JITENDRA Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) This reference before the Full Bench has been made on 26th of April, 2011 in view of the apparent conflict in view expressed by the Division Bench of this Court in the case of M/s Samarth Co operative Consumers Central Stores Limited Versus State of Maharashtra and the view expressed by the Division Bench of this Court in this writ petition. Earlier, the Division Bench of this Court had, in the case of M/s Samarth Co operative Consumers Central Stores Limited Versus State of Maharashtra & others, held that the petitioner therein, a foreign liquor licensee, was not liable to pay the license fee for the period during which he had not carried on business. Since the FL III license of the petitioner therein was not renewed for the period from 01.04.1979 to 01.04.2004, the Division Bench held that the petitioner cannot be asked to pay the license fee for that period. The Court observed that Section 49 of The Bombay Prohibition Act, 1949 did not empower the authorities to demand license fee for the period for which the petitioner had not carried on business. The other Division Bench making the reference, however, was unable to agree with the view and the observations in the case of M/s Samarth Co operative Consumers Central Stores Limited Versus State of Maharashtra & others. In view of the Division Bench, making the reference, the licensee was not entitled for refund of privilege fees for the period during which the license was not in use. According to the Court making the reference, privilege fee is charged by the State for parting with the exclusive privilege of trading in liquor and since the Government had not withdrawn the privilege granted to the licensee at any point of time, the licensee was not entitled to refund of license fee, even if he was prevented from carrying on business due to the prohibitory order of the Court. In the circumstances, the Division Bench considered it appropriate to refer the following question for a decision by a larger Bench.

(2.) Few undisputed facts giving rise to the writ petition and then to the order of reference, are stated thus A FL III license was granted in the year 1974 in the name of one Parasram Ghate. Since the licensee failed to carry on business, the license lapsed and in the year 2005, it was re validated and transferred in the name of the petitioner. The petitioner desired that the license be transferred from Narkhed to Nagpur and, hence, applied to the Excise Commissioner in that regard. The Excise Commissioner, however, rejected the application for transfer of the license to Nagpur. A revision against that order was allowed and the shop was shifted to Bidipeth, Nagpur. Some residents of Bidipeth locality filed a writ petition challenging the order granting permission to shift the shop from Narkhed to Bidipeth, Nagpur. In Writ Petition No.4693 of 2007, filed by the residents of Bidipeth, this Court granted stay to the effect, implementation and operation of the order of transfer on 19.10.2007. The ad interim relief was confirmed on 23.07.2008. During the pendency of the petition, the petitioner informed the Court that he was willing to shift his shop to some other locality of Nagpur and the Court granted permission to the petitioner to make the necessary application to the competent authority. The Superintendent of Excise, Nagpur was pleased to allow the petitioner to shift his shop from Bidipeth, Nagpur to Radke Layout, Nagpur. Since the petitioner was prevented by the order of the High Court from operating his license at Bidipeth, Nagpur, the petitioner filed the writ petition seeking the refund of the license fee paid by him for the period during which his shop remained closed. The Division Bench of this Court, was of the view that in the circumstances of the case, the petitioner was not entitled for refund of privilege fees. Since the Division Bench was unable to agree with the view expressed by the other Division Bench in the case of Samarth Co operative Consumers Central Stores Limited Versus State of Maharashtra & others, the question stated hereinabove was referred for a decision by a larger Bench.

(3.) Shri Jaiswal, the learned counsel for the petitioner, submitted that the business of the petitioner was stopped without any fault on the part of the petitioner and, hence, the petitioner was entitled to the refund of license fees. According to the learned counsel for the petitioner, the Government had transferred the privilege and the license fee is the profit, which the Government would have earned, had it done the business of vending foreign liquor. It is submitted on behalf of the petitioner that if the privilege was not transferred to the petitioner, the State would have done the business and due to the prohibitory order of the Court, if the State could not have carried on the business and earned the profit, it is not for the State to seek the license fees from the petitioner, who was prevented by an order of the Court to carry on business. The learned counsel for the petitioner relied on the judgments (Har Shankar & others etc. etc. Versus The Deputy Excise and Taxation Commissioner & others etc., 1975 AIR(SC) 1121 ), (Panna Lal & others etc., etc. Versus State of Rajasthan & others, 1975 AIR(SC) 2008), (State of U.P. & others Versus Sheopat Rai & others, 1994 Supp1 SCC 8), (State of Punjab & another Versus Devans Modern Breweries Ltd. & another, 2004 11 SCC 26) and (State of Madhya Pradesh & others Versus Lalit Jaggi, 2008 10 SCC 607) to substantiate his submission that the amount charged as a license fee is not a fee or a tax but, is in the nature of price of a privilege, which the purchaser has to pay in any trading and business transaction and thus falls within the realm of a contract. The learned counsel for the petitioner submitted by relying on the provisions of Section 56 of the Contract Act, 1872 that the contract to deal with liquor became impossible in view of the prohibitory order of the High Court and as the petitioner was prevented from carrying on the business in liquor, the contract for that period became void. The learned counsel for the petitioner also relied on the provisions of Section 65 of the Contract Act, 1872 to submit that as the contract became void, the State, having received the advantage under the void contract or agreement, was bound to restore it to the petitioner, who did not carry on the business due to the prohibitory order of the Court.