H L MALHOTRA Vs. STATE OF ANDHRA PRADESH

JUDGEMENT

(1.) The petitioner filed the Writ Petition alleging that he and Respondents 5 and 6 constituted a firm in the name and style of Deccan Wines and General Stores (Bonded Ware House), Secunderabad (hereinafter called 'the firm') and has been carrying on the business of liquor. The petitioner being a resident of New Delhi, the business was entrusted to Respondents 5 and 6. The business had to be closed down in the year 1976 on account of losses due to the malpractices committed by 5th respondent. The firm fell in arrears of Excise duty of Rs. 14,13,519-56. Respondents 5 and 6 paid an amount of Rs.9,50,000/- out of the above total arrears on 29-3-1982. Since the remaining amount wasnot paid, the respondents 1 to 3 demanded the petitioner for payment of the same by the letter dt. 4-5-1982. It is alleged that the petitioner was not liable to pay any amounts to wards the above Excise arrears since in fact he was not the Licensee. The Licensee was 5th respondent and he was solely liable to pay the entire Excise arrears. However, respondents 1 to 3 unlawfully sought to collect the balance of Rs.4,22,351-45 from the petitioner, along with interest of Rs.6,46,954/- on the total arrears of Rs. 14,13,519-56. However, the petitioner paid the princip al amount of Rs.4,22,351-45 by August, 1982. It is alleged that he made the said payment since the 2nd respondent, the Commissioner of Excise, promised to waive the interest in his letter dt. 28-7-1982, addressed to the petitioner. Though several dates have been fixed for hearing for the purpose of consideration of waiver of interest by the 2nd respondent, the 2nd respondent had not finally considered the waiver of interest nor has 2nd respondent communicated any further date of hearing after 9-3-83. It was, therefore, assumed by the petitioner that the interest has been waived by the 2nd respondent. Even otherwise the respondents were estopped from claiming the interest. Surprisingly the respondents 1 to 3 have now sought to recover the sum of Rs. 10,69,305-45 towards interest from the petitioner and towards excise arrears for the period 1971-72 to 1974-75, by issuing a demand notice dt. 24-11-987 through the 4th respondent, with distress warrant, to pay the said amount. The action of the respondents 1 to 4 isnow attacked as illegal and without jurisdiction. The petitioner filed the above writ petition seeking a Writ of Mandamus restraining the respondents 1 to 4 from collecting any amount either to wards principal or interest with regard to the Excise arrears of M/s Deccan Wine Corporation, Secunderabad.

(2.) It is the contention of the learned counsel for the petitioner that the petitioner or the firm, or which he was a partner, was not the actual licensee and that the licensee was only the 5th respondent and the firm was carrying on the business on behalf of the 5th respondent. Hence the excise revenue due to the Government has to be recovered only from the 5th respondent and the notice issued by respondents II to 3 to the petitioner for payment of the interest is illegal.

(3.) The licence is not produced by the petitioner or the Commissioner of Excise. The petitioner has not placed any material on record 1o show that 5th respondent was the licensee. The Commissioner of Excise has not filed the counter affidavit in the case. His Secretary filed the counter affidavit on behalf of respondents 1 to 4, making ambiguous statements regarding the identity of the licensee. We have, therefore, directed the Commissioner of Excise to file an additional counter affidavit. Thereupon the Commissioner has filed counter affidavits dt.2-9-1995 and 7-9-1995. In the counter affidavit dt. 7-9-1995 the Commissioner of Excise has categorically stated that Board of Revenue (Excise), Andhra Pradesh, Hyderabad, through its Circular dt. 15-7-1971 accorded sanction under Rule-5(2) of the Andhra Pradesh Indian Liquor (Storage in Bond) Rules, 1961 to M/s Deccan Wine and General Stores (Bonded Ware House), Secunderabad dt. 21-12-1971 and as per the Orders of the Government hi G.O.Ms. No. 1110, dt.6-11-1971 the licensee i.e., the above firm has been ordered to store the maximum limit of storage of liquor and Beer and on which stocks the duty payable was Rs. 10 lacs. It is also stated therein that the report of the Asst. Commissioner of Excise, Enforcement, Twin Cities, Hyderabad, dt. 20-4-1982 revealed that the licence was granted in favour of the firm. From the above statements of Commissioner ofExcise it is clear that the firm was the licensee and not the 5th respondent. Being liable as partners of the firm, the respondents 5 and 6 paid an amount of Rs.9,50,000/- on 29-3-1992 and the petitioner paid the remaining amount of amount of Rs.4,63,519-56 towards the principal. Otherwise there was no reason for the petitioner or for the 6th respondent to have paid the arrears of excise. The petitioner knew very well that the firm was the licensee and being a partner he was also liable to pay the excise arrears of the firm and the interest thereon. The stand now taken by the petitioner in this writ petition is not bonafide but only to evade the payment of interest. The case put up by him is a false one. We, therefore, hold that the firm was the licensee and the petitioner being partner of the firm is liable to pay the excise arrears including interest thereon.