Interim suspension of excise licence pending enquiry held unavailable absent express statutory power under the Act.

Under the Andhra Pradesh Excise Act, 1968 and the connected rules, a licence to vend liquor or toddy could be cancelled or suspended only after enquiry and after the licence-holder was given an opportunity to represent. The majority held that no express or implied power existed to impose an interim suspension pending enquiry, because such a drastic measure could not be inferred from the Act's scheme and other protective powers, such as seizure and prohibition of adulterated toddy, were available to address urgency. The interim suspension orders were therefore illegal and the writ petitions were allowed, although the dissent would have treated temporary suspension as an incidental protective power in urgent cases.

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Issues: Whether a licence granted under the Andhra Pradesh Excise Act, 1968 and the relevant excise rules could be suspended pending enquiry into alleged breach of licence conditions, and whether such power existed as an incidental or ancillary power even though the statute did not expressly provide for interim suspension.

Analysis: The majority held that Section 31 of the Andhra Pradesh Excise Act, 1968 contemplates cancellation or suspension only after enquiry and after giving the licence-holder an opportunity to make a representation. The Act and the rules contained no express provision authorising suspension as an interim measure pending enquiry. The majority treated the licence to vend liquor or toddy as a valuable privilege acquired for consideration, the suspension of which would cause serious and possibly irreparable loss, and held that such drastic action could not be inferred merely from the power to grant, cancel or suspend a licence after proof of breach. The availability of other protective powers, including seizure and prohibition of sale of adulterated toddy, was considered sufficient to meet urgency. The majority therefore rejected the doctrine that interim suspension was necessarily implied as an incidental or ancillary power in this context.

Conclusion: The power to suspend the licence pending enquiry was held not to exist under the Andhra Pradesh Excise Act, 1968 and the connected rules; the impugned interim suspension orders were illegal and the writ petitions were allowed.

Dissenting Opinion: The dissent held that the licensing authority did possess incidental and ancillary power to suspend a licence pending enquiry in appropriate cases of urgency, because such suspension was only a temporary holding measure to prevent further harm, and the proviso to Section 31(1) was directed to final suspension or cancellation. On that view, the writ petitions were liable to be dismissed.

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