Case Note & Summary
The petitioner, Suresh Krishnaji Lakudkar, held a CLIII license under the Bombay Prohibition Act, 1949, for the sale of foreign liquor. In Writ Petition No. 4474 of 2008, he challenged the demand for arrears of license fee amounting to Rs. 5,25,000 for the years 2000 to 2004, even though his license was granted only in 2004. The respondents issued communications dated 18.03.2008, 30.05.2008, and 08.08.2008 demanding payment. The petitioner contended that the demand for arrears prior to the grant of license was arbitrary and without authority of law. In Writ Petition No. 4839 of 2009, the petitioner challenged the order dated 27.07.2009, which rejected his application for shifting the licensed premises on the ground that the license had lapsed. The petitioner argued that the license could not be treated as lapsed without any notice or opportunity of hearing. The Court, after hearing both sides, held that the demand for arrears for the period before the license was granted was unsustainable and quashed the demand. The Court also held that the license cannot be deemed to have lapsed without following the principles of natural justice, and directed the respondents to consider the petitioner's application for shifting afresh after giving him a hearing. The petitions were allowed with no order as to costs.
Headnote
A) Excise Law - License Fee Arrears - Demand for Period Prior to Grant - Bombay Prohibition Act, 1949 - The petitioner was granted CLIII license in 2004, but the respondents demanded arrears of license fee for the years 2000 to 2004, i.e., prior to the grant. The Court held that the demand for arrears for a period before the license was granted is unsustainable and arbitrary. (Paras 2, 5) B) Excise Law - Lapse of License - Natural Justice - Bombay Prohibition Act, 1949 - The petitioner's application for shifting the licensed premises was rejected on the ground that the license had lapsed. The Court held that the license cannot be treated as lapsed without issuing a notice and providing an opportunity of hearing to the licensee, as such action violates principles of natural justice. (Paras 3, 6)
Issue of Consideration
Whether the demand for license fee arrears for the period prior to the grant of the license is valid, and whether the license can be treated as lapsed without notice and opportunity of hearing.
Final Decision
Both writ petitions are allowed. The demand for arrears of license fee for the period prior to the grant of license is quashed. The order rejecting the application for shifting is set aside, and the respondents are directed to consider the application afresh after giving the petitioner an opportunity of hearing. No order as to costs.
Law Points
- License fee arrears cannot be demanded for period prior to grant of license
- License does not lapse automatically without notice and opportunity of hearing
- Principle of natural justice applies to administrative decisions affecting license rights
