TaxTMI 
TaxTMI 
1983 (8) TMI 307
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....re low and would result in a loss of revenue to the Government, if accepted and suggesting that it might be recommended to the Excise Commissioner that the auctions might be cancelled and, re-auctions held with a new strategy which he also suggested in the letter. On March 28, 1983, the Commissioner of Excise passed an order setting aside the auction of all the shops and directing a re-auction. The order may be usefully extracted here in full. It is as follows: It became evident after the analysis of the results of Auction of the shops of country liquor, bhang and foreign liquor held on 17th, 18th and 24th March, 1983 of Allahabad district that the final bids of the shops accepted by the Collector and the bids received of the auction of the shops still postponed all taking together is comparatively less by (90-87) lacs to that of the license fees of the last year such a heavy loss does not stand to reason in view of the trend of the results of auction received from other districts. The results of the auction held in the neighbouring districts of Allahabad are as follows: Name of the District Rate of Increment 1. Mirzapur 86-8 percent 2. Benares 24-3 percent 3. Pratapgarh 15-8 per....
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....ed Civil Miscellaneous Writ Petition No. 411 of 1983 challenging the order of the Excise Commissioner. The High Court by its judgment dated April 29, 1983 quashed the order of the Excise Commissioner and directed him to accept the respondents' bid. The High Court took the view that the Excise Commissioner had made an 'eroneous approach in law' and that his order was arbitrary and founded on irrelevant considerations. The focal point of the judgment of the High Court was its conclusion that the Excise Commissioner was in error in thinking that the rise over the previous years bid in the case of the shops in question was negligible and that it was the result of the application of an incorrect formula. The Excise Commissioner has invoked the jurisdiction of this Court under Article 136 of the Constitution. 2. The learned Attorney General submitted that the High Court was wholly in error in assuming to itself the role of the Excise Commissioner and substituting its judgment in the place of that of the Excise Commissioner on the question whether or not the bids were adequate and there was loss of revenue to the Government. It was also submitted that even if the Excise Commi....
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....y auction or inviting tenders or otherwise or be assessed on the basis of the sales made or quota lifted under the licence or partiy-26 " fixed and partly assessed in the aforesaid manner. Paragraph 373 of the UP Excise Manual (Vol. 1) deals with the general conditions that are applied to excise sales by auctions. Conditions 1 and 2 are as follows: (1) The officer conducting the sales is not bound to accept any highest or any bid. In any case when the highest or any bid is hot proposed to be accepted, the next highest bid should also be reported to the Excise Commissioner. (2) The final acceptance of any bid is subject to the sanction of the Excise Commissioner, which in its turn, is subject to decision by the Government in appeal or revision, if any. Paragraph 374 of the UP Excise Manual deals with the general rules for conducting excise sales. Rule 6 mentions: At the time of the sale the person accepted as the auction purchaser shall be required to sign his name or affix his mark against the relevant entry of the licence in the Record G-14, it being explained at the time that the deposit paid in advance will ; be returned in the event of the licence being subsequently r....
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....the full extent they propose to offer before the close of the auction. 5. A perusal of the above extracted provisions of the UP Excise Act and the UP Excise Manual clearly establish that it is the State Government or the Excise Commissioner acting on behalf of the State Government that has to accept the amount offered as consideration for the grant of the exclusive privilege to sell liquor and that the bid can only be considered as finally accepted if it is sanctioned by the Excise Commissioner, subject again to the decision of the Government in appeal or revision. There can be no final acceptance of the bid by the officer conducting the auction. It can at best be provisional. Adequate price is the principal factor to be considered in the sanctioning of a bid by the Excise Commissioner. Rules 11 and 12 of Paragraph 374 contain guidelines for the guidance of the Excise Commissioner. But they are certainly not intended to create any right in the bidders. In the light of these provisions of the Act and the Manual, let us consider whether there was any justification for the High Court interfering in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution. ....