BHAGWANDAS T MANDALIYA Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE petitioner is engaged in the production and manufacture of certain medicinal and toilet goods dutiable under the Medicinal and Toilet Preparations (Excise Duties) Act, 1955. A licence was issued to him for the purpose under the act. On 9th May 1960, the Collector, Raipur, issued to him a notice asking him to show cause why his licence should not be suspended because of a breach on his part of the conditions of the licence about manufacture of the goods and of the provisions of the Act and the rules made thereunder. The notice mentioned, inter alia, that the petitioner's manufactory was not a contiguous unit and did not conform to the specifications laid down in Rules 22 and 23; that the preparation of 'ark Kikar--a Unani, preparation--was in contravention of the conditions of the licence; that he had failed to maintain correct accounts as required by Rule 56; that the accounts of the consumption of rectified spirit maintained by him were not correct; and that he had failed to pay duty amounting to Rs. 7,978. 25 np. By his letters dated 12th and 13th May 1960, the applicant denied these allegations and requested for an opportunity of a hearing. On 8th july 1960, the Excise Commissioner passed an order under Rule 87 of the medicinal and Toilet Preparations (Excise Duties) Rules, 1956, suspending the petitioner's licence pending further enquiries. He found that the charges levelled against the petitioner had been prima facie established.

(2.) THE applicant challenges the legality of this order of the Excise Commissioner and prays that a writ of certiorari be issued for quashing it.

(3.) SHRI Sen, learned counsel appearing for the petitioner, submitted that under rule 87 a licence could be suspended only at the conclusion of an enquiry and the excise Commissioner had no power to suspend the petitioner's licence pending further enquiries. In our opinion, this contention must be accepted. Rule 87, in so far as it is material here, runs as follows: "87. Revocation and suspension of licence.-- (1) Any licence granted under these rules may be revoked or suspended by the licensing authority if the holder, or any person in his employ, is found to have committed a breach of the conditions thereof, or of any of the provisions of the Act or these rules or has been convicted of an offence under section 161, read with Section 109 or with Section 116 of the Indian penal Code (45 of 1860): provided that such revocation or suspension shall not be made until the holder of the licence has been given a reasonable opportunity of showing cause against the action proposed to be taken. * * * * *" the language of the rule clearly shows that a licence can be revoked or suspended only if the holder of the licence is found to have committed a breach of the conditions of the licence or of the provisions of the Act or the rules thereunder or has been convicted under Section 161 read with Section 109 or with Section 116, i. P. C. The expression "if the holder. . . . is found to have committed a breach. . . . " clearly shows that unless there is a finding about the breach of the conditions of the licence or of the provisions of the Act or the rules thereunder or about the conviction for an offence mentioned in Rule 87 (1), there cannot be any revocation or suspension of the licence. The finding that is contemplated by Rule 87 (1) is the final finding and not any provisional finding. This conclusion is reinforced by the proviso to Rule 87 (1) under which revocation or suspension cannot be made until the holder of the licence has been given a reasonable opportunity of showing cause against the action proposed to be taken. The proviso unmistakably shows that the holder of the licence must be given a notice to show cause against the action proposed to be taken against him, and there must be an enquiry giving a reasonable opportunity to the holder of the licence for showing cause against the proposed action. Learned Government Advocate said that under Rule 87 (1) it was permissible to revoke or suspend the licence pending an enquiry after giving a notice to the holder of the licence to show cause against the action proposed to be taken. We do not agree. What the proviso says is that the revocation or suspension shall not be made until the licence-holder has been given a reasonable opportunity of showing cause against the action proposed to be taken and not that until the holder of the licence has been given a notice to show cause against the proposed action. It is only after a show cause notice has been given to the licence-holder and he has been given a reasonable opportunity and after a finding is given by the competent authority that a licence can be revoked or suspended under Rule 87 (1 ).