Delhi government has power to float New Excise Policy 2021, observes High Court

Delhi government has power to float New Excise Policy 2021, observes High Court


The Delhi government has the power and jurisdiction to float the New Excise Policy 2021, the Delhi High Court observed on Wednesday and refused to stay the closure of retail vends having L7 licences for the sale of Indian liquor in private sector under the old policy with effect from September 30. A bench headed by Chief Justice D N Patel, dealing with an application by one such licence holder – Rattan Singh – for stay on the closure, said that prima facie, the new mechanism did not violate any of his rights.

The application was part of the petition seeking to extend the licence in parity with other categories under the provisions of the Delhi Excise Act.

“Government ought to be given free movement in the joints. It ought to be kept in mind that change is inevitable and excise policy is no exception. New experiments are always being permitted in matters of policy. Prima facie, we do not want to prejudice the resultant effect of the policy,” said the bench which also comprised Justice Jyoti Singh.

“Prima facie, the respondent has all the powers and jurisdiction to float a new excise policy under the Delhi Excise Act, 2009 and its Rules,” it added.

The court further stated that to withdraw from the sale and distribution, in a phased manner, of liquor was a policy decision of the Delhi government under the new regime, which has its own benefits.

“Prima facie, the mechanism which is going to be adopted under the new policy does not violate any right of the petitioner… Even if L7 licences are brought to an end with effect from September 30, there is no prima facie case in favour of the petitioner because there is no discrimination,” the court said.

The court stated that the public at large was not going to suffer on account of the closure as other categories of vends would continue to operate.

“There are different types of licences for different purposes, from L1 to L35… Public at large is not going to suffer. Other licences would continue. Public will have to move out of their comfort zone. Everything will not be at the doorstep when there is transformation,” it remarked.

Out of 849 vends under the new policy, 260 vends have L7 and L10 licences (retail sale of Indian and foreign liquor), the court noted.

Senior counsels Abhishek Manu Singhvi and Rahul Mehra, appearing for the Delhi government, informed the court that with effect from November 16, even the government vends would close and it was thus necessary that there is a “peaceful and harmonious” transition into the new policy.

Senior lawyer Singhvi added that from November 16, bidders who have succeeded in the auction process under the new excise policy would start their operation.

Senior counsel Mehra asserted that on account of the new policy, the revenue has increased by 50 per cent, to Rs 9,500 crore and an additional Rs 1,000 crore was also expected.

Counsel for the petitioner sought a stay on the expiry of his L7 licence on the ground that the decision of closure was unilateral, arbitrary and in violation of the Delhi Excise Act.

Saying that it was “not in agreement” with the petitioner at this stage, the court dismissed the stay application while passing the interim order and listed the case for further hearing on October 21.

Several petitions are pending before the court against the New Excise Policy on the ground that it is illegal, unfair, arbitrary and violative of the Delhi Excise Act, 2009.

Last month, the court had orally stated that the actions taken by the Delhi government pursuant to its New Excise Policy 2021 will be subject to the outcome of petitions challenging the new regime.

In July, the court had refused to stay the new policy on the petition by Readymade Plaza India Pvt Ltd which contended that the new regime would lead to complete monopoly of the few big players.

The Delhi government has defended New Excise Policy 2021, saying that the new regime would generate optimum revenue and ensure ease of doing business while eliminating cartelization, proxy players and monopoly.

In its response to the pending petitions, it said that privatization of government liquor vends and re-distribution of all liquor vends equitably across the national capital “would most certainly lead to a manifold increase in free competition and overwhelm existing cartels in the market”.

Asserting that the citizens of India have no fundamental right to trade in liquor, the government said that the Excise Policy 2021-22 was formulated in larger public interest and since it is a matter of economic policy, it does not warrant judicial interference.

Licence regarding home delivery of liquor has been in existence for long and would now result in less overcrowding outside the liquor store/shops, it is added.



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