*Strikes down several clauses, upholds cancellation notices
‘Right to trade in liquor is not fundamental right’
Mohinder Verma
JAMMU, Dec 28: Observing that Excise Policies were framed from time to time in the most arbitrary and irrational manner just to benefit those who had access to the corridors of power and without any focus on revenue generation, a Division Bench of the High Court comprising Justice Rajesh Bindal (Acting Chief Justice) and Justice Sanjay Dhar has issued directions for framing of new Excise Policy strictly in accordance with the Jammu and Kashmir Excise Act and the law laid down by the Supreme Court on the subject.
Moreover, the Division Bench has upheld the show-cause notices issued in respect of 60 vends for cancellation of their temporary licenses and struck down those clauses of the Excise Policies for the years 2017-18, 2018-19 and 2019-20 which provide that grant of new licenses will be for a period of five years and validity of the existing license will be five years.
Even the Chief Secretary has been asked to take appropriate action against the officers who had issued Excise Policies for the years 2017-18, 2018-19 and 2019-20 by acting totally contrary to the provisions of Jammu and Kashmir Excise Act and J&K Liquor License and Sales Rules and ensure that in future they are not entrusted with any responsible position keeping in view their mindset of violating the law.
The landmark judgment has been delivered by the Division Bench while disposing of several appeals and allowing a writ petition wherein different issues were flagged of and relief was sought from the court.
“This court has once again been called upon to clear the skeletons from the cup-board in the Union Territory of Jammu and Kashmir and this time it is in liquor trade, which had always remained lucrative”, the DB said.
As per the Government information there are 223 functional liquor vends in Jammu and Kashmir and these are continuing with the same persons or their successors in interest for decades as the process of renewal of licenses was being followed where admittedly the allotments had not been made in a transparent manner, the DB said, adding “the same were only on the recommendation of the Finance Minister concerned”.
Without there being any advertisement issued, on an application filed by a favourite, the Finance Minister would order allotment of a vend and the allottee will continue for all times to come, the DB observed, adding “moreover two sub-vends granted in the year 2005-06 were regularized vide order dated 25-02-2019 and 60 vends were allotted on temporary basis in August 2005 for a period of four months and are continuing till date in view of various interim orders passed by this court in different cases filed by them which are subject matter of consideration in the present cases”.
While referring the settled legal position with regard to trade in liquor, the DB said, “the Supreme Court in numerous judgments has held that there is no fundamental right to do trade or business in intoxicants and the State under its regulatory powers has the right to prohibit absolutely every form of activity in relation to intoxicants-its manufacture, storage, export, import, sale and possession”, adding “grant of licenses to manufacture or sale of liquor would essentially be a matter of economic policy wherein the courts normally do not intervene but if the action appears to be plainly arbitrary, irrational and malafide interference is called for”.
“Though the J&K Excise Act was enacted in the year 1958 yet the J&K Liquor License and Sales Rules, which prescribe for procedure for allotment of vends or for providing any other procedure, were framed in the year 1984 and in the absence of any Rules how the system of allotment of vends and charge of license fee and duties was being worked out for more than eight decades after the Act was enacted is anybody’s imagination”, the DB said.
Finding lacuna in formulation of Excise Policies, the DB said, “first in the series was issued on 03.04.2001 for the year 2001-02. The same was quite sketchy. It merely stated that the Government does not recognize sale of liquor as normal trade activity. Licenses shall be issued only if justified by exceptional circumstances. It means that before 2001-02 no Excise Policy was notified. However, 160 licenses had been issued before that admittedly by applying a pick and choose policy”.
“Excise Policy for the year 2002-03 is not forthcoming and notification dated June 26, 2003 merely provided for duty and fee on liquor. There is nothing on record to suggest as to what was the license fee charged for different types of licenses before the notification was issued”, the DB pointed out, adding “from the Excise Policies produced before the court, it is evident that in the 13 years practically there was no increase in the license fee for JKEL-2 licenses. That is why the liquor vendors are interested to continue with this trade merely by approaching the court and with interim orders passed in their favour and the object of the Government to generate revenue is totally defeated”.
In the Excise Policy for the year 2017-18, Clause 3.2.1 provides that grant of licenses for operating liquor vends shall be strictly in terms of the provisions of the Act and the Rules and judgment of Supreme Court. However, going beyond that Clause 3.2.7 was added which provides that grant of new licenses shall be for a period of five years, which runs contrary to the provisions of the Rules, the DB further pointed out.
After going through the Excise Policies of 2018-19 and 2019-20, the Division Bench said, “there was no change in the license fee for any of the categories though liquor trade is said to be one, which though is prohibited but is a major source of revenue for the Government but no application of mind was there by any authority in that direction”, adding “the fact remains that no new licenses were allotted in Jammu and Kashmir ever since 2005 except that one license was granted in January 2011 and two sub-vends allotted in the year 2005, were made regular in 2019. Hence, issuance of Excise Policies was an eye-wash and apparently were only for renewal of the earlier licenses granted”.
Stating that concept of regularization of licenses is unknown in the liquor trade and alien to the provisions of the Act and the Rules, the DB said, “Clause 3.2.11 talks about sub-vends. It provides that operational sub-vends shall be eligible for regularization. Nothing was suggested at the time of hearing that any transparent procedure was adopted for allotment of sub-vends. It is nothing else but the system which follows the principle of ‘You show me face I show you rule'”.
“The conduct of the officers at the helm of affairs who had issued the Excise Policies for the years 2017-18, 2018-19 and 2019-20 and acted totally contrary to the provisions of the Act and the Rules and interim order dated 23.03.2017 passed in these appeals needs to be examined by the competent authority as to whether in future they can be entrusted with any responsible position”, the DB said, adding “their mindset of violating the law and court orders, is another factor which is required to be taken care of as they are capable of tinkering with provisions of law and violate the mandate contained therein or rewrite the same”.
Holding that right to trade in liquor is not a fundamental right, the DB said, “no transparent procedure was followed for grant of licenses for liquor vends till June 25, 2005 and even for the allotment of vends in question though the procedure for draw of lots was followed but the fact remains that even the same was found to be tainted”.
Stating that the transparent method for allotment of licenses for trade in liquor is required to be followed which may give fair opportunity to all interested in the trade subject to their eligibility, the DB said, “these have not to be limited to the persons in power or close to the corridors of power, as had been the practice earlier”, adding “the fact that licenses already granted were being renewed as a matter of course, contrary to the provisions of the law, will not debar the authorities to take corrective steps and act in accordance with law”.
Accordingly, the DB has upheld the show-cause notices issued in respect of 60 vends for cancellation of their temporary licenses granted on August 20, 2005, which were valid up to December 19, 2005 and struck down those clauses of the Excise Policies for the years 2017-18, 2018-19 and 2019-20 which provide that grant of new licenses will be for a period of five years and validity of the existing license will be five years.
“The official respondents shall be at liberty to frame new policy for the coming year-2021-22 in accordance with the provisions of the Act and the Rules and the law laid down by the Supreme Court on the subject”, the DB directed, adding “the liquor vends already operating shall be allowed to continue till 31.03.2021 and thereafter the licenses shall be allotted in terms of the Excise Policy to be notified by the Government for the year 2021-22”.
“The Government shall be at liberty to take appropriate steps in view of striking down of the provisions of the Excise Policies, which envisage grant and automatic renewal of licenses for a period of five years”, the DB said, adding “as renewal of licenses for trade in liquor is not a matter of right for the purpose of renewal, if permissible in law, all the conditions applicable for grant of a new license shall also be applicable”.
Senior Advocate Z A Shah along with Advocate Rahil Raja, Senior Advocate P N Raina along with Advocate J A Hamal, Senior Advocate R K Gupta, Senior Advocate Abhinav Sharma and Senior Advocate Pranav Kohli appeared for the petitioner/appellants while as Senior AGG Seema Shekhar and Government Advocate Bhanu Jasrotia appeared for the respondents.
Follow our WhatsApp channel
