Court Dismisses Plea from M/s Kanda Wine, Affirms State's Right to Enforce Contractual Obligations
In a significant ruling, the Himachal Pradesh High Court upheld the cancellation of a liquor license for M/s Kanda Wine, a prominent liquor trading firm, due to non-payment of license fees. The division bench, comprising Justices Vivek Singh Thakur and Ranjan Sharma, dismissed the petition filed by M/s Kanda Wine, which challenged the orders of the Financial Commissioner (Excise) and the Collector (Excise)-cum-Joint Commissioner of State Taxes and Excise, Palampur.
The petitioner, M/s Kanda Wine, argued that business losses due to natural calamities and competitive liquor pricing in neighboring Punjab hindered their ability to pay the license fees. Despite being regular with payments until June 2023, the firm defaulted from July 2023 onwards. The firm sought relief from the court to set aside the cancellation and allow them to operate their vends as per the original license terms.
The court's judgment emphasized that the terms and conditions of the liquor license, voluntarily accepted during the auction process, are binding. The bench observed that the State had provided adequate opportunities for the petitioner to clear the dues but the petitioner failed to comply. Furthermore, the court noted that business losses cannot justify altering or waiving contractual obligations.
Additionally, the court dismissed the petitioners' claim that the freezing of their bank accounts was unjustified, stating that the petitioner failed to prove how the action affected their ability to pay the dues. The court affirmed the State's action as valid and necessary to protect government revenue.
While dismissing the petition, the court also addressed related proceedings involving disputed partnership deeds and directed the involved parties to pursue appeals to adjudicate the validity of these deeds. The final notice for recovery of license fees has been kept in abeyance pending the appeal's outcome.
This judgment underscores the judiciary's stance on upholding contractual obligations and the stringent enforcement of excise laws in the state.
Bottom line:-
Liquor License - Contractual obligations arising from a liquor license are binding, and non-payment of license fees due to business losses or unfavorable conditions cannot be grounds to alter the terms of the contract.
Statutory provision(s): Himachal Pradesh Excise Act, 2011 Sections 29, 68, 71, 73; Condition No 2.42 of Annual Excise Announcements
M/s Kanda Wine v. State of Himachal Pradesh, (Himachal Pradesh)(DB) : Law Finder Doc id # 2935536
