sec. 47 -A of A.P. Excise Act, 1968 - licence holder - seized stock is a duty paid one - The only ground on which the beer was seized is that the stock was not handed over at the petitioner's shop premises but the same was being transported to a different place at Huzurnagar side. - Where the Commissioner is satisfied that the offence is not grave in nature, he can either levy compounding fee or collect the value of the seized stock. - collecting both is illegal - Writ allowed - I am of the opinion that the condition directing payment of the value of the seized duty paid liquor, is wholly irrational and unreasonable. Accordingly, the impugned order, to the extent of stipulating the condition of payment of the value of the seized stock, is set-aside. The respondents are directed to refund the sum of Rs.78,953/- representing the value of the seized stock, to the petitioner. = M/s. Siddivinayaka Wines,Nalgonda, represented by its licencee N. Veera Reddy The Commissioner of Prohibition & Excise,Nampally, Hyderabad and others = 2011 (Nov. Part ) judis.nic.in/judis_andhra/filename=8511

  sec. 47 -A of A.P. Excise Act, 1968 - licence holder - seized stock is a duty paid one -  The only ground on which the beer was seized is that the stock was not handed over at the petitioner's shop premises but the same was being transported to a different place at Huzurnagar side.  - Where the Commissioner is satisfied that the offence is not grave in nature, he can either levy compounding fee or collect the value of the seized stock.  - collecting both is illegal - Writ allowed - I am of the opinion that the condition directing payment of the value of the seized duty paid liquor, is wholly irrational and unreasonable.  Accordingly, the impugned order, to the extent of stipulating the condition of payment of the value of the seized stock, is set-aside.  The respondents are directed to refund the sum of Rs.78,953/- representing the value of the seized stock, to the petitioner. =
The petitioner is a holder of A-4 licence for running retail liquor shop.
When certain quantity of beer belonging to the petitioner was being transported,
the same was intercepted at Gopalpuram, near Huzurnagar town and the stock was  
seized.  A criminal case was registered against the petitioner.  The petitioner
requested for compounding the case.  The petitioner's request was recommended by 
respondent No.2 and accepted by respondent No.1 vide his proceedings 
Cr.No.17054/2010/CPE/G2, dated 17-1-2011, subject to the condition of the
petitioner paying compounding fee of Rs.50,000/- and also payment of the value
of the seized stock.  The petitioner accordingly deposited the sum of
Rs.50,000/- and also Rs.78,953/- representing the value of the seized stock
through Bank challan (wrongly described as bank guarantee in the Writ Petition).
The petitioner approached the respondents for return of the bank challan on the
ground that once the compounding fee is levied and collected, he is not liable
to pay the value of the seized stock.  As the said amount has not been refunded,
the petitioner filed the present Writ Petition.=
in view of the Judgments of Division Bench
of this Court in V. Srinivas Reddy Vs. Commissioner of Excise and another2 and
A. Ramesh Babu Vs. Commissioner of Prohibition & Excise3.   
        In Indian Wine Corporation (1-supra), the learned Single Judge, on the
interpretation of Section 47-A of the A.P. Excise Act, 1968 (for short "the
Act") which confers special powers on the Commissioner to compound an offence  
falling under Section 38 of the Act, held that the phrases "compounding fee" and
"compensation" are used as synonymous terms and that once the compounding fee is   
collected, the owner of the goods shall not be called upon to pay the full value
of the stock seized after payment of such compounding fee or compensation.=
In the instant case, it is not in dispute that the seized beer suffered
duty.  The only ground on which the beer was seized is that the stock was not
handed over at the petitioner's shop premises but the same was being transported
to a different place at Huzurnagar side.  
Section 47(2) of the Act vests
discretion in the Commissioner to permit composition of an offence either by
collecting the compounding fee or the value of the stock or both. 
It is therefore not obligatory on the part of the Commissioner to impose the condition
of payment of the value of the seized stock in every case.  
Where the
Commissioner is satisfied that the offence is not grave in nature, he can either
levy compounding fee or collect the value of the seized stock.  
When the
Legislature vests discretion in an authority, it is expected that such
discretion is exercised in a reasonable and rational manner.  
Mere existence of
discretionary power shall not entitle the authority to exercise such power in a
mechanical manner without being conscious of the gravity of the offence.  
There is no allegation against the petitioner that the stock was intended to be
diverted or sold in an unlawful manner. 
 It is also not alleged that the
petitioner is dealing in non-duty paid liquor.  
In this factual background, I am of the opinion that respondent No.1 has not exercised the discretion vested in him in a sound and rational manner by directing payment of the value of the
seized stock, having already levied the compounding fee of Rs.50,000/-.  
The petitioner, having already paid the value of the seized stock to A.P. Beverages
Corporation Limited, it would be wholly iniquitous to collect the same once
again from him.  No specific reasons have been assigned by the Commissioner to 
subject the petitioner to such a harsh penalty.
        On the facts of this case, as discussed above, I am of the opinion that
the condition directing payment of the value of the seized duty paid liquor, is
wholly irrational and unreasonable.  Accordingly, the impugned order, to the
extent of stipulating the condition of payment of the value of the seized stock,
is set-aside.  
The respondents are directed to refund the sum of Rs.78,953/-
representing the value of the seized stock, to the petitioner.  The Writ
Petition is accordingly allowed to the extent indicated above.
2011 (Nov. Part ) judis.nic.in/judis_andhra/filename=8511
HON'BLE SRI JUSTICE C.V. NAGARJUNA REDDY        

W.P.No.5254 of 2011

2-11-2011

M/s. Siddivinayaka Wines,Nalgonda, represented by its licencee N. Veera Reddy

The Commissioner of Prohibition & Excise,Nampally, Hyderabad and others        

 Counsel for petitioner : Sri K. Laxmaiah

 Counsel for respondents : Assistant Government Pleader for Prohibition &
Excise

>HEAD NOTE:  

?CASES REFERRED :    
1. 1997(5) ALD 232
2. 1997 (6) ALT 696
3. W.A.No.497/2010, dt.19-10-2010
4.  W.A.No.490 of 2010, dt.19-10-2010

ORDER:
        This Writ Petition is filed for a mandamus to declare the action of the
respondents in not releasing the bank guarantee/challan of Rs.78,953/- credited
to Crime No.648/2010-11 on the file of the S.H.O., Prohibition & Excise,
Huzurnagar Police Station, Nalgonda District, as illegal and arbitrary.  The
petitioner sought for a consequential direction to the respondents to release
the challan.  
        The petitioner is a holder of A-4 licence for running retail liquor shop.
When certain quantity of beer belonging to the petitioner was being transported,
the same was intercepted at Gopalpuram, near Huzurnagar town and the stock was  
seized.  A criminal case was registered against the petitioner.  The petitioner
requested for compounding the case.  The petitioner's request was recommended by 
respondent No.2 and accepted by respondent No.1 vide his proceedings 
Cr.No.17054/2010/CPE/G2, dated 17-1-2011, subject to the condition of the
petitioner paying compounding fee of Rs.50,000/- and also payment of the value
of the seized stock.  The petitioner accordingly deposited the sum of
Rs.50,000/- and also Rs.78,953/- representing the value of the seized stock
through Bank challan (wrongly described as bank guarantee in the Writ Petition).
The petitioner approached the respondents for return of the bank challan on the
ground that once the compounding fee is levied and collected, he is not liable
to pay the value of the seized stock.  As the said amount has not been refunded,
the petitioner filed the present Writ Petition.
        At the hearing, Sri K. Lakshmaiah, learned counsel for the petitioner,
placed reliance on the Judgment of a learned Single Judge of this Court in
Indian Wine Corporation Vs. State of Andhra Pradesh1, in support of his
submission that the petitioner is entitled to refund of the value of the stock.
        Per contra, the learned Assistant Government Pleader for Prohibition &
Excise, submitted that the Judgment of the learned Single Judge in Indian Wine
Corporation (1-supra), on which reliance is placed by the learned counsel for
the petitioner, is no longer good law in view of the Judgments of Division Bench
of this Court in V. Srinivas Reddy Vs. Commissioner of Excise and another2 and
A. Ramesh Babu Vs. Commissioner of Prohibition & Excise3.   
        In Indian Wine Corporation (1-supra), the learned Single Judge, on the
interpretation of Section 47-A of the A.P. Excise Act, 1968 (for short "the
Act") which confers special powers on the Commissioner to compound an offence  
falling under Section 38 of the Act, held that the phrases "compounding fee" and
"compensation" are used as synonymous terms and that once the compounding fee is   
collected, the owner of the goods shall not be called upon to pay the full value
of the stock seized after payment of such compounding fee or compensation.  The
Division Bench of this Court in V. Srinivas Reddy (2-supra) however dealt with
Section 47(2) of the Act and interpreted the said provision as conferring power
on the Commissioner to order compounding on payment of the sum of money or value
of the stock seized, or both, as the case may be, in accordance with the
provisions of sub-section (1) of Section 47-A of the Act.  The said view is
reiterated in Thuti Vidyasagar Reddy Vs. The Commissioner, Prohibition and
Excise, Hyderabad and 2 others4.
        In the instant case, it is not in dispute that the seized beer suffered
duty.  The only ground on which the beer was seized is that the stock was not
handed over at the petitioner's shop premises but the same was being transported
to a different place at Huzurnagar side.  Section 47(2) of the Act vests
discretion in the Commissioner to permit composition of an offence either by
collecting the compounding fee or the value of the stock or both. It is
therefore not obligatory on the part of the Commissioner to impose the condition
of payment of the value of the seized stock in every case.  Where the
Commissioner is satisfied that the offence is not grave in nature, he can either
levy compounding fee or collect the value of the seized stock.  When the
Legislature vests discretion in an authority, it is expected that such
discretion is exercised in a reasonable and rational manner.  Mere existence of
discretionary power shall not entitle the authority to exercise such power in a
mechanical manner without being conscious of the gravity of the offence.  There
is no allegation against the petitioner that the stock was intended to be
diverted or sold in an unlawful manner.  It is also not alleged that the
petitioner is dealing in non-duty paid liquor.  In this factual background, I am
of the opinion that respondent No.1 has not exercised the discretion vested in
him in a sound and rational manner by directing payment of the value of the
seized stock, having already levied the compounding fee of Rs.50,000/-.  The
petitioner, having already paid the value of the seized stock to A.P. Beverages
Corporation Limited, it would be wholly iniquitous to collect the same once
again from him.  No specific reasons have been assigned by the Commissioner to 
subject the petitioner to such a harsh penalty.
        On the facts of this case, as discussed above, I am of the opinion that
the condition directing payment of the value of the seized duty paid liquor, is
wholly irrational and unreasonable.  Accordingly, the impugned order, to the
extent of stipulating the condition of payment of the value of the seized stock,
is set-aside.  The respondents are directed to refund the sum of Rs.78,953/-
representing the value of the seized stock, to the petitioner.  The Writ
Petition is accordingly allowed to the extent indicated above.
        As a sequel, WPMP No.6534/2011 is disposed of as infructuous.

        ________________________  
Justice C.V. Nagarjuna Reddy
Date : 2-11-2011

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