturing licence on the ground of sales tax arrears, relying on a Government Resolution. The High Court held that there is no provision in the Maharashtra Prohibition Act empowering the authorities to cancel or refuse renewal of a licence for recovery of sales tax dues. The authorities cannot act as agents of the Sales Tax Department. The Government Resolution cannot confer such power. The impugned orders were quashed and the respondents were directed to renew the licence. (Paras 2-8)
Issue of Consideration
Whether the State Excise authorities can refuse to renew a licence for manufacturing country liquor under the Maharashtra Prohibition Act, 1949 on the ground that the licensee has sales tax dues.
Final Decision
The writ petition is allowed. The impugned order dated 05/12/2018 passed by respondent No.1 and order dated 28/06/2018 passed by respondent No.2 are quashed and set aside. The respondents are directed to renew the licence of the petitioner within a period of two weeks from the date of the order, subject to compliance with other statutory requirements.
Law Points
- State Excise authorities cannot refuse renewal of liquor licence for recovery of sales tax dues
- No power under Maharashtra Prohibition Act to act as agent of Sales Tax Department
- Government Resolution cannot override statutory provisions
