SMT SAMPAT DEVIversusState of UP AND 3 OTHERS

          HIGH COURT OF JUDICATURE AT ALLAHABAD
                         WRIT TAX No. - 753 of 2024

Smt Sampat Devi
                                                              .....Petitioner(s)
                                    Versus

State Of Up And 3 Others
                                                            .....Respondent(s)

Counsel for Petitioner(s)             :   Utkarshni Singh, Vaishali Rai
Counsel for Respondent(s)             :   C.S.C.

Court No. - 7
                      HON'BLE PIYUSH AGRAWAL, J.

1. Heard learned counsel for the petitioner and learned ACSC for the State -
respondents.

2. The instant writ petition has been filed against the impugned order dated
27.02.2024 passed by the respondent no. 1 as well as the impugned order
dated 11.09.2023 passed by the respondent no. 2 and the order dated
09.06.2023 passed by the respondent no. 3.

3. Learned counsel for the petitioner submits that the petitioner is a licensee
of country liquor shop at Kotra Jalaun for the year 2023-24. On 10.04.2023,
the petitioner was served with a show cause notice on the basis of the reports
dated 31.12.2022 and 09.01.2023, to which the petitioner submitted her
reply. Thereafter, the respondent no. 3, vide order dated 09.06.2023,
cancelled the licence of the petitioner. Aggrieved by the said order, the
petitioner preferred an appeal, which has been dismissed vide order dated
11.09.2023. Thereafter, the petitioner filed revision before the respondent
no. 1, which has also been dismissed vide order dated 27.02.2024. Hence,
this writ petition.

4. Learned counsel for the petitioner further submits that the petitioner has
absolutely clear antecedents and the husband of the petitioner has not been
convicted in any case, who has no concern in the business of the petitioner.
It is further submitted that as per section 7 of the U.P. Excise Act, the
possession will have to be provided in the court of law and not on the
statement of the enforcement agencies. In support of her submissions, she
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has placed reliance on the judgement of this Court in Kanupriya Jaiswal Vs.
State of U.P. & Others [Writ Tax No. 623/2022, decided on 29.03.2023].

5. Per contra, learned ACSC supports the impugned orders and submits that
the petitioner's license for the country liquor shop was rightly cancelled and
blacklisted under Section 34(1) of the U.P. Excise Act, 1910, read with Rule
21 of the Uttar Pradesh Excise (Management of licenses for retail country
liquor shop) Rules, 2020. It is contended that the petitioner submitted a false
affidavit at the time of renewal by concealing the extensive criminal history
of her husband/family member, Veer Singh Thekedar @ Virendra Singh,
who is a history-sheeter (History Sheet No. 197-A) involved in heinous and
excise-related offenses, and that the shop was being operated indirectly by
him in clear violation of excise rules and government orders defining family
members. Learned ACSC further submits that the concurrent findings of fact
recorded by the licensing authority, the appellate authority, and the
revisional authority are based on credible police reports and material
evidence, warranting no interference under Article 226 of the Constitution of
India.

6. After hearing learned counsel for the parties, the Court has perused the
record.

7. The settled principle of law governing matters of this nature, as
considered in light of the judgment of this Court in Kanupriya Jaiswal Vs.
State of U.P. & Others (Writ Tax No. 623/2022, decided on 29.03.2023),
states that an excise license granted to an individual cannot be suspended,
cancelled, or denied renewal on the ground that a family member of the
licensee (such as a spouse) is merely accused, as opposed to convict, of a
criminal offence, where there is no allegation that the licensee herself
breached any condition of the license. The relevant paragraphs in
Kanupriya Jaiswal (supra) is quoted below:-

"On perusal of the impugned order and the show-cause notice served upon
the petitioner, the only ground that emerges for the department taking action
for cancelling the license of the petitioner is that the husband of the
petitioner was involved in an offence registered under Section 60/72 of the
U.P. Excise Act and his name surfaced in another criminal case - although
he was not an accused initially, subsequently, he has been impleaded as an
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accused in the said offence also.

Learned counsel for the petitioner argues that the power to cancel/revoke or
suspend license is provided under Section 34 of the Act, which is as under:

"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) No compensation or refund claimable for cancellation or suspesnion of
license, etc. under this section.- The holder shall not be entitled to any
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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."

He further argues that in respect of the license of country liquor shop,
separate rules have been framed by the State Government known as 'Uttar
Pradesh Excise (Settlement of Licenses for Retail Sale of Country Liquor)
(Thirteenth Amendment) Rules, 2020' (hereinafter referred to as 'the Rules,
2020') wherein Rule 21 provides for suspension/cancellation and
compounding of the license penalties. Relevant portion of Rule 21 reads as
under:

"21- Suspension/cancellation and Compounding of the license and penalties.

(1) Licensing authority may suspend or cancel the license-

(a) if any bottle/tetra pack or container of country liquor is found in the
licensed premises on which duty has not been paid and which does not carry
security code affixed duly approved by the Excise Department as proof of
payment of duty:

(b) if any bottle or container of any other kind of liquor or intoxicating drug
(for which license is not granted) is found in the licensed premises:

(c) If any liquor or intoxicating drug is found in the possession of licensee
against the provisions of the Act or rules:

(d) if the affidavit submitted by the licensee at the time of application is
found incorrect and assertions made therein are found to be false:

(e) If it is found that the licence has been obtained in a false name or the
licensee is holding the licence on behalf of some other person.

(f) If the licensee fails to deposit monthly installment of license fee or
replenish the deficit in security amount within prescribed period:

(g) If the licensee is convicted of an offence punishable under the Act or any
cognizable and non-bailable offence or any offence punishable under the
Narcotics Drugs and Psychotropic substances Act. 1985 or of any offence
punishable under Sections 482 to 489 of the Indian Penal Code, 1860.
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(h) If any caramel, colour, essence, hologram/shrink sleeve or barcode,
label, capsule, seal or other illegal material found in licence premises.

(i) If any Adulteration with water or any other substance/dilution of liquor
mixing of low category liquor with high category liquor is found in the
licensed premises: Action under other relevant provisions of law shall also
be taken.

(2) In the aforesaid conditions-

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 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 licence is cancelled the basic licence 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."

In the light of the said provisions contained in Section 34 of the Act read
with Rule 21 of the Rules, 2020, it is argued by the petitioner that merely
because the husband of the petitioner is involved in an offence, none of the
ingredients of Section 34 of the Act or Rule 21 of the Rules, 2020 are
attracted so as to exercise power of cancellation as has been done by the
department. He argues that Section 34(1)(b) of the Act provides that in the
event of breach of any condition of the license either by the licensee, or by
his servant or by any person acting on his behalf in respect of the conditions
of the license, steps can be taken for cancellation, whereas in the present
case, the husband of the petitioner does not fall in any of the said three
categories and even otherwise, there is no allegation of breach of any
condition of the license granted to the petitioner.
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It is also argued that in terms of Section 34(1)(c) of the Act, the powers can
be invoked by the Licensing Authority only if the holder of the license is
convicted of an offence, whereas admittedly in the present case, the
petitioner has never been convicted of any offence, thus, it is argued that
none of the conditions prescribed under Section 34(1)(a) to (e) are attracted.

It is further argued that even in terms of Rule 21 of the Rules, 2020, steps for
cancellation can be taken only when the licensee is convicted of an offence
punishable and specified in Rule 21(1)(g) of the Rules, 2020, whereas in the
present case the petitioner being the license holder has not been convicted in
any of the offences.

In the counter affidavit filed by the State it has been reiterated that the
husband of the petitioner was involved in an offence, which is the foundation
for passing of the order. It is further sought to be argued that at the time of
obtaining license, the petitioner had given an affidavit that neither herself
nor any of the family members are involved in any crime, whereas a criminal
case was admittedly registered against the husband of the petitioner.

In the light of the said submission and on perusal of the cancellation order,
it transpires that it has been cancelled merely because the husband of the
petitioner is accused for an offence. None of the ingredients of Section 34(1)
of the Act or Rule 21 of the Rules, 2020 get attracted so as to enable the
Licensing Authority to cancel the license on these grounds as has been done
in the present case.

Considering the fact that there is no authority vested in the authorities to
take steps for cancellation either under Section 34 of the Act or under the
Rules only on the ground that husband of the petitioner is an accused, the
order impugned dated 02.04.2022 passed against the petitioner cancelling
the license as well as the appellate order dated 31.01.2022 are wholly
unsustainable and are quashed.

The writ petition is accordingly allowed.

The amount of security forfeited shall be refunded to the petitioner in
accordance with law and her application for renewal of the shop license for
the period 2022-23 shall be considered afresh and fresh orders thereupon
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                                    shall be passed within a period of three weeks from the production of a
                                    certified copy of this order in accordance with law.

                                    It is further clarified that pendency of the criminal case against the husband
                                    of the petitioner would not be a ground available to the respondents in
                                    deciding the application for renewal of the license, as directed above."

                                    8. In view of the aforesaid facts & circumstances of the case as well as the
                                    judgement of this Court in Kanupriya Jaiswal (supra), the impugned orders
                                    cannot be sustained in the eyes of law. The same are hereby quashed.

                                    9. The writ petition succeeds and is allowed.



                                                                                            (Piyush Agrawal,J.)
                                    September 18, 2026
                                    Amit Mishra




Digitally signed by :-
AMIT KUMAR MISHRA
High Court of Judicature at Allahabad