M/S Neelam Wine Shop Through Manjit ... vs Union Territory Of J&K Through Finance ... on 25 September, 2020

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Jammu & Kashmir High Court

M/S Neelam Wine Shop Through Manjit ... vs Union Territory Of J&K Through Finance ... on 25 September, 2020

Bench: Javed Iqbal Wani

      HIGH COURT OF JAMMU AND KASHMIR
                                 AT JAMMU
                   (Through Video Conferencing at Srinagar)
                                                           Reserved On: 08.09.2020.
                                                         Pronounced On:25.09.2020.

                                                          WP(C ) No. 1197/2020
                                                          WP(C ) No. 1206/2020
                                                          WP(C ) No. 1208/2020
                                                          WP(C ) No. 1210/2020
                                                          WP(C ) No. 1211/2020
                                                          WP(C ) No. 1212/2020
                                                          WP(C ) No. 1213/2020
                                                          WP(C ) No. 1214/2020
 M/s Neelam Wine Shop through Manjit Singh.
 M/s Ram Pyari Wine Shop.
 M/s Apex and Co. Wine Shop.
 M/s Grapes Wine Shop.
 M/s Nasheeli Wine Shop.
 M/s Ram Pyari Wine Shop.
 M/s Sunny Wine Shop.
 M/s Ram Pyari Wine Shop.
                                                                  .....Petitioner(s)
                                   Through: -
                          Mr. Mohsin Qadri, Advocate
                                   V/s
 Union Territory of J&K through Finance Department and Ors.
                                                       .....Respondent(s)
                                Through: -
                     Mr D. C. Raina, Advocate General with
                          Mr K. D. S. Kotwal, Dy.AG.
 CORAM:
           Hon'ble Mr. Justice Javed Iqbal Wani, Judge.
                                 JUDGMENT

These petitions raise akin and analogies issues as such are being taken up together for adjudication at this stage with the consent of learned counsel for the parties.

In the first place facts those emerge from the petitions in hand are required to be delineated separately here under: -

(A) WP(C ) No. 1197/2020

1. Petitioner in the instant petition has sought following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/606-607 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

i) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of his License.

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ii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

2. The aforesaid reliefs are being sought by the petitioner on the premise that liquor license bearing No. 205/JKEL-2 was initially held by one Smt. Neelam Kumari W/o Chander Mohan Sharma R/o Raghunath Pura, Jammu, and subsequently name of the petitioner came to be added in the aforesaid license by the competent authority on 05.05.2003 under and in terms of Jammu and Kashmir Excise Act SVT, 1958 and the Jammu and Kashmir Liquor License and Sale Rules, 1984 (herein after for short the Act and the Rules) 2(a) It is being stated in the petition that the said license came to be renewed by the competent authority for the year 2018-2019 upto 2022-2023.

2(b) According to the petitioner, a show cause notice bearing No. Notice/DECEJ/Exc/606-607 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4 purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

2(c) It is being further stated in the petition by the petitioner that the impugned notice came to be duly replied by the petitioner and while denying the allegations of the show cause notice, a request for furnishing of the communication dated 05.06.2020 of the Excise Commissioner supra was sought.

2(d) Petitioner in the instant petition challenges the impugned notice inter-alia amongst others on the grounds, that the impugned notice is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution.

Page 3 of 23

3. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter-alia amongst others on the following premise and grounds:

3(a) That none of the statutory or fundamental rights of the petitioner have been violated which would warrant the exercise of extraordinary writ jurisdiction.

3(b) That petitioner has raised disputed question of facts which cannot be adjudicated through the medium of this petition.

3(c) That the petition is grossly misconceived both in law as well as on facts.

3(d) That instant petition does not disclose any infringement of legal, fundamental or statutory right, so far as the answering respondent is concerned which being sine-quo-non for maintaining a writ petition under Article 226 of the Constitution.

3(e) That respondents deny each and every averments made by the petitioner unless same are admitted by the respondents.

3(f) That no prejudice can possibility be caused to the petitioner by virtue of a show cause notice which has been provided to the petitioner legally.

3(g) That show cause notice has been issued on the address provided by petitioner and instant petition is a sheer waste of the precious time of the Hon'ble Court and in fact the instant petition has been filed just to place the cart before the horse as also petitioner has approached this court without waiting for the outcome of the enquiry.

3(h) That show cause notice as also all subsequent proceeding emanating from the show cause notice shall be in consonance in law and, Page 4 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ 3(i) That an enquiry has been initiated in the matter qua the license of the petitioner and that the show cause notice has been issued on the instructions of the Excise Commissioner who is competent authority prescribed under the Excise Act.

(B) WP(C ) No. 1206/2020

4. In this petition petitioner seeks following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/596-597 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of his License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

5. The aforesaid reliefs are being sought by the petitioner on the premise that liquor license bearing No. 125/JKEL-2 was earlier held by one namely Smt. Ram Pyari W/o Late Shri Daswandi Ram R/o 192/1 Trikuta Nagar, Jammu and the said license came to be transferred in the name of the petitioner (grandson of the Smt. Ram Pyari) vide Excise order No. 674 of 2005 dated 28.01.2005 by the competent authority under and in terms of Act and the Rules, supra.

5(a) It is being stated by the petitioner in the petition that the license supra stands renewed by the competent authority for the year 2018-2019 upto 2022-2023.

5(b) It is further being stated by the petitioner that the license in question came to be transferred in his name on 28.01.2005 vide order No. 674 of 2005 before coming into being of SRO 98 dated 05.04.2005 where under Rule 14 (d) came to be inserted providing for transfer of license in favour of legal heirs of the licensee for good and sufficient reasons for remaining period of the term of licensee after amending earlier Rule 14 (d) which provided for transfer of license during its currency to a new licensee.

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WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ 5(c) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/596-597 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

5(d) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

5(e) Petitioner challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution and further on the ground that doctrine of promissory estoppel would apply against the respondents in the matter.

6. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and grounds which have been raised and averred in the aforesaid WP (C) No. 1197/2020 as such, for the sake of brevity and in order to avoid repetition are not reproduced here under.

7. Petitioner in the instant petition has sought following reliefs: -

Page 6 of 23

WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/590-591 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of his License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

8. The aforesaid reliefs have been sought by the petitioner on the premise that the petitioner is a sole proprietor/ licensee bearing license No. 96/JKEL-2 issued by the competent authority under and in terms Act and the Rules supra.

8(a) According to the petitioner license supra was initially held by him as a partner with partners namely Joginder Miskeen, Ramesh Koul and Jai Krishan Koul, where after the said partners were deleted vide order dated 29.01.2009 by the competent authority.

8(b) It is being stated by the petitioner in the petition that the license supra stands renewed for the year 2018-2019 upto 2022-2023.

8(c) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/590-591 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

8(d) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

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WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ 8(e) Petitioner in the instant petition challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution in as much as in breach of the Rules supra.

9. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and objections which have been averred and raised in the aforesaid WP (C) No. 1197/2020 as such, same are not for the sake of brevity and in order to avoid repetition reproduced here under.

(D) WP(C ) No. 1210/2020

10. In this petition petitioner seeks following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/592-593 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of her License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

11. The aforesaid reliefs are being sought by the petitioner on the premise that the petitioner is holder of license bearing No. 124/JKEL-2 vide order No. 238 of 2016 dated 27.07.2016 issued by respondent No. 3 under and in terms of the Act and the Rules supra.

11(a) It is being stated by the petitioner that the license supra came to be renewed by the competent authority for the year 2018-2019 upto 2022-2023.

11(b) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/592-593 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, Page 8 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

11(c) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

11(d) Petitioner challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution in as much as in breach of the Rules supra.

12. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and objections which have been averred and raised in the aforesaid WP (C) No. 1197/2020 as such, same are not for the sake of brevity and in order to avoid repetition reproduced here under.

(E) WP(C ) No. 1211/2020

13. In this petition petitioner seeks following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/616-617 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of his License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

Page 9 of 23

14. The aforesaid reliefs are being sought by the petitioner on the premise that the petitioner is holder of liquor license in partnership bearing No. 253/JKEL-2 vide order No. 789 of 2005 dated 31.03.2005 issued under and in terms of Act and the Rules supra.

14(a) It is being stated by the petitioner that the license supra came to be renewed by the competent authority for the year 2018-2019 upto 2022-2023.

14(b) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/616-617 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

14(c) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

14(d) Petitioner challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution in as much as in breach of the Rules supra.

15. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and objections which have been averred and raised in the aforesaid WP (C) No. Page 10 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ 1197/2020 as such, same are not for the sake of brevity and in order to avoid repetition reproduced here under.

(F) WP(C ) No. 1212/2020

16. In this petition petitioner seeks following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/604-605 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of her License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

17. The aforesaid reliefs have been sought by the petitioner on the premise that the original license was held by one Smt. Ram Pyari W/o Late Sh. Daswandi Ram R/o 192/1 Trikuta Nagar, Jammu, which subsequently came to be transferred as proprietor in the name of the petitioner vide order No. 675 of 2005 dated 28.01.2005 by the competent authority being granddaughter of above Smt. Ram Pyari under and in terms of the Act and the Rules supra.

17(a) It is being stated by the petitioner that the license supra came to be renewed by the competent authority for the year 2018-2019 upto 2022-2023.

17(b) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/604-605 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

17(c) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying Page 11 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

17(d) Petitioner challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution in as much as in breach of the Rules supra.

18. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and objections which have been averred and raised in the aforesaid WP (C) No. 1197/2020 as such, same are not for the sake of brevity and in order to avoid repetition reproduced here under.

(G) WP(C) No. 1213/2020

19. In this petition petitioner seeks following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/614-615 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of her License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

20. The aforesaid reliefs have been sought by the petitioner on the premise that a fresh liquor license bearing No. 251/JKEL-2 was granted in her favour by the competent authority vide Excise order No. 55 of 2005 dated 23.04.2005 under and in terms of the Act and the Rules supra.

20(a) It is being stated by the petitioner that the license supra came to be renewed by the competent authority for the year 2018-2019 upto 2022-2023.

Page 12 of 23

WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ 20(b) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/614-155 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

20(c) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

20(d) Petitioner challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution in as much as in breach of the Rules supra.

21. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and objections which have been averred and raised in the aforesaid WP (C) No. 1197/2020 as such, same are not for the sake of brevity and in order to avoid repetition reproduced here under.

(H) WP(C ) No. 1214/2020

22. In this petition petitioner seeks following reliefs: -

i) Certiorari: Quashing Show Cause Notice No. Notice/DECEJ/Exc/600-601 dated 06.06.2020; as the same have been issued without any Legal Competence on account of Malafides and Extraneous considerations.

Page 13 of 23

ii) Mandamus: Directing the respondents not to interfere in the Business Activity of the petitioner during the currency of her License.

iii) Issue or pass any writ, direction or order, which this Hon'ble Court may deem fit and proper in the facts of the case and in the interest of probity and rule of law.

23. The aforesaid reliefs have been sought by the petitioner on the premise that she is holder of liquor license bearing No. 138/JKEL-2 vide Excise order No. 715 of 2005 dated 01.03.2005 issued by the competent authority upon transfer from the original licensee namely Smt. Ram Pyari being her granddaughter under and in terms of the Act and the Rules supra.

23(a) It is being stated by the petitioner that the license supra came to be renewed by the competent authority for the year 2018-2019 upto 2022-2023.

23(b) According to the petitioner a show cause notice bearing No. Notice/DECEJ/Exc/600-601 dated 06.06.2020 (herein after for short impugned notice) came to be issued by respondent No. 4, purportedly on the basis of a communication dated 05.06.2020 addressed by respondent No. 3 to respondent No. 4 copy whereof is stated to be never supplied to the petitioner, alleging in the impugned notice that it has been observed that the license has been transferred outside the legal heir/ family in violation of the Rules.

23(c) It is being further stated by the petitioner that the impugned notice came to be duly replied by the petitioner while denying the allegations of the show cause notice, a request for furnishing of the communication of the Excise Commissioner supra was sought.

23(c) Petitioner challenges the impugned notice inter-alia amongst others on the grounds that the impugned notice notwithstanding the reply filed thereto is issued without any jurisdiction and competence as also in violation of Article 14 , 19 and 21 of the Constitution in as much as in breach of the Rules supra.

Page 14 of 23

24. Per contra, respondents in their objections filed in opposition to the petition have resisted and controverted the contentions raised and grounds urged in the petition and seek dismissal of the petition inter- alia amongst others on similar and identical premise and objections which have been averred and raised in the aforesaid WP (C) No. 1197/2020 as such, same are not for the sake of brevity and in order to avoid repetition reproduced here under.

25. Heard the appearing counsel for the parties and perused the record produced by learned counsel for the respondents.

26. The learned counsel for the petitioners on one hand while making his submissions reiterated the pleas taken in the writ petitions and prayed for grant of the reliefs sought in the writ petitions fundamentally on the grounds that the impugned show cause notices have been issued without any competence and jurisdiction by the respondent No. 4 in as much as the impugned notices otherwise also are not framed and constructed in proper form, as such, violate principles of natural justice and in the process cause serious prejudice to the petitioners.

27. The learned Advocate General on the other hand while controverting the submissions made by the learned counsel for the petitioners sought dismissal of the petitions primarily on a maiden ground that the writ petitions are not maintainable against impugned show cause notice in view of law laid down by the Hon'ble Supreme Court in case titled as "Special Director & Anr. Vs. Mohd Ghulam Ghouse and Anr., reported in 2004 (3) SCC 440" and judgement of Division Bench passed in "M/s Crown Industries and Anr. Vs, Union of India and Ors., (OWP No. 483/2014....) dated 10.02.2015"

28. In the aforesaid backdrop, the central issues those emerge for consideration of this court for adjudication in these petitions are crystalized and framed here under:

I. Whether the impugned show cause notices dated 06-06-2020 have been issued without any competence and jurisdiction.

Page 15 of 23

WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ II. Whether the frame, form and nature of the impugned Show Cause Notices is proper, fair and reasonable serving the principles of Audi Alteram Partem---Natural Justice.

29. Before adverting to the aforesaid issues, it would be appropriate to refer hereunder the provisions of the Act and the Rules supra, which are relevant and germane to the controversy: -

Section 4 of the Act provides for appointment of Excise and Taxation Officer and reads as under;

"The Government may appoint such officers as it thinks fit to be Commissioner, Deputy Commissioners, and Excise and Taxation Officers; and the officers so appointed shall exercise such powers as may be conferred and perform such duties as may be required by or under this Act.

Notwithstanding anything contained in sub-section (1) the government may appoint any person as Joint Commissioner Enforcement to exercise powers under such provisions of the Act as it may, by notification, in the Government Gazette specify and also appoint such other persons to assist him as it deems fit."

Section 4(a) Provides for delegation of power conferred by section 4 and reads as under: -

"The government may delegate any of the powers conferred by section 4 to any of the officers named therein, and may further empower them to appoint such other servants as are necessary for the carrying out of this Act.

Every person appointed in exercise of such delegated power may be suspended or dismissed by the officer who appointed him."

Section 20 of the Act provides for forms and conditions of licenses and reads as under:

1. Every license or permit granted under this Act shall be granted---

(a) on payment of such fees (if any),

(b) for such period,

(c) subject to such restrictions and on such conditions, and

(d) shall be in such form and contain such particulars, as the Government may direct, either generally or in any particular instance, in this behalf.

2. The Government may, by order, delegate all or any of its powers under sub-section (1) to the Commissioner subject to such conditions, if any, as be specified in the order.

Section 22 of the Act provides for power to recall licenses and reads as under: -

The Commissioner may cancel or suspend any license or permit granted under this Act--

(a) if any fee or duty payable by the holder thereof be not duly paid; or Page 16 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________

(b) in the event of any breach by the holder of such license or permit, or by his servants, or by any one acting with his express or implied permission on his behalf, of any of the terms or conditions of such license or permit; or

(c) if the holder thereof is convicted of any offence against this Act or any other law for the time being in force relating to the Excise revenue, or of any cognizable or non-bailable offence; or

(d) where a license or permit has been granted on the application of the holder of an exclusive or other privilege, or of a farmer of duties under this Act, on the requisition in writing of such person; or

(e) if the conditions of the license or permit provide for such concealment or suspension at will; or

(f) if the holder of the license or permit resorts to illegal transportation of liquor from the distillery.

Rule 14 of the Rules reads as under: -

Every license issued under the provisions of the Jammu and Kashmir Excise Act and the rules framed thereunder shall be renewed before the expiry of its period of validity if the Licensing Authority approved the continuation of license through the same licensee and in respect of the same premises. A new license shall, however, be required where a license has determined by reasons of surrender, cancellation or order of non-renewal or for any other reason or where it is proposed that a license in respect of premises or persons not previously licensed, should be issued; Provided that no license shall be deemed to have been renewed on its expiry unless the Licensing Authority issues the express orders for its continuation:

Provided further that: .......

Issue No. 1

30. It is an admitted position that the petitioners are holding liquor licenses being JKEL-2, one amongst the classes of licenses provided under Rule 4 of the Rules supra wherein for grant and renewal of said licenses, Excise Commissioner, is provided to be the competent authority. The licenses of the petitioners admittedly are issued and renewed by the Excise Commissioner.

31. Before testing the legality of the impugned show cause notices dated 06.06.2020, it becomes imperative here to extract and reproduce here under communication bearing No EC/Exc/2020-21/550-52 dated 05.06.2020 addressed by respondent No. 3- Excise Commissioner to respondent No. 4, -Deputy Excise Commissioner, in that, the said communication has formed the basis for issuance of impugned show Page 17 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ cause notices by the respondent No. 4 and that the said communication being not part of the pleadings was summoned by this court from the respondents along with the respective relevant records of the licenses of the petitioners and was accordingly produced by the learned counsel for the respondents.

The Deputy Excise Commissioner, (Executive), Jammu No: EC/Exc/2020-21/550-52 Dated: 05-06-2020 Subject: Services of Notices.

Sir, You may kindly refer to your letter No. 2088/DECEJ/Exc/549 dated 04-06-2020, by virtue of which 19 more licenses have been identified which have been transferred in gross violation of rules outside the legal heir/family by the individual licensees (JKEL-2).

Before proceeding further, you may issue notices to them including two licenses of Kashmir Division. It may also be checked whether the provisions of rule 30 have been adhered in these cases for having obtained NOCs etc. from concerned authorities.

The requisite information should reach this office within a week's time positively.

Yours faithfully, (Rajesh Kumar Shavan), KAS Excise Commissioner, Jammu & Kashmir Copy to the:

1. Financial Commissioner, Finance Department, Civil Secretariat, Jammu.

2. Deputy Excise Commissioner, (Accounts), Jammu.

32. As is revealed from the perusal of the aforesaid communication, the respondent No. 4 pursuant to his letter dated 04.06.2019, has furnished particulars of around 20 licensees to the respondent No.3 amongst which figures the cases of the petitioners figuring at serial Nos. 5, 6, 7, 9, 11, 12, 16 and 17, in the annexure appended to the aforesaid letter dated 04.06.2020. The said annexure in the column of remarks reflects the particulars of original licensees as also deletions and insertions of the new licensees along with the numbers and dates of the orders issued in this regard.

Page 18 of 23

33. What emerges from above is that the respondent No. 3 on the basis of letter of respondent No. 4 dated 04.06.2020 and annexure appended therewith directed the respondent No. 4 vide letter dated 05.06.2020 supra to issue notices to the 19 license holders figuring in the annexure supra along with 2 license holders of Kashmir division. The respondent No. 3 further directed in the said letter supra to the respondent No. 4 to check whether provisions of Rule 30 have been adhered in these cases for having obtained NOCs from concerned authorities.

34. Perusal of above record would manifestly demonstrate that respondent No. 3 while directing issuance of impugned notices against the petitioners has merely taken into account letter dated 04.06.2020 and annexure appended thereto supra containing the particulars of the licensees, licenses and order Nos., with dates in the remarks column therein the said annexure furnished to him by respondent No. 4 and instead of proceeding against the petitioners himself for alleged possession of unauthorized licenses entrusted the said task to the respondent No. 4 who while issuing the impugned notices can by no sense of imagination be said to have performed only a ministerial act.

35. Once the respondent No. 3 had chosen to adhere to and follow the principles of natural justice in the matter while intending to proceed against the petitioners qua their alleged unauthorized licenses, he was in law obliged himself to consider the matter with independent application of mind fairly and reasonably and upon assuming satisfaction thereof strictly to follow the mandate of the Act enshrined in Section 4 read with Section 22 of the Act and not to delegate the power so possessed by him upon respondent No. 3, in view of well- known principle of law that when a power has been confided to a person in circumstances indicating that trust is being placed in his individual judgement and discretion, he must exercise that power personally unless he has been expressly empowered to delegate it to another.

Page 19 of 23

36. The impugned show cause notices manifestly are issued by respondent No. 4 without any power and authority, in that, neither the Act nor the Rules expressly empower respondent No. 3 to delegate his powers enshrined in Section 4 read with section 22 of the Act, as such, the impugned notices being clearly unfounded in law do not stand the test of legal scrutiny having been issued without competence and jurisdiction by respondent No. 4.

37. In view of above consequently writ petitions are held maintainable against the impugned show cause notices, in view of law laid down in the judgement of the Apex Court titled as "Siemens Ltd. Vs. State of Maharashtra & Ors., reported in 2006 (12) SCC 33",.

38. The maiden objection raised by the learned Advocate General qua maintainability of the writ petitions in view of above is turned down. Reliance placed by the learned Advocate General in support of the objection on judgement supra of the Apex Court viz "Special Director & Anr. Vs. Mohd Ghulam Ghouse and Anr., and Division Bench judgement viz "M/s Crown Industries and Anr. Vs, Union of India and Ors.," do not lend any support to the respondents primarily because the Apex Court do not in all cases forbid entertaining of the petitions against a show cause notice and secondly that the Division Bench judgement supra is quite distinguishable, and in fact reiterates the legal position regarding filing of writ petition against a show cause notice.

Issue No. 2

39. In view of aforesaid finding regarding the legality of impugned show cause notices, dealing with issue No. 2 may not be warranted, yet having regard to the facts and circumstances of the case, this court deems it proper and appropriate to deal with issue No. 2 as well.

40. Before dealing with issue No. 2 it would be advantageous and appropriate to refer to Apex Court Judgement in case titled as "Dharampal Satyampal Limited Vs. Deputy Commissioner of Central" reported in 2015 (8) SCC 519, wherein the nature, scope Page 20 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ and applicability of the principles of natural justice came under consideration and it has been noticed in para 21, 24 and 28 as under:

"21. In common Law, the concept and doctrine of natural justice, particularly which is made applicable in the decision-making by judicial and quasi-judicial bodies, has assumed a different connotation. It is developed with this fundamental in mind that those whose duty is to decide, must act judicially. They must deal with the question referred both without bias and they must give (sic an opportunity) to each of the parties to adequately present the case made. It is perceived that the practice of aforesaid attributes in mind only would lead to doing justice. Since these attributes are treated as natural or fundamental, it is known as "natural justice".

The principles of natural justice developed over a period of time and which is still in vogue and valid even today are: (i) rule against bias i.e. nemo debet esse judex in propria sua causa; and

(ii) opportunity of being heard to the party concerned i.e. audi alteram partem. These are known as principles of natural justice. To these principles a third principle is added, which is of recent origin. It is the duty to give reasons in support of decision, namely, passing of a "reasoned order".

"24. The principles have a sound jurisprudential basis. Since the function of the judicial and quasi-judicial authorities is to secure justice with fairness, these principles provide a great humanizing factor intended to invest law with fairness to secure justice and to prevent miscarriage of justice. The principles are extended even to those who have to take an administrative decision and who are not necessarily discharging judicial or quasi-judicial functions. They are a kind of code of fair administrative procedure. In this context, procedure is not a matter of secondary importance as it is only by procedural fairness shown in the decision-making that a decision becomes acceptable. In its proper sense, thus, natural justice would mean the natural sense of what is right and wrong."

"28. It is on the aforesaid jurisprudential premise that the fundamental principles of natural justice, including audi alteram partem, have developed. It is for this reason that the courts have consistently insisted that such procedural fairness has to be adhered to before a decision is made and infraction thereof has led to the quashing of decisions taken. In many statutes, provisions are made ensuring that a notice is given to a person against whom an order is likely to be passed before a decision is made, but there may be instances where though an authority is vested with the powers to pass such orders, which affect the liberty or property of an individual but the statute may not contain a provision for prior hearing. But what is important to be noted is that the applicability of principles of natural justice is not dependent upon any statutory provision. The principle has to be mandatorily applied irrespective of the fact as to whether there is any such statutory provision or not."

41. As is seen from above the concept and doctrine of principles of natural justice- Audi Alteram Partem and its application in justice delivery system is not new. It no doubt is a procedural requirement, Page 21 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ but it ensures a strong safeguard against any judicial or administrative order or action adversely affecting the substantive rights of an individual.

42. The first principle of natural justice is that there should be no bias and the rule against the bias is expressed in maxim that "no one must be judge in his own cause."

43. The second broad principle is that "no party should be condemned unheard." This right to be heard precisely would mean that the party must know the case he has to meet. The party must have reasonable opportunity to present his case. The requirement of a show cause notice flows directly from the above second principle. A show cause notice is more than a notice.

44. What should be a proper show cause notice and its purpose has been dealt with by the Apex Court in case titled as "Gorkha Security Services Vs. Government (NCT of Delhi) and Others" reported in 2014 (9) SCC 105, where under in para 21 following is noticed:

"21. The central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of show cause notice is to make the noticee understand the precise case setup against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/ breaches complained of are not satisfactorily explained. When it comes to black listing this requirement becomes all the more imperative having regard to the fact that it is harshest possible action."

45. Looking to the frame, form and nature of the impugned show cause notices in the light of aforesaid legal principles and propositions, it is evident and manifest that the form of impugned show cause notices is not in tune with the principles laid down by the Apex Court in "Gorkha Security Services Vs. Government (NCT of Delhi) and Others" supra.

46. Perusal of the impugned show cause notices would reveal that same have been mechanically prepared in a cyclostyled form addressed Page 22 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ with hand written names of the noticees and with a general allegation that the licenses held by the petitioners have been transferred outside the legal heirs / family in violation of the Rules without precisely setting up cases against the petitioners based upon the respective relevant record, in that as is noticed in some cases the bar of transfer of licenses to anyone except an heir is not applicable. The nature of proposed action therein the impugned notices is also not provided. To sum up the impugned notices providing so called opportunity of hearing and explanation to show cause seems to have been an idle formality and farce undertaken by the respondents.

47. The impugned show cause notices cannot in law said to be proper show cause notices standing the test of fairness, reasonableness and adherence to the principles of natural justice, notwithstanding the replies submitted thereto by the petitioners which replies in view of above can safely said to be insignificant. The petitioners in this view of the matter could be said to have suffered considerable prejudice, in that, the respondents on the basis of impugned show cause notices admittedly intended to proceed against them qua the licenses held by them for carrying on their trade and business in order to earn their livelihood.

48. Regard being had to the aforesaid facts and in view of the preceding analysis, these petitions succeed and are allowed, as a sequel to which the impugned show cause notices bearing Nos. Notice/DECEJ /Exc/ 606-607, Notice /DECEJ / Exc /596-597, Notice/DECEJ /Exc /590- 591, Notice/ DECEJ/ Exc/ 592-593, Notice/ DECEJ/ Exc/ 616- 617, Notice/ DECEJ/ Exc/ 604-605, Notice/ DECEJ/ Exc/ 614- 615 and Notice/DECEJ/Exc/600-601, are quashed.

49. The respondents are directed to forebear from causing any interference to the petitioners in conduct of their businesses under and in terms of their respective licenses held by them validly as on date unless there is any other legal impediment thereto.

50. It is made clear that this court did not express any opinion or make any observation qua the allegations levelled against the petitioners in Page 23 of 23 WP(C) No. 1197/2020, WP(C) No. 1206/2020, WP(C) No. 1208/2020, WP(C) No. 1210/2020, WP(C) No. 1211/2020, WP(C) No. 1212/2020, WP(C) No. 1213/2020 & WP(C) No. 1214/2020 ______________________________________________________________________________ regard to their respective licenses and should the respondents decide to contemplate /initiate an enquiry against the petitioners qua the said allegations, they shall be free to contemplate /initiate the same notwithstanding the quashing of the impugned show cause notices and the respondents in that event shall strictly follow the mandate of the Act and the Rules as well as principles of Audi Alteram Partem/ Principles of Natural Justice.

51. Disposed of all writ petitions along with all connected CM(s).

52. Registry to remit back record to learned counsel for respondents.

Javed Iqbal Wani) Judge SRINAGAR September 25th, 2020 "Ishaq"

                               i.    Whether the Order is speaking?            Yes/No.
                               ii.   Whether the Order is reportable?          Yes/ No.




ISAQ HAMEED BHAT
2020.09.28 10:56
              10:53
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