TaxTMI 
TaxTMI 
TaxTMI 
2013 (1) TMI 771
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....-cum-tender basis and, accordingly, applications were invited from interested persons. As the settlement could not be effected in respect of group 'ka' shops in the said district, the Collector issued a second notification on 17th May, 2006 for the said group 'ka' which consisted of six country spirit shops and three spiced country spirit shops. On 5th June, 2006, the group 'ka' excise shops were settled in favour of the respondent at a monthly licence fee of Rs. 8,29,600/-. The respondent deposited the advance security of Rs. 8,29,594/- on 7th June, 2006 and further Rs. 8,29,600/- on 22nd June, 2006. The Collector, Kishanganj moved the Commissioner for his approval and the same was granted on 1st July, 2006 in the office of the Collector on 5th July, 2006 and on that day itself, the licence was issued in favour of the respondent- licencee. It is the case of the appellant that as the respondent did not deposit the requisite 1/4th amount of the annual licence fee as advance security as prescribed under the Rules but did so in three instalments, there was delay in obtaining the approval from the Excise Commissioner in terms of Rule 17(kha) of the Rules. Despite the delay in the payme....
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....pproved by the Excise Commissioner, Bihar on 1st July, 2006 and after receipt of the approval from the Excise Commissioner on 5th July, 2006, the licence was issued by the Licensing Authority on that date. Surely, in the backdrop of the facts that the licence was issued on 5th July, 2006 the petitioner could not have been fastened with the liability to pay licence fee from 5th June, 2006." [Underlining is ours] 6. Questioning the correctness of the aforesaid conclusion, it is submitted by Mr. Gopal Singh, learned counsel for the State of Bihar, that the High Court has fallen into error by construing that the default has been condoned though there is no concept of condonation in such a trade. It is urged by him that as the requisite advance licence fee was not deposited as per the Rules, the approval could not be obtained earlier and hence, the Department, not being at fault, should not suffer the loss of revenue more so when the licencee had accepted the conditions enumerated in the licence. That apart, submits Mr. Singh, as per the Rules, in such a situation, the respondent was legally bound to pay the licence fee from the date of settlement. 7. Mr. Shantanu Sagar, learned couns....
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....ce fee shall be paid by the highest bidder as advance security in the following manner for due execution of a contract: - a) An amount equivalent to sixth portion of annual licence fee shall be immediately deposited in cash or in the form of Bank Draft. The amount of cash/Bank Draft and that of advance money deposited previously under Rule 11(a) and Rule 11(c) respectively, shall be adjusted in part from security amount. b) The payable remaining amount on account of advance security shall have to be deposited within ten days of auction or before commencement of the licence whichever is earlier." 12. On a plain reading of the said Rule, it is manifest that the highest bidder has to immediately deposit one fourth of the annual licence fee as advance security money in the manner provided in sub-clauses (a) and (b) of the Rule. 13. Rule 20 deals with the consequences of default in advance security. It reads as under: - "20. Default in advance security. - In case of failure to deposit the amount of advance security, as mentioned in Rule 19, within the prescribed time, the settlement and the licence, if issued, shall stand cancelled and the deposited amount, if any, shall be forfeit....
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....aining the approval on 1st July, 2006 from the Excise Commissioner, the licence was issued by the Licensing Authority on 5th July, 2006, and, therefore, the demand of licence fee for the period from 5th June, 2006 to 5th July, 2006 is not sustainable. 19. As the factual matrix would reveal, the notification in Form No. 127 was issued on 23rd March, 2006. The terms and conditions of the settlement of excise shops were duly incorporated in the sale notification and as per Rule 8, the terms and conditions mentioned in the notification are deemed to be included in the conditions of the licence. As per the first notification, all the three country spirit shops could not be settled and further steps were taken for settlement and, eventually, the bid of the respondent was accepted on 5th June, 2006 with the annual licence fee of Rs. 99,55,200/- or at a monthly fee of Rs. 8,29,600/-. The respondent was required to pay 1/4th of the annual licence fee as advance security money but he failed to do so in time. He deposited the requisite amount in three instalments, i.e., first on 7th June, 2006, second on 22nd June, 2006 and third on 17th July, 2006. As per Rule 19(a), he was required to depo....
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....ence and that he has to pay the licence fee from the date of the settlement. 21. At this juncture, we may usefully address to the issue whether in a case of this nature, the principle of condonation of default by way of conduct can be attracted. First of all, under the Rules, the authorities are entitled to forfeit the amount deposited when there is non-compliance of the Rules. It is to be borne in mind that the nature of the trade has also its own significance. In Amar Chandra Chakraborty v. The Collector of Excise, Govt. of Tripura, Agartala and others[ AIR 1972 SC 1863], this Court held thus: - "Trade or business in country liquor has from its inherent nature been treated by the State and the society as a special category requiring legislative control which has been in force in the whole of India since several decades. In view of the injurious effect of excessive consumption of liquor on health this trade or business must be treated as a class by itself and it cannot be treated on the same basis as other trades while considering Article 14." 22. In the case of Nashirwar etc. v. State of Madhya Pradesh and Others[AIR 1975 SC 360], this Court opined that the State has the exclu....
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....termining its policy of regulating, manufacture and trade in liquor. Moreover, the grant of licences for manufacture and sale of liquor would essentially be a matter of economic policy where the Court would hesitate to intervene and strike down what the State Government had done, unless it appears to be plainly arbitrary, irrational or mala fide." [emphasis supplied] 28. In P.N. Krishna Lal and Ors. v. Govt. of Kerala and Anr.[ 1995 Supp (2) SCC 187], the Court expressed thus:- "28....dealing in liquor inherently pernicious or dangerous goods which endangers the community or subversive of morale, is within the legislative competence under the Act. The State has thereby the power to prohibit trade or business which is injurious to the health and welfare of the public and the elimination and exclusion from the business is inherent in the nature of liquor business. The power of the legislature to evolve the policy and its competence to raise presumptive evidence should be considered from this scenario." [emphasis supplied] 29. In Secretary to Govt., Tamil Nadu and Anr. v. K. Vinayagamurthy[ AIR 2002 SC 2968], it has been held as follows: "7....So far as the trade in noxious or dan....