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Jai Bharat Wine Contractor Vs. the State of Rajasthan - Court Judgment

LegalCrystal Citation
SubjectExcise
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Writ Petition No. 964 of (sic)971
Judge
Reported in1979WLN(UC)282
AppellantJai Bharat Wine Contractor
RespondentThe State of Rajasthan
DispositionPetition allowed
Excerpt:
.....due to dharana before madore distillery held petitioner firm is not liable to pay excise duty on short supply;thus according to the terms of the licence, the petitioner firm could have lifted upto the 10th of may and that shortfall which had occurred in the month of april, 1968 and if she petitioner firm could not lift before 10th may, 1965 excess quantity to make good the short fall of the month april, 1968, on account of dharma at the maud re distillery in the month of may, 1968, it cannot be said that the short supply was on account of the fault of the petitioner firm. the petitioner firm is, thererefor, entitled to claim that it is not liable to pay the proportionate excise duty on the short supply duting he month of april, may, june and july, 1968. if the total short fall for the..........and the state 'of rajasthan shall file their affidavit in answer thereto;(b) that if there is short supply for no fault of their owe, the appellants shall not he liable to pay the proportionate excise duty and/ or revenue representing the short supply;(c) that the high court shall decide this question and give what over relief the appellants shall be entitled to on that ground and other appropriate reliefs consequentials thereto;(d) that the relief for short supply shall be cor fined only to the alligations made in the writ petition in the high court and no other point shall be allowed to be raised by either side4 after the aforesaid decision of the supreme court, an affidavit was filed by shri pukhraj on behalf of the petitioner firm and a counter affidavit in reply to the said.....
Judgment:

S.C. Agrawal, J.

1. Messrs. Jai Bharat Wine Contractor, (hereinafter referred to as the petitioner firm') is a partnership firm, carrying on business in retail sale of country liquor at Jodhpur For the year 1968 69, a licence was issued to the petitioner firm under the provisions of the Rajasthan Excise Act, 1950, for felling country liquor at 12 shops in the city of Jodhpur. At the relevant time, the Rajasthan Excise Rules, 1956 provided for the sale of country liquor according to the 'guarantee system'' & the 'exclusive privilege system' Under the 'gurantee system', for which provision was made in chapter VII A of the Rules, the licencee for retail shops of country liquor had to give guarantee to the Government to draw liquor from the Government warehouses for the purpose of sale of a specified value during the particular financial year for which licence had been obtained and that specified value was called the amourt of guarantee Under the 'exclusive privilege system' for which provision was made in Chapter VI [ B of the Rules, a licence for exclusive privilege of selling by retail of country liquor within any local area was granted on condition of payment of lump sum instead of, or n addition to, excise duty as may be determined by the Excise Commissioner. The licence that was granted to the petitioner firm was under the 'guarantee system'. The amount of guarantee prescribed for under the said licence was Rs. 27, 09, 050 and the petitioner firm was required to deposit the sum of Rs. 2,25, 760/- as security deposit, which amount was deposited by the petitioner firm on 11th March, 1968 Condition No. 1 (ka) of the licence issued in favour of the petitioner firm contained a guarantee by the petitioner firm to the Governor of the State of Rajasthan that it would obtain from the Government Warehouses during the financial year ouch quantity of country liquor in all, whose total value calculated at the issue price effective on the 1st January, would not be less than Rs. 27,09,050/- Condition No. 2(ka) of the licence prescribed that the petitioner firm would be bound to lift upto the end of every month country liquor of the value of l/12th part of the amount of guarantee, per month at the issue price effective on the 1st january, 1964 and if failed to lift Jiquor of the aforesaid value at the issue price effective on 1st January, 1964 it would be bound to lift by the 10th of the next succeeding month extia liquor of the value of such difference amount at the aforesaid issue price or otherwise it would be bound to make payment of the said difference at the ware house by the aforesaid date. Condition No. 2 (kha) of the said licence laid down that in the event of the petitioner firm tailing to pay she aforesaid amount or of its failing to life such extra quantity of liquor as aforesaid, the said difference amount would he liable to be recovered from out of the security amount deposited by the petitioner firm or from out of its moveable and immoveable property and also from the legal representatives. Condition No.2 (Gha) of the said licence further provided that in the event of the gurantee not being fulfilled according to the term of condition No. 1(a) or there being a shore fall in the amount of guarantee on account of condition No. 2 (Ga), the amount of such shortfall shall be liable to be recovered from out of the cash security of the petitioner farm and or out of its move able and immoveable property and from its Jegal representatives.

2. It appears that by the end of financial year 1968 69 the petitioner firm was not able to sell liquor of the value equal to the guarantee amount & there was a shortfall to the extent of Rs. 3,18,922.32/-. The District Excise Officer, Jodhpur, by his notice dated 28th july, 196 9 informed the petitioner firm that there was short fall of Rs. 3,18,922 32/ in the year 1968 69 and that after the adjustment of the sum of Rs. 2 25,760/- which has been deposited by the petitioner firm by way of security, the sum of Rs. 93 992.32/- was recoverable from the petitioner firm and the petitioner firm was recruited to deposit the aforesaid amount of Rs. 93,962 32 within a period of 15 days from the date of the reccipt of the said notice, failing which, proceedings for the recovery of the said amount under the provisions of the Rajasthan Land Revenue Act would be initialed. Being aggrieved by the aforesaid notice, the petitioner firm has filed this writ petition for the issue of an appropriate writ, direction or order, quashing the demand of Rs. 3,18 922 32/ and the notice of demand dated 28th July. 1979 for the recovery of Rs. 93.162 32/- and also for the issue of a writ or order, directing the respondents to refund the security amount of Rs. 2,25 760/ to the petitioner firm. In the writ petition, the petitioner firm has also praved for a declaration that the Rules 67. I and 67. J of Chapter VII B and also Section 24 of Rajasthan Excise Act ate unonconti-tiunal.

3. The writ petition of the petitioner firm, along with the other writ petitions raising common questions, was heard by a learned Single Judge of this Court ( fyagi, j ), who by his order dated 20th April, 1972 allowed the writ petition and quashed the demands raised by the respondents The learned Single Judge further held that the orders passed by the Excise Department to confiscate the security amount were bad in law. The aforesaid order of the learned Single Judge was reversed in appeal (D B Civil Special Appeal No. 498 of 1972, by a Division Bench of this Court (Beri, G J. and Gupta, J ) by judgment and order diced 9th May 1974 and the writ petition of the petitioner firm was dismissed Thereafter, the petitioher firm fild an appeal 'Civil Appeal No. 1355 of 1974) before the Supreme Court and the said appeal of the petitioner firm was allowed by the Supreme. Court by its order dated 26th November, 1974. While allowing the said appeal, the Supreme Court has directed:

(a) That the Appellants herein shall file an affidavit in the High Court stating all facts regarding short sopply and the State 'of Rajasthan shall file their affidavit in answer thereto;

(b) That if there is short supply for no fault of their owe, the Appellants shall not he liable to pay the proportionate excise duty and/ or revenue representing the short supply;

(c) That the High Court shall decide this question and give what over relief the Appellants shall be entitled to on that ground and other appropriate reliefs consequentials thereto;

(d) That the relief for short supply shall be cor fined only to the alligations made in the writ petition in the High Court and no other point shall be allowed to be raised by either side

4 After the aforesaid decision of the Supreme Court, an affidavit was filed by Shri Pukhraj on behalf of the petitioner firm and a counter affidavit in reply to the said affidavit was also filed by Shri U.K. Bohra, District Excise Officer. Jodhpur and a rejoinder to the said affidavit was filed by Shri Pukhraj in D B Special Appeal No. 498 of 1972 The said special appeal alongwith other connected special appeals was heard by a Division Bench of this Court (Sen, Actg.C J, and Gunta, J ) and by order dated 9th Jaunary, 1878, the Division Bench, while allowing the appeals and setting aside the orders of the learned Single Judge (Tyagi.J) and remitting the writ petitions to be listed for hearing before a Single Judge, has directed that:

While deciding the writ petitiong, the learned Singh Judge may take into consideration the documents and affidavits filed by the parties in these appeals in support of their respective contentions.

5. In pursuance of the aforesaid direction given by the Division Bench of the Court, in the special appeal, this writ petition has row Kited before me for hearing.

6. As per direction contained in the order dated 26th November, 1974, passed by the Supreme Court and the Order of the Division Bench dated 9h january, 1978, the question which arises for determination in this writ petition is as to whether the shortfall of Rs. 3,8,922.32 which had occurred in the financial year 1968-69 was due to short supply of liquor and that the said short: supply was not due no any fault on the part of the petitioner firm According to the aforesaid direction given by the Supreme Court and the Division Bench the petitioner firm will not be liable to pay proportionate Excise duty and/or revenue representing the short supply of liquor which was not due to any fault on ins part. The Supreme Court has, however, directed that the relief for shot supply is to be confined only to allegations made in the writ petition before this Court It is, therefore, necessary to examine the averments contained in the writ petition with regard to the reasons for the short fall of Rs. 3,18.922 32/- in the financial year 1968 69.

7. A perusal of the writ petition shows that in paragraph 4, the petitioner firm has alleged that in the month of May, June and July, 1968, there was an agitation against the policy of the Government for boosting up the sale of liquor and the Distillery of the Government at Mandore from where the liquor was being supplied to Jodhpur was made a special target and thousands of person continued round-the-clock 'dharna' with the result that the Distillery was closed for all intents and purposes and no liquor could be supplied In paragraph 5 of the writ petition, the petitioner firm has alleged that as the liquor could not be supplied to the petitioner firm, it could not sell liquor during the aforesaid month as required by the terms of the licence and this had resulted in shortfall of Rs.3,18,922.32/- In paragraph 5 of the writ petition, the petitioner firm has placed reliance on the remarks contained in the note dated 9th September, 1970, submitted by the District Excise Officer, Jodhpur, to the Commissioner Excise, Jodhpur wherein the District Excise Officer has stated that liquor could not be supplied to the petitioner firm from May to July in the year 1968-69 on account of Dharna at Mandore Distillery and that efforts were made to make the supply from the other points too but still full supply for these months could not be made which fell short by Rs. 3,18,922.32/- and that from August onwards full supply was made and the licencees lified full supply for the remaining period. The District Excise Officer, in his note aforesaid, has further stated that he had got the sales register examined from May to July and found that the liquor shops remained closed for some days on account of non-supply of liquor.

8. The aforesaid averments contained in the writ petition clearly show that in the writ petition, the petitioner firm has made an averment to the effect that the shortfall for Rs. 3,18 922,32/- which had occurred in the financial year I968 69 was on account of short supply 'of liquor and that the said short supply was not due to any fruit on its part. It appears that no return was filed on behalf of the respondents to the writ petition and the said allegation remained unconverted and the writ petition was heard and disposed of by a learned Single Judge (Tyagi, J) The learned Judge did not consider it necessary examine the question' with regard to short supply of liquor as he was allowing the writ petition on other grounds.

9 Now in pursuance of the direction given by the Supreme Court in its order dated 26th November, 1974, an affidavit dated 23rd July, 1975 was filed in Special Appeal (S B Civil Special Appeal No.498 of 1972) by Shri Pukhraj on behalf of the petitioner firm In the said affidavit it has been reasserted that the shortfall of Rs. 3, 18, 92232/- in the finacial year 1968-69 had occurred on account of an agitation in the months of May, June and July, 1968 by 'Sharab Bandi Samiti' against the supply and sale of country liquor and there was a complete Dharna Outside the Mahdore Distillery from where liquor was being supplied to Jodhpur country liquor shops and that during this period thousands of persons continued round-the clock dharna with the result that the Distillery was closed for all intents and purposes and that liquor could not be supplied to the licencees. In the said affidavit of Shri Pukhraj, it is also stated that there was picketing at the warehouses also that no supply was made to the petitioner firm after 10th May, 1968 for the month of May, 19b8, though the petitioner firm had deposited an amount of Rs. 1,23,324.40/-for supply of country liquor for that month and that during the period of 'Sharab Bandi Andolan'' from 10th May to 24th July, the total liquor supplied to the petitioner firm ''yielded Rs. 2,33,899 63/- as licence fee or excise duty whereas, according to the conditions of licence, the petitioner firm ought to have been supplied at its option the minimum quantity of country liquor yielding Rs. 5,53,462/- and that there was a short supply of country liquor the licence fee adjustment for which or excise duty computed of which comes to Rs. 3,19,570 19/- In the affidavit aforesaid, it is further stated that during this period, the petitioner firm was asked to get liquor from the other warehouses of Bikaner and Ganganagar & that efforts were made by the petitioner firm to get liquor from those ware houses also but after incurring heavy expenses, the petitioner firm could not get liquor as required by it from the above sources also and only liquor worth Rs. 14,533,00/- was supplied from Bikaner warehouse and only 6434 litres of liquor was issued from Ganganagar. In the affidavit of Shri Pukhraj referred to above, reliance has also been placed on the note of the District Excise Officer, Jodhpur dated 9th September, 1970 which had been reproduced by the petitioner firm in paragraph 5 of the writ petition.

10. In the counter Affidavit of Shri U.K. Bohra, District Excise Officer, Jodhpur, which has been filed in reply to the above affidavit of Shri Pukhraj, it is not denied that in the months of May, June and July, there was agitation and Dharna by 'Sharab Bandi Andolan Samiti'' outside the Mandore Distillery. It is, whoever, asserted that the Mandore Warehouse had sufficient stock at the relevant time during the period 1967-68 and that liquor was constantly supplied to the other licencees through out the year. It is further claimed that the Excise Commissioner was competent to ask the licencee to draw the liquor from any other Government Warehouse in the State and that the' petitioner firm never approached the Department for allowing them to lift liquor from other placed and, therefore, the petitioner firm was itself to be blamed for the non-supply and non-lifting of the liquor from the Government Warehouse and the State Government was not at fault for non-supply of the liquor to the petitioner firm. In the counter affidavit aforesaid, figures have been given with regard to the issue of liquor during the months of May, June and July, 1968 to the various licencees including the petitioner farm and figures have also been given about the quantity of the liquor lifted by the petitioner firm during the each month in the year 1968-69. As regards the note of the District Excise Officer, Jodhpur, dated 9th September, 1970, on which reliance has been placed by the petitioner firm, it is submitted that the correspondence between the District Excise Officer and the Commissioner is not relevant for the decision in the present matter.

11. From the averments contained in the paragraphs 4 & 5 of the writ petition and the affidavit of Shri Pukhraj, it is established that an agitation had been launched by the 'Sharab Bandi Samiti' in the months of May, June & July, 1968 and on account of the said agitation there was a Dharna outside the Mandore Distillery from where liquor was being supplied to the country liquor shoos at Jodhpur. The mere fact that some supplies were made during these months to the various licencees' including the petitioner firm, does not belie the case of the petitioner firm that as a result of the Dharna, the petitioner firm and the other licencees could not get their normal supply of liquor. I find that the case of the petitioner firm that it could not get normal supply of liquor during the months of May, June and July, 1968 is borne out from the figures of the monthly supply made to the petitioner firms, which have been given in the counter affidavit of Shri U K Bohra The said figures show that in the months of May, supply of liquor to the petitioner firm was to the extent of Rs. 73 074.83/- & there was a short fall of Rs. 1,52,678/17 in the month of June, 1968, the supply of liquor was to the extent of Rs. 1,42 655.37 and there was a short fall of Rs.83.097.63 and in the month of July, the supply of liquor was to the extent of Rs. 1,51,908 64. & there was a short fall of Rs.73 844 36. In other words during the month of May. June and July, there was a short fall to the tune of Rs. 3,09,620.16. The fact that there was short supply of liquor during the months of May, June and July on account of Dharna at the Mandore Distillery is also borne out by the note submitted by the District Excise officer 1 Jodhpur dated 9th September, 1970 to the Commissioner wherein it is stated that:

The liquor could not be supplied to them May to July on account of the Dharna at the Mandore distillery Efforts were made to make the supply from the other points too, still full suppy for these months could not be made which fell short by Rs.3,922 32, from August on wards full supply was made and the licencees lifted full supply for the remaining period.

12 There is no denial of the aforesaid note in the counter affidavit of shri U K. Bohra and in the absence of a denial, it must be held that the contents of the said note are correct and it fully establishes the case of the petitioner firm that the short-fall in the months of May, June and July, 1968 was on account of short supply of liquor due to the Dharna outside the Mandore Distillery.

13. The learned Counsel for the petitioner firm has submitted that under the terms of licence, it was open to the petitioner firm to make good the short fall of April, 1968 up to the 10th May, 1968 and that on account of Dharna outside the Mandore Distillery, it could not be possible for the petitioner firm to make good the short fall for the month of April, 1968 in the month of May, 1968 and that the shortfall in the month of April, 1968 should also be added to the shortfall to the months of May, June and July, 1968 and that if the shortfall for all the four months of April, May, June and July is added, it comes to Rs. 3,42, 800.40/- whith is more than the actual shor fall of Rs. 3,18,922.32 In my opinion, the aforesaid argument of the learned Counsel for the petitioner must be accepted in as much as in Condition No. 2 (Ka) of the licence, it is provided that the licencee would be bound to lift upto the end of every month country liquor of the value of 1/12th part of the amount of guarantee, per month at the issue price effective on the 1st January, 1968 and that it would be bound to lift by the 10th of the next succeeding month extra liquor of the value of such difference amount. Thus according to the terms of the licence, the petitioner firm could have lifted upto the 10th of May, the shortfall which had occurred in the month of April, 1968 and if the petitioner firm could not lift before 10th May, 1968 excess quantity to make good the short fall of the month April, 1968 on account of Dharna at the Mandore Distillery in the Month of May,l968, it cannot be said that the shot supply was on account of the fault of the petitioner firm. The petitioner firm is, therefore, entitled to claim that it is not liable to pay the proportionate excise duty on the short supply during the months of April, May, June and July, 1968. If the total short fall for the months of April, May, June and July, 1968 is excluded the shortfall in respect of which the petitioner firm can claim a rebate is more than the actual short fall of Rs. 3,18 922 32. In my opinion, therefore, the respondents are not entitled to make a demand from the petitioner firm in respect of the aforesaid shortfall of Rs. 3,18,922.32.

14. In the result, this writ petition is allowed and the notice of demand Ex. 15 for the recovery of Rs. 93,162 32 from the petitioner firm is quashed and the respondents are restrained from making a demand of Rs. 3,18,922.32 from the petitioner firm. It is further directed that the petitioner firm is entitled to the refund of the security amount of Rs. 2,25,760 00 deposited by the petitioner firm under the licence for the year 1968-69. But in the circumstances of the case, the parties are left to bear their own costs in this writ petition.


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