RAM NARAYAN & SONS Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE petitioner challenges the validity of the proceeding initiated under the Public Demand Recovery Act, at the instance of Superintendent of Excise, Aurangabad for alleged recovery of penality in terms of condition 7(a) of the conditions of licence for the wholesale of country spirit. The penalty therein is for alleged loss of State excise duty due to short supply of spirit to warehouses under the licence aforesaid. The short point raised is that under the said provision it is the Commissioner of Excise who is competent to impose the penalty. The Commissioner never imposed any such penalty, yet, proceedings were initiated for its recovery.

(2.) COUNTER affidavit has been filed by the Superintendent of Excise, Aurangabad and rejoinder thereto has been filed. With consent of parties the writ application is being disposed of at the stage of admission itself. The petitioner admittedly was granted the wholesale licence for country liquor for the period 1.11.1983 to 31.3.1987 by the permission of the Commissioner of Excise, Bihar, and as such was issued a licence in Form -27, as prescribed under the Bihar Excise Act, 1915 . Under the said licence, petitioner was obliged to supply a minimum quantity of spirit to the warehouses for selling country liquor in wholesale. If there was a short supply of spirit it naturally results in shortage of availability of country -liquor for retail sale. If there is a shortage of retail sale of country liquor State loses excise revenue as collection reduces. It is virtually to overcome this that the! provision of penalty has been made in condition 7(a) of the licence, which quoted hereunder: - Condition 7(a). Failure to supply spirit as specified in condition 7 supra shall entail penalty at the discretion of the Commissioner of Excise. The penalty may extend to the amount of duty on the spirit demanded by the licensed vendors but not supplied together with compensation for any loss that may fall on Government in consequence of this failure to supply spirit.

(3.) PETITIONER states that it so happened that during the period under consideration because of two reasons, as has been mentioned itself in the supplementary counter affidavit, there was a default on part of the petitioner to maintain the minimum supplies. These facts were non -allocation and non -availability of molasses to the petitioner distillery by the State and secondly diversion of spirit held in petitioner 'sstock by orders of the Licensing Authority, the Collector. Diverting stocks to other district because of which petitioner could not maintain his commitment to his district. Both were reasons beyond petitioner 'scontrol.