Excise licence remission and closure compensation require proper application of quota and closure rules, not a single sales ground.

A claim for remission of licence fee and compensation for closure of a country liquor shop cannot be rejected solely because the licensee lifted quantity above the minimum guarantee quota. The Court held that the licensing authority had to apply Rule 15 of the Uttar Pradesh Excise (Settlement of Licences for Retail Sale of Country Liquor) Rules, 2002, which permits lifting beyond the minimum guarantee quota up to the prescribed upper limit, and Rule 17, which governs closure of licensed premises and requires lawful closure directions, including those based on law and order or election-related grounds. As no finding supported the extended closure on such grounds, the rejection was quashed and the matter remitted for fresh consideration.

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Issues: Whether the rejection of the petitioner's claim for remission of licence fee and compensation for closure of the country liquor shop could be sustained when the licensing authority proceeded only on the ground that sales exceeded the minimum guarantee quota.

Analysis: The order rejecting the claim ignored the scheme of Rule 15 of the Uttar Pradesh Excise (Settlement of Licences for Retail Sale of Country Liquor) Rules, 2002, which permits lifting of quantity beyond the minimum guarantee quota up to the prescribed upper limit. It also failed to consider Rule 17 of the said Rules, which governs closure of licensed premises and indicates that closure beyond the notified days must rest on lawful closure directions, including those based on law and order or election-related activity. The order recorded no finding that the extended closure was justified on any of those grounds, and the relevant statutory factors were not applied to the petitioner's claim.

Conclusion: The rejection of remission and compensation was unsustainable and was quashed. The matter was remitted to the District Magistrate for fresh consideration in accordance with the Rules and the observations of the Court.

Ratio Decidendi: A claim for remission or compensation for closure of a licensed liquor shop cannot be rejected merely because the licensee lifted quantity above the minimum guarantee quota if the authority fails to consider the statutory limits on permissible lifting and the closure conditions under the governing excise rules.

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