# Shriram Jaiswal v. State of U.P. &Ors

- **Citation:** (2019) 1 ILRA 519
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-16
- **Case number:** Civil Misc. Writ Petition No. 142 of 2019
- **Bench:** Saumitra Dayal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/shriram-jaiswal-v-state-of-u-p-ors-44520
- **Pages:** 12

## Headnote

A. United Provinces Excise Act, 1910:
Sections
34,
72(c),
U.P.
Excise
(Settlement of Licenses for Retail Sale of
Country Liquor) Rules, 2002: Rule 21,
S.34(3)-
'security
amount'
is
also
'deposit made'. Latter phrase cannot be
confined to the words 'fee paid'. It
includes 'security amount' money also.

The license of the petitioner to vend country
liquor was cancelled, stocks, license fee and
advance security deposit were also confiscated
by
the
District
Magistrate.
Appeal
was
dismissed and revision was rejected. Present
writ petition challenges the confiscation of
stocks, license fee and advance security
deposit etc., though not the cancellation of the
vending
license.
Partly
allowing
present
petition, the High Court. Held: - Under Section
520 INDIAN LAW REPORTS ALLAHABAD SERIES
34(3), the licensee would lose all rights to
seek refund of any fee paid or deposit made,
or other compensation for cancellation or
suspension of his license. The words "in
respect thereof" are clearly not suffixed or
used to confine the word 'deposit' to the
words 'fee paid'. (Para 22, 23)

B. After amendment - discretion to
forfeit 'security amount converted into
mandatory confiscation of any 'deposit
made'. It is an automatic consequence of
cancellation of licence.

Merely because the words "security amount"
had been added by amendment w.e.f.
01.04.2018 in Rule 21(3), would not mean
that prior to that day, there was no power to
forfeit
any
security
amount.
Prior
to
01.04.2018, the power to forfeit security
amount was discretionary; post 01.04.2018,
the
confiscation
of
security
amount
is
mandatory (Para 25, 26, 28)

C. An authority can pass a composite
order dealing with different aspects of
cancellation of licence, forfeiture and
penalty. Only requirement is of prior
show cause notice on all aspects.
An authority can pass a composite order
dealing with different aspects, though different
aspects of that order may be appealable
before different forums. This only has a
bearing on the remedy that the aggrieved may
have against the order, but does not affect the
validity or correctness of the composite order
and cannot be used to differently/narrowly
interpret the scope of power of the authority.
(Para 32, 33, 34)

Precedent distinguished:

## Text

_Characters 0–39,755 of 40,187. This is a partial read: ask again with offset=39755 for what follows._

1 All. Shriram Jaiswal Vs. State of U.P. & Ors.
519

The issues dealt with from paras
21 to 25 by the High Court already stands
approved by this Court. In para 29, the
High Court has held that clause. (d) has
prospective operation, viz., with effect
from 01.04.2005, and this legal position is
not disputed by the Revenue before us.
What follows from the above is that prior
to 01.04.2005, these developers/assessees
who had got their projects sanctioned
from the local authorities as 'housing
projects', even with commercial user,
though limited to the extent permitted
under the DC Rules, were convinced that
they would be getting the benefit of 100%
deduction of their income from such
projects under Section 80IB of the Act..."

29. In view of the observation of the
Hon'ble Apex Court, we are of the
opinion that the projects which were
approved
prior
to
1.4.2005
the
applicability of Section 80IB(10)(d), of
the Act is not permitted. In other words,
Section 80(IB)(10)(d) of the Act will be
applicable
prospectively
and
not
retrospectively.

30. Once it has come on record by
fact finding Authority also that there is no
such
condition
to
have
completion
certificate within four years from the local
authority granting approval of the projects
in question, the reassessment proceedings
taken against the assessee are bad and
against the settled principle of law.

31. Therefore, the Tribunal has
rightly
set
aside
the
re-assessment
proceeding and directed the assessing
authority to grant benefit of Section
80IB(10) of the Act to the assessee.

32. In view of the above facts and
circumstances of the case the question of
law are answered in favour of assessee
and against the Revenue.

33. The appeals are, accordingly,
answered. Both the appeals fail and are
therefore dismissed.

34. Copy of this order be placed in
the connected Income Tax Appeal No.
114 of 2016.
--------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.07.2019

BEFORE
THE HON'BLE SAUMITRA DAYAL SINGH, J.

Civil Misc. Writ Petition No. 142 of 2019

Shriram Jaiswal ...Petitioner
Versus
State of U.P. &Ors. ...Respondents

Counsel for the Petitioner:
Sri Abhishek Sharma, Sri Neeraj Sharma.

Counsel for the Respondents:
Shri. Avinash Chandra Tripathi, S.C..

A. United Provinces Excise Act, 1910:
Sections
34,
72(c),
U.P.
Excise
(Settlement of Licenses for Retail Sale of
Country Liquor) Rules, 2002: Rule 21,
S.34(3)-
'security
amount'
is
also
'deposit made'. Latter phrase cannot be
confined to the words 'fee paid'. It
includes 'security amount' money also.

The license of the petitioner to vend country
liquor was cancelled, stocks, license fee and
advance security deposit were also confiscated
by
the
District
Magistrate.
Appeal
was
dismissed and revision was rejected. Present
writ petition challenges the confiscation of
stocks, license fee and advance security
deposit etc., though not the cancellation of the
vending
license.
Partly
allowing
present
petition, the High Court. Held: - Under Section
520 INDIAN LAW REPORTS ALLAHABAD SERIES
34(3), the licensee would lose all rights to
seek refund of any fee paid or deposit made,
or other compensation for cancellation or
suspension of his license. The words "in
respect thereof" are clearly not suffixed or
used to confine the word 'deposit' to the
words 'fee paid'. (Para 22, 23)

B. After amendment - discretion to
forfeit 'security amount converted into
mandatory confiscation of any 'deposit
made'. It is an automatic consequence of
cancellation of licence.

Merely because the words "security amount"
had been added by amendment w.e.f.
01.04.2018 in Rule 21(3), would not mean
that prior to that day, there was no power to
forfeit
any
security
amount.
Prior
to
01.04.2018, the power to forfeit security
amount was discretionary; post 01.04.2018,
the
confiscation
of
security
amount
is
mandatory (Para 25, 26, 28)

C. An authority can pass a composite
order dealing with different aspects of
cancellation of licence, forfeiture and
penalty. Only requirement is of prior
show cause notice on all aspects.
An authority can pass a composite order
dealing with different aspects, though different
aspects of that order may be appealable
before different forums. This only has a
bearing on the remedy that the aggrieved may
have against the order, but does not affect the
validity or correctness of the composite order
and cannot be used to differently/narrowly
interpret the scope of power of the authority.
(Para 32, 33, 34)

Precedent distinguished:
1. Chandra Pal Singh Vs. State of U.P.& 4 Ors.

2. Writ Tax No. 356 of 2014 decided on
27.05.2014 (Para 6, 36) (E-4)

(Delivered by Hon'ble Saumitra Dayal
Singh J.)

1. The present writ petition has been
filed
against
the
order
dated
25/27.10.2015 passed by the District
Magistrate/Licensing authority. By that
order, the petitioner's license for retail
vend of country liquor has been cancelled;
stock
of
lawful/unlawful
liquor
confiscated; holograms, wrappers and
corks, basic license fee, advance security
and cash Rs. 17,530/- forfeited. That
order is disclosed to have been passed
with reference to the powers vested in that
authority under Section 34 and Section
72(c) of the United Provinces Excise Act,
1910 (hereinafter referred to as the Act)
and Rule 21 of the U.P. Excise
(Settlement of Licenses for Retail Sale of
Country Liquor) Rules, 2002 (hereinafter
referred to as the Rules).

2. Challenge has also been raised to
the order dated 05.05.2016 passed by
Excise Commissioner, U.P. dismissing
the appeal filed by the petitioner against
the order dated 27.10.2015. Further,
challenge has been raised to the order
dated 27.09.2018 passed by the State
Government rejecting the revision filed
by the petitioner against the appellate
order
dated
05.05.2016.
Thus,
the
cancellation of license as also forfeiture
and confiscation of basic license fee,
security deposit, advance security deposit,
lawful/unlawful stock of liquor, wrappers,
cash and other items discovered during
the inspection/survey dated 21.09.2015
has been confirmed.

3. Heard Sri Neeraj Sharma assisted
and Sri Abhishek Sharma learned counsel
for the petitioner and Sri A.C. Tripathi,
learned Standing Counsel for the revenue.

4. At the outset, Sri Neeraj Sharma
has confined the submissions and prayer
made in the present writ petition against
the forfeiture and confiscation of advance
1 All. Shriram Jaiswal Vs. State of U.P. & Ors.
521
security, lawful stock of liquor and cash
Rs. 17,530/-. Challenge has not been
pressed to the other part of the impugned
orders whereby country liquor license of
the
petitioner
has
been
cancelled;
unlawful stock of liquor and basic license
fee for the excise year 2015-16 had been
forfeited.

5. Learned counsel for the petitioner
first states, upon the inspection conducted
on 21.09.2015, no seizure of stock of
liquor etc. had been made. However, a
wholly false FIR had been lodged against
the petitioner on the same day. About a
week thereafter, on 29.09.2015, a show
cause notice had been issued to the
petitioner in exercise of power under Rule
21(2) of the Rules to show cause why the
petitioner's license may not be cancelled.
The petitioner had furnished his reply to
that show cause notice. In that reply, he
objected to the proposed forfeiture of the
lawful stock of country liquor; cash; as
also advance security deposit.

6. Placing heavy reliance on the
language of the Rule 21(2) and (3) of the
Rules as also the judgment of the learned
single judge of this Court in Writ Tax No.
356 of 2014, Chandra Pal Singh Vs.
State of U.P. & 4 Ors., decided on
27.05.2014, it has been submitted, though
the order cancelling the country liquor
license is not being challenged in the
present proceedings, however, there could
not have been any forfeiture of security,
cash money found in the shop and
confiscation stock of lawfully procured
liquor.

7. First, it has been submitted, under
Rule 21(2) and (3) of the Rules, the
licensing authority could have required
the petitioner to show cause against
proposed cancellation of license and
forfeiture of security or basic license fee
or license fee, alone. No action could
have been taken under that provision of
law to forfeit the security money or
confiscate the stock of lawfully procured
liquor or cash. The proceedings under
Rule 21 of the Rules are distinct and
different from those under Section 72 of
the Act. While proceedings for suspension
and cancellation of license may arise in
accordance with Rule 21 of the Rules read
with Section 34 of the Act, those
proceedings have to be drawn up by the
licensing authority. On the other hand, the
proceedings
for
confiscation,
as
contemplated under Section 72 of the Act
have to be drawn up by the Collector after
seizure of items/animals, etc that may be
subjected to confiscation proceedings. In
the present case, only one notice had been
issued
(dated
29.09.2015),
by
the
licensing authority. No other notice was
issued by the Collector in exercise power
under Section 72 of the Act. Therefore, it
has been submitted, the mandatory
requirement of the Act had been violated.
The confiscation of the valid stock of
liquor and cash could not have been made
by
the
licensing
authorities
while
exercising powers under Rule 21 of the
Rules.

8. It is his further submission, in any
case, unamended Rule 21(3) of the Rules
did not contemplate or provide for
forfeiture of security amount. This Rule
was amended by Ninth Amendment, 2018
w.e.f. 01.04.2018 whereby the words
"security amount deposited by him" were
added after the words "basic license fee
and license fee" appearing in the
unamended rule. Therefore, no security
amount could not have been forfeited
prior to 01.04.2018.
522 INDIAN LAW REPORTS ALLAHABAD SERIES

9. Also, it has been submitted, in
any case, even under Section 34(3) of the
Act, the word "deposit" only refers to the
license fee that may have been paid by the
licensee. For that reason also, there was
no jurisdiction or authority whereby, prior
to
01.04.2018,
the
security deposit
furnished by the petitioner could be
forfeited. The words "in respect thereof"
appearing at the end of the sub-section (3)
of Section 34 of the Act, clearly go to
indicate that the word "deposit" appearing
in that provision of law refers only to
license fee that may have been deposited.

10. Opposing the present petition,
learned Standing Counsel submits, in the
first place, the powers of the licensing
authority
and
the
Collector
(two
authorities under Rule 21 of the Rules and
Section 72 of the Act) are wielded by one
and the same officer who discharges those
functions in twin capacities. The District
Magistrate,
appointed
by
the
State
Government,
also
functions
as
the
Collector and the licensing authority
under the Act. In any case, no objection
appears to have been raised before the
original authorities or before the appeal
authorities, as to lack of jurisdiction.
Therefore,
that
plea
may
not
be
entertained, at this belated stage.

11. Second, it has been submitted, in
the facts of the present case, the notice
dated 29.05.2015 makes it plain that the
same had been issued in dual capacity of
the District Magistrate as the Collector
and also as the Licensing Authority.
Therefore, there was never any defect in
the exercise of the jurisdiction.

12. Third, again as a fact, the notice
makes a clear mention of the proceedings
being initiated. First, the notice refers to
Rule 21 of the Rules and proposes to
cancel the license of the petitioner in light
of the infractions of the law committed by
the petitioner. Also, the notice proposes to
forfeit/confiscate the basic license fee and
security deposit as also the entire stock of
lawful/unlawful liquor being 7552 bottles
of country liquor of Rs. 17,530/- in cash.
Not only does the notice refer to the
above, it also draws the attention of the
petitioner to the provisions of the Section
72(c) of the Act viz a viz the proposed
action to forfeit the basic license fee,
security deposit as also to confiscate the
entire stock of lawful and unlawful liquor
and
cash.
Therefore,
it
has
been
submitted, the show cause notice dated
29.09.2015 did not suffer from any
jurisdictional, legal and factual errOrs.

13. Then, referring to the Rule 21(2)
of the Rules, it has been submitted,
authority was fully empowered to seek
cancellation of license and forfeiture of
security, even in the light of the
unamended Rule 21 of the Rules. Here,
reference has been made to the provisions
of Rule 21(2) of the Rules, which provides
for issuance of a show cause notice to
cancel the license and also to forfeit
security
money. Besides the
above,
reliance has been placed on Section 34(3)
of the Act to submit, under that provision
of law, upon suspension or cancellation of
his license, the petitioner lost his right to
claim refund of any fee paid or deposit
made with respect to the country liquor
license (that had been earlier issued to him),
and which became the subject matter of
suspension and cancellation proceedings.
The words "in respect thereof" do not
restrict the word "deposit" to any fee paid
but they restrict the word "deposit" and
relate it to the country liquor license against
which such deposit may have been made.
1 All. Shriram Jaiswal Vs. State of U.P. & Ors.
523

14. Last, referring to Section 72(c)
of the Act, it has been submitted, once the
petitioner was found to have committed
the offence punishable under the Act,
every quantity of intoxicant whether in his
lawful
or
unlawful
possession
was
exposed to confiscation proceedings. The
fact that the petitioner did not file any
appeal against that part of the order before
the District Judge as provided under the
Act, does not make any difference to the
merits of the order.

15. Having heard learned counsel for
the parties and having perused the record, in
the first place, it has to be recognized that
the Act does separately provide for
suspension and cancellation of country
liquor
license,
forfeiture
and
for
confiscation. While making such separate
provisions, it also appears that the power to
cancel and suspend licenses has been
conferred on the licensing authority while
the power for confiscation has been vested
in the Collector. Though the word
"Collector" has not been defined under the
Act, under Section 3(2) of the Act, the
Excise Officer has been defined to mean a
Collector or any officer or person appointed
under Section 10 of the Act. On the other
hand, under Rule 2(k) of the Rules,
"licensing authority" is defined to mean a
Collector or the District Magistrate. In the
present case, the District Magistrate was the
licensing authority under the Act.

16. Thus, in absence of any case that
the issuing authority/District Magistrate
was
not
the
Collector,
it
remains
undisputed, even if separate notices had to
be issued, one under Section 34 read with
Rule 21 of the Rules for cancellation of
license and another under Section 72(5) of
the Act for confiscation of items, those
two notices would still have been issued
by the same signatory in different
capacities.

17. Then, factually, in the present
case,
the
notice
dated
29.09.2015
specifically refers to both Section 34 and
Section 72(c) of the Act as well as Rule
21 of the Rules. Also, the subject matter
of the notice refers to both Section 34 of
the Act read with Rule 21 of the Rules as
also Section 72(c) of the Act. In other
words, the said notice speaks both, of the
proposal to cancel the country liquor
license as also to forfeit security money
and confiscate, stock of lawful and
unlawful liquor as also cash. Thus, it
cannot be the case of the petitioner that he
had not been issued any prior show cause
notice before the proceeding for forfeiture
were
undertaken.
The
action
of
confiscation of stock of liquor and cash
and forfeiture of security is found to have
been preceded by a notice issued under
Section 34 of the Act read with Rule 21 of
the Rules and section 72(c) of the Act.
There is no procedural defect in the same.

18. Coming to the other objection
raised on behalf of the petitioner, first, the
statutory provisions may be taken note of.
The provision of Rule 21(2) and (3) of the
Rules, both prior to and after the
amendment may, first be noted as below:

Column-I
 Existing rule
Column-II

Rule as hereby
substituted
2)
The
licensing
Authority
shall
immediately suspend the
license and issue a show
cause
notice
for
cancellation
of
license
and forfeiture of security
the licensee shall submit
his explanation within 7
days of the receipt of
notice. There after the
(2) The licensing Authority
shall immediately suspend
the license and issue a
show cause notice for
cancellation of license and
forfeiture of security the
licensee shall submit his
explanation within seven
days of the receipt of
notice. There after the
licensing authority shall
524 INDIAN LAW REPORTS ALLAHABAD SERIES
licensing authority shall
pass suitable orders after
giving due opportunity of
hearing to the licensee.

Provided
that
the
procedure of suspension
and
cancellation
of
license related to relevant
matter as adduced in the
sub paragraph (f) of the
aforesaid rule-21(1) shall
be executed in accordance
with the rule-14.

(3) In case the license is
cancelled
the
basic
license fee, license fee
deposited by him shall
stand forfeited in favour
of the Government and
the licensee shall not be
entitled to claim any
compensation or refund.
Such licensee may also be
blacklisted and debarred
from holding any other
excise license.
pass suitable orders after
giving due opportunity of
hearing to the licensee.

Provided
that
the
procedure of suspension
and cancellation of license
related to relevant matter
as adduced in the sub
paragraph
(f)
of
the
aforesaid rule-21(1) shall
be executed in accordance
with the rule-14.

(3) In case the license is
cancelled the basic license
fee,
license
fee
and
security amount deposited
by
him
shall
stand
forfeited in favour of the
Government
and
the
licensee
shall
not
be
entitled
to
claim
any
compensation or refund.
Such licensee may also be
blacklisted and debarred
from holding any other
excise license.

19. For a proper consideration of the
submission advanced by the learned
counsel for the parties, it is also necessary
to take note of the language of Section 34
of the Act and Section 72 of the Act.
Thus, provisions of Section 34 of the Act
are noted below:

"34.
Power
to
cancel
or
suspend licences, etc.- (1) Subject to such
restrictions, as the State Government may
prescribe, the authority granting any
licence, permit or pass under this Act may
cancel or suspend it

(a) if any duty or fee payable by
the holder thereof be not duly paid; or

(b) in the event of any breach by
the holder of such licence, permit or pass
or by his servants, or by any one acting
on his behalf with his express or implied
permission of any of the terms or
conditions of such licence, permit or pass;
or

(c) if the holder thereof is
convicted of any offence punishable under
this Act or any other law for the time
being in force relating to revenue, or of
any cognizable and non-bailable offence,
or of any offence punishable under the
[Dangerous Drugs Act, 1930,] or under
the Merchandise Marks Act, 1889, or of
any offence punishable under Sections
482 to 489 (both inclusive) of the Indian
Penal Code; or

(d) where a licence, permit or
pass has been granted on the application
of the grantee of an exclusive privilege
under this Act, on the requisition in
writing of such grantee; or

(e) if the conditions of the
licence or permit provide for such
cancellations or suspension at will.

(2) When a licence, permit and
pass held by any person is cancelled
under clauses (a), (b) or (c) of sub-section
(1), the authority aforesaid may cancel
any other licence, permit or pass granted
to such person by, or by the authority of
the State Government under this Act or
under any other law for the time being in
force relating to excise revenue or under
the Opium Act, 1878.

(3) The holder shall not be
entitled to any compensation for the
cancellation or suspension of his licence,
permit or pass under this section nor to a
refund of any fee paid or deposit made in
respect thereof."

20. Also, relevant to the issue at
hand, the provisions of Section 72 of the
Act are noted below:

72. What things are liable to
confiscation.- (1) Whenever an offence
1 All. Shriram Jaiswal Vs. State of U.P. & Ors.
525
punishable under this Act has been
committed-

(a) every intoxicant in respect of
which such offence has been committed;

(b)
every
still,
utensil,
implement or apparatus and all materials
by means of which such offence has been
committed;

(c) every intoxicant lawfully
imported,
transported,
manufactured,
held in possession or sold along with or in
addition to any intoxicant liable to
confiscation under clause (a);

(d) every receptacle, package
and covering in which any intoxicant as
aforesaid or any materials, still, utensil,
implement or apparatus is or are found,
together with the other contents (if any) of
such receptacle or package; and

(e) every animal, cart, vessel or
other conveyance used in carrying such
receptacle or package shall be liable to
confiscation.

(2) Where anything or animal is
seized under any provision of this Act, the
officer
seizing
and
detaining
such
property shall, within three working days
from the date of such seizure and
detention; produce a detailed report for
confiscation along with such seized
property,
seizure
memo
and
other
relevant documents before the Collector.
The Collector shall, upon receiving the
said report along with seizure memo and
seized property, immediately order for
safe custody and storage of goods as he
may deem fit. The Collector, if satisfied
for reasons to be recorded that an offence
has been committed due to which such
thing or animal has become liable to
confiscation under sub-section (1), he
may order confiscation of such thing or
animal whether or not a prosecution for
such offence has been instituted:

Provided that in the case of
anything (except an intoxicant) or animal
referred to in sub-section (1), the owner
thereof shall be given an option to pay in
lieu of its confiscation such fine as the
Collector thinks adequate, not exceeding
its market value on the date of its seizure.

(3) Where the Collector on
receiving
report
of
seizure
or
on
inspection of the seized things, including
any
animal,
cart,
vessel
or
other
conveyance, is of the opinion that any
such things or animal is subject to speedy
wear and tear or natural decay or it is
otherwise expedient in the public interest
so to do, he may order such things (except
an intoxicant) or animal to be sold at the
market price by auction or otherwise.

(4) Where any such things or
animal is sold as aforesaid, and-

(a) no order of confiscation is
ultimately passed or maintained by the
Collector under sub-section (2) or on
review under sub-section (6); or

(b) an order passed on appeal
under sub-section (7) so requires; or

(c) in the case of a prosecution
being instituted for the offence in respect
of which the thing or the animal is seized,
the order of the court so requires;

the
sale
proceeds
after
deducting the expenses of the sale shall be
paid to the person found entitled thereto.

(5) (a) No order of confiscation
under this section shall be made unless
526 INDIAN LAW REPORTS ALLAHABAD SERIES
the owner thereof or the person from
whom it is seized is given-

(i) a notice in writing informing
him of the grounds on which such
confiscation is proposed;

(ii) an opportunity of making a
representation in writing within such
reasonable time as may be specified in the
notice; and

(iii) a reasonable opportunity of
being heard in the matter.

(b) Without prejudice to the
provisions
of
clause
(a),
no
order
confiscating any animal, cart, vessel, or
other conveyance shall be made if the
owner thereof proves to satisfaction of the
Collector that it was used in carrying the
contraband goods without the knowledge or
connivance of the owner, his agent, if any,
and the person in-charge of the animal,
cart, vessel or other conveyance and that
each of them had taken all reasonable and
necessary precautions against such use.

(6) Where on an application in
that behalf being made to Collector within
one month from any order of confiscation
made under sub-section (2), or as the case
may be, after issuing notice on his own
motion within one month from the order
under
the
sub-section
refusing
confiscation to the owner of the thing or
animal seized or to the person from whose
possession it was seized to show cause
why the order should not be reviewed,
and after giving him a reasonable
opportunity of being heard, the Collector
is satisfied that the order suffers from the
mistake apparent on the face of the record
including any mistake of law, he may pass
such order on review as he thinks fit.

(7) Any person aggrieved by an
order of the confiscation under subsection
(2) or sub-section (6) may, within one
month from the date of the communication
to him of such order, appeal to such
judicial
authority
as
the
State
Government may appoint in this behalf
and the judicial authority shall, after
giving opportunity to the appellant to be
heard, pass such order as it may think fit,
confirming, modifying or annulling the
order appealed against.

(8) Where a prosecution is
instituted for the offence in relation to
which such confiscation was ordered the
thing or animal shall subject to the
provisions of sub-section (4) be disposed
of in accordance the order of the Court.

(9) No order of confiscation
made by the Collector under this section
shall prevent the infliction of any
punishment to which the person affected
thereby may be liable under this Act.]

21. For the purpose of giving true
meaning for the language of Rule 21 (2)
and (3) of the Rules, both before the
amendment and after amendment, first
notice must be had to the language of the
principal legislation. Here, it appears,
under Section 34(1) of the Act, the
legislature has authorized the licensing
authority to cancel or suspend a license
(that may have been granted under the
Act). Subject to any restriction placed by
the State Government, the contingencies
wherein the license may be suspended or
cancelled are provided under Section
34(1)(a) to (e) of the Act. Insofar as the
cancellation
of
the
license
of
the
petitioner has not been questioned, no
further discussion is required to be made
as to the contingency for cancellation. So
1 All. Shriram Jaiswal Vs. State of U.P. & Ors.
527
far as the Section 34(2) of the Act is
concerned, it provides for consequences
for cancellation of the license on other
license/s as may be existing in favour of
such person. Again, that is not the issue
involved in the present case.

22. Then, sub-Section (3) of Section
34 refers to the effect that a cancellation
order would have on the rights of the
licensee that may have otherwise existed
in view of the license granted to him.
Here, it appears the legislature has clearly
provided, upon cancellation of a license,
the licensee would lose all rights or
entitlement to seek compensation for
cancellation or suspension of the license,
permit or pass, that may have been issued
to him. Further, he would lose his right or
entitlement to claim refund or any fee
paid or deposit made. The words "in
respect thereof" are clearly not suffixed or
used to confine the word 'deposit' to the
words "fee paid".

23.

While
providing
the
consequence and the effect of cancellation
on the right of the licensee, the legislature
appears to have clearly provided, the
licensee would lose all rights that he may
otherwise claim on the strength of his
license. It is in light of that concept and it
is in that context that his right to claim
compensation has been done away. Upon
the occurrence of cancellation of his
license, the licensee's right to claim
refund of any fee paid or deposit made
has been taken away. There is no
suggestion contained in the statutory
language as may confine the use of word
'deposit' to the words "fee paid". The
word "or" used between the words "fee
paid" and "deposit" appearing in subSection (3) of Section 34 of the Act also
mitigates against the interpretation being
offered by the learned counsel for the
petitioner.

24. Here, it is relevant that under Rule
21(2) of the Rules, the licensing authority
was always authorized to issue a show-cause
notice to cancel the license and to forfeit the
security and to pass final order providing for
such confiscation. That power arises under
the first part of Rule 21(2) of the Rules that
obligates the licensing authority to issue a
show-cause notice for cancellation of license
and forfeiture of security.

25. Sub-Rule (3) of Rule 21 of the
Rules
would
in
any
case
remain
consequential to sub-Rule (2) of Rule 21
of the Rules i.e. it would come into play
as soon as cancellation order is passed.
Therefore, under the amended law, once
the licensing authority, who was duly
empowered to issue a notice, amongst
others, to forfeit the security [under Rule
21(2) of the Rules] had acted in exercise
of that power and he was fully enabled
[under that sub-rule itself] to pass an
order after hearing the licensee to forfeit
the security as well. It is not possible to
accept the contention advanced by the
learned counsel for the petitioner that
merely
because
the
word
"security
amount" did not appear in the unamended
text of sub-Rule (3) of Rule 21 of the
Rules and since those words had been
added
by
the
amendment
w.e.f.
01.04.2018, therefore, prior to that
amendment, there did not exist any power
to
forfeit
security
amount.
That
interpretation would render the earlier
part of Rule 21(2) of the Rules redundant.

26. In fact, true reading of sub-Rule
(3) of Rule 21 of the Rules makes it clear,
even prior to the amendment to that Rule,
by
way
of
direct
and
mandatory
528 INDIAN LAW REPORTS ALLAHABAD SERIES
consequence of cancellation of license,
the basic license fee and the license fee
deposited by a licensee would be forfeited
as a consequence of cancellation of
license.
However,
if
the
licensing
authority wanted to forfeit the "security
amount" it had a discretion in terms of
sub-Rule (2) of Rule 21 of the Rules. By
virtue
of
amendment
made
w.e.f.
01.04.2018,
the
consequence
of
mandatory confiscation has been extended
to "security amount" as well.

27. Therefore, post amendment to
Rule 21(3) of the Rules, a simple order of
cancellation of the license would result in the
licensee losing his rights over the security
amount along with basic license fee and the
license fee, that may have been deposited by
him. It is only with respect to other
consequences such as black-listing and
debarring the licensee to hold any other
license that sub-Rule (3) leaves a discretion
with the licensing authority. However, we
are not concerned with that aspect of the
matter. That effect and differentiation is
further accentuated by use of the words
"shall" (while providing for confiscation) and
"may" (while providing for black-listing).

28. In view of the above, I am
unable to accept the contention advanced
by the learned counsel for the petitioner
that prior to the amendment made to subRule (3) of Rule 21 of the Rules, there did
not exist any power with the licensing
authority to forfeit the security amount.
That power is found to be pre-existing, by
virtue of sub-Rule (2) of Rule 21 of the
Rules. The introduction of the words
"security amount" by amendment made to
sub-Rule (3) has the effect of making
confiscation of "security amount", a
mandatory consequence of an order of
cancellation of license.

29. In the facts of the present case,
the forfeiture was proceeded by a specific
show cause notice, in terms of section 34
of the Act read with Rule 21(2) of the
Rules and section 72(c) of the Act. The
order for forfeiture of advance security
deposit as has been passed is referable
only to sub-Rule (2) and not to the subRule (3) of Rule 21 of the Rules. SubRule(3) only provides for the mandatory
and other consequences of cancellation of
the license. It does not authorize the
licensing authority to pass an order. That
power is contained completely in subRule (2). One is therefore not required to
look into sub-Rule (3) for the purposes of
the decision of the present case.

30. Insofar as Section 72 of the Act
is concerned, sub-Section (1) provides for
confiscation of different items and also
animals, carts and vessels or other
conveyance in the event of offence
punishable
under
the
Act
being
committed. Sub-Section (2) provides for
confiscation of any animal. Under subSection (3) and (4), the Collector upon
receiving the report of seizure or upon
inspection of seized things or animal etc
may, if such seized items or animal is
subject to speedy or other decay provide
for its disposal. Sub-Section (5) provides
for issuance of show-cause notice to the
owner of the thing or animal, etc. that
may
be
made
subject
matter
of
confiscation proceeding. The owner has
thus been given a statutory right to object
in writing and also to be heard before
confiscation order may be passed. SubSection (6) provides for a power of
limited review in certain circumstances,
while sub-Section (7) gives the right to
the person from whom such any property
may have been seized, a right to appeal to
a duly appointed judicial authority. Sub-
1 All. Shriram Jaiswal Vs. State of U.P. & Ors.
529
Section (8), on the other hand, relates for
disposal of the thing or animal in the
event of prosecution being instituted. SubSection (9) provides that confiscation
would not act as a bar on punishment
which may otherwise be imposed on the
offender.

31. Thus, relevant for our purpose,
under Section 72(1)(c) of the Act, any
intoxicant, whether lawfully imported or
not is made liable to confiscation in the
event of offence punishable under the Act
being found committed.

32. Though, a right of appeal given
to the owner, under Section 72 of the Act
is separate and distinct from the right of
appeal under section 11 of the Act that a
licensee may have against an order passed
in terms of Rule 21 of the Rules, it may
not necessarily imply that the original
authority must therefore pass two separate
orders, though he was otherwise vested
with both the power to suspend or cancel
the license and also the power to
confiscate. The fact that he exercised the
power compositely may only make a
difference on the remedy that the
petitioner may have against the order.

33. Thus, against the impugned
order dated 05.05.2016, the petitioner
may have had a right to appeal before the
Appeal
Authority,
which
was
the
Commissioner under Section 11 of the
Act, insofar as that order related to the
cancellation of license and denial of
refund of security amount, but he may
also have had a separate right of appeal
against the other part of the order which
relates to confiscation of lawful stock of
liquor and cash. However, that difference
of appeal forum made available to the
petitioner would not lead to a different
conclusion insofar as the interpretation is
to be given to the language of Rule 21(3)
of the Rules.

34. The submission of the learned
counsel for the petitioner that no
proceedings was instituted under Section
72 of the Act and therefore forfeiture of
liquor is illegal is also found unacceptable
in view of the reasoning given above. The
show cause notice dated 29.9.2015 was a
composite
notice,
both
seeking
cancellation of license and forfeiture of
license fee and security deposit as also for
confiscation of liquor. The petitioner also
appears to have replied to that notice and
participated in the proceedings. His reply,
on merits, was considered and decided. In
absence
of
any
inherent
lack
of
jurisdiction with the issuing authority,
merely because the proceedings for
confiscation of liquor are provided under
Section 72 of the Act to be undertaken by
the Collector, it would make no real
difference since, as noted above the
District Magistrate was the Collector and
the Licensing Authority. The objection
being raised by the petitioner is found to
be cosmetic in nature and substantially
unreal. Thus, as a fact the show cause
notice was issued by the proper authority.
It was replied to and thereafter the order
had been passed in the prescribed manner
after
by
following
the
procedure
contemplated under Section 72 of the Act.
Therefore, the proceeding did not suffer
from defect of jurisdiction.

35. In view of the above, neither I
consider it a proper or a fit case to now
relegate the petitioner for the remedy of
appeal before the District Judge in respect
to the confiscation of lawful and unlawful
stock and liquor. To that extent, I decline
to exercise jurisdiction of Article 226 of
530 INDIAN LAW REPORTS ALLAHABAD SERIES
the Constitution of India in view of the
facts that have transpired and the
proceedings that the petitioner had
already availed. Also, substantially the
claim of the petitioner is found to be
lacking on merit. Once the cancellation
order has been accepted on merits, the
petitioner lost all rights to deal with
lawful or unlawful stock of liquor.

36. Insofar as the decision in the
case of Chandra Pal Singh Vs. State
of U.P. & 4 Ors. (supra) is concerned
from a bare perusal of the order dated
27.05.2014, it appears that the State
could not point out any provision of
law to resist that petition. Though the
SLP against that decision has been
dismissed, the submissions similar to
those advanced by the learned Standing
Counsel, in the present case, appear to
have been raised (in that case), only
upon review petition being filed. It
came to be rejected on a technical plea
that the same would fall outside the
scope of review. Thus since the
decision in Chandra Pal Singh Vs.
State of U.P.& 4 Ors. (supra) was
based, practically on the concession
made by the State, the further fact that
the SLP therefrom may have been
dismissed would not amount to any
declaration of law, that may bind the
Court. That decision would remain a
decision on facts.

37. However, there is no provision
of law which the learned Standing
Counsel could refer to as may enable the
excise authorities or the Collector to
confiscate any amount of cash that may
have been found at the time of inspection
or survey. The cash found is clearly not
excisable goods and there is no allegation
or finding against the petitioner that the
same were proceeds of unlawful trade in
liquor. In view of the above, the amount
of Rs. 17,530/- is liable to be refunded to
the petitioner forthwith, in accordance
with law. To that extent, the petition must
succeed. It is declared that the excise
authorities or the Collector had no
authority to confiscate the cash Rs.
17,530/-.

38. Accordingly, the petition is
partly allowed.
-------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 01.07.2019

BEFORE
THE HON'BLE SAUMITRA DAYAL SINGH, J.

CIVIL MISC. WRIT (TAX) PETITION NO. 311
of 2016

Cantonment Board, Meerut &Anr.
 ...Petitioners
Versus
M/S B.K. Das & Sons. ...Respondent

Counsel for the Petitioners:
Sri Udit Chandra

Counsel for the Respondent:
C.S.C., Sri Kiran Kumar Arora, Miss
Priyanka Arora.

A. The Cantonment Act, 2006: Sections
73(a), 73(b), 76.