TaxTMI 
TaxTMI 
1995 (5) TMI 284
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....set up new distilleries at new sites was upheld. 3. On 26th April, 1993, the Under Secretary, Government of Madhya Pradesh, Commercial Taxation Department, issued an order to the Excise Commissioner. By this order, this State Government granted permission to give licence in favour of the appellant to manufacture potable alcohol in the interest of more competition. The order was to the following effect :- GOVERNMENT OF MADHYA PRADESH COMMERCIAL TAXATION DEPARTMENT No. B-1-64/85/VA.KAR/5 Bhopal dated 26th April, 1993 To The Excise Commissioner, M.P. Gwalior. Subject : Regarding grant of DI licence to Messers Ramnarayan Satyanarayan Agrawal, Bilaspur for manufacture of industrial alcohol. Reference : Your memo No. 3/2/670 dated 20.4.93. The State Government grants permission for manufacture of potable alcohol in order to encourage greater competition for issuance of licence to Messers Ramnarayan Satyanarayan Agrawal Distilleries Pvt. Ltd., Chherka Bench, Bilaspur, which produces industrial alcohol. 2. In accordance with earlier cases the distiller would be responsible for the other license/permis....
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.... tenders for supply of country liquor in 19 supply areas of the State of Madhya Pradesh. The respondent Nos. 1 and 2 did not directly submit any tender, but another concern of the Kedia Group i.e. Castle Douglas Industries Limited, submitted its tender. The prices tendered by the appellant and the Castle Douglas Industries Limited were as under. Price tendered by the appellant Bilaspur Raipur Rs. 5.21 Rs. 5.71 Price tendered by Castle Douglas Industries Ltd. Bilaspur Raipur Rs. 14.71 Rs. 14.71 6. The tender of the appellant was much lower than the tender of Castle Douglas Industries Limited. There was no other contender. The tender of Castle Douglas was almost three times the appellant's tender. If the tender of Castle Douglas Industries Limited were accepted, the Exchequer would have suffered huge loss. 7. Having failed in open competition the respondent Nos. 1 and 2 are now trying to perpetuate their monopoly by legal process. 8. Initially, a writ petition was moved in the name Arvind Kashiv on 3.5.1993 (M.P.No. 1035/1993). Arvind Kashiv claimed to be a journalist interested in public causes. Arvind Kashiv failed to obtain ex-parte stay of acceptance of the appell....
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....an Agrawal Distilleries Pvt. Ltd. has now come up in appeal by special leave before this Court. 12. The case of the appellant is that the provisions of the Industries (Development and Regulation) Act, 1951 (hereinafter referred to as 'the Act') does not apply to an industrial unit in which less than fifty persons are employed. This contention must be upheld. 'Factory' has been defined in Section 3(c) of the Act as under : 3 (c). 'Factory' means any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on - (i) With the aid of power, provided that fifty or more workers are working or were working thereon on any day of the preceding twelve months; or (ii) without the aid of power, provided that one hundred or one workers are working or were working thereon on any day of the preceding twelve months and provided further that in no part of such premises any manufacturing process is being carried on with the aid of power. 13. The manufacturing process of appellant's business establishment is being carried out by only 22 workers. Consequently, the ....
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.... Industries Limited has been registered as an existing industrial undertaking under Section 10 of the Act, nor any licence has been issued to either of these undertakings under Section 11 of the Act. If the contention of the respondent No. 1 is to be accepted, then the distilleries run by them will have to be closed down, as they have no right to manufacture industrial or potable alcohol. 18. It has been contended on behalf of the respondents that even though they have not obtained a licence under Section 11 of the Act, they have applied for permission to carry on business (COB) to Government of India and their application has been registered. That, however, is not the same thing as having a licence under Section 11 of the Act. If the provisions of the Act are strictly enforced, the respondents will have no right to carry on business of manufacturing liquor. 19. So far as the appellant is concerned, it has been stated in the appeal before this Court as well as in the affidavit filed in the court below, that they employ not more than 22 persons in their factory. Section 10 of the Act requires the owner of every existing industrial undertaking to get the undertaking registered ....
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.... view we have taken by a judgment of this Court in the case of State of Madhya Pradesh v. Nandlal Jaiswal (supra). In that case, an argument was advanced that the respondents were not entitled to set up new distilleries without obtaining a licence from the Central Government under Section 11 of the Act. Since there was nothing to show that they had obtained such a licence before setting up the new distilleries, their action in setting up the new distilleries was illegal. This contention was repelled by this Court on the ground that no such plea had been raised in the court below. 23. It was held by P.N. Bhagwati, C.J.:- Moreover, it is obvious from Section 11 read with the definitions of 'factory' and 'industrial undertaking' contained in Sub-sections (c) and (d) of Section 3 of this Act that licence from the Central Government for setting up new distilleries and here in the present writ petitions, there is nothing to show that 50 or more workers were going to be employed in the new distilleries. We were told at the Bar that in fact old distilleries were also working without any licence from the Central Government presumably because less than 50 workers ....