K KRISHNA MURTHY ARRACK SHOP LICENSEE OF MAQDOOMPALLY JALALPUR Vs. EXCISE SUPERINTENDENT NALGONDA DISTRICT AT NALGONDA

JUDGEMENT

(1.) Two questions mainly arise in this batch of writ petitions namely (1) whether the licensee in respect of an arrack shop is. entitled to proportionate remission i n the privilege fee and issue price in case the Government is unable to supply the entire monthly quota in a given month and (ii) whether the Government is entitled in such a situation, to compel the licensee to lift the short-drawn quantity in a month ia the succeeding month and deny the licensee's claim for remission in the privilage fee and issue price? These questions have to be examined in the light of the new system evolved by the State Government for the current Excise year.

(2.) Excise revenue is one of the sub stantial source of revenue for the State Government and the revenue derived by parting with the privilege to sell arrack in favour of licensees constitutes a major component of excise revenue. Arrack is produced in the State in the distilleries, i both in public sector and private sector. Even the arrack produced in private distilleries is subject to total control by the State. The Excise year commences with the first of October and ends with the 30th September of the following year (corresponding to Fasli year). Until the excise year 1988-89 arrack licenses were granted in the following manner.

(3.) For each shop or group of shops a particular quantity was fixed as minimum guaranteed quantity (MGQ). Licences in respect of a shop or group of shops were then auctioned. Licence was awarded to the highest bidder. The licensee was obliged to pay the monthly rental offered by him and also to lift the minimum guaranteed quota for the year. The MGQ fixed for the year was allowed to be distributed among 12 months according to the convenience of the licensee. He was bound to lift that quantity each month on remitting the issue price of arrack. A small fee was also prescribed for each licence. Thus, the excise revenue in case of arrack shops comprised three components, namely (i) rental amount (ii) issue price of the arrack which the licensee was bound to lift for the year and (iii) licence fee.