Discretionary cancellation of linked excise licences under prior cancellation rules is not automatic and needs cautious application.

Section 34(2) of the United Provinces Excise Act, 1910 permits cancellation of another licence of the same person only after a prior cancellation under Section 34(1)(a), (b) or (c), and the power is discretionary rather than automatic. No fresh independent breach for the second licence is required, but the authority must act cautiously on notice and consider the facts of the earlier cancellation and revenue interests. The Court found the jurisdictional challenge unsustainable on the facts because the later notice followed the first cancellation and the remand order. It also treated final cancellation of the Majhenpurwa licence as premature because the underlying Gehrukheda licence dispute had not attained finality.

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Issues: Whether cancellation of one excise licence could justify cancellation of another licence of the same licensee under Section 34(2) of the United Provinces Excise Act, 1910 without proving a fresh independent violation for the second licence, and whether the cancellation order and appellate order cancelling the Majhenpurwa licence could stand in the facts of the case.

Analysis: Section 34(1) permits cancellation of a licence for breaches, non-payment, conviction, or other specified defaults. Section 34(2), however, is triggered only after another licence of the same person has already been cancelled under clauses (a), (b), or (c) of Section 34(1). The provision does not require a fresh independent breach in relation to the second licence, but the power is not automatic or mandatory; it is discretionary and must be exercised with caution on notice, having regard to the facts established in the earlier cancellation proceeding and the interest of revenue. The Court further held that the challenge to lack of jurisdiction could not survive on the facts because the later notice was issued after the first cancellation and pursuant to the remand order. At the same time, final adjudication of the Majhenpurwa cancellation was considered premature because the foundational dispute regarding the Gehrukheda licence had been remanded and had not attained finality.

Conclusion: The cancellation of the Majhenpurwa licence could not be finally sustained at that stage and the impugned cancellation and appellate orders were set aside, with the matter remitted for fresh consideration after the outcome of the Gehrukheda licence proceedings.

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