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2021 (2) TMI 4 - HC - Indian LawsMaintainability of petition - Jurisdiction - liquor shop license - power of licensing authority to cancel both the licenses of the petitioner without any prior notice proposing to cancel the Majhenpurwa license. Maintainability of petition - HELD THAT:- The preliminary objection raised as to maintainability of the present petition is found not acceptable as a question of law does appear to exist as to the true meaning to be given to section 34(2) of the Act. Also, the proceeding for cancellation of the Gehrukheda license that occasioned the present proceeding has been remitted to the appeal authority by a separate order passed in Writ Tax No. 227 of 2020 on 19.01.2021. As, stated by both sides, the fate of the present petition hangs, at least partly, on the fate of the Gehrukheda license. Then affidavits have already been exchanged - No useful purpose may be served in requiring the petitioner to approach the revising authority at this stage, in such facts. Inherent lack of Jurisdiction - HELD THAT:- It appears that the same may not be entirely correct, in the face of the proceedings as they stand today. Though it is true, no prior notice had been issued to the petitioner to cancel his Majhenpurwa license before the order dated 28.05.2019 came to be passed, two different appeals were filed by the petitioner against that order- one against the cancellation of the Gehrukheda license (Excise Appeal no. 31 of 2019) and the other against the cancellation of the Majhenpurwa license (Excise Appeal no. 32 of 2019). While allowing appeal no. 32 of 2019 on 10.08.2019, the appeal authority specifically observed that the licensing authority may issue a fresh notice to the petitioner to cancel the Majhenpurwa license. That order has attained finality. The ground of patent lack of jurisdiction to cancel the Majhenpurwa license may have existed with the petitioner, when that license came to be cancelled first, on 28.05.2019. Upon order dated 10.08.2019 passed in Excise Appeal No. 32 of 2019, the licensing authority issued the notice dated 29.08.2019. On that date the Gehrukheda license of the petitioner stood cancelled. As further discussed later, the jurisdictional fact to proceed against the Majhenpurwa license, under section 34(2) of the Act, thus arose on 28.05.2019 and it existed on 29.08.2019 - The present proceedings arise solely from that notice. Hence, the challenge raised as to lack of jurisdiction does not survive for consideration in this writ petition. At present, the proceedings instituted after issuance of the notice dated 29.08.2019 alone are to be tested, on their merits. That notice was within jurisdiction. Giving full play to the provisions of section 34(1) and (2) of the Act, in case a licensee commits separate violations with respect to each or more than one license held by him, he may stand exposed to proceedings for cancellation of each such license under section 34(1) of the Act, exclusively. If, however, one out of more license held by a licensee is cancelled, either under clause (a) or (b) or (c) of section 34(1) of the Act, it would expose such a licensee to cancellation of his another/other license/s, irrespective of a complete absence of any violation committed in the operation of the another/other license/s. That is the plain meaning of section 34(2) of the Act - Other than excluding the contingencies specified under clauses (d) & (e) of section 34(1) from the scope of applicability to the power conferred under section 34(2) of the Act, the legislature has vested a wide discretion on the licensing authority, in that regard. Thus, the legislative intent, is to confine the power under section 34(2) of the Act to situations involving specified violations - as to payment of fee, breach of any express or implied terms and conditions and conviction for any of the specified offences. Unless a license of a licensee is first cancelled for any such ground, another/other license/s of that licensee cannot be cancelled under section 34(2) of the Act. The proceedings under section 34(2) may arise purely in the core interests of revenue, owing to the deliberate violation committed by the licensee, as may have been found/proven in an earlier proceeding of cancellation of any other license issued under the Act. Yet, no further and other violation may exist as a pre-condition to be satisfied or proven before action may be taken under section 34(2) of the Act to cancel any other license of that licensee. Therefore, the proceedings for cancellation of an earlier license must itself bring out existence of reason/s so grave and serious as may give rise to a satisfaction with the licensing authority, that all or any other license of that licensee be also cancelled in the interest of revenue. Illustratively, but not in any way exhaustively, those may be cases of large scale or organized evasion or avoidance of excise duty; breach of terms and conditions made by way of a regular business practice adopted by the licensee; disentitlement earned to hold any excise license, due to any of the specified convictions or operation of law or any other reason/ground that may spring form the facts already proven in the earlier proceeding, to cancel one or more licence of the same licensee, under section 34(1)(a) or (b) or (c) of the Act - oming to the facts of the present case, it would be wholly pre-mature to reach a conclusion that the ground specified in the showcause notice is wholly insufficient or is sufficient for the purposes of examining the correctness or otherwise of the cancellation of the Majhenpurwa licence. It is so because the basic facts giving rise to the cancellation of the Gehrukheda licence, have yet not attained finality. By the order passed in Writ Tax No. 277 of 2020, decided on 19.01.2021, those proceedings have been remanded to the Appeal Authority to examine the same afresh and to record it's conclusions whether the petitioner was in possession of tampered QR Code and Caps. Till the Appeal Authority reaches a firm conclusion as to that, in the facts of the present case, the cancellation of Majhenpurwa licence may not be examined, simultaneously. Thus, for the purpose of clarification, it is stated that in case the petitioner succeeds in establishing that his Gehrukheda licence was not liable to be cancelled as he had not violated either section 34(1) (a) or (b) or (c) of the Act, the present proceedings to cancel the Majhenpurwa license would necessarily fall. However, if the Appeal Authority does reach a conclusion adverse to the petitioner (in that case), it would be for the Licensing Authority to then examine the existence or otherwise of an adequate reason or ground to exercise his extraordinary discretionary power to cancel the Majhenpurwa licence of the petitioner under Section 34(2) of the Act. Once the license of the original licensee was restored, the replacement licensee was found to have no rights surviving with him to claim continuance of his license. Such is not the case here. As observed above, the Gehrukheda license stands cancelled and also, it is not clear if the Majhenpurwa license had ever been renewed for the Excise Year 2018-2019. In any case, that Excise Year is long over - revival of that license is not warranted, at this stage. Petition allowed in part.
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