Andhra HC (Pre-Telangana)
Toddy Tappers Co-Op. Society Group, ... vs Prohibition And Excise ... on 31 August, 2001
Equivalent citations: 2001(6)ALD309, 2001(5)ALT793
Author: Bilal Nazki
Bench: Bilal Nazki, E. Dharma Rao
JUDGMENT Bilal Nazki, J.
1. These are three Writ petitions filed by the same petitioner against the same respondents. In Writ petition No. 5406/99 a prayer is made that respondents should be directed to restore the toddy shop licence and toddy depot licence to the petitioner society. It also sought a declaration that registering of case in Cr.No. 2129/98/P&Ex./B3, dated 6-11-98 and 12-3-99 was illegal. The second Writ petition is W.P. No. 8135/99. In this petition the order passed by Prohibition & Excise Superintendent rejecting the representation of the petitioner for grant of remission of rentals in respect of TCS group, Khammam has been challenged. Third Writ petition is W.P. No. 21033/99. In this Writ petition a direction is sought not to collect the tree tax for the trees which were not tapped by the petitioner society in Krishna, Khammam and Nalgonda districts.
2. The controversy is in fact same in all the three Writ petitions but the same controversy has attained different manifestations. Coming to the first Writ petition i.e., W.P. No. 5406/99, the petitioner' contended that it was a society formed and registered under A.P.T.T. Co-operative Societies Act. According to the petitioner, there are 159 actual tapper members registered in the TCS group. Khammam consisting of 20 toddy shops. Respondent No.1 issued licence on 23-10-98 for retail sale of toddy for 20 toddy shops and also issued a licence oil 23-10-96 for the Depot for the period from 23-10-96 to 30-9-2001. The petitioner society, was carrying on business and never violated any provisions of the Excise laws at any time. The Prohibition & Excise Superintendent cancelled all the 20 licences of petitioner society and also toddy depot licence vide his proceedings dated 6-11-98 on the allegation that the Chemical Examiner of the Excise laboratory had reported that samples taken from the shops of the petitioner society were adulterated, these samples contain diazepam. Another ground for cancellation of licence was that rentals had not been paid for the month of October, 1998. The petitioner Submits that the report of the Chemical Examiner was doubted by the petitioner society therefore they made an application on 2nd November, 1998 for sending the second sample to an independent laboratory. Eight samples had been taken therefore the petitioner wanted all the eight samples to be sent to an independent laboratory. The first report had been given by the laboratory of the Excise Department. The samples were sent to Indian Institute of Chemical Technology. Tarnaka, Hyderabad. They, submitted their report stating therein that samples were not adulterated with diazepam or chloral hydrate. This report was given on 20th November, 1998. In the meantime the rentals for October, 1998 were also paid. Therefore, the petitioner made an application on 4th December, 1998 requesting the Excise Superintendent to restore the licence as the allegations of adulteration had not been proved. The respondent declined to pass any order. In similar circumstances the Commissioner had passed an order on 31st May, 1996 and directed restoration of licence in view of the second report on the sample by an independent agency. It is further contended that it is the practice of the Excise department that licences are restored if the second report says that the sample was not adulterated. In this Writ petition it is stated that, since the first respondent did not consider its representation the petitioner filed Writ petition No. 35825/ 98 before the High Court, this Writ petition was disposed of by an order dated 28-12-98 directing the 1st respondent to consider the representation of the petitioner dated 14-12-98. The first respondent was directed to take all material into consideration and decide as to whether the order passed, by him on 6-11-98 could be revoked. It is further submitted that the rental for October,1998 had already been deposited and accepted by the respondent along with interest. The first respondent even after the directions of the High Court did not pass any order. The first respondent forwarded the file to the Commissioner of Prohibition and Excise requesting him to issue necessary instructions but the Commissioner vide his letter dated 10-2-99 asked the Prohibition & Excise Superintendent to take necessary action on merits and as per rules. Again the Prohibition & Excise Superintendent through District Collector, Khammam on 23-2-99 sought specific instructions from the Commissioner. The Commissioner wrote back that there was no need for ally specific instructions and that the first respondent should decide the matter on merits keeping in view the directions of the High Court. It was contended that though on paper the Commissioner asked the respondent to pass orders on merits but the first respondent gave oral instructions to reject the request of the petitioner. Thereafter the respondent No.1 rejected the application of the petitioner on 12-3-98. It is contended that there was clear report from an independent agency that there was no adulteration therefore the order passed rejecting the request of revocation of licence was arbitrary and illegal. The petitioner obtained an order of interim suspension and managed to go on with the business.
3. The Writ petition No. 8135/99 is a result of order passed on 7-4-99 by the Prohibition & Excise Superintendent after the High Court gave interim directions in W.P. No. 5406/99. The licence was restored to the petitioner but a demand was made from him for the rentals of October, 1998 to April, 1999. This Writ petition challenges that order and submits that in terms of rules when the petitioner had been kept out of business by the respondents by suspending or cancelling his licence rentals could not be demanded by him.
4. Third Writ petition No. 21033/99 was filed against an order dated 25-9-99 by which the petitioner has been asked to pay the tree tax the relevant period. This also has been challenged on the ground similar to first and second Writ petitions.
5. Counters have been filed. The counter in W.P. No. 5406/99 admits the fact as alleged in the Writ petition with respect to taking of the samples and obtaining two reports with regard to the chemical analysis. It is also contended that there are no rules which would suggest that the authorities concerned were bound to follow the opinion obtained in the second analysis. Therefore, the only question which will have to be dealt with in these writ petitions is whether the Excise authorities are bound to restore a licence suspended or cancelled on the basis of a chemical analysis report if the second opinion is that the sample was not adulterated. Under Section 31 of the A.P. Excise Act the competent authority has the power to cancel or suspend the licence. Section 31(1)(b) and 31(1)(c) lay down.;
"31. Power to cancel or suspend Licence etc.--(1) Subject to such restrictions as may be prescribed the authority granting any licence or permit under this Act may cancel or suspend it, irrespective of the period to which the licence or permit relates
(a).....
(b) in the event of any breach by the holder thereof, or by any of his servants or by any one acting on his behalf with his express or implied permission, of any of the terms and conditions thereof; or
(c) and (d).....
(e) if the conditions of the licence or permit provide for such cancellation or suspension at will:"
Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 gives the power to Excise Officer to draw the samples and rule 11 prohibits adulteration of toddy or arrack.
6. By, perusing these provisions of law applicable to the case, it becomes clear that a licence can be suspended or cancelled if there is breach of any terms and conditions of the licence and one of the term and conditions of the licence is laid down in rule 11 of the rules itself that the Toddy shall not be adulterated. Therefore, if there is a case of adulteration of toddy, which is prohibited the licence call be suspended or cancelled. Now, the question remains is, if there are two reports one given by the Analyst of Excise department and another given by an independent laboratory which report has to be relied upon? Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969 lays down :
"24. Drawal of samples :--Any Excise Officer not below the rank of Sub-Inspector of Excise or Food Inspector appointed under the Prevention of Food Adulteration Act, 1954, shall be competent at any time to take samples of arrack or toddy in possession of licensee or any person storing arrack or toddy for purposes of analysis. Such Officer shall take two samples ill the presence of the licensee or his agent under a Panchanama. Both the samples shall be sent to the Court with a requisition to send one of the samples to the Chemical Examiner for chemical examination expeditiously, Only in the event of the sample sent to the Chemical Examiner being damaged in transit or otherwise before the analysis is concluded, the said officer shall approach the Court to send the second sample bottle deposited with the Court to the Chemical Examiner."
By reading this rule it becomes abundantly clear that the power to take samples is not only given to Sub-Inspector of Excise but it is also given to the Food Inspector appointed, under the Prevention of Food Adulteration Act, 1954. If a sample is taken by the Food 'Inspector obviously lie will proceed in accordance with the provisions of Food Adulteration Act. In Section 13 of the Food Adulteration Act a second sample can be sent for testing by Central Food Laboratory but under Sub-section (3) of Section 13 the certificate issued by the Director of Central Food Laboratory shall supercede the report given by Public Analyst. Therefore, in terms of Food Adulteration Act a certificate issued by the Director of Central Food Laboratory by analyzing the second sample supercedes the first report given by the Public analyst by analyzing the first sample which would mean that the first report becomes nonexistent. There is no such provision in the Excise Act or the Rules made thereunder. Even under Food Adulteration Act the analysis report of second sample has not been taken to be conclusive with regard to the fact whether a particular sample was adulterated or not. There have been consistent opinions of various High Courts. The Madhya Pradesh High Court in Narendra Kumar v. Municipal Corporation, Indore, 1986 Cr.LJ 1688 (MP), held that the certificate signed by the Director of Central Food Laboratory sent to the Court in the prescribed from specifying the result of analysis was final and would constitute conclusive evidence of facts therein as distinct from the opinions thereon.
7. So, even under the Food Adulteration Act the opinion with regard to adulteration expressed, in second report by the Central Food Laboratory is not taken to be conclusive proof of the quality of the sample. It is merely a piece of evidence which may or may not be accepted in a given case on given facts. But, in Excise Act or the rules made thereunder there is no provision akin to Section 13(3) of Prevention of Food Adulteration Act. By having two conflicting reports from two different laboratories at best a doubt may arise with regard to the quality of the sample which could possibly be a defence in a criminal proceedings but a doubt with regard to the quality of the sample of toddy in a departmental proceedings in question resulting cancellation of licence should go in favour of the consumers rather than in favour of a licensee. In the present case the first analysis disclosed that the sample contained diazepam and chloral hydrate. So, if the people are made to drink toddy with diazepam and chloral hydrate the health of the general public would be at jeopardy and in such a doubtful situation it would not be advisable to take a risk of life and health of the general public. It is known to one and all that large number of people in the State of Andhra Pradesh consume toddy. The petitioner society has been running 20 retail toddy shops therefore in each and every case it would be for the authorities concerned to take a decision and take all relevant material into consideration while suspending or cancelling the licence. However, the learned counsel for the petitioner has pressed into service a judgment of learned Single Judge of this Court reported in Toddy Tappers Co-op. Society v. Proh. & Excise Superintendent, . The facts were similar. The Court found :
"On a perusal of the second sample report dated 4-11-98, I am satisfied that the second sample is free from either Diazepam or such other adulterant. It is not in dispute that the test conducted on the spot did not disclose that the toddy was adulterated with Diazepam, but it is strange that the first sample sent to departmental laboratory was found to contain Diazepam. It was in these circumstances that the petitioner approached this Court for a direction to send the second sample bottle to independent laboratory. As already narrated above this Court was satisfied for sending second sample bottle to an independent laboratory and accordingly the report dated 4-11-98 has been received. Whenever there is a difference between the analysis report of the department agency and report of independent agency it is the second report that has to be accepted. The petitioner has made some allegations against the respondents, but it is not necessary to go into those allegations, since the matter has reached this stage. Suffice it to say that on the basis of the second sample analysis report of the independent agency there is every reason to believe that the sample drawn from shop No.1 in proceedings dated C.O.R No. 280/97-98 dated 18-6-1998 is not adulterated toddy. In that view of the matter, there is no reason for the authorities to proceed against the petitioner society with the threat of cancellation of licences.. There is no other contravention alleged against the society and hence this writ petition merited."
The learned Judge was of the view that whenever there is variance between the report of the departmental agency and report of independent agency the report of the independent agency should be accepted. There is no discussion for making such observation and the learned counsel for the petitioner has not shown us any authorities to accept such a proposition. It is well known that running a business in liquor is not a fundamental right. We need not go into catena of decisions on this issue as it is well settled that dealing with liquor is prerogative of the State and this prerogative can be extended and granted to people and can also be revoked. Though, dealing in liquor is only a privilege granted by the State and it can be withdrawn by the state as has been held in Khoday Distilleries v.
State of Karnataka, and Mc. Dowels v. State of A.P., , however the privilege can be withdrawn subject to limitations placed under Article 14 of the Constitution of India. We have not been able to find any infraction of Article 14 of the Constitution in the present case. Intrinsically the use of alcohol is bad for health and therefore under Article 47 the State is duty bound to have prohibition of the consumption of intoxicating drinks which are injurious to health. Therefore, when the health of the generaj public and the life of the consumers is at stake and there is a reasonable doubt that a person to whom such a privilege has been granted is indulging in adulteration of liquor the State would be within its powers to revoke the licence. For these reasons, we do not find that the judgment reported in Toddy Tappers Co-op. Society v. Proh. & Excise Superintendent (supra) is laying down any good law.
8. The learned counsel for the petitioner has also brought to our notice judgment of Division Bench reported in Ushanna Goud v. Commissioner of Excise, 1993 ALT Suppl. (1)209 (DB). There was an amendment in Rule 24 of A.P. Excise (Arrack and Toddy Licences General Conditions) Rules, 1969, the words "The option of the Chemical Examiner for Excise shall be final" had been added to the rule. This was struck down by the Division Bench of this High Court. This judgment in no way helps the petitioner as we have already held that both the reports are piece of evidence and both can be taken into consideration by the competent authority at the time of deciding about the cancellation, revocation or suspension of the licence keeping in view the general public health and the welfare of the consumers.
9. In the counter the respondents have stated that it was not desirable to consider the representation of the licensee who deals with liquor and it may prove disastrous in the event of any covert or overt action, therefore, the representation of the petitioner for revocation of orders of cancellation was dismissed.
10. For these reasons we do not find merit in W.P. No. 5406/99 which is accordingly dismissed.
11. Since we have held that the revocation of licence was lawful therefore the licensee is bound to pay the tree tax as well as the licence fee for the period in question. The Writ petitions Nos. 8135/99 and 21033/99 are also accordingly dismissed.