Meghalaya High Court
Umpohliew Central Bonded Warehouse vs The State Of Meghalaya Represented ... on 30 April, 2025
Author: H. S. Thangkhiew
Bench: H. S. Thangkhiew
Serial No. 01
Supplementary List
HIGH COURT OF MEGHALAYA
AT SHILLONG
WP(C) No. 430 of 2024
Date of Order: 30.04.2025
Umpohliew Central Bonded Warehouse
... Petitioner(s)
Versus
1. The State of Meghalaya represented through
The Principal Secretary, Excise, Registration, Taxation and
Stamps Department, Government of Meghalaya,
Shillong, Meghalaya.
2. The Commissioner of Excise,
Excise, Registration, Taxation and
Stamps Department, Government of Meghalaya,
Shillong, Meghalaya .... Respondent(s)
Coram:
Hon'ble Mr. Justice H. S. Thangkhiew, Judge Appearance:
For the Petitioner(s) : Mr. D.K Mishra, Sr. Adv. With Dr. N. Mozika, Sr. Adv.
Mr. M.L. Nongpiur, Adv.
For the Respondent(s) : Mr. A Kumar, AG with
Mr. A.H. Kharwanlang, Add. Sr. GA
Mr. A.S. Pandey, Adv.
Ms. S. Laloo, GA
Page 1 of 12
1. The instant writ petition has been filed assailing the threatened action of the State to create additional Central Bonded Warehouses in the State which the petitioner feels has impinged upon the rights of the petitioner to function in accordance with the Meghalaya Bonded Warehouse (Amendment) Rules, 2020 and the Meghalaya Excise (Third Amendment) Rules, 2020, as well as under the license to operate a Central Bonded Warehouse for the deposit and storage of Foreign Liquor in the State granted pursuant to the NIT dated 17.11.2020, issued by the Commissioner of Excise, Shillong. It has been contended that the decision to create additional Central Bonded Warehouses in the State of Meghalaya is in gross violation of the Meghalaya Bonded Warehouse (Amendment) Rules, 2020 and the Meghalaya Excise (Third Amendment) Rules, 2020.
2. Before alluding to the submissions advanced by the parties, the brief facts surrounding the case are that the State of Meghalaya took a policy decision to centralize the import and distribution of IMFL, Beer, Wine etc., to the Bonded Warehouses in the State through one entity namely the Central Bonded Warehouse (CBW). In accordance with the said policy decision, the Meghalaya Excise Rules and the Meghalaya Bonded Warehouse Rules were accordingly amended in 2020. Page 2 of 12
3. In accordance with the amended Rules, an NIT dated 17.11.2020 was then floated ostensibly, in accordance with Rule-44 (1) of the Meghalaya Bonded Warehouse (Amendment) Rules, 2020. The petitioner who had submitted his bid, was awarded the contract and a Letter of Intent was issued in its favour on 23.02.2021. The amended Excise Bonded Warehouse Rules thereafter, were also put to challenge by one association under the name of International Spirit and Wines Association of India, by way of WP(C) No. 186 of 2021, against this action of settlement of the contract. On the decision of the State to create additional CBW's, the petitioner as such, aggrieved with this threatened action, and maintaining that the Rules clearly provide that there shall be only one Central Bonded Warehouse, is before this Court by way of the instant writ petition.
4. Mr. D.K. Mishra, learned Senior counsel with Dr. N. Mozika, learned Senior counsel assisted by Mr. M.L. Nongpiur, learned counsel on behalf of the petitioner has submitted that Rule-44 (1) of the Meghalaya Bonded Warehouse (Amendment) Rules, 2020, provides for the establishment of only one CBW and that Rule 44 (14) of this Rule, has specifically provided that on commencement of the CBW, the Bonded Warehouses shall lift liquor deposits, from the said CBW against the Page 3 of 12 import permit issued by the Commissioner of Excise and cease to import directly from the Companies or Bottling Plants. He submits that Rule 44 (8) further provides that the CBW shall also be eligible to supply only to the Bonded Warehouses within the State. The learned Senior counsel contends that as the Rules allow for only one CBW, the State being bound by the Rules cannot arbitrarily create additional Central Bonded Warehouses and therefore the decision of the State to have additional CBWs, is in gross violation of the Rules.
5. It is then submitted by the learned Senior counsel, that the decision of the State respondents is hit by the doctrine of Promissory Estoppel, inasmuch as, the State respondents had taken a Policy Decision to centralize the import and distribution of IMFL, Beer, Wine etc., and to this effect had also amended the Meghalaya Excise Rules and the Meghalaya Bonded Warehouse Rules. The NIT he submits was floated for selection of persons to operate the CBW in furtherance of this Policy Decision, and as per the amended Rules. The petitioner on being selected he submits, has made huge investments to establish and work the CBW, as the same involves the infusion of substantial capital. It is contended that the State cannot now retract and create additional CBW's, on the pretext of providing a non-existing level playing field. The petitioner he Page 4 of 12 submits, having been selected to operate the CBW in the entire State of Meghalaya under the Rules, has legitimate expectation, that it shall be operating the CBW for 10 years as per the Rules, which however the State now has threatened the said legitimate expectation. In support of his arguments, the learned Senior counsel has referred to the following Judgments:-
i) (1971) 2 SCC 261 Para 5
D.A.V. College, Bhatinda Vs. State of Punjab
ii) (2006) 6 SCC 207 Para 7
Om Prakash Srivastava Vs. UOI
iii) Manu/SC/0021/1967 from Manupatra Para 31, 35 UOI Vs. Indo-Afgan Agencies
iv) (1979) 2 SCC 409 Para 33 Motilal Padampat Sugar Mills Vs. State of U.P.
v) (1998) 2 SCC 502 Para 8, 9, 11 Dr. Ashok Kumar Maheshwari Vs. State of U.P.
vi) (2000) 3 SCC 379 Para 11 India Thermal Power Vs. State of MP
6. It has been also emphasized by the learned Senior counsel that though the issue may seem to be connected and ancillary to the proceedings in WP(C) No. 186 of 2021, the instant writ petition stands on a different footing altogether, as the challenge in WP(C) No. 186 of 2021, is with regard to the constitutional validity of the Meghalaya Excise Page 5 of 12 (Third Amendment) Rules, 2020 and Meghalaya Bonded Warehouse (Amendment) Rules, 2020, whereas the challenge in the present writ petition, is the decision of the State respondents to create additional CBW's. As such, he submits the issue in both these writ petitions being dissimilar, the instant writ petition is not barred by the principles of Res Judicata, and that Section 10 CPC, also will have no application whatsoever. It is lastly submitted that the contention of the respondents that the main challenge is pending before the Division Bench is misplaced, as under the Meghalaya High Court Rules, 2013, the jurisdiction of the Division Bench as well as Single Bench is clearly provided, and the main and interim prayers are mentioned in the instant writ petition itself.
7. On behalf of the State respondents, in the counter affidavit itself, it has been denied that there exists any statutory restriction to establish multiple CBW's, and its authority in this regard under Section-
16 of the Meghalaya Excise Act, (adopted from the Assam Excise Act, 1910) licensing additional Warehouses has been asserted. It has been contended by the State respondents that the writ petition is premature and barred by the doctrine of res sub judice, as the validity of the Amendment Rules is pending adjudication in WP(C) No. 186 of 2021. It is reiterated by the State respondents that Section-16 of the Meghalaya Excise Act, Page 6 of 12 allows establishment of Bonded Warehouse of any kind, and also allows establishment of multiple Bonded Warehouses and that in WP(C) No. 186 of 2021 itself, the petitioner on affidavit has concurred to the power of the State to create Central Bonded Warehouses under Section-16 of the Excise Act.
8. It is submitted by Mr. A. Kumar, learned AG that the amendment made to the Meghalaya Excise Rules specifically at Rule-2 by insertion of (ii) (a), provides that a Central Bonded Warehouse means license to centralize a Warehouse and that does not mean that there shall be only one Central Bonded Warehouse. Further it is submitted that Rule- 44 of the Meghalaya Excise Bonded Warehouse Rules, provides that the Commissioner of Excise, on the prior approval of the Government has the power to establish a Central Bonded Warehouse in respect of a designated area, and that in the tender dated 17.11.2020, wherein the petitioner was successful, it has been given that the licencee shall be bound by the provisions of the Meghalaya Excise Rules and Meghalaya Bonded Warehouse Rules, including all amendments.
9. On the other points, it has been argued that the petitioner has no fundamental right to trade and derive profit out of liquor trade and consequently, it cannot dictate the economic policy of the Government, as Page 7 of 12 the Government has latitude in economic and fiscal matters. Moreover, it is contended that in the first place, there is no order or notification existing, for the establishment of additional CBW, and as such the writ itself is premature. It is then reiterated that the present writ petition is barred by the doctrine of res sub judice as WP(C) No. 186 of 2021 on the connected issue, is pending adjudication before the Division Bench of this Court.
10. On the aspect of Promissory Estoppel, it has been submitted that the same is inapplicable in the present case as there cannot be Promissory Estoppel against law, which permits the respondents to create multiple CBW's and further that, no promise has been held out by the Government, apart from the fact that in the license stipulation, no such promise was made. The reliance of the petitioner on the NIT, it is contended is misplaced as the said notice has been issued for the establishment of one CBW but however, the notice does not prohibit the Government from establishing another CBW. Series of judgments have also been placed and relied upon by the learned AG in support of his contentions, which are listed hereinbelow:-
i) Union of India Vs. Godfrey Philips India Ltd., (1985) 4 SCC 369 Para 13
ii) Har Shanker Vs. Excise & Taxation Commissioner, (1975) 1 SCC 737 Para 53 Page 8 of 12
iii) Khoday Distilleries Ltd., (1) Vs. State of Karnataka (1995) 1 SCC 575 Para 60
iv) R.K. Garg Vs. Union of India (1981) 4 SCC 675 Para 8
v) Mahadeo Vs. Sovan Devi (2023) 10 SCC 807 Para 15
vi) Manish S. Pardasani Vs. Inspector State Excise (2019) 2 SCC 660 Para 65 to 67
vii) Hamjad Ali Vs. Union of India (2020) SCC OnLine Ker 15426 Para 4
viii) Aspi Jal Vs. Khushroo Rustom Dadyburjor (2013) 4 SCC 333 Paras 9 to 11
11. This Court on hearing the parties at length has given its anxious consideration to all the arguments that have been advanced. Firstly, it is noted that the writ petitioner has approached this Court against the threatened action of the creation of additional Central Bonded Warehouses in the State based on the averments contained in the affidavit filed by the State respondents dated 23.02.2021 in WP(C) No. 186 of 2021, which it contends is in gross violation of the Meghalaya Bonded Warehouse (Amendment) Rules, 2020 and the Meghalaya Excise (Third Amendment) Rules, 2020. On perusal of the affidavit filed in the said writ Page 9 of 12 petition, it is noted this averment is contained in paragraph-3 thereof, and it appears that the decision was made on the recommendation of a Technical Committee which had been constituted on 15.09.2023, to examine the functioning of the Central Bonded Warehouse in the State, with the further mandate that the Committee was to ensure that no monopoly practice is practiced at the Central Bonded Warehouse level. This subsequent chain of events, thus led the petitioner to approach this Court by way of the instant writ petition, though the larger issue with regard to the legality and the vires of the amendments made to the Excise Bonded Warehouse Rules is still pending adjudication in WP(C) No. 186 of 2021. The petitioner is therefore seeking this Court's interference with the decision of the Government, based on the recommendations of the Technical Committee.
12. At this juncture, it would be apposite to refer to the challenge made to the amendments in the Rules, wherein the petitioner has been arrayed as a party respondent being the successful tenderer in the NIT dated 17.11.2020. This Court notes that the objections in the instant writ petition, raised against the proposed actions by the State respondents, for setting up of additional Central Bonded Warehouses in the State is already on record in a detailed affidavit filed by the petitioner in WP(C) No. 186 Page 10 of 12 of 2021, annexed as Annexure-15 to the present writ petition. A perusal of the affidavit reflects that the writ petitioner, has placed on record in WP(C) No. 186 of 2021, the factual aspect which has also been placed in the present writ petition, which has however been further embellished and expanded with submissions on points of law, along with additional pleadings questioning the justifiability of the actions of the State respondents.
13. This Court in this factual backdrop though compelling arguments have been advanced by the learned Senior counsel Mr. D.K. Mishra, touching upon all the vital issues together with discussion on the legal doctrines and efforts made to distinguish the situation of the present writ petition as opposed to WP(C) No. 186 of 2021, pending before the Division Bench; in the considered view of this Court however, the adjudication of the instant matter before this Single Bench cannot be acceded to as prayed. As per the discussion and observations made, the inescapable fact is that the instant matter is intrinsically and inextricably linked with WP(C) No. 186 of 2021.
14. As such, in order to avoid recording of findings which may be conflicting on issues which are not only substantially but directly in issue in WP(C) No. 186 of 2021, which are also on record in the affidavit of the Page 11 of 12 petitioner, without holding the matter any further, this Court deems it necessary that this writ petition be heard together by the Division Bench, with WP(C) No. 186 of 2021. The respective judgments relied upon by the counsel in support of their case is not discussed in view of the decision to place this matter before the Division Bench.
15. Accordingly, let the records of this writ petition alongwith this order be placed before the Hon'ble Division Bench of this Court for due consideration. It is further provided that as interim orders are in operation, the petitioner for continuance of the same shall have to make a fresh prayer before the Hon'ble Division Bench, when this matter is taken up for consideration.
JUDGE Meghalaya 30.04.2025 "V. Lyndem-PS"
Page 12 of 12