INTERNATIONAL SPIRITS AND WINES ASSOCIATION OF INDIA versus STATE OF HARYANA AND OTHERS

Citation: [2019] 3 S.C.R. 234 · Decided: 12-02-2019 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
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INTERNATIONAL SPIRITS AND WINES ASSOCIATION OF
INDIA
v.
STATE OF HARYANA AND OTHERS
(Civil Appeal No. 9533 of 2018)
FEBRUARY 12, 2019
[RANJAN GOGOI, CJI, NAVIN SINHA AND
K. M. JOSEPH, JJ.]
Haryana Liquor License Rules, 1970:
r. 24(i-eeee)(as amended) – L-1BF license to trade in foreign
liquor – r. 24(i-eeee) providing for a single L-1BF license for the
entire State to deal in imported foreign liquor, bottled outside India
and imported into the country in a bottled form (i.e. bottled in
original), if ultra vires the provisions of the 1914 Act – Held: r.24(i-
eeee) is ultra vires the powers of the Financial Commissioner under
the Act and is struck down – Financial Commissioner was not
competent to amend the Rules with regard to grant of number of
licenses for the entire State, and which power was exclusive to the
State Government u/s. 6 read with ss.13(a) and 58(2)(e) – To hold
that the power of Financial Commissioner u/s. 59(a) to regulate
sale of liquor, and that sale could be regulated through grant of
license, the Financial Commissioner was vested with the power to
determine the number of licenses, is unreasonable as also
unsustainable – Amendment notified by the Excise Commissioner
as a delegate of the Financial Commissioner was per se ultra vires
the powers of the latter u/ss. 6 and 13(a) r/w s. 58(2)(e) – While the
State Government would have the power to determine the number
of licenses and to issue licence for a local area only, the Excise
Commissioner would have a superior power to determine the number
of licenses and issue licenses for the entire State – Punjab Excise
Act, 1914 – ss. 8, 6, 13(a) and 58(2)(e) – Haryana Liquor License
(Amendment) Rules, 2017 – Liquor.
Allowing the appeal, the Court
HELD: Per Navin Sinha, J. (for himself and Ranjan Gogoi,
CJI):
1.1 Under Section 8 of the Punjab Excise Act, 1914 the
State Government exercises general superintendence and control
[2019] 3 S.C.R. 234
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of Excise Administration and Excise Officers. Section 9 provides
for vesting powers of the Financial Commissioner in the Excise
Commissioner by the State Government. The Financial
Commissioner is therefore, competent to delegate only such
powers to the Excise Commissioner which the State Government
can delegate to the former under the Act, in view of the prohibition
contained in Section 13(a). Under Section 58(2)(e) of the Act, the
State Government alone has the power to regulate the number of
licenses which may be granted in any local area for wholesale or
retail sale. In the scheme of the Act, the Haryana Liquor License
Rules, 1970 and the Punjab Intoxicants License and Sales Orders,
1956 read together it is apparent that a liquor license is to be
granted for a local area only. The power to determine the number
of licences that may be granted in any category in a local area is
exclusively vested in the State Government under Section 58(2)(e)
of the Act. The delegation of this power by the State Government
to the Financial Commissioner is prohibited by Section 13(a).
This is only in consonance with the general power of
superintendence vested in the State Government under Section
8. The Act maintains a clear distinction between a local area as
the unit for grant of licence, and the entire State for other purposes.
The State government is the sole repository of these other powers
with regard to the entire State evident from Sections 5 and 6.
The power to declare by notification that a licence granted shall
be applicable to the entire State is exclusively vested in the State
Government under Section 6(a) of the Act. [Paras 6, 10, 12][245-
B, E; 248-A, E]
1.2 The High Court held that in contradistinction to Section
58(2)(e) of the Act, which limits the powers of the State
Government to grant of licence for a local area, the Excise
Commissioner, as the delegatee of the Financial Commissioner,
was competent under Section 59(a) to grant a single L-1BF licence
for the entire State. [Para 13][248-F]
1.3 The nature of powers conferred under Section 59 of
the Act, make it manifest that it is but a regulatory power available
only after a license is granted to the licensee for a local area, to
ensure supply, storage, sale or otherwise that the conditions of
INTERNATIONAL SPIRITS AND WINES ASSOCIATION OF
INDIA v. STATE OF HARYANA
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[2019] 3 S.C.R.
the license are adhered to and necessary directions can also be
g

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