TMI Blog2013 (1) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... ous excise shops in groups in the said district for the year 2006- 07 and the terms of licence. 3. As the factual matrix would exposit, the Collector, Kishanganj, got the sale notification in Excise Form 127 issued for settlement of various excise shops in various groups in the district of Kishanganj for the financial year 2006-07 which stipulated that the settlement shall be made on 23rd March, 2006 on auction-cum-tender basis and, accordingly, applications were invited from interested persons. As the settlement could not be effected in respect of group ka shops in the said district, the Collector issued a second notification on 17th May, 2006 for the said group ka which consisted of six country spirit shops and three spiced country spirit shops. On 5th June, 2006, the group ka excise shops were settled in favour of the respondent at a monthly licence fee of ₹ 8,29,600/-. The respondent deposited the advance security of ₹ 8,29,594/- on 7th June, 2006 and further ₹ 8,29,600/- on 22nd June, 2006. The Collector, Kishanganj moved the Commissioner for his approval and the same was granted on 1st July, 2006 in the office of the Collector on 5th July, 2006 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Excise and only after it is accepted by the Commissioner, then the licence is issued. In the backdrop of the aforesaid legal position, when we turn to the facts of the present case, it would be seen that although highest bid of the petitioner was accepted on 5th June, 2006 but it was only on 30th June, 2006 that the Licensing Authority recommended to the Commissioner of Excise for approval of settlement and it was approved by the Excise Commissioner, Bihar on 1st July, 2006 and after receipt of the approval from the Excise Commissioner on 5th July, 2006, the licence was issued by the Licensing Authority on that date. Surely, in the backdrop of the facts that the licence was issued on 5th July, 2006 the petitioner could not have been fastened with the liability to pay licence fee from 5th June, 2006. [Underlining is ours] 6. Questioning the correctness of the aforesaid conclusion, it is submitted by Mr. Gopal Singh, learned counsel for the State of Bihar, that the High Court has fallen into error by construing that the default has been condoned though there is no concept of condonation in such a trade. It is urged by him that as the requisite advance licence fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd after his acceptance, the licence is issued. The pertinent part of this Rule is that the amount of highest bid accepted would be the annual amount of licence fee. 11. Rule 19 provides for payment of advance security in the manner prescribed therein. The said Rule is reproduced hereinbelow: - 19. Payment of Advance Security. After the declaration of acceptance of the highest bid the Licensing Authority, one fourth, portion of the annual licence fee shall be paid by the highest bidder as advance security in the following manner for due execution of a contract: - a) An amount equivalent to sixth portion of annual licence fee shall be immediately deposited in cash or in the form of Bank Draft. The amount of cash/Bank Draft and that of advance money deposited previously under Rule 11(a) and Rule 11(c) respectively, shall be adjusted in part from security amount. b) The payable remaining amount on account of advance security shall have to be deposited within ten days of auction or before commencement of the licence whichever is earlier. 12. On a plain reading of the said Rule, it is manifest that the highest bidder has to immediately deposit one fourth of the annual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney from the first day of the licence period, even if the licence has been issued thereafter. The proviso further stipulates that if any shop or a group of shops is settled in the midst of the excise year, the licence shall commence from the date of settlement of the shop or the group of shops. 18. The High Court, interpreting the Rule position, has opined that the shops were settled in favour of the respondent in the midst of the year, i.e., on 5th June, 2006, and after obtaining the approval on 1st July, 2006 from the Excise Commissioner, the licence was issued by the Licensing Authority on 5th July, 2006, and, therefore, the demand of licence fee for the period from 5th June, 2006 to 5th July, 2006 is not sustainable. 19. As the factual matrix would reveal, the notification in Form No. 127 was issued on 23rd March, 2006. The terms and conditions of the settlement of excise shops were duly incorporated in the sale notification and as per Rule 8, the terms and conditions mentioned in the notification are deemed to be included in the conditions of the licence. As per the first notification, all the three country spirit shops could not be settled and further steps were taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Excise. The default, as we perceive, comes into play if there is violation of Rule 19 which stipulates for advance security. There is no dispute over the fact that there was delay. The respondent was clearly responsible for the same. The licensing officer thought it appropriate to recommend his case and the Excise Commissioner did approve it and on receipt of the approval, the licence was issued on the same day. The respondent accepted the licence knowing fully well the terms and conditions of the licence and that he has to pay the licence fee from the date of the settlement. 21. At this juncture, we may usefully address to the issue whether in a case of this nature, the principle of condonation of default by way of conduct can be attracted. First of all, under the Rules, the authorities are entitled to forfeit the amount deposited when there is non-compliance of the Rules. It is to be borne in mind that the nature of the trade has also its own significance. In Amar Chandra Chakraborty v. The Collector of Excise, Govt. of Tripura, Agartala and others[ AIR 1972 SC 1863], this Court held thus: - Trade or business in country liquor has from its inherent nature been treated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture and sale of liquor as it involves the State largesse, has stated thus:- 33. But, while considering the applicability of Article 14 in such a case, we must bear in mind that, having regard to the nature of the trade or business, the Court would be slow to interfere with the policy laid down by the State Government for grant of licences for manufacture and sale of liquor. The Court would, in view of the inherently pernicious nature of the commodity allow a large measure of latitude to the State Government in determining its policy of regulating, manufacture and trade in liquor. Moreover, the grant of licences for manufacture and sale of liquor would essentially be a matter of economic policy where the Court would hesitate to intervene and strike down what the State Government had done, unless it appears to be plainly arbitrary, irrational or mala fide. [emphasis supplied] 28. In P.N. Krishna Lal and Ors. v. Govt. of Kerala and Anr.[ 1995 Supp (2) SCC 187], the Court expressed thus:- 28....dealing in liquor inherently pernicious or dangerous goods which endangers the community or subversive of morale, is within the legislative competence under the Act. The State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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