COMMISSIONER EXCISE AND ANR. versus MANOJ ALI AND ANR.

Citation: [2006] SUPP. 7 S.C.R. 691 · Decided: 19-10-2006 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed

Judgment (excerpt)

-· 
COMMISSIONER EXCISE AND ANR. 
A 
v. 
MANOJ ALI AND ANR. 
OCTOBER 19, 2006 
[S.B. SINHA AND DAL VEER BHANDARI, JJ.] 
B 
Rajasthan Excise Act, 1950-Section 34-Lecensee was granted 
wholesale and retail licenses for Indian Made Foreign Liquor and Beer on 
expiry of the period of licenses granted to an erstwhile licensee-Licensee 
proposed to occupy the same premises which was used by the erstwhile C 
licensee-Revenue seized bottles of liquor from one of the rooms of the 
premises-Licensee, in reply to the show-cause notices issued by the Revenue, 
contended that the seized bottles belonged to the erstwhile licensee and that 
the room in the premises was not handed over to the licensee-Revenue 
cancelled the licences of the licensee and forfeited the security amount- D 
Board of Revenue allowed the appeal of the licensee-High Court dismissed 
the Writ Petition of the Revenue-Correctness of-Held, on facts and records, 
seized bottles of liquor were supplied to the erstwhile licensee and that the 
room, from where the seizure was made, was still in possession of the erstwhile 
licensee-Hence, the cancellation of the licences of the licensee held to be 
improper-Revenue directed to refund the security amount to the licensee E 
with interest. 
Respondents were granted wholesale and retail licences for Indian Made 
Foreign Liquor (IMFL) and Beer by appellants on expiry of the period of 
licenses granted to an erstwhile licensee. The appellants inspected the 
premises of the erstwhile licensee and issued a report stating that there was F 
no stock of liquor in the premises. The respondent proposed to occupy the 
same premises, which was used by the erstwhile licensee. In the meantime, 
the appellants conducted a raid in the premises and seized a large number of 
liquor bottles from one of the rooms in the premises. The appellants initiated 
a criminal proceeding against the respondents. The appellants also issued a 
show-cause notice to the respondents as to why the licences granted to them G 
should not be cancelled. The respondents replied to the show-cause notice 
contending that the room, from where the bottles of liquor were seized, was 
still in possession of the erstwhile licensee and that it was not handed over to 
him; and that the Department has falsely proceeded against them to suppress 
691 
H 
692 
SUPREME COURT REPORTS (2006] SUPP. 7 S.C.R. 
A its fault of not verifying the stock of liquor in the room on the expiry of the 
licence of the erstwhile licensee. The appellants rejected the cont_entions of 
the respondents, cancelled the licences granted to the respondents and 
forfeited the security amount of the respondents. 
The respondents preferred an appeal before Board of Revenue. The 
B Board allowed the appeal and remanded back to the appellants to pass a justified 
judgment after probing all the facts and records in respect of the case and 
after giving sufficient opportunity of adduction of evidence to the respondents. 
The appellants and the respondents filed Writ Petitions before High Court 
questioning the legality of the order of the Board of Revenue. Single Judge 
of the High Court. dismissed the Writ Petition of the appellants on the ground 
C that the State had not preferred an appeal and allowed the Writ Petition of 
the respondents on the ground that there was no ground for justification of 
the cancellation of the licences granted to the respondents. The appellants 
filed a Writ Appeal before the High Court. The High Court allowed the Writ 
Appeal and upheld the oruer of the Board of Revenue. The appellants and the 
D respondents filed Special Leave Petitions before this Court. This Court 
remanded back the matter to the High Court to consider the case afresh on 
merits. The Division Bench of the High Court upheld the judgment and order 
passed by the Single Judge. Hence the appeals by the appellants and the State. 
The appellants contended that the respondents were in possession of 
E the premises from where the bottles of liquor were recovered and hence they 
must be held to have violated the terms and conditions of the licences; that 
the respondents never informed them that the possession of one of the rooms 
in the premises was still in the possession of the erstwhile licensee; and that 
there is no illegality committed by the appellants in directing cancellation of 
F 
licenses and consequently forfeiture of the security amount. 
The respondents contended that they should not be penalised

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