Excise licence partnership is not void absent express statutory prohibition against transfer or illegal licensing arrangements.

A partnership firm was held eligible for registration where one partner held the excise licence and the firm financed and assisted the licensed partner in carrying on liquor business. The arrangement was not treated as a prohibited transfer of the licence because there was no assignment document or accounting entry showing the licence itself was contributed to the firm. The Kerala Abkari Act and Rule 6(22) were read as regulating unauthorised transfer and enabling cancellation or suspension of the licence, but not as expressly making such a partnership void. Statutes that expressly invalidate such arrangements were distinguished, and mere partnership with a licence holder was not treated as unlawful transfer.

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Issues: Whether a partnership firm was entitled to registration when one partner held an excise licence and the firm carried on liquor business through that licence, and whether such arrangement amounted to a prohibited transfer of the licence or otherwise rendered the partnership illegal.

Analysis: The arrangement disclosed no document of assignment or any accounting entry showing that the licence itself was contributed to the firm. The partnership was treated as having only financed and assisted the licensed partner in carrying on the liquor business and sharing the profits. The statutory scheme was examined and it was found that the Kerala Abkari Act did not treat transfer of licence without consent as a punishable offence in the manner required to make the underlying agreement void. Rule 6(22) prohibited sale, transfer, lease or sub-rent without consent, but the Act also contemplated cancellation or suspension of the licence on breach and did not show an intention to prohibit the arrangement so as to invalidate the firm. The decisions treating different excise statutes as voiding such partnerships were distinguished, and the principle that a licence holder entering partnership does not by itself amount to unlawful transfer was accepted.

Conclusion: The firm was entitled to registration. The answers to the referred questions were in the negative, against the Revenue and in favour of the assessee.

Ratio Decidendi: A partnership is not disqualified from registration merely because a partner holding an excise licence carries on the licensed business with the assistance of the firm, unless the statute expressly makes such an arrangement a prohibited and punishable transfer that renders the partnership void.

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