M/s. Sri Sai Srinivas Wines v. 1. The State of Telangana

2. Heard Sri L.Ravi Chander, learned Senior Counsel appearing for Sri D.Y.N.L.N.Charyulu, learned counsel for the petitioner, and learned Government Pleader for Prohibition and Excise appearing for respondent Nos.1 to 5, and Sri B.Mallesh Yadav, learned counsel appearing for respondent No.6, and perused the record.

3. The case of the petitioner, in brief, is that it has been granted A4 licence, vide Licence No.JTL043l2023-25 dt.05.72.2023, to run a retail liquor shop at Sarangapur Village, for a period of Mo years; that since, \ ...,., 2 liquor shoP the place at v,hich it has been granted licence to run a retai was not doirr3 good business, it had approached the 4th authority and tnade an application under Rule 2B(3) of th: Telangana Excise (Grant ()f Licence of selling by shop and conditi()ns of Licence) Rules, 2-0 12 (for short, 'the Rules'), for shifting of ihe shop from Sarangapur !'rl age to Laxmidevipally Village, slnce both thr: villages fall respondent within the sartr: mandal. It rs 11e further case of the petitioner that or tre petitioner 4. approaching the 4th respondent and submitting the a lo''Ie-mentioned application, t r: said application was forwarded to the 2n' respondent' who, in tr;rn, try his proceedings No,2403l2O23lCPEl1S,tF4 tlt'20'02'2024 permitted th,) petitioner to shift the shop from the p-errises bearing No.4-9, Sarangapur Village and Mandal to newly proco:;ed premises No.4-100/78 c,f Laxmidevipally Village of Sarangapur 14'rncal on certain terms and crtttditions; that on the 2nd respondent issuirrg the aforesaid proceeding, rhe petitioner had complied with the con iit ons specified under the Rr |:s by paying 2o/o of tax in an amount of I{s'2,10,000/-; and that thereaFl e r, shifted the shop to the newly pernritec premises at Laxmidev,palL)' Village and doing business since,2024' It is t're futher case of the petitioner that the uno'fc al respondent

5. herein,,/vho vras granted licnece to run a retail liquor slop, vide Licence No.lTL/044/.1023-25 dt.05.12.2023, had filed an appea against the , 3 proceedings dt.20.02.2024 ofthe 2nd respondent before the 1't respondent who by Memo No.6930lEx.II(L)12024-1 dt.16.03.2024 had set aside the order of the 2nd respondent dt.20.02.2024; that the petitioner has assailed the order of the 1't respondent dt.16.03.2024, by filing a Writ Petition before this Court, rzriy'e W.P.No.B126 of 2024 and this Court by its order dt.27.03.2024 was pleased to suspend the order of the 1't respondent; and that thereafter, the said Writ Petition was disposed of by order dt.22.04.2024 by setting aside the order of the l't respondent dt.16.03.2024 and remanding the matter dt.22.04.2024 back to the 1't respondent directing the 1'r respondent to conduct enquiry and pass orders in accordance with law within a period of four (4) weeks from the date of receipt of a copy of the order.

6. It is the further case of the petitioner that on this Couft setting aside the order dt.16.03.2024 and remanding the matter back to the ls respondent, it had filed objections dt.Il.71.2024 requesting the authorities to consider and pass appropriate orders by taking into consideration the rule position empowering the authorities to pass orders for shifting the A4 licence shop under Rule 2B(3) of the Rules 2012; and that the 1't respondent without considering the objections submitted by the petitioner had passed order once again vide Memo No. 6930/Ex. II( 1) I 2024-3 dt. 1 5.02.2025 observing that the 2'd respondent \ \ ./ - 4 passed order s permiLting shifting of the petitioner's pren,ise s without any valid ground lr compelling reasons.

7. It is v)hemenfly contended by the petitioner that :h( order of the 1't respondert is not a speaking order and no valid. reasc)n; o- grounds are recorded by iim for setting aside the order of the .l,J r-.spondent in permitting sh if ting of the petitioner,s 44 licence shop fron r Sarangapur Village to La <rnidevtpalli Village; and that the finding r:crrrded by the 1't respondert in the impugned order that the 2.d rcs:otdent by his proceedingi c)..20.02.2024 did not record valid/compell ng reasons in suppot of his riecision permitting shifting of 44 shop is f,actu;rily incorrect, unless the 2n respondent had recorded valid reasons fcr prlrmitting the same. 8' on beh l f oF the petitioner, it is arso contended that in terms of the provisions ,:f l,,,le 28 of the Rules, the power is conferreri c nly with the Commissioner, ruho on due consideration of the applicatio - r rade by the petitioner and the report furnished had validly exercisect ,he sald power and as such, t is not open for the 1't respondent to ho d l.hat the 2nd respondent dic ,ot record varid or compefling reasons for a rolving shifting of the petiti,rrrer's 44 licence shop from Sarangap lr Village to Laxmidevipally v illage. 5

9. It is also contended that proviso to sub-rule (3) of Rule 28 of the Rules, empowers the Commissioner to consider and permit for valid reasons shifting of licenced premises, notwithstanding the notified area but within the mandal and since, the 2nd respondent authority on due consideration of the application made by the petitioner having granted permission vide his proceedings dt.20.02.2024, the 1't respondent ought not to have set aside the same by considering the application submitted by the petitioner, in exercise of powers conferred under Section 63 of the Telangana Excise Act, 1968 (for short,'the Act'), which deals with appeals, while the power exercised is in the nature of revision.

10. On behalf of the petitioner, it is contended that since, the 1* respondent could not have adjudicated the appeal filed by the unofficial respondent under Section 63 of the Act, by addressing the impugned order which is in the nature of revision, the lst respondent authority not only lacks jurisdiction but also the order suffers from improper reason; and that the unofficial respondent being a competitor to the petitioner's business, the 1st respondent authority ought not to have entertained the application and ought to have granted the same.

11. By pleading as above, the petitioner seeks for setting aside the order of the lstrespondent dt.16.03.2024. -*r \ - I ,l 6

12. Per co;[ra, learned Government Pleader for Prohib tiorl and Excise appearing on tehalf of respondent Nos.1 to 5 would subm t t 1at the order of the 2ni respondent in permltting shifting of the petitiorer's shop from thenotifie,la.<lai.e.SarangapurVillageoutsidethenon-n]ti.iedareai.e., Laxmidevipall/,issincenotbasedonanyvalidreaSon,tn(]sltidorderwas set aside by :lle 1't respondent pursuant to an application made by the unofficial resl c,ndent herein.

13.LearncdGovernmentPleaderrvouldfurtherstrbr'litthatthe petitionerWa;Verymuchawareatthetimeofapplyingfo.li(,enceitselfas to place for ',/1ich it is making application seeking for 9r; nt of A4 licence for sale of lic,uor and also the business it would do at t[.,al. p ace; and that the claim of lhe petitioner that after obtaining licence, for opening A4 liquor shop i I notified area of Sarangapur, the petit ioler submitted application rr,rrluesting to shift his A4 licenced shop bear nl [:oor No'4-9 of Sarangapur \/illage to premises baring Door No.4-100/7tl 'lf l'axmidevipaliy Village, Sara rr;apur Village, with a licence fee of Rs 50,00,0(10/- within the same Mand;:1, due to lack of sales in Sarangapur Village ra hich was duly forwarderl 1: the 2nd respondent by considering tho eport of the in Cr.No.138/20231A5 dt.21.12'20'1:, had granted 3'd respon( €rnt permission 10 the petitioner for shifting of the A4 licerrce I premises to non-notified area; that the aforesaid permission grarrte 1 by the 2nd ,espondent'itr without independent consideration by tlre said authority 4 7 himself; and that the 2nd respondent while according permission had merely acted on the report and recommendations of the 3'd respondent which in turn based on the repoft of the 4th respondent and that for the said reason, the order was set aside by the 1't respondent, initially on t6.O3.2[24which was the subject matter of writ Petition before this court videW.P.No.8126ot2024;andthatonthisCourtsettingasidethenew order of the 1$ respondent, the impugned order has been passed afresh by duly considering the objections submitted by the petitioner'

14.LearnedGovernmentPleaderfurtherSubmitsthatsince,theorder of the 2nd respondent is based on the report and recommendations of the 3'd and 4th respondents, and the said authority himself having not applied hismindastoWhetherthereexistsvalidreasonsforthepetitionertoseek any permission to shift the shop from the notified area to non-notified area, the 1't respondent authority by the impugned order dt'15'02'2025 was only required to examine the record as to whether the order permittingshiftingofthepetitioner,sA4licencewouldbefromnotified area to non-notified area had recorded valid and compelling reasons, and since, the order of the 2nd respondent did not indicate any reasons the same could not be sustained and accordingly was set aside'

15. Learned Government Pleader would further submit that the unofficial respondent - 6th respondent had filed an appeal on 01'03'2024 against the order of the 2nd respondent dt.20.02.2024 permitting shifting \.,

2."' : -l I 8 of the petitiol()r's A4 licenced shop from the notifled arr3' t( non-notified area thereby affecting his business, the l't respondent by ccnsidering the aforesaicl app e'al as an application filed under Section 64 o" the Act had called for the record, examined and found the order of thr: 2'd respondent not in accord lnce with the Rules had set aside the same

16. A r:ou rter-affidavit on behalf of the unofficial rr:sp ondent - 6th respondent i: 'iled.

17. By th( :ounter-aFfidavit, it is contended that in terrns of Rule 2B(3) of the Rules ]ermission for shifting of licenced premises c;rn be granted for va|id rea ;ons within the notified area; that the Com ni:.sioner iS also vested with I he power to consider and permit shifting of' I ce tced premises within lhr: strrne mandal or municipality or municipal co pcration, as the case may be subject to valid reasons existing for permitt ng such shifting; and that tle 2nd respondent by proceedings dt'2002'i024 however without con:,iclering there exist any valid reasons, had merelv acted on the h respondents basis of the report and recommendations of the 3'd anc 4 and did not soecify himself as to whether the ground or w lich petitioner had sought c,r shifting of the A4 licneced shop from notifiel area to non- notified area rvould constitute valid reason.

18. On br:rhalf of the unofficial respondents, it is furthr:r ( ontended that the report s rbmitted by the 3'd and 4b respondents on t.re basis of whlch 9 the 2nd respondent authority had issued permission, in favour of the petitioner, permitting shifting from the notified area i.e. Sarangapur to non-notified area i.e. Laxmidevipally does not reflect the correct details of the off take of liquor from Telangana State Beverages Corporation Limited, are if only considered properly would show that the claim of the petitioner of it not having proper sales would stand falsified.

19. On behalf of the 6th respondent, it is contended that in terms of Rule 2B(3) of the Rules, the authorities are required to consider 'valid reasons' for permitting shifting of A4 licence and the said rule is pari materia to Rule 29(3) of the Telangana (Lease of Right of Selling by Shop and Conditions of Licence), Rules 2005; and that a Division Bench oF this Court in W.A.No.1336 of 2006 by order dt.L2.02.2007 while considering the scope of the expression "valid reason" had held that in order to exercise power under sub-rule (3) of Rule 29 of the Rules, permitting shifting of licenced premises must be for good and sufficient reason having bearing on public interest.

20. On behalf of the unofficial respondent, it is further contended that the Commissioner while according permission to shift A4 licenced premises is required to make further enquiry by himself and ought not to have acted on the recommendations made by the Deputy Commissioner and inasmuch as the proceeding dt.20.02.2024 passed by the 2nd respondent clearly indicates that the said authority not only considered the report and \a l 10 recommendat cns of the 3d and 4th respondents herein, brt llso failed to notethatthec|aimofthepetitionerdoesnotcorroboratewi,htherecord of the TSBCI and that the plea of poor sales cannot co lstitute valid reason inasn l:h the petitioner was very much aware of the business it would do at t t(: time of making application and being gran:ec licence' 2l.Onberalfoftheunofficialrespondent,itisalso':cntendedthat since by the crder of the 2nd respondent dt.20.02.2024, th( petitioner is permittedtoshifthisA4licencedshopfromSarangapurnctifiedareato Laxmidevioalynon-notifledarea,thedistancebetweer-heunofficial respondent icenced premises vide Licence No''fL104412023-25 dt.05.12.202 i is only being two kilometers, the same wculd adversely affect the bu;iness of the petitioner for which he was grarte(l licence'

22. On bclalf of the 6h respondent, it is contende(l :h€t said reason, the 6th respondent had submitted appeal,/app ication to the 1't respondrrt as provided under the Act and the slid authorty by it is for the considering he overall circumstances and also the fact r.hat the order of the 2t1d rt spondent is entirely based on the rep)rt and the - recommendi'trons of the 3'd and 4th respondents had val dl\ set aside the same ancl ff srefore, the present writ Petition is liable tc tre rlismissed'

23. On b,:ralf of the 6th respondent, it is also corrtetded that the petitioner hi c resorted to suppression while approaching th s Court by the 11 present Writ Petition by claiming of poor sales, while the record of sales from 01.12.2021 to 31.07.2023 i.e. earlier licence period, indicates that the retail turn over of sales is of Rs.10.00 crores and that erstwhile licencee had paid an amount of Rs.87,00,000/- as licence fee out of earning of Rs.2,10,00,000/- as commission from the sales of Rs.10.00 crores and thus, is not entitled to seek permission for shifting the licenced premises or for that matter approaching this Court under Article 226 of the Constitution of India.

24. On behalf of the 6th respondent, it further contended that the Sarangapur is Mandal Head Quarter and has various amenities like commercial bank, Mandal Health Centre, Educational Institutions, Government Mandal Offices and consists of population of 3255 members including Potharam Village; and that being a Mandal head quarter there will be a regular visit of community of people to the mandal head quarter and as such the petitioner cannot claim of having door as well as on account of locational disadvantages.

25. I have taken note of the respective contentions urged.

26. Though on behalf of the petitioner it has been contended by the learned Senior Counsel that the order of the 1$ respondent on examination, it is seen that the order of the 2nd respondent dt.20.02.2024 not only does not record valid/compelling reasons for the said authority t2 permitting sh ling of petitioner's A4 licenced shop, but also the said finding of the lst respondent is factually incorrect; and thlt '-he order of the 2nd respottdent dt'20.02-2024 categorically records trat the 2nd respondentaLtloritybyconsideringthereportandrecontm':ndationsof theDeput},C:)rnmissionerandaftercarefulexaminationhavngaccorded permission fo shifting of petitioner's A4 licence shop fro.n rotified area Sarangapur\,illageandMandaltoLaxmidevipallyVillage'non-notified area).

27. Ho\r'./ev lr', a perusal of the order of the 'i''d respondent dl.2O.O2.2O2,.),doesnotrecordthesatisfactionofthe2n'respondent authorityrvitlregardtotheexistenceofvalidreasonl.o.limtopermit shiftingofA4lCencefromnotifiedareatonon-notifiedare:a.ontheother hand, the 2 j respondent by hls proceedings dt'20'02 2024 had only Statedthatlelhadexaminedtherepotandrecomrneldl.rtionsofthe Deputy Com r issioner while according permission, while :he mandate under provis,r to Rule 2B(3) of the rules require the '2'r r:spondent to indicate the ' ralid reasons" while granting such permissior '

28. Thougr on behalf of the petitioner, it is corrt:nrled that the 2nd respondtrt being satisfied with the representatiorl of the 3'd and 4th respondents indicating the reason, it has to be crlnstrued as the 2nd respondt'rt being in agreement with the District E(ci,;e Prohibition Officer with Jre said reason is thereby constituting 'vali J r 3ason' of the 13 said authority in the absence of the order dt.20.02.2024 reflecting the mind of the 2nd respondent as to on what basis the said authority has accepted the report and recommendations of the 3'd and 4th respondents on being examined by him, this Court is of the view that mere examination or the report and recommendation of the 3'd and 4th respondents by the 2nd respondent and according permission for shifting of petitioner licence premises from notified area to non-notlfied area cannot be considered as by recording'valid reason'.

29. In this regard, it would be useful to refer to the provisions of Rule 29(3) of the Andhra Pradesh Excise (Lease of right of selling by shop and conditions of licence) Rules, 2005, which was the subject matter of consideration in a writ appeal before this Cout in W.A.N0.1336 of 2006 with Rule 2B(3) of the Rules 2012. Rule 28 J Shifting of the licensed premises may be permitted for valid reasons within the notified area and sublect to conditions as may be specified by the Commissioner of Prohibrtion & Excrse, subject to payment of 1% of the "Retail ShoP Excise Tax" ot Rs.25,000/- whichever is higher. Provided that the Commissioner may consider and permit for valid reasons the licensed Premises, shifting of notwithstanding the notified area of the licensed premises, within the same Nagar Panchaya[ or 14unicipality or Iv]unicipal Corporation without affecting the total number of Notified shops in the said I'4andal or Municipaliq/ or Municipal Corporation subject to conditions as specified by the Commissioner and subject to payment of 1olo of "Retail Shop Excise Ta.Y" or Rs.25,0OOl- whichever is higher. Rule 29 3 Shifting of the licensed premises may be permitted for valid reasons within the notiFied area and subject to conditions as may be specified by the Commissioner subject to payment of one per cent of the lease amounl oI Rs.25,000/ whichever is hrgher; Provided that the Commissioner may consider and Peimit for valid reasons shifting of the licensed premises, notwithstanding the notified area of the licensed premises, within the same Iliandal or lvlunicipality or I'4unicipal corporation, without affecting the total number of notifted shops in the said lvlandal or 14unicipality or 14unrcipal Corporation subject to condition as specrfied by the Commissioner and subject to payment of one per cent of lease amount or Rs.25,000/ whichever is higher. g I I I l l 14

30. A ,:on rparative reading of the aForesaid Rules, vuc uk clearly show that proviso hr rule 2B(3) of the Rures 20tz is pari materk to provrso to Rule 29(:i) rf the ealier Rules 2005, which was duly, :or sidered by a Division []er:h of this Cout in W.A.No.1336 of 2O0rj, sine, the pari materia pro' sion has been considered and the express ic n ',valicr reason,, as con|ailec in the said provision had been interpre:ec, whereby a Division Bencr of this Court had held that the authority wl o s empowered with the po\, € r to accord permission is required to con ;id lr by himself making furthr:r enquiry as to whether there exist varid retrsc n and not by merely ar_cepting the recommendation oF the Deput) ( lommissioner without J,re( Ling his attention to the language of Flu e 29(3) which envisages gr; riing of permission for shifting of licenced pr,lm ses for ,valid reasons', canr ct be held to be valid.

31. In the facts of the present case, as noted hererrrabove, from a perusar of the c,rder of the 2nd respondent dt.20.02.2024, tre same except recordinq thit the 2nd respondent having obtained a repoft and recommendat tts of the 3rd and 4th respondents and exam nir g the same, did not mentic n as to how the said authority had satisfiecl rrin serf of ,varid reason' arrd .r:,:epted for permitting the petitioner to sh ft 44 licenced shop from not 'i :d area to non-notifled area.

32. Since, t r _. order of the 2nd respondent itself is a n )n_speaking order, the cont:1tion of the petitioner that the order of the 1sr respondent 15 in setting aside the same does not record reasons cannot be accepted, as the basic order under consideration itself does not record any reasons.

33. Dealing with the contention of the petitioner that the ls respondent lacks jurisdiction, to consider the appeal filed by the unofficial respondent under Section 63 of the Act, it is to be noted that Section 63 of the Act, while deals with the appeal, Section 64 of the Act confers power of revision on the 1st respondent authority. Though the unofficial respondent had submitted an appeal under Section 63 of the Act, the Act does not provide for an appeal against the order of the 2nd respondent authority, the appeal filed by the unofflcial respondent herein though under Section 63 of the Act would have to be considered as an application filed under Section 64 of the Act seeking revision of the order of the 2nd respondent.

34. It is settled position of law that the authorities empowered under the Act are required to consider the "substance rather than the form" as held by the Supreme Court in Dowell and company Limited Vs com m e rcia I Tax otficel.

35. Since, the 1'r respondent being empowered under the Act to examine the records of any officer in respect of any decision, order or other proceeding under the Act and for the purpose of satisfying themselves as to the correctness or legality or propriety of such decision '(rses) g scc z:o a \ I I i I , i 16 or order or ; s to the regularity of such proceeding, it carrnc t be said that the actior r f the 1't respondent authority by conside rin3 the appeal submitted b z the unofficial respondent even assumin,; hat the said authori$, lac (:; jurisdiction under Section 63 of the Ad to consider the appeal v'roul have to be treated in exercise of suo mctu power under Section (;4 o the Act and as such, the said action of th,: l,t respondent authority can I tt be held as without jurisdiction or lacks jur isc iction.

36. Furth€', it is arso seen that though on behari of |he lretitioner it is contended tl ;t on account of poor sales, it having .tp1,p66ched the responde nts-, rrrthorities and making an application seekinq rermission to shift the A,4 lc3nced shop from notified area to non-notifed area though within the sarr: Mandar, it is to be noted that since it is nlt :he first time that a licencr is being granted in respect of the notiflel i rea, the 2nd respondea: o r(rht to have taken note of the previous exc se period sales turnover and :l'le licence fee paid by the licencee durinq sur:h period for him to ar:cep .he craim of the petitioner constituting viar d .eason granting pr:rn i:;sion for shifting. Since, the order of thr: 2n, respondent dt.20.02.2024 rlid not proceed by considering all the re:erarrt facts, and the petitioner r rving obtained ricence for a notified aera ar d mmediately, thereafter hav rg made an application seeking permission for shifting to a non-notified a €a, results in loss of revenue not only to flre person who had obtaitrcd- cence in non-notiFied area like the 6rh respond tnt but also 17 t0 the respondenrs, from which licence fee is required to be paid. It is for the said reason also, the order of the 2nd respondent was required to examine by the 1st respondent in exercise of power of revision under Section 64 of the Act either by suo motu or on an application which in the facts of the present case has been done by the l,t respondent based on the appeal filed by the 6th respondent herein, though in the form of an appeal instead of application and also under a wrong provision would not in the considered view of this Couft vitiate the action of the 1'r respondent.

37. Accordingly, this Court is of the considered view that the present Writ Petition as filed is devoid of merit and it is accordingly dismissed. No order as to costs.

38. Miscellaneous petitions, if any, pending in this writ petition shall stand closed. //TRUE COPY// SD/.T. TIRUMALA DEVI EPUTY REGIS ECTION OFFICER

1. Two CCs to GP FOR PROHIBITION AND EXCISE H h Court for the State of Telang ana'at Hyderabad. [OUT] One CC to SRI D.Y.L.N.CHARYUL U, Advocate [OP One CCs to SRI Two CQ Copiqs B.MALLESH YADAV, Advocate (OPU To 2 J 4 N. SA BS \/ACATTON COURT /:l (-) 0i rlJfl a6 $1a ,-.z c \\ .(! * HIGH COURT DATED:04t0612025 ORDER WP.No.7682 ot 2025 DISMISSING THE W.P WITHOUT COSTS. 4 L l/