STATE OF U.P. Vs. ZAFAR ALI

JUDGEMENT

(1.) The respondents in Writ (Tax) No. 507 of 2011 are the Appellants herein.

(2.) The Appeal examines the levy and demand of penalty for nonperformance of Minimum Guaranteed Quota (for short, 'MGQ') by the Respondents, under the Uttar Pradesh Excise (Settlement of Licences for Retail Sale of Country Liquor) Rules, 2002 (for short, 'Rules 2002'). It concerns a dispute arising out of an excise licence granted to the Respondents for the years 2006-07 and 2007-08, namely, whether a retail country liquor licensee, who has fulfilled and lifted the entire annual minimum guaranteed quantity fixed for the excise year, can still be held liable to pay deficit licence fees, penalties, and interest if there was a short-fall in lifting the monthly minimum guaranteed quantity in a particular month. The prayer in the Writ Petition reads as follows:

(3.) To appreciate the controversy between the parties, illustratively, the relevant portion of an impugned Demand Notice dtd. 20/3/2009 issued to the Petitioner in Writ (Tax) No. 507 of 2011 is excerpted hereinunder: