Natural justice governs liquor licence suspension, with refund available only for unlawful closure periods, not proven breaches.

Punitive sealing, suspension or cancellation of a liquor licence must comply with natural justice, including prior notice and an opportunity to respond. Where closure was unlawful or effected without due process, the licensee was entitled to a proportionate refund of licence fee and related differential amounts for the period of unlawful closure. By contrast, refund was not available where the closure followed proved breaches of tender or licence conditions and the record showed that show-cause notices were issued and explanations considered. The principle applied is that refund is confined to periods of closure not attributable to the licensee's proven default.

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Issues: (i) Whether refund of licence fee and differential amount was payable for the period during which the manufacturing units were sealed or their licences were suspended or cancelled without due opportunity. (ii) Whether refund could be denied where the closure followed violation of tender conditions or licence conditions and the affected licensees had been given notice and an opportunity to respond.

Issue (i): Whether refund of licence fee and differential amount was payable for the period during which the manufacturing units were sealed or their licences were suspended or cancelled without due opportunity.

Analysis: Where sealing or suspension was found to be unlawful or where no notice preceded the punitive action, the exclusion of the unit from operations could not be treated as attributable to the licensee. In such circumstances, the licensee was held entitled to proportionate refund for the period of unlawful closure. Suspension and cancellation of a licence were treated as punitive actions requiring observance of natural justice.

Conclusion: Refund was held admissible for the period of unlawful sealing or suspension where the action was found illegal or vitiated by absence of notice.

Issue (ii): Whether refund could be denied where the closure followed violation of tender conditions or licence conditions and the affected licensees had been given notice and an opportunity to respond.

Analysis: Where closure resulted from breaches of the tender terms or licence conditions, and the record showed issuance of show-cause notices and consideration of explanations, the High Court's grant of refund was found unsustainable. The earlier or separate adjudication in favour of the licensee was absent in such matters, and the statutory and contractual breaches justified the departmental action.

Conclusion: Refund was denied in cases where the closure followed proved violations and adequate opportunity had been given.

Final Conclusion: The batch of appeals was disposed of with mixed outcomes, sustaining refund only in matters involving unlawful closure or absence of notice, and denying relief where the closures were justified by proven breaches and due opportunity had been afforded.

Ratio Decidendi: Punitive suspension, cancellation, or sealing of a liquor licence must comply with natural justice, and refund of licence fee or related charges is admissible only for periods of unlawful closure not caused by the licensee's proven breach.

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