ASHOK KUMAR Vs. STATE OF KERALA

JUDGEMENT

(1.) THE question involved in these Original Petitions is as to whether the arrears of Excise Duty payable under R. 8 (1) of the Kerala Abkari shops (Disposal in auction) Rules, 1974 thereinafter referred to as' the rules') can be appropriated from the security deposit made by the Abkari contractors under R. 5 (10) of the Rules.

(2.) UNDER R. 8 (1), before starting the auction in each group of arrack shops, the auctioning officer shall announce that permits will be issued to the contractors to import/ purchase a designated quantum of duty paid rectified spirit. The Rule further provides that the contractors shall remit the Excise Duty on the designated quantum of Rectified Spirit each month. If it is not remitted on or before the 10th day of each month, the same may be remitted on or before 25th day of that month with 18% interest on the Excise duty. The rule further provides that the failure on the part of the licensee to pay up the amount of Excise Duty and interest shall entail the consequences similar to those prescribed in sub-rule (28) of R. 6 for failure to pay the kist due from him. Petitioners in these O. Ps. who are Abkari contractors defaulted payment of the Excise duty due from them and accordingly the Excise authorities appropriated those amounts with interest from the deposits made under R. 5 (10) and directed the contractors to recoup the amount towards the security deposit. It was further ordered that in case it is not done, the licences issued to the petitioners will be cancelled without further notice. The action of the Excise authorities in appropriating the security deposit towards arrears of Excise Duty is challenged in these O. Ps. as violative of the provisions contained in the Rules.

(3.) ON an anxious consideration of the provisions I do not think that the contention of the petitioners can be accepted. Rule 6 (28)provides for the action which the Excise authorities are entitled to initiate in the case of a defaulting contractor. In the first part of R. 6 (28)it is provided that when there is default, the Assistant Excise Commissioner may cancel the licence subject to the confirmation by the Board of Revenue. The word used therein is 'may'. Thus, I am clearly of the opinion that, it is not always necessary that the Assistant Excise Commissioner should cancel the licence for the default committed by the contractor in payment of kist or excise Duty, as the case may be. No doubt, he is entitled to cancel the licence as well but it is not obligatory on his part that he should cancel the licence in all cases of default. As stated earlier, the sub-rule provides that any sum due from a licensee on account of kist etc. may be recovered from his deposit. There is nothing which prevents the Assistant Excise Commissioner from exercising this power in the first instance itself without cancelling the licence. It is not as if all the provisions contained in R. 6 (28)are cumulative but I am of the opinion that they are independent and the Excise commissioner is entitled to resort to any of the modes mentioned in that rule and that it is not always necessary that he should cancel the licence before he recovers the amount from the security deposit. The last portion of R. 6 (28) is to the following effect: " If any adjustment is made from the deposit the licensee shall be bound to replace the sum adjusted from his deposit within fifteen days of receipt of notice from the Excise Officer in charge of the Division in which his shop is situated. " This provision clearly indicates that it is not necessary in all cases that the licence should be cancelled before appropriating the arrears from the deposit amount. If the licence is already cancelled, no question of any security deposit arises and the above provision clearly indicates that the Excise authorities are entitled to invoke any one of the provisions contained in R. 6 (28) and that the cancellation of the licence is not a condition precedent for invoking the other provision contained in R. 6 (28 ). 1