Writ Petition (C) No. 287(SH) of 2009. Case: Meghalaya Wine Dealers Association and Anr. Vs State of Meghalaya and Ors.. Guwahati High Court
| Case Number | Writ Petition (C) No. 287(SH) of 2009 |
| Counsel | For Appellant: A.M. Mazumder, S.S. Dey and D.S. Rathore, Advs. And For Respondents: K.S. Kynjing, N.D. Chullai, S. Sen, H.L Shangreiso and S.K. Nongrum, Advs. |
| Judges | T. Vaiphei and H. Baruah, JJ. |
| Issue | Meghalaya Societies Registration Act, 1990; Meghalaya Excise Act - Sections 26 and 36; General Causes Act, 1972; Meghalaya Excise (Amendment) Rules, 2009; Societies Registration Act, 1860; Meghalaya Excise Rules - Rules 242 and 246; Meghalaya Excise (Amendment) Rules, 2008 - Rules 372 and 373; Central Services (Recognition of Service ... |
| Citation | (2010) 5 GLR 332 |
| Judgement Date | March 12, 2010 |
| Court | Guwahati High Court |
Judgment:
H. Baruah, J., (Shillong Bench)
1. In this writ petition, the petitioner(s) herein has challenged the vires of the Rule 242 and Rule 246 of the Meghalaya Excise Rules as amended by the Meghalaya Excise (Amendment) Rules, 2009 and notified vide notification dated 3rd July, 2009 contained under No. ERTS(E) 11/98/124 and published in the Gazette of Meghalaya 16th July, 2009 as well as Rule 373 of Meghalaya Excise (Amendment) Rules, 2008 as notified vide notification dated 2nd April, 2009 contained under No. ERTS(E)22/2008/23 and published in the Gazette of Meghalaya 9th April, 2009. Further petitioner(s) also have challenged the legality of the order dated 14.7.2009 issued by respondent No. 3 under No. K/EX/10/97/35.
2. The facts involved in this case are as follows:
Petitioner No. 1 is an association originally registered as "Shillong Wine Dealers Association" under the Meghalaya Societies Registration Act, (Act 7 of 1990) vide Registration No. SR/SWDA-598/94 of 1994 having its registered office at V.W Bonded Warehouse, Lower Lachumiere, Shillong-1, East Khasi Hills, Meghalaya. Subsequently on 18.8.2009 in the general meeting of the aforesaid "Shillong Wine Dealers Association" a resolution was adopted to alter its name from "Shillong Wine Dealers Association" to "Meghalaya Wine Dealers Association" with immediate effect and on the same date the petitioner No. 2 being the Secretary of the association (elected as Secretary vide resolution No. 2) submitted an application to the Registrar of societies. Government of Meghalaya, Shillong to approve the resolution No. 2 so adopted on 18.8.2009 in its general meeting in regard to change/alteration of the name of the association from "Shillong Wine Dealers Association" to "Meghalaya Wine Dealers Association" and also to do the needful. It is claimed by the petitioner(s) that the petitioner association is a legal person having been constituted of Members and is entitled to all rights, privilege and protection guaranteed under the constitution of India and the law for the time being in force.
3. Petitioner association as contended is composed of 20 members associated with the business of Bonded Warehouse for storage of liquor, i.e., Indian Made Foreign Liquor ('IMFL'), 150 numbers of members of retail sellers of IMFL and 12 numbers of members having Bar in the State of Meghalaya. All the members of the petitioners' association have got common grievances and accordingly had taken up the matter with the Government of Meghalaya in the name of the association. It is contended that since the members have got a common cause of action they filed the instant writ petition in the name of association jointly to avoid multiplicity of litigation. The members of the association having obtained licences are dealing in business of liquor within the State of Meghalaya by obtaining licences from the respondent authorities by paying stipulated license fee before issuance of licence followed by advance payment of excise duties import dudes, countervailing duty, gallonage fees, etc., as well as security deposit paid in advance in the following scale.
| Licencees | Present security deposit |
| Bonded warehouse | Rs. 5,000 |
| IMFL Retail Licence | Rs. 2,000 |
| Bar Licence | Rs. 1,000 |
While the members of the petitioners' association running the business in liquor on the basis of the licences granted to them by the respondent authorities by notification dated 3.7.2009 contained under No. ERTS(E)11/98/124 and published in the Gazette of Meghalaya 16th July, 2009 Rule 246 (unamended) of the Meghalaya Excise Rules ('the Rules') have been amended while vide notification dated 2nd April, 2009 contained under No. ERTS(E)22/2008/23 and published in the Gazette of Meghalaya 9th April, 2009 a new Rule 373 has been added to the Principal Rules. The amended rules may be reproduced as under:
Rule 246. For existing Rule 246 of the Principal Rule, the following shall be substituted, namely - "Security Deposit" - an advance deposit pledged as Security in favour of the Commissioner of Excise for due observance of the conditions and terms of the license and ensuring prompt payment of license fees shall be deposited by all licensees. The amount of Security deposit will be as follows:
(A) (i) Bonded warehouses = Rs. 5,00,000
(ii) Distellery/Bottling Units = Rs. 5,00,000
(iii) IMFL retail license = Rs. 1,00,000
(iv) Bar License = Rs. 75,000 (v) Methylated/Rectified = Rs. 10,000
Spirit/Medicinal and Toilet Preparations
....Rule 373 (New Rule) - (i) All liquor and Veer bottles, etc., containing IMFL, Beer, Wines, Gin, Vodka, Rum of different capacity and size imported by licensed Bonded Warehouse locally/from outside and sold in the state have a hologram prescribed for the purpose.
(ii) The cost of the hologram will be borne by the manufacturer/bottler/bonded warehouse and added in their Cost Price Separately.
(iii) Hologram will be ordered by the Excise Department and supplied to the manufacturer/bottler/bonded warehouse who will affix the hologram in the liquor, beer bottles, etc., before effecting export or sales as the case may be from their premises to the concerned importer.
(iv) The Officer-in-charge of the Bonded Warehouse will verify and ensure that no issue of the liquor from the Bonded Warehouse should be allowed if holograms are not affixed on the bottle. Issue without a hologram is illegal.
(v) The cost of each hologram is subject to change from time to time.
(vi) The annual fee for registration/renewal of hologram by any firm is Rs. 1,00,000 to be paid through Treasury Challan. The fee is subject to enhancement at any time as the State Government may consider appropriate.
(vii) Renewal will be effected annually by the Commissioner of Excise subject to satisfactory performance by the firm....
Pursuant to the amended Rule 246, respondent No. 4 issued a direction to all bonded warehouses, IMFL retail licencees, Bar licencees and others vide letter under No. K/EX/10/97/55 dated 14.7.2009 to furnish the security deposit in the form of call deposit valid for 5(five) years in favour of Commissioner of Excise (respondent No. 3) Meghalaya, Shilling on or before 16th August, 2009 with a direction that such call deposit should be made with the Shillong Co-operative Urban Bank with further direction that security deposit should be submitted to the office of the respondent No. 4 along with original licence for further necessary action, failing which action will be taken as per relevant rules and provision laid down in Meghalaya Excise Act. It is contended by the petitioners that members of the petitioner's association obtained the respective licences by paying security deposit at the rate of Rs. 5,000, Rs. 2,000 and Rs. 1,000 in respect of Bonded warehouse, IMFL retail licencees and Bar licencees respectively. But by the impugned amendment of the aforesaid Rule 246 of the Meghalaya Excise Rules, the security deposit has been enhanced to a greater degree to the tune of Rs. 5 lakhs, 1 lakh and 75 thousands respectively. It is contended by the writ petitioner(s) that the enhancement of the security deposit by way of amendment of the original provision of Rule 246 is beyond the scheme of the Act and the rules framed thereunder which is manifestly unjust, arbitrary and unreasonable. Section 26 of Meghalaya Excise Act provides for source and basis for security deposit while Section 36 of the Meghalaya Excise Act empowers the Government to make rules but the enhancement of the security deposit, if the provision of Sections 26 and 36 of the Meghalaya Excise Act are read conjointly would indicate such amendment of the Rule 246 beyond the scheme of the Act. It is further contended by the petitioner(s) that the statute does not empower the State respondent to enhance the security deposit to such a high extent without showing any proper justification. The writ petitioner(s) further contended that such amendment could have been done by the State respondents in respect of the security deposit staying within the frame work of Rule 246 (unamended). But the State respondent by amending the Rule 246 fixed the security deposit at a sky high rate which caused prejudice to the writ petitioner(s), members of the writ petitioners' association and infringement of the legal...
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