Cancellation of Licences under United Provinces Excise Act Cannot Be Due To Suspicion: Allahabad High Court [Read Order]

The Allahabad High Court has held that the cancellation of a license under Section 34(2) of the United Provinces Excise Act, 1910 cannot be based on suspicion. The Court held that without there being any cogent material or evidence such harsh penalty of cancellation of license must not be invoked.

No specific allegation of violation was made against the petitioner, Sandeep Singh for the running/operation of the licensed liquor shop at Majhenpurwa. Earlier, the allegation had emerged under Section 34(1)(b) of the Act for another license issued to the petitioner for the shop at Gehrukheda that led to the cancellation of the petitioner's license for the said shop at Gehrukheda. At present, that matter is lying under consideration before this Court in Writ Tax No. 818 of 2021.

Section 34(2) of the United Provinces Excise Act, 1910 provides for cancellation of any license granted under this Act or under any other law for the time being in force relating to excise revenue or under the Opium Act, 1878 of such licensee whose license, permit or pass has been cancelled under clause (a), (b) or (c) of sub-section (1).

It was stated that in case the petitioner succeeds in establishing that his Gehrukheda licence was not liable to be cancelled as he had not violated either section 34(1) (a) or (b) or (c) of the Act, the present proceedings to cancel the Majhenpurwa license would necessarily fall. However, if the Appeal Authority does reach a conclusion adverse to the petitioner (in that case), it would be for the Licensing Authority to then examine the existence or otherwise of an adequate reason or ground to exercise his extra-ordinary discretionary power to cancel the Majhenpurwa licence of the petitioner under Section 34(2) of the Act, keeping in mind the observations made above.

A division bench of Justice Saumitra Dayal Singh and Justice Donadi Ramesh observed that in the cancellation order, the authorities had merely stated that license for shop at Majhenpurwa was being cancelled as petitioner's license at Gehrukheda stood cancelled, however, no reasons were provided as to how that cancellation would affect the license for shop at Majhenpurwa.

While allowing the petition, the Court held that license cannot be cancelled based on mere suspicion and set aside the order of cancellation of license for the shop at Majhenpurwa. Shekher Singh,Ram Naresh Singh Gautam appeared for the petitioner. Shri Nimai Das appeared for the State respondents.

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