Excise Inspection Without Prescribed Police Officer Is Invalid, Distillery's Licences Restored: Himachal Pradesh High Court
The Himachal Pradesh High Court has held that the absence of a police officer not below the rank of Deputy Superintendent of Police from an excise inspection team constitutes a material defect, rendering the entire inspection proceedings invalid.
The Court quashed the cancellation of licences granted to K.M. Distillery Pvt. Ltd., holding that the mandatory requirements under the Himachal Pradesh Excise Act, 2011, and the applicable notification had not been followed, and directed the authorities to restore the distillery's licences subject to fulfilment of the applicable conditions.
Justice Sandeep Sharma remarked that: “Non-inclusion of officer not below the rank of Deputy Superintendent of Police is a procedural lapse, which can be ignored; rather, the same being a material defect in constitution of team entire inspection proceedings need to be quashed and set aside.”
K.M. Distillery Pvt. Ltd., which operates a bottling plant in Parwanoo, Himachal Pradesh, held a BWH-2 licence along with subsidiary licences in Forms L-13C, L-15 and L16. Following a surprise inspection on June 2, 2025, the Excise and Taxation Department alleged discrepancies in liquor stocks, unaccounted liquor and other irregularities.
After issuing a show cause notice under Section 29(b) and (c) of the Himachal Pradesh Excise Act, 2011, the Financial Commissioner (Excise) cancelled the company's licences on July 14, 2025.
Challenging the order, the company approached the High Court, primarily contending that the inspection team had not been constituted in accordance with the statutory requirements and the State Government's notification dated April 26, 2025.
The High Court held that the inspection team was constituted in violation of Section 6 of the Himachal Pradesh Excise Act, 2011, and the State Government's notification dated April 26, 2025, as it did not include a police officer not below the rank of Deputy Superintendent of Police.
The Court observed that this omission was a material defect, not a mere procedural irregularity, and consequently vitiated the entire inspection and the proceedings based on its report.
Accordingly, it quashed the order cancelling the distillery's licences and directed the authorities to renew its BWH-2 licence for 2026–27 and restore its L-13C, L-15 and L-16 licences, subject to fulfilment of the applicable conditions.
Date of Decision: 30.09.2026