Bombay High Court Orders Inquiry Upon Noting That Excise Officials Illegally Seized Chemical Company's Ethanol At Behest Of Competitors

The Bombay High Court recently ordered the Additional Chief Secretary, Maharashtra Excise Department, to conduct an inquiry into excise officials who seized a company's ethanol despite it not being a contraband as per Bombay Prohibition Act.A division bench Justice GS Kulkarni and Justice Jitendra Jain in a writ petition observed that the excise officials appeared to have acted on the behest of the petitioner company's competitors and harmed the petitioner's reputation and business interest.“It prima facie appears, from what has been urged before us on behalf of the intervenors, as also seen from the contents of the newspaper reports and the wide publicity which has been given to the seizure in question, labelling the petitioners to have indulged in illegal activities in dealing with ethanol, that this is clearly at the behest of the petitioners' competitors…Such a situation as brought about by the illegal seizure at the hands of the Excise officers would amount to not only a gross illegality but bring about a situation of absolute lawlessness in exercise of solemn public duties by such officials”, the court held.The court further deprecated the officers' high-handedness by publishing photos of the boxes of ethanol with excise officers in the newspapers making it look like illegal materials were seized from the petitioner company. “It was certainly most objectionable for the officers to pose themselves in photographs in projecting that the petitioners were dealing in prohibited goods. This is certainly neither a part of their duties, nor permissible under the Bombay Prohibition Act or under the Rules under which they were supposed to act”, the court observed.The court was dealing with a writ petition filed by chemical importer K Raj & Company challenging the seizure of goods by state excise authorities.Advocate Shah for the petitioner contended that the seizure, which took place in December 2023, was in direct violation of the court's prior order dated November 4, 2023 and a coordinate bench's 2021 ruling in another writ petition. In the 2021 order, the court held that the goods in question, namely ethanol, did not fall under the purview of the Bombay Prohibition Act. The petitioners argued that the recent seizure was a clear contradiction of these orders.Two news reports published in two newspapers on December 12 and 13, 2023, respectively, highlighted the seizure of 28,000 liters of ethanol from the petitioners and one arrest in connection with the case. The reports suggested that the ethanol was mis-declared as lab chemicals and implicated the petitioners in illegal activities. They said that the reports were disparaging and questioned the source of the information.To the court's surprise, two intervenors MSB Chemical Limited and Laboratory Solutions India appeared before the court during the proceedings. They supported the seizure claiming that the imports of ethanol by the petitioners were adversely affecting their business interests. The court found this contention shocking and questioned the sudden appearance of the intervenors.Advocate Shruti Vyas for the State Excise Department stated that the State Excise Department did not intend to persist with the seizure. She assured the court that the seized goods and the vehicle would be released immediately.Despite the state's decision to release the goods, the court refused to simply accept the statement and close the proceedings due to the emergence of intervenors in the proceedings.The court concluded that the petitioners had suffered due to the illegal seizure. The court opined that the seizure appeared to be at the behest of the petitioners' competitors and raised serious concerns about the conduct of the excise officials involved.The court directed the immediate release of the seized goods (ethanol) to the petitioners. The court observed that the officials had prima facie not acted bona fide and had abused their powers under the Bombay Prohibition Act.The court ordered an inquiry by the Additional Chief Secretary, Government of Maharashtra. The inquiry is to delve into the conduct and role of the excise officials responsible for the seizure, as well as the involvement of private parties at whose behest the seizure may have occurred. The inquiry would also investigate insinuations in newspaper reports against the petitioners, considering they have been dealing with these goods for the past 50 years. The court stressed the need to restore the trust and confidence of traders in the rule of law.The court directed the inquiry to be completed within three weeks and sought the report on January 9, 2024. The court emphasized that if the inquiry reveals the involvement of the concerned officials, appropriate civil and criminal actions should be initiated against them. The court allowed the Additional Chief Secretary to move the State Government to pass appropriate orders, including suspending officials pending inquiry if there was prima facie material against...

Bombay High Court Orders Inquiry Upon Noting That Excise Officials Illegally Seized Chemical Company's Ethanol At Behest Of Competitors

Amisha Shrivastava

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