Punjab govt to file reply in plea alleging tailor-made criterion in Excise Policy 22-23 before Punjab and Haryana High Court

In a petition alleging tailor-made criterion for running duty-paid liquor shops at the Chandigarh International Airport, the State Government will file its reply before the Punjab and Haryana High Court. The matter will come up for hearing on September 27, 2022.

M/S Liquor World Venture Private Limited, a firm running three shops at the airport, moved the high court challenging some provisions in the Punjab 2022-23 Excise Policy, which the operator alleged were "tailor-made to favour some".

During an earlier hearing in June, the petitioner’s counsel Advocates Kunal Mulwani and Abhinav Gupta contended that a clause introduced vide Excise Policy of 2022-23 imposed onerous conditions of having a minimum experience of two years of running a duty-paid liquor retail store inside the terminal building of an airport in India and a minimum average annual turnover of ₹10 crore from 2018 onwards.

They argued that only a limited number of persons would have two-year experience from 2018 onwards as the petitioner itself could not operate the liquor vends at the airport during Covid-19.

The counsel for the petitioner argued that the excise department had exceeded its jurisdiction by encroaching upon the exclusive domain of the Chandigarh International Airport Limited (CHIAL), the airport operator, which is a conglomerate of the Government of India, Punjab and Haryana.

They informed the court that a clause in the Excise Policy 2019-20 provided for granting licences of leases at airports on the annual fee of Rs 10 lakh with the condition that permission would be taken from the airport authority.

They submitted that CHIAL had invited a tender for operation of duty paid liquor shops at three sites and the licence was for five years where the technical qualification was also specified.

In accordance with the same, the counsel asserted, that a letter of intent for five years was awarded to the petitioner vide communication dated January 20, 2020, and the monthly licence fee was Rs 24,06,935; the bank guarantee of Rs 1,44,42,000 valid till February 8, 2025, was also furnished and by way of supplementary licence agreement following Covid-19, the period was extended by another two years.

Therefore, claiming that the petitioner's licence had been renewed up to the year 2023, the counsel for the petitioner submitted that it had an ongoing contract with CHIAL, which was binding on the Punjab government as well.

On the other hand, the state’s counsel argued that the agreement was only with respect to having the right to an area within the airport, while the excise rules remained applicable and policies were modified from time to time.

Taking note of the submissions, a division bench of Justice GS Sandhawalia and Justice Vikas Suri held that prima facie the arguments which had been raised by the State that the agreement with CHAIL is only for permission to operate with CHAIL was not justified.

Court said, "As admittedly the stores are running since the last two years, and the license fee has also been deposited and which stands renewed till 2023. The State has also passed orders where the violations have been made".

Accordingly, while stating that it was open to the State to invite tenders, Court held that the petitioner shall be allowed to continue and operate within the premises of the Chandigarh Airport and no adverse order shall be passed without the permission of the Court.

However, Court stressed that while inviting tenders, the State will inform a person applying about the litigation pending before the court. "So that they are put to notice of these facts and it will be subject to final orders and it will be at their risk and cost," Court said.

[Input: Hindustan Times]

Case Title: M/S. LIQUOR WORLD VENTURE PRIVATE LIMITED VERSUS STATE OF PUNJAB AND OTHERS