Liability on surrender of liquor licence: basic fee and linked licence fee remained recoverable for the unexpired period.

On surrender of a retail liquor licence, the Excise Act and the 2002 Rules were read to require payment of the fee attributable to the unexpired period unless remitted by the Excise Commissioner. The basic licence fee was treated as part of the consideration for grant of the licence, while the additional licence fee was linked to the annual minimum guaranteed quantity and formed part of the statutory fee structure. Rule 19 was held to cover recovery of both components as outstanding excise dues on surrender, and Rule 20 did not relieve the licensee from that liability. The surrender-versus-cancellation distinction did not defeat the express scheme, so recovery of both fees for the unexpired period was upheld.

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Issues: Whether, on surrender of a retail liquor licence, the licensee remained liable to pay the basic licence fee and the additional licence fee linked to the guaranteed quantity for the unexpired period of the excise year.

Analysis: Section 36 of the United Provinces Excise Act, 1910 makes surrender of a retail licence effective only on one month's notice and on payment of the fee payable for the licence for the whole period for which it would have remained current but for surrender, unless the Excise Commissioner remits it. The expression "fee" was read with Section 41(c) of the Act and the Rules framed under it. Under the 2002 Rules, the basic licence fee is part of the consideration payable before grant of the licence, while the licence fee is the remaining part of the consideration and is equal to the excise duty leviable on the annual minimum guaranteed quantity. The monthly minimum guaranteed quantity was treated as part of that contractual and statutory fee structure. Rule 19, which speaks of recovery of outstanding excise dues on surrender, was held to include both the basic fee and the licence fee. Rule 20 did not assist the surrendering licensee, and the distinction suggested between surrender and cancellation was held not to defeat the express scheme of the Act and Rules.

Conclusion: The licensee remained liable to pay both the basic licence fee and the additional licence fee for the unexpired period, and the recovery action was upheld.

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