Constructive possession can justify excise licence cancellation when illicit liquor is found in a licence-holder's vehicle.

Excise licence cancellation may be justified where illicit liquor is recovered from a vehicle owned by the licence-holder and the record shows his knowledge and tacit consent, because such recovery can amount to constructive possession under the excise rules. The commentary also notes that cancellation proceedings are independent of criminal prosecution and do not depend on the licensee being arraigned or convicted. On that basis, the owner was treated as liable in law for the vehicle's illegal use, and the cancellation of the country liquor and foreign liquor licences was regarded as lawful.

---

---

Issues: Whether the cancellation of the petitioner's country liquor and foreign liquor licences was justified on the ground that illicit liquor was found in the vehicle owned by him, attracting the statutory provisions governing suspension and cancellation of licences.

Analysis: Section 34 of the United Provinces Excise Act, 1910 and Rule 21 of the Uttar Pradesh Excise (Settlement of Licences for Retail Sale of Country Liquor) Rules, 2002, together with Rule 18 of the Uttar Pradesh Excise Settlement of Licences for Retail Sale of Foreign Liquor (Excluding Beer and Wine) Rules, 2001, empower the licensing authority to cancel a licence where liquor is found in possession of the licensee against the provisions of the Act or the Rules. The Court held that cancellation proceedings are independent of criminal prosecution and do not depend upon the licensee being arraigned or convicted in the criminal case. Since the liquor was recovered from a vehicle owned by the petitioner, which he had permitted others to use, and the material on record showed his knowledge and tacit consent, the recovery was treated as being from his constructive possession. The operator of the vehicle was treated as acting for the owner, and the petitioner was held liable in law for the illegal use of his vehicle.

Conclusion: The cancellation of the licences was held to be lawful, as the illicit liquor recovered from the petitioner's vehicle attracted the relevant rules and justified cancellation.

Final Conclusion: The writ petition failed because the petitioner was deemed to be in possession of the illicit liquor found in his vehicle, and the impugned cancellation orders were upheld.

Ratio Decidendi: Where illicit liquor is recovered from a vehicle owned and knowingly permitted to be used by the licence-holder, the liquor is deemed to be in his constructive possession for the purpose of licence cancellation under the excise rules, irrespective of the outcome of criminal proceedings.

---