TaxTMI 
TaxTMI 
2017 (8) TMI 590
X X X X Extracts X X X X
X X X X Extracts X X X X
.... R. K. Gupta, Sr. Advocate, with Mr. Riteesh Mahajan, adv Mr. Abhinav Sharma, Advocate; Mr. S. K. Shukla, Advocate. For official Respondents : Mr. J. I. Ganai, Advocate General, with. Mr. Ehsan Mirza, Dy. AG; and Mr. Faraz Iqbal, Dy. AG; For private Respondents: Mr. Pranav Kohli, Ms. Meenakshi Salathia, Mr. Sachin Dogra, Mr. W. S. Nargal, Mr. Ravi Abrol, Mohd Shaqir Hussain and Mr. C. S. Azad, Advocates. ORDER 1. These eleven writ petitions relate to licences for retail sale of Indian Made Foreign Liquor (IMFL), popularly termed as JKEL-2 license, and I wish to commence this judgment recording my conviction about the universal truth that gross loss of unimaginable magnitude in intoxicants overweighs the little benefits in them, and that there cannot be any good in something that covers minds, induces ruin in the biological beings and economy of a people, and reduces most of the consumers to abject penury. 2. In four of these petitions - OWP nos.822/2005, 826/2005, 827/2005 & 835/2005 - the petitioners challenge communications dated 14.12.2005, styled as 'notice for cancellation of temporary licence' addressed to them by the Excise Commissioner; in the other four writ petitions ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in OWP no.822/2005 had gone to the Supreme Court feeling aggrieved of the judgment of the Division Bench of this Court in the aforesaid case. The petitioners in OWP no.822/2005 have also stated these facts in their writ petition. Therefore, I feel that narration of some of these background facts from the said judgment herein becomes imperative, and I lift such facts from the aforesaid judgment and proceed to reproduce them hereunder. 5. The trade of liquor and intoxicating drugs in the State is governed by the Jammu and Kashmir Excise Act, 1958 and the Rules, known as J&K Liquor Licence & Sales Rules, 1984. Earlier, there was a dual system adopted by the State to regulate the trade of liquor: the Indian Made Foreign Liquor was sold through separate retail vends on a fixed annual licence fee whereas the Country Liquor was sold exclusively through identified vends with the privilege of trading granted in open auction conducted yearly and/or through departmental operations as per the provisions of J&K Excise Act and the Rules made thereunder. 6. For opening of a vend for the purposes of sale of Indian Made Foreign Liquor (IMFL), a person desirous of trading in the commodity was req....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of LPA No. 145/99, titled 'Residents of Kunjwani v. State of Jammu & Kashmir'. However, before fresh licences could be issued under the Policy for the year 2001-02, another writ petition in public interest, being PIL No. 803/2001, titled, "Vaid Vishnu Dutt v. State of J&K" came to be filed. That petition was disposed of by the Court on 30.5.2003, observing that the grievance made in the petition stood already redressed in terms of the directions of the Court passed in the earlier writ petitions filed in public interest directing the Government to formulate a policy, pursuant to which the Government, vide Order No. 112-F of 2001 dated 3.4.2001, had, in fact, formulated the above quoted policy. 11. It may be mentioned here that, however, no licence was issued till 2003. On expiry of the policy for the year 2001-02, the Government, vide Order No. 99-F of 2003 dated 7.4.2003 read with Order No. 156-F of 2003 dated 22.7.2003, notified the Excise Policy for the year 2003. The policy recognized the need for restrictive and regulative trade in the liquor till the time it was considered appropriate to bring about a total prohibition. Under the policy it was decided that in processing the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be abolished and, instead, IMFL of the same strength, degree and essence would be provided to the consumers of country liquor. For this purpose, it was provided that the existing country-liquor vends would be converted into IMFL vends, through which, apart from other brands of IMFL, the liquor of the strength, degree and essence of erstwhile country liquor, to be branded as JK-Desi Whisky, shall be allowed to be sold as a branded product on a fixed fee. The shift in discarding the system of sale of country-liquor and replacing it by branded liquor, known as JK-Desi Whisky, involved a major policy decision which was announced by the Government as a part of budgetary measure for the year 2004-05 in the State Legislature. The decision was formally communicated after the legislature accorded its approval to the budget proposals for the year 2004-05. 15. Because of the shift in the policy of sale of IMFL and country liquor, apart from 89 locations already notified, need was felt to issue licences for 170 erstwhile country-liquor vends also. Since 54 vends of country-liquor were already operating in 89 locations notified for grant of IMFL licences, the actual number of locations for whi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... lucky draws were to be drawn, the first being in respect of the 89 notified locations. For each of these locations, the draw was to be confined to those who had applied for a particular location. The second draw in respect of 116 locations was to be amongst the applicants including those who had applied for non-specific locations. Those who would be selected in the first draw for 89 locations were to be excluded and those of the applicants, who would figure in the waiting list for various places in the first draw, were also to be included in the second draw. The applicants, who would figure in the waiting list of any location in the second draw, were to be included in the draw for each subsequent location as well. An applicant who figured in the waiting list of a particular location of the first draw and may subsequently be selected for another location in the second draw, was to forego the selection for the second draw in case he had been picked up from the waiting list because of the person already selected in the first draw for that specific location being dropped for any reason including non-fulfilment of formalities. It was also decided that if any computer error would occur ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... receipt of applications was 6.10.2003. Before the applications could be processed, budget meeting of the State Legislature took place on 13.2.2004 and a decision regarding restructuring of the sale of liquor in the State was taken. On 20.2.2004 budget was announced in the State Legislature and decision dispensing with the system of sale of country liquor by auction and replacing it by branded liquor, known as JK-Desi Whisky, to be sold on the same network of IMFL, was formally communicated when the Legislature accorded its approval to the budget proposal for the year 2004-05. On 22.2.2004 the Government approved the suggestion of Excise Commissioner in regard to the short-listing of the applicants through the procedure of draw of lots. On 25.2.2004 proposal for draw of lots was notified. The draw of lots took place on 27.2.2004, which was not limited to only 89 locations already notified, but for additional 116 locations as well, which had not been notified. In this background, we find merit in the submission of Mr. R.K. Gupta, learned counsel appearing for some of the writ petitioners, that the decision of the Government with regard to putting of country liquor, to be branded as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or modify the policy in public interest. The appeals stand disposed of in the terms indicated above." 23. The aforesaid judgment of the Division Bench in the bunch of LPAs, lead by State of J&K v Vikas Jandial (supra), came to be challenged in SLP nos.3309-3310 of 2005, titled Satvir Singh and ors. v. State of J&K & ors. Therein the Supreme Court on 25.02.2005 passed an order to the following effect: "Issue notice limited to the question as to whether fresh steps should have been, as directed, taken even in respect to 89 IMFL shops." Another SLP titled Vikas Jandial & ors. v. State of J&K & ors. was also filed before the Supreme Court challenging the judgment of the Division Bench and the two SLPs were clubbed together. 24. Since the Supreme Court did not pass any stay order against the judgment of the Division Bench of this Court, the Excise Department was free to proceed ahead with implementation of the directions made by the Division Bench in its judgment. Resultantly, on 25.06.2006 a notice was issued by the Excise Commissioner which was published in the local dailies to the following effect: "Whereas the Division Bench of Hon'ble High Court J&K Jammu in its judgment date....
X X X X Extracts X X X X
X X X X Extracts X X X X
....andial & ors. v. State of J&K & ors. Whereas, it is proposed to grant new off-licenses (JKEL-2) for retail vending of IMFL for 90 locations noted below by draw of lots: ... ... Whereas, out of the above locations sub-vends are functional at 75 places as an interim arrangement which are proposed to be replaced by regular license. Now, therefore, interested persons may apply for grant of license on the above locations. Mere acceptance/receipt of an application in the Excise Department shall not confer any right or claim for the grant of a license. Each selectee shall have to fulfill the formalities prescribed under the Jammu and Kashmir Excise Act, Jammu & Kashmir Liquor License and Sales Rules, 1984 and the Policy framed under before the actual grant of a license." 25. In consequence of the process undertaken pursuant to the above notice, the Excise Department, under the supervision of Divisional Commissioner, Jammu, and in presence of respondent no.2, conducted the draw of lots. The result of the draw of lots was published vide notice no.EC/ST/207/2005-06/2889-92 dated 09.08.2005. Thereafter, respondent no.2 also informed the selectees, prospective licensees, about their sele....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r name figures at Srl. No.11 in the annexed Schedule and were selected for grant of JKEL-2 license for establishment of a vend at BATYTAL BLLAN for retail sale of liquor; and 6. Whereas pending completion of prescribed formalities for grant of a regular license a temporary license under No.257 in Form JKEL-2 for a period of four months was granted to you on 8/20/2005 in terms of sub-rule (8) of rule 30 of the Jammu and Kashmir Liquor License and Sales Rules 1984; and 7. Whereas on receipt of information alleging irregularities in drawing of lots on 09.08.2005 for grant of said license, the State Vigilance Organization carried out a joint surprise check; and 8. Whereas the State Vigilance Organization vide its letter No.SVO/PE-SLK-2/05-11988-90 dated 16.09.2005 addressed to the Chief Secretary recommended to take appropriate remedial action; and 9. Whereas Commissioner of Vigilance, Jammu and Kashmir Srinagar vide is letter No.SVO/PE-SLK-2/05-15912-14 dated 23.11.2005 has again intimated the Government that the C. D. carrying the programme through which lots were draw on computer by the Excise Department was referred to Senior System Analyst, CBI whose findings have been summari....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is petition came up for consideration before the learned Writ Court on 14.12.2005 and the Court issued notice to the learned Advocate General and directed the matter to be listed on the following day, i.e., 15.12.2005. On 15.12.2005, the matter was ordered to be listed on 16.12.2005 on which date it was posted for 19.12.2005. Meanwhile, since the aforesaid notices dated 14.12.2005 had been issued, the very same petitioners in collaboration with some other selectees (56 persons in all) filed another writ petition, OWP no.822/2005, questioning the legality of the said notice. Like-wise, six other selectees also filed a separate petition, being OWP no.817/2005, titled Ved Kumari & ors. v. State of J&K & ors., questioning the legality of the notices issued to them. OWP no.802/2005 ultimately came up before the Court on 19.12.2005 and on that date the Court ordered the same to be listed alongwith OWP nos. 817/2005 and 822/2005 after vacation. Meanwhile, by way of interim measure, the Court directed that till next date before the Bench there shall be status quo as on that date with regard to the business in question. As already mentioned, some twenty of the common petitioners in OWP no.8....
X X X X Extracts X X X X
X X X X Extracts X X X X
....usly and clarify that it will be open to all parties to raise all issues before the High Court. Mr. T.S. Doabia, the learned senior counsel appearing for the appellants in C.A.No.7295/2008 has invited our attention to Annexure 'P-3', a Government Order dated 22.07.2003 in which some exceptions have been carved out with reference to the liquor licenses. This question too will be available to the appellants to argue before the High Court. The appeals are disposed of accordingly." 30. It is in the aforesaid background facts and circumstances that the appellants before the Supreme Court sought permission to be impleaded as party respondents in the lead case, OWP no.822/2005. Their prayer was allowed and they have been arraigned as respondents 4 to 53. These respondents have filed their objections to the claim of the writ petitioners made in their writ petitions. 31. The grievance of the writ petitioners in writ petition, OWP no.822/2005, which is the lead case herein, and the connected petitions filed on identical cause, principally relates to the notice dated 14.12.2005 issued to them wherein they were informed that the draw of lots has become doubtful and that the Governmen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he decision of the Supreme Court in Siemens Ltd. v State of Maharashtra, (2006) 12 SCC 33. 33. Having considered the matter, I think it stands concluded by the order of the Supreme Court dated 30.04.2009 quoted above, insofar as it has been observed therein that as the liquor vends were operable only for one year, no relief could now be granted at this stage. From a perusal of the order of the Supreme Court, inter alia, the following things become axiomatic: i) that the appeals before the Supreme Court arose out of a challenge to the Liquor Policy for the year 2004-05 framed by the State of Jammu & Kashmir; ii) that the Supreme Court found that as the liquor vends were operable only for a year, no relief could now be granted to the appellants therein with respect to the policy for the year 2004-05; iii) that the appellants before the Supreme Court had also some grievance with respect to the direction to the Department to initiate action afresh for identification of the locations/areas and notify the same in all leading newspapers of all the liquor vends including the 89 for which selection had been made earlier; iv) that the Supreme Court laid down that the above observations ....