Summary
The appellant company ran a distillery at Karnal under a licence in form D-2 granted to it under s. 21 of the Punjab Excise Act, 1914. The excise act Taxation Commissioner gave certain directions to the company in regard to storage of molasses purporting to be directions given under R. of the Punjab Distillery Rules 1962- made Linder s. 59 of the aforesaid Act. Section 36(c) of the Act provided that the Commissioner could cancel or revoke a licence in case of breach of its terms by the licencee. Under s. 80(2) of the Act, however, the cancellation or suspension of any licence permit or pass under s. 36 "may be foregone or revoked" at the discretion of the authority concerned on payment of such penalty as the authority may fix. In view of the failure of the appellant company to comply with the directions aforementioned given to it by the commissioner the latter on June 5, 1963 passed an order holding that the company was guilty of violation of condition 5 of its licence and the licence was therefore liable to cancellation under s. 36(c) of the Act. The order however purported to impose a penalty of Rs. 500 under section 80(2) of the Act instead of cancellation of the license. The company filed a writ petition in the High Court. On merits the petition was dismissed but the High Court observed that the penalty could not be recovered is an arrears of land revenue and the only action that could be, taken on failure to pay the penalty was the cancellation of the licence. On October 16. 1964 the Commissioner sent a notice to the company informing it that by reason of the company's default in not paying the penalty within the period fixed by the order dated June 5.
1963 its licence had to be cancelled in terms of the said order. However the Commissioner stayed his hands in view of an application for special leave to appeal to this Court filed by the company before the High Court. The petition was dismissed. Thereafter the Commissioner by order dated December 5, 1967 passed an order canceling the distillery licence. The appellant made another representation which was rejected by the Commissioner on December 28, 1967.Against these orders the company filed a writ petition in the High Court but the Single Judge as well as the Division Bench decided against it. The company by special leave appealed to this Court. Allowing the appeal,HELD : Assuming that R. 37 permitted the Commissioner to give to the appellant company a direction about storage of molasses etc. any violation of that direction could be met with an order for cancellation or suspension of the licence under s. 36 of the Act. Having passed such an order the Commissioner could under s. 80(2) revoke or forego the said cancellation if penalty was paid. The word revocation is only apposite when it is intended to repeal, annul or withdraw some order which had already become effective. To"forego" according to the Shorter Oxford Dictionary means"to go past, to neglect, slight, to let go, 862give up etc." Foregoing, cancellation or suspension therefore would mean ,giving up or undoing the effect of the cancellation. [866 H-867 C]Section 80(2) does not authorise the Commissioner to make a conditional order in the form in which he purported to do by his order of June 5, 1963. There was no cancellation of licence by that order the Commissioner merely intimated the appellant that its licence had become liable to cancellation or suspension but instead of cancelling the licence he was imposing a penalty of Rs. 500 to be paid within a fortnight failing which action for cancellation would be taken under s. 36(c). The Commissioner's show cause notice dated October 16. 1964 proceeded on the basis that as the penalty had not been paid within the period fixed, the licence had to be cancelled in terms of the order of June 5, 1963.Section 36 of the Act does not permit the taking of such a course. The grounds for cancellation or suspension of the licence are specified in sub-cls. (a) to (g) of the section and default in payment of penalty levied under the Act does not find a place therein. The imposition of a penalty by way of threat of cancellation of licence was also not permissible under the Act. [867 C-F]The contention that s. 80(2) permitted the making of an order directing payment of fine in lieu of cancellation and making the cancellation effective in default of payment of fine, cannot be accepted. [868 A]See the full content of this document
Extract
Karnal Distillery Co. Ltd. VS. State Of Haryana And Ors.
PETITIONER: KARNAL DISTILLERY CO. LTD.Vs.RESPONDENT: STATE OF HARYANA AND ORS.DATE OF JUDGMENT: 16/10/1969BENCH: ACT: Punjab Excise Act 1 of 1914-Cancellation or suspension under s. 36(c) of licence granted under s. 21-Revoking or foregoing cancellation of licence on payment of penalty under s. 80(2)-Provision whether authorises cancellation of licence subject to payment of penalty.JUDGMENT: CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1256 of 1968.Appeal by special leave from the order dated March 25, 1968 of the Punjab and Haryana High Court in Letters Patent Appeal No. 168 of 1968.H. L. Sibal, B. N. Khanna, S. Harbans Singh, B. Datta, D.N. Mishra and J. B. Dadachanji, for the appellant.Niren De, Attor...
See the full content of this document