Punjab-Haryana High Court
Haryana Distillery vs State Of Haryana Etc on 26 August, 2014
Author: Ajay Kumar Mittal
Bench: Ajay Kumar Mittal, Fateh Deep Singh
CWP No.9266 of 2002 (O&M) 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
CWP No.9266 of 2002 (O&M)
Date of decision: 26.8.2014
Haryana Distillery, Yamuna Nagar
......Petitioner
Vs.
The State of Haryana and another
.....Respondent
CORAM: HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
HON'BLE MR. JUSTICE FATEH DEEP SINGH
Present: Mr. Rajiv Atma Ram, Sr. Advocate with
Mr. Ranjit Singh Kalra, Advocate for the petitioner (in CWP
No.9266 of 2002).
Mr. Arastu Chopra, Advocate and Mr. Fateh Saini, Advocate for
the petitioner (in CWP No.11641 of 1997)
Ms. Mamta Singla Talwar,AAG, Haryana.
Ajay Kumar Mittal,J.
1. This order shall dispose of CWP Nos. 11641 of 1997 and 9266 of 2002, as according to the learned counsel for the parties, the facts and the issue involved in both the petitions are similar. However, the facts are being extracted from CWP No.9266 of 2002.
2. Prayer in CWP No.9266 of 2002 is for issuance of a writ in the nature of certiorari quashing the notification dated 27.3.1998, Annexure P.1 GURBAX SINGH 2014.10.29 10:44 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.9266 of 2002 (O&M) 2 to the extent it provides for imposition of penalty for not using 60% new bottles and for quashing the notice dated 22.6.1999, Annexure P.2 and the order dated 18.4.2002, Annexure P.4, passed by respondent No.2.
3. A few facts relevant for the decision of the controversy involved as narrated in CWP No.9266 of 2002 may be noticed. The petitioner is one of the units of M/s Modi Spinning and Weaving Mills Company limited which is situated at Yamuna Nagar, whereas the registered office of the company is at Modingar (UP). The said company is sick company under Section 19(2) of the Sick Industrial Companies Act (Special Provisions) Act, 1985. The petitioner unit was engaged in the manufacture of liquor and the same continued upto the imposition of prohibition in the State. It was granted licence for the manufacture of liquor under the provisions of the Punjab Excise Act, 1914 (in short, "the Act") and the rules framed thereunder from time to time. The respondent State in exercise of powers conferred by sub section (1) of Section 57-A of the Act issued a notification dated 27.3.1998, Annexure P.1 fixing the price of liquor. Under the said notification, the distillery was required to use new and old quartz size bottles in the ratio of 60:40 and in case of failure, the Excise and Taxation Commissioner, Haryana was empowered to impose penalty at the rate of ` 1/- per bottle after affording reasonable opportunity of being heard. As per notification, the use of the new and old quartz size bottles was to be calculated on quarterly basis under normal circumstances. According to the petitioner, it used new and old quartz size bottles in the ratio of 60:40 as prescribed in the notification. Still the petitioner was served with notice dated 22.6.1999 by respondent No.2 calling upon it as to why penalty of ` GURBAX SINGH 2014.10.29 10:44 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.9266 of 2002 (O&M) 3 19,96,281/- be not imposed for not using 60% new quartz size bottles as per the notification dated 27.3.1998, Annexure P.1. The petitioner submitted detailed reply dated 20.7.1999 to respondent No.2, inter alia stating that with effect from 1.4.1998 to 30.6.1998, it had used 51,33,468 new bottles whereas in the notice, the figure of the new bottles used was given as 48,61,824. According to the petitioner, the notice was issued after the expiry of about three months of the relevant period of financial year. The petitioner averred that had there been any objection to the use of old bottles for the relevant period, it would not have used the old bottles in the absence of availability of the new bottles and it might have shut down the production though it had used the new quartz size bottles from 1.4.1998 to 30.9.1998 much above the prescribed ratio. After considering the matter, respondent No.2 passed the impugned order dated 18.4.2002, Annexure P.4 imposing penalty of ` 1/- per bottle for the alleged excess use of old bottles. Hence the instant writ petitions by the writ petitioners.
4. After hearing learned counsel for the parties, we find merit in the writ petitions.
5. In order to effectively adjudicate the controversy arising in the writ petitions, it would be expedient to reproduce Section 57-A of the Act which reads thus:-
"57A. Fixation of price of intoxicant to be sold by distilleries : (1) The State Government may, from time to time by notification, fix the prices of plain, spiced and special spiced country spirits, bulk or bottled or both, for sale by the distilleries after taking into consideration their manufacturing cost.
2) The licencee shall maintain in the office of the Distillery GURBAX SINGH 2014.10.29 10:44 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.9266 of 2002 (O&M) 4 for inspection of a statement of the current prices of plain, spiced and special spiced country spirits bulk as well as bottled, in accordance with the prices fixed by the state Government under sub section (i).
3) No licensee shall sell country spirits at prices different from those fixed under sub section (i)."
6. The State Government under Section 57-A of the Act as applicable to the State of Haryana is empowered to fix the price of the intoxicant which is to be sold by the distilleries. Sub section (1) of Section 57-A of the Act enables the State government to issue notification from time to time fixing the price of plain, spiced and special spiced country spirits, bulk or bottled or both, for sale by the distilleries after taking into consideration their manufacturing cost. There is no provision on the basis of which the State can impose any condition restricting sale of liquor on the basis of old and new bottles under Section 57-A of the Act. Thus, the notification dated 27.3.1998, Annexure P.1 authorising the State to require the distillery to use new and old quartz size bottles in the ratio of 60:40 and imposing penalty at the rate of rupee one for its violation was beyond the power conferred by the statute under Section 57-A of the Act. As a necessary corollary, no penalty on the aforesaid premises could have been imposed. In view of the above, imposition of penalty at the rate of rupee one per bottle is bad. Accordingly, notifications dated 27.3.1998 and 21.3.1995 in both the writ petitions are set aside. Consequently, the orders imposing penalty are also quashed.
7. In CWP No.11641 of 1997, it was submitted by the learned counsel for the petitioner that in pursuance of the penalty order, certain GURBAX SINGH amount had been recovered from the petitioner. In view of our above order 2014.10.29 10:44 I attest to the accuracy and integrity of this document High Court Chandigarh CWP No.9266 of 2002 (O&M) 5 whereby we have held that the levy of penalty is bad, the petitioner cannot be held liable for penalty. Thus, any amount recovered in pursuance to the order of penalty, shall be refunded to the petitioner in accordance with law.
8. Accordingly, both the petitions are allowed.
(Ajay Kumar Mittal)
Judge
August 26, 2014 (Fateh Deep Singh)
Judge
'gs'
GURBAX SINGH
2014.10.29 10:44
I attest to the accuracy and
integrity of this document
High Court Chandigarh