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Chandan Mal Vs. the State of Rajasthan - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Writ Petition Nos. 3229, 3302, 3387, 3397 of 1974 and 22 and 1631 of 1976
Judge
Reported in1980WLN(UC)137
AppellantChandan Mal
RespondentThe State of Rajasthan
DispositionPetition allowed
Cases ReferredHar Lal vs. Stateof Raj.
Excerpt:
.....for tie entire shortfall and the said notices do not taken into account, the fact that there was short supply of liquor at the government warehouses from where the petitioners were required to draw their supplies of liquor at various times in the year 1967.68 and the proceedings for the recovery of the aforesaid demand, including the orders for attachment of the properties of the petitioners, are quashed it will, however, be open to the respondents to make fresh demand against any of the petitioners for the recovery of the deficit in respect of the short-fall, which can be attributed to the inability of the said petitioner or petitioners to draw liquor from the government warehonses during the year 1967 68 while making the said demand, the appropriate authority will, amongst other..........of any explanation by the respondents to the aforesaid documents it must be held that there was short supply of liquor to the petitioner from the warehouse at phulera during the months of may to september, 1967 on account of non-availability of liquor at the said warehouse. this means that a part of the short fall is to be attributed to the non availability of liquor at the warehouse at phulera.11. in (sic)jecvrajps v. state of rajasthan s.b civil writ petition no. 163p of 1976, the petitioner had been granted a licence for retail sale of country liquor at the liquor shop at harji and sendriya. the supply of liquor for both the shops was to be obtained from the government warehouse at jalore. with regard to the shop at harji, the petitioner has placed on record, the gatepasses with.....
Judgment:

S.C. Agarwal, J.

1. In these six writ petitions filed under Article 226 of the Constitution of India, the petitioners have challenged the validity of the notices of demand and the proceedings for recovery of the said demands in respect of the licenses for retail sale of Country Liquor issued in their favour. As these writ petitions raise common questions they are disposed of by a common order.

2. The retail sale of Country Liquor in the State of Rajasthan is regulated by the provisions of the Rajasthan Excise Act, 1950 (hereinafter referred as 'the Act') wherein, it is laid down that no excisable article shall be sold except in accordance with the terms and conditions of a licence granted in that behalf and provision is made with regard to grant of licence In exercise of the powars conferred by the Act, the State Government h's framed the Rajasthan Excise Rules 1965 (hereinafter referred at the Rules'). The Rules prescribe the various modes by which licences may be granted. One of the modes prescribed in the rules in with regard to grant of a licence under the guarantee system and provisions with regard to the same are contained in Chapter VII-A of the Rules. In a licence under the guarantee system the licensed guarantees to draw from the Government warehouse and a sale in a finacial year or the part there of country liquor of a specified value which is called the amount of guarantee end the licence is required to deposit 10% of the amount of guarantee by way of security. The licensee is also required to draw from warehouse every month liquor equivalent in value to 1/12th of the amount of guarantee and in case, the licensee fails to fulfil the terms of the guarantee, the amount of(sic)deducit can be recovered from out of the security amount deposited by him and also from his movable and immovable property.

3. In Balmukand v. State of Rajasthan SB civil writ petition No. 1797 of 1969, decided on July 27, 1971, a Iearned Judge (Tyagi. J , as he then was) had held that the State is not entitled to raise the demands against a liquor contractor for the deficit amount under the guarantee system because in essence, it is realising excise duty on undrawn liquor. The aforesaid decision was reversed in appeal, by a (sic)Diuision Bench of this Court in State of Rajasthan v. Balmukand 1974 W.L N. 367, on the view that the recovery in relation to short-fall occasioned on account of failure on the part of the liquor contractor to fulfil the terms end conditions of the licence, squarely falls withing the defini ion of the term 'Excise Revenue' as defined in Section 3(8) of the Rajasthan Excise Act. The aforesaid judgment of this Court was affirmed by the Supreme Court in Pannalai v. State of Rajasthan ( : [1976]1SCR219 )

4. The petitioners in these writ petitions were granted licences under the guarantee system for retail sale of country liquor during the year 1967-68. The particulars with regard to the amount of the guarantee undar their respective licences, the warehouse from where they could draw their supply of country liquor, the amount of short-fall that had occurred during the year 1967-68 and the amount of demand in respect of which recovery is being made against them are fully set out in the schedule annexed hereto and the tame shall form the part of this order.

5. The case of the petitioners in all these writ petitions is that during the year 1967-68, there was shortage of country liquor in the entire State of Rajasthan on account of low production of liquor in the distilleries and that country liquor was not available at the Government Warehouses from where the petitioners were required to draw their supply of liquor and that, as a result thereof the petitioners could not draw liquor from the Warehouses as per their requirements. According to the petitioners the reason for their inability to fulfil their obligations with regard to the amount of guarantee was the failure on the part of the respondents to supply liquor to the petitioners as per their demands and that the petitioners cannot be held liable for the shortfall in the amount of guarantee.

6. In the replies that have been filed on behalf of the respondents, it has been pleaded that the State is not at fault for non-supply of liquor to the petitioners and that liquor was supplied to the petitioners as and when demanded and that the petitioners have to blame themselves for the non-fulfilment of the conditton with regard to the amount of guarantee.

7. It cannot be disputed that the licensee would be liable for deficit amount of the short-fall in the guarantee if the short-fall has been (sic)occassioned on account of inability of the licensee to draw the liquor from the Government Warehouse. But the licensee can not be held liable for the deficit amount in a case where the short-fall in the amount of guarantee has been occasioned due to the non availability of liquor at the Warehouse and the consequent inability on the part of the Excite authorities to supply liquor to the (sic)licence as per his requirements.

8. The decision of Dwarka Prasad J , in Shanti Lal v. State of Rajasthan S.B. Civil Writ Petition No. 3889 of 1974 and other connected writ petitions, decided on July 5, 1973 on which reliance has been placed by the learned Deputy Government Advocate also proceeds on this basis. to that case, the learned Judge had held that in order to succeed in his writ petition, the (sic)licensec will have to prove that in his case the short fall was caused on (sic)Bcccunt of non-supply of the liquor to him by the Excise Authorities as and when demsrded by him either wholly or partially.

9. It is therefore, necessary to examine the facts of each ease in order to determine whether the short-fall was occasioned on account of then in availability of liquor at the Government Warehouse in the year 1967 68 as alleged by the petitioners.

10. In Rom Lei v. State of Rajasthan S B Civil Writ Petition No. 22 of 1976, the petitioner had bren granted licence for tale of country liquor at the liquor shop at Dudu and supply of liquor was to be drawn from the Wsrebruse at Phulera. The petitioner has placed on record the telegrams dated May 9, 1967, June 8, 1967 and June 21, 1967 sent by him to the Excise authorities complaining that due to non-availability of liquor at the Ware house, non-supply of 1 quor to him due to (sic)nonavailability of the liquor at the Ware house and has further stated in the months of July and August also be had to close his shop because liquor was not available. The petitioner has also produced the Inspection-cotes recorded by the Excise Inspector, Phagi According to the inspection-note dated June 29, 1967, the petitioner received 180 (sic)litres plane liquor, which was sold in a single day and in the month of June, the shop was closed for 21 days In the inspection note dated July 18, 1967, the Inspector has noticed that on account of non-availability of the liquor, there was shortfall in the guarantee. In the inspection note dated August 24, 1967, the Inspector has stated that the shop was closed for 4 days in the month of August, 1967 due to non supply of liquor. In the inspection note dated September 13, 1967 the Inspector has stated that in the month of August, 1967 the shop was closed for 7 days and that in the month of September till then there was no stock of liquor in the shop. In addition to the aforesaid documents, the petitioner has also placed on record the gate passes with regard to delivery of liquor issued from the warehouse at Phulera. From the said gatepasses, it appears that the liquor in respect of which the money was deposited by the petitioner on May 10, 1967 was not fully supplied to the petitioner till June 10, 1967 and that the liquor in respect of which money was deposited on September 9, 1967 was not fully supplied till October 10, 1967. In the reply filed on behalf of the respondents, there has been no denial of the documents filed as annexures to the writ petition. In the absence of any explanation by the respondents to the aforesaid documents it must be held that there was short supply of liquor to the petitioner from the warehouse at Phulera during the months of May to September, 1967 on account of non-availability of liquor at the said warehouse. This means that a part of the short fall is to be attributed to the non availability of liquor at the warehouse at Phulera.

11. In (sic)Jecvrajps v. State of Rajasthan S.B Civil Writ Petition No. 163P of 1976, the petitioner had been granted a licence for retail sale of country liquor at the liquor shop at Harji and Sendriya. The supply of liquor for both the shops was to be obtained from the Government Warehouse at Jalore. With regard to the shop at Harji, the petitioner has placed on record, the gatepasses with regard to the delivery of liquor issued by the warehouse at Jalore, which show that the liquor in respect of which the money had been deposited on 12th April, 1967 was not fully supplied till 10th June, 1967. Similarly, with regard to the shop at Sendriya, the petitioner hat placed on record, the gate-pastes to how that liquor in respect of which money deposited on May 26, 1967 was not fully supplied till 10th June, 1967. So far as the shop at Harji is concerned, the petitioner has also pointed out that the licence for the said shop was cancelled on February 3, 1968 and said order of canoe-Nation of the licence was set aside in appeal by the Excise Commissioner by his order dated March 10. 1968 and that the petitioner was able to reopen the shop on 11th March, 1968 and that during the period from February 3, 1968 to March 11, 1968 the petitioner could not sell liquor at the shop and that aforesaid period during which the petitioner could not sell liquor at the shot ought to have been excluded for the purpose determining the liability of the petitioner for the short fall for the year 1967 68. The petitioner has also submitted that at the time when the licence for the shop of (sic)Harji was cancelled on February 3, 1968, there was stock of liquor worth Rule Section 3,543/-whioh was seized by the Excise Inspector and that the petitioner is entitled to reimbursement of the value of the said liquor which was seized There is no specific denial of the aforesaid averments in the reply filed on behalf of the respondents and, therefore, it must be held that there was short supply of liquor at the Government warehouse at Jalore in the months of April, May and June 1967 and that one of the reasons for the short fall in the year 1967-68 was the non-availability of adequate supplies of liquor at the warehouse at Jalore and other reason for the petitioner's failure to fulfil the condition with regard to the amount guarantee in respect of the shop at Harji was the inability of the petitioner to run the said shop during the period from February 3, 1968 to March 11, 1968 on account of the cancellation of his licence.

12. In Chandunmal v. State of Rajasthan S B Civil Writ Petition No. 3239 of 1974, the petitioner bad been granted a licence for retail sale of country liquor at the liquor shop at Sagwara. The supply of liquor for the said shop was required to be drawn from the Government Warehouse at Sagwara. The petitioner has placed on record the telegrams dated August 21, 1967, November 26, 1967, December 26, 1967 addressed to the Commissioner for Excise, Rajasthan, Jalpur, a and the District Excise Officer, Udaipur, wherein he has referred to non-availability of liquor at Sagwara Warehouse since May 1967. In paragraph 6 of the writ petition, the petitioner has also fully set oat the letter dated March 10, 1969 addressed by the District Excise Officer, Udalpur to the Excise Coommissioner, wherein, while referring to the short-fall In the amount of guarantee prescribe 3 in the licence of the petitioner during the year 1967-68, the District Excise Officer has stated that on account of shortage of liquor at the warehouse, liquor of the value of Rs, 53,173/-could not be supplied to the liquor shop at Sagwara and further that in the months, of December and March, 60 U.P. liquor was not available at the warehouse and that the petitioner was not able to fulfil the condition with regard to the amount of guarantee due to the Inability of the Government to supply liquor to him. In the reply that has been filed on behalf of the respondents, there is no specific denial of the aforesaid documents. It must, therefore, be held that one of the reasons for the short-fall was the non-supply llability of liquor at the warehouse at Sagwara and the consequent non-supply of liquor to the petitioner as per his demand.

13. In Harlal v. State of Rajasthan S.B Civil Writ Petition No 3387 of 1974 the petitioner had been granted a licence for retail sale of the country liquor at the liquor shop at Jogiwada, Udaipur. The supply of the liquor for the said shop was required to be drawn from the Government Warehouse at Jogiwada. Udaipur. The petitioner has placed on record the photostat copy of the letter dated March 6, 1963 addressed by the District. Excise Office Udaipur, to the Commissioner for Excise Rajasthan Udaipur wherein he has staled that after scrutinising the records of the warehouse, it has been it found that the petitioner had deposited the money for issue of liquor from time to time but on account of shortage of liquor at the warehouse, liquor could not be issued to the petitioner in accordance with the monthly guarantee and that for eight months continuously the amount deposited by the petitioner was more than the value of the liquor that was issued to the petitioner from the warehouse and that this was the reason why the petitioner was not able to fulfil the condition with regard to the amount of guarantee. Annexed to the letter is a chart showing the amounts deposited by the petitioner at the warehouse in each month and the value of country liquor which was issued to him each month. From the said chart it appears that (sic)durirg the months of May to December, 1867, the value of liquor which was issued to the petitioner was less than the amount deposited by the petitioner. In view of the aforesaid letter of the District Excise Officer, the correctness of which has not been disputed by the respondents in their reply, it must be held that one reason why the petitioner has not been able to fulfil the condition with regard to the amount of guarantee was the non-availability of liquor at the warehouse and the consequent non-supply of liquor to the petitioner (sic)lnspite of his demand.

14 In Jogdish Lal v. State of Rojasthan S.B. Civil Writ Petition No. 3302 of 1974, the petitioner had been granted a licence for retail sale of liquor at the liquor shop at Kunwari. In Manohur Lal v. State of Rojasthan S.B Civil Writ Petition No. 3397 of 1974, the petitioner had been granted a licence for retail sale of liquor at the liquor shop of J lchaki. The supply of liquor for both the shops was to brawn from the Government warehouse at Rajnagar. In Civil Writ Petition No. 3302 of 1974, the petitioner has placed on record, the gate passes of Rajnagar Warehouse, which show that the liquor in respect of which money was deposited on January 24, 1968 was not fully supplied till February 25, 1968 and liquor in respect of which money was deposited on February 5, 1968 was not fully supplied till March 23, 1968. In Civil Writ Petition No. 3397 of 1974. the petitioner has placed on record, the gate passes of the warehouse at Rajnagar which show that the liquor in respect of which money was deposited on November 7, 1967 was not fully supplied till November 22, 1967 and the liquor in respect of which money was deposited on December 6, 1967, was not fully supplied till December 15, 1967. The aforesaid documents show that there was shortage of liquor at Rajnagar warehouse, in the months of November and December, 1967 and January and February 1968 and that one of the reasons why the petitioners were not able to fulfill the condition with regard to the amount of guarantee was the non-snpply of iiquor to them lnspite of their demand, from the Rajnagar warehouse, on account of non-availability of the liquor at the said warehouse.

15 Thus, in all the cases, It has been found that the failure on the part of the petitioners to fulfil with the condition with regard to the amount of guarantee was due to the non supply of the liquor to them and the reason for the said, non-supply of liquor to the petitioners was the non availability of liquor at the Government Warehouses Once, it is held that the shortfall was also occasioned due to non availability of liquor at the warehouse and consequent inability on the part of the respondents to supply the liquor to the petitioners as per their demands, the petitioners cannot be held liable for the entire amount of deficit due to the said shortfall. The impugned notices of demand have been issued on the basis that the petitioners are responsible for tie entire shortfall and the said notices do not taken into account, the fact that there was short supply of liquor at the Government Warehouses from where the petitioners were required to draw their supplies of liquor at various times in the year 1967.68 and the proceedings for the recovery of the aforesaid demand, including the orders for attachment of the properties of the petitioners, are quashed It will, however, be open to the respondents to make fresh demand against any of the petitioners for the recovery of the deficit in respect of the short-fall, which can be attributed to the inability of the said petitioner or petitioners to draw liquor from the Government Warehonses during the year 1967 68 While making the said demand, the appropriate authority will, amongst other mutes tike into consideration the availability of country liquor in the entire State of Rajasthan in the year 1967.63 the total monthly requirement of liquor of the various licencees, who were entitled to draw their supplies of liquor from the particular warehouse, the quantity of liquor that was available every month at the said warehouse for distribution to the licensees and the fact that under the terms of the licences issued, to the no, the petitioners were entitled to make good the shortfall of a particular month by the tenth day of the succeeding month. Before Making a determination with regard to the amount of short fall that can be attributed to the petitioner concerned for the purpose of making a fresh demand, the appropriate authority will afford a reasonable opportunity to the said petitioners to show that the said shortfall cannot be attributed to him. The petitioners would be entitled to the refund of the amount deposited by them as security if the respondents fail to initiate any proceedings against them for the purpose of determination of their liability for the shortfall for the year 1967 68 within a period of three months or if as a result of the said determination it is found that no part of the short-fall can be attributed to them In cases, where it is found that the amount of short fall for which any of the petitioners is liable is less than the amount of security deposited by him, the petitioner concerned shall be entitled to the refund of the balance amount after deducting the amount for which he is found liable from the amount of security lying in deposit. In the circumstances of the case the parties are left to their own costs in these writ petitions.

S. No.

No. of Writpetition

Name's of parties

Name of the Warehouse

Amount ofguarantee

Amount ofshortfall

Amount of demand

1

2

3

4

5

6

7

1.

22/76

Ram Lal vs. Stateof Raj.

Phulera

52,420.00

20,137.36

14,895.36

2.

1631/76

Jeev Raj vs. Stateof Raj

Jalore

65,000.00

16,157.20

8,687.14

3.

3229/74

Chandanmal vs.State of Raj.

Sagwara

1,22,560,00

38,14805

25,688.05

4.

3387/74

Har Lal vs. Stateof Raj.

Udaipur

2,20,300.00

79,339.03

57,309.08

5.

3302/74

Jagdish Lal vs.State of Raj.

Rajnagar

21,000.00

5,893.08

3,793.08

6.

3397/74

Manohar Lal vs.Stale of Raj.

-Do-

56,225.00

11.006.84

5,377.84


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