Excise Dept To Decide Liquor Contractors' Security Refund Claims Within 30 Days, 12% Interest In Case Of Delay: Rajasthan High Court

Rajasthan High Court held that the petitions filed by the liquor contractors, challenging non-refund of the security deposit by the Excise Department, even beyond the expiry of their license period, was premature since no order of demand, recovery or forfeiture was yet passed.At the same time, the bench of Justice Sameer Jain opined that administrative inaction leading to an indefinite retention of lawful dues could not be accepted. Accordingly, the State was directed to decide every representation filed after this order within 30 days. The Court further directed that in case the order was not passed within the stipulated timeline, the claim for refund shall be deemed to be valid, and the retention of money beyond 30 days of filing the representation shall attract an interest at the rate of 12% p.a. till payment. The Court was hearing a bunch of petitions filed by the license holders of composite liquor shops who had the licenses for the year 2023-24, and owing to huge losses suffered, were unwilling to renew the license. However, after imposition of Model Code of Conduct during general elections, auction for 2024-25 could not happen. Hence, the licenses of the petitioners were compulsorily extended from April to June 30, 2024. The main contention of the petitioners was that even after operating within the extended period, the State did not refund their security deposits as was earlier agreed. Subsequently, based on an allegedly unauthorized notification passed by the Excise Commissioner, the agreed upon refund mechanism was altered. Hence, the petitions were filed. It was the case of the State that firstly the petitions were premature and devoid of action since no demand notice, recovery proceedings, or order of forfeiture were made or issued against the petitioners till date. Secondly, it was submitted that the clarifications issued by the Excise Commissioner could not be said to be without authority since the Commissioner was competent to interpret the policy guidelines in the field. After hearing the contentions, the Court agreed with the submission of the State about the petitions being premature. However, at the same time, referring to the concept of “where there is a right, there is a remedy”, the Court held that indefinite retention of lawful dues, owing to administrative inaction could not be accepted. Thus, to safeguard the interests of the petitioners, and prevent multiplicity of litigation, the Court directed that the State shall adjudicate the representations filed by the petitioners seeking refund, within 30 days of filing, with a speaking order. In the event of failure, the claim within such representation(s) shall be deemed to be valid and the amount sought for refund shall be released forthwith. It was also clarified that in case the refund was retained beyond 30 days of filing, it shall attract 12% interest p.a. Accordingly, the petitions were disposed of. Title: Atar Singh v State of Rajasthan & Ors., and other connected petitionsCitation: 2025 LiveLaw (Raj) 354Click Here To Read/Download Order

Excise Dept To Decide Liquor Contractors' Security Refund Claims Within 30 Days, 12% Interest In Case Of Delay: Rajasthan High Court

Nupur Agrawal

Tags