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M/s N.V. Distilleries Ltd. Versus The State of Haryana and others

Penalty - Section 61 (1) (aaa) and C (i) of the Act of 1914 - principles of Natural Justice - request of the representative of the petitioners for an adjournment was rejected - Smuggling - Held that: - Section 61 (1) (aaa) and C (i) of the Act of 1914 stipulates that import, export, transport or possession of liquor in contravention of the Act, rules or licence would invite penalty of not less than ₹ 50 and not more than ₹ 500 per bottle of 750 mili litres or part thereof. Thus minim .....

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they wanted to prepare adequate defence after examining the accounts. It would thus be difficult to conclude with absolute certainty as to whether the request was bona fide or a ruse to delay the proceedings. We are nevertheless of the view that some time should have been granted if the request for adjournment had been made. It was the first request and granting some time even of a few days would not have affected the proceedings. Declining the request on the first date itself would not be in co .....

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of remand. - CWP No. 821 of 2017 (O&M) - Dated:- 9-8-2017 - MR. S.J. VAZIFDAR AND MR. ANUPINDER SINGH GREWAL, JJ. For The Petitioners : Sandeep Goyal, Advocate ORDER Anupinder Singh Grewal, J. The petitioners have sought quashing of order dated 26.09.2014 (Annexure P-6) passed by Collector-cum-Deputy Excise & Taxation Commissioner (Excise), Sonepat, (Collector-cum-DETC), whereby penalty of ₹ 27,30,000/- has been imposed upon them as well as the orders dated 30.04.2015 (Annexure P-18) a .....

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ng description and quantity :- Brand No. of Cases Besto Drygin 137 labelled as for sale in Arunachal Pradesh Besto Whisky 318 labelled as for sale in Arunachal Pradesh Brand No. of Cases Royal Stag 30 Imperial Blue 65 3. On being questioned, Sh. Rajesh Kumar, driver and Sh. Kala, cleaner could not produce any permit or pass in respect of the consignment of liquor and, therefore, the consignment along with the truck was taken into police custody. The driver and the cleaner were also arrested. On .....

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in Fauji Colony, Sonepat from where he loaded 30 cases of Royal Stag Whisky and 65 cases of Imperial Blue Whisky and thus, 550 cases of IMFL were there in his truck when he was taking the truck to Delhi before detection by the respondents-authorities. The respondents thereafter inspected the said room near L-13 vend of Sh. Ravinder Kumar at Fauji Colony, Sonepat pursuant to the statement of the driver. Upon inspection, the IMFL of following description and quantity was recovered. Brand No. of c .....

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the Act of 1914) (Annexure P-1) for penalty was issued and served upon the petitioners on 19.09.2014 asking them to appear before the Collector on 26.09.2014. The respondents-authorities also traced the ownership of the truck to Umed Singh, who was also issued notice. On 26.09.2014, Sh. Suresh Verma AGM (HR & Admn.) appeared on behalf of the N.V. Distilleries Ltd., Sonepat and submitted an application seeking adjournment of 20 days as their Accounts Manager was on leave. The application was .....

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5 cases i.e. 5460 bottles x ₹ 500) to ₹ 27,30,000/-. For the remaining 95 cases (1140 bottles) of other brands the owner, driver and cleaner were held liable for ₹ 5,70,000/- (1140 x ₹ 500). Thus, the liability of the petitioners distillery was limited upto ₹ 27,30,000/- and for the owner, driver and cleaner, it was upto ₹ 33,00,000/-. The appeal as well as the review application preferred by the petitioners was dismissed by the Excise and Taxation Commissione .....

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ontention, he relied upon judgment of a Division Bench of this Court in the case of Stelco Strips Ltd. Vs. State of Punjab and others, 2009(Vol. 19) VST 498. He further contended that the petitioners ought not to have been penalized for liquor, which has been confiscated from third party as Section 61(1)(aaa) of the Punjab Excise Act, 1914 does not authorise respondents to impose penalty unless the liquor has been seized from the possession of the petitioners. The petitioner distillery cannot be .....

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- Section 61 for Haryana (1) Whoever, in contravention of any section of this Act or any rule, notification issued or given there under or order made, or of any licence permit or pass granted under this Act. [(a) manufactures or collects any intoxicant; or (aa) imports, exports, transports or possesses any intoxicant other than liquor; or [(aaa) imports, exports, transport or possesses any liquor; or] (b) xxx xxx xxx xxx xxx xxx xxx xxx (c) uses, keeps or has in his possession any materials, sti .....

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nd [Provided that the person punishable for an offence under clause (aaa) and facing trial in court, shall have the option, to be exercised in writing in the court during the pendency of trial, to compound the offence by payment of penalty to be decided by the court which shall not be less than five hundred rupees and not more than one thousand rupees per bottle of 750 milliliter;] 8. The relevant rules of the Haryana Imposition of Penalty Rules, 2003 read as under:- xxx xxx xxx xxx xxx xxx xxx .....

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duced any evidence on which such person or persons may rely in his or their support. 6. Determination of amount of penalty Section 59. - The Collector, after taking such evidence as the person may produce and after making such enquiry, as he may deem proper, on being convinced and satisfied that offence was committed under the Act, shall determine the amount of penalty recoverable from the offender or person concerned. Collector shall pass order for confiscation of liquor under Section 78. xxx x .....

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d be under the Administrative control of the Collector. 9. Section 61 (1) (aaa) and C (i) of the Act of 1914 stipulates that import, export, transport or possession of liquor in contravention of the Act, rules or licence would invite penalty of not less than ₹ 50 and not more than ₹ 500 per bottle of 750 mili litres or part thereof. Thus minimum penalty of ₹ 50 per bottle can be imposed for minor violation while in cases of grave or serious nature the penalty upto ₹ 500 p .....

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r. It is, however, important to note that excise authorities cannot be helpless in case some more time is granted to the alleged offender to produce his defence as nothing stops them from raiding any premises or apprehending any suspects in the meantime. If the time sought for producing defence is utilised for eliminating evidence or causing any hindrance to the excise authorities, the Collector would also be free to record the same or even draw adverse inference thereof but to say that in no ci .....

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o be exercised judiciously and with due application of mind to the facts of the case. 11. It is well settled that an order visiting penal consequences upon a person or entity cannot be passed without affording it opportunity of hearing. We may refer to the judgment of the Division Bench of this Court cited by the learned counsel for the petitioners in the case of It pertains to a matter where the proceedings were re-initiated and finalised after over a year of the detention of the goods and the .....

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time than the notice period of less than 7 days before adjudicating the matter. All it says is that in the first instance, the notice cannot be of more than 7 days. If we were to interpret Rule 5 to mean that no further time can be granted to the offender/assessee and the order of penalty would have to be passed within 7 days, the consequences would be disastrous. The authorities would get licence to act arbitrarily and whimsically and even bona fide and genuine requests to file reply would be .....

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s where the absence of hearing would not have caused any prejudice to the person against whom action is taken. The validity of such orders has to be tested by the Court on the touchstone of prejudice. It is not for the authority to dispense with opportunity of hearing to the affected party by holding it would make no difference or no prejudice shall be caused to it. It is only for the Court to consider as to whether any purpose would be served in remanding case keeping in mind whether any prejud .....

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he controversy. 15. The defence set up by the petitioners before the appellate authority is that in terms of Punjab Distillery Rules, 1932 (hereinafter referred to as Rules of 1932) as applicable to the State of Haryana, the entire functioning of the distillery is under the control of Excise Department. No product can be removed or sold without pass/permit or authorisation by the competent authority of the Excise Department. The raw material and stock of finished goods are invariably kept and op .....

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stablishment to his distillery for the purpose of ensuring the due observance of these rules and for watch and ward. This establishment shall consist of an Excise and Taxation Officer and as many Inspectors] and peons as the [Excise Commissioner] shall deem sufficient for the requirements of the distillery. This staff shall be subject to the inspection by Financial Commissioner and the Collector and be under the Administrative control of the Collector. 14. The licensee shall, provide within the .....

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barrels, bottles and other containers are duly registered with the department along with their capacities. The stocks held in these receptacles corresponds to the approved manufacturing capacity of the distillery. Unless it is established that these stocks are disproportionate to the approved manufacturing capacity, case for unauthorised removal of liquor would not be made out. The periodic inspection was carried out by the Excise officials and they did not observe any irregularity in the functi .....

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stillery and that others had manufactured them illegally at unauthorised places without any knowledge of the petitioners. The department has not provided any sample of the confiscated bottles or liquor and imposed the penalty without opportunity of hearing and it has solely relied upon the statements of the truck driver and cleaner, who are not in employment of the petitioners nor is the truck registered in the name of the petitioners. It is also stated that the alleged labels on the recovered l .....

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on and by issuing such labels, they had tried to mislead the concerned authorities. 18. These are, however, issues which ought to have been decided by the Excise Authorities after granting adequate opportunity to the petitioners to submit their reply. In the case at hand request for adjournment was sought on the ground of the Accounts Manager being on leave. We do not find that such a request at the very first instance is such which would merit outright rejection. It is possible that the petitio .....

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