Page No.# 1/9 GAHC010021142023 2025:GAU-AS:5162 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/590/2023 M/S NISA WINE SHOP BARUAH ROAD, NALBARI, PIN- 781335, ASSAM (BEING REPRESENTED BY ITS PROPRIETOR SRI SATYAJIT MALLA BUJARBARUA). VERSUS THE STATE OF ASSAM AND 4 ORS REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY TO THE GOVT. OF ASSAM, EXCISE DEPARTMENT, DISPUR, GUWAHATI-6. 2:THE ADDITIONAL COMMISSIONER OF EXCISE ASSAM DISPUR GUWAHATI-6. 3:THE DEPUTY COMMISSIONER NALBARI NALBARI. 4:THE SUPERINTENDENT OF EXCISE NALBARI NALBARI. 5:THE INSPECTOR OF EXCISE BUREAU OF INVESTIGATION (EO) ASSAM Page No.# 2/9 SRIMANTAPUR GUWAHATI- 32 Advocate for the Petitioner : MR. S K TALUKDAR, MR A K BORAH Advocate for the Respondent : SC, EXCISE DEPTT., GA, ASSAM BEFORE HONOURABLE MR. JUSTICE MICHAEL ZOTHANKHUMA ORDER 29.04.2025 Heard Mr. S.K. Talukdar, learned counsel for the petitioner. Also heard Mr. R.R. Gogoi, learned counsel for the Excise Department. 2. The petitioner is aggrieved by the enquiry report dated 05.12.2022, the letter dated 17.12.2022 issued by the Addl. Commissioner of Excise, Assam (i/c) and the letter dated 10.01.2023 issued by the Deputy Commissioner, Nalbari, asking the petitioner to deposit an amount of Rs.1 lakh, as determined by the Enquiry Officer in his enquiry report dated 05.12.2022. 3. The petitioner’s basic challenge to the letter dated 10.01.2023 issued by the Deputy Commissioner, Nalbari is on the ground that the Deputy Commissioner has got no competence to issue such an order, keeping in view Rule 302 of the Assam Excise Rules, 2016 (hereinafter referred to as ‘the 2016 Rules’) and Section 58(b), Section 69 and 70 of the Assam Excise Act, 2000 (hereinafter referred to as ‘the 2000 Act’). 4. The facts of the case in brief is that during inspection of the petitioner’s IMFL ‘OFF’ shop bearing the name of M/S Nisa Wine Shop on 24.08.2022, it was Page No.# 3/9 found that no departmental approval/endorsement for employing the agents/salesmen of the wine shop had been sought for from the Excise Department. The enquiry report thereafter came to a finding that as the same was in violation of Rule 302 of the 2016 Rules, the petitioner was liable to be punished with a fine, which was not to be less than Rs.50,000/-, but could have been extended to Rs.5 lakhs. As such, the Enquiry Officer recommended that a fine of Rs.1 lakh be realized from the petitioner, for not seeking prior approval for employment of his agents/salesmen in the wine shop. 5. Pursuant to the enquiry report dated 05.12.2022, the Addl. Commissioner of Excise wrote a letter dated 17.12.2022 to Deputy Commissioner, Nalbari, requesting him to take necessary action as per the Assam Excise Act and Rules and submit an action report thereafter. 6. The Deputy Commissioner, Nalbari thereafter issued the impugned letter dated 10.01.2023 to the petitioner, requesting him to deposit Rs.1 lakh, as had been determined by the Enquiry Officer vide the enquiry report dated 05.12.2022. 7. The petitioner’s counsel submits that a reading of Section 58(b) along with Sections 69 & 70 of the 2000 Act clearly goes to show that the penalty that can be imposed pursuant to Section 58(b), can only be done by a Magistrate and that too only after a trial has been conducted by a Magistrate not less than 2nd Class. He submits that as no trial has taken place before a Magistrate of 2nd Class pursuant to Section 58(b) of the 2000 Act, the impugned letter dated 17.12.2022 issued by the Addl. Commissioner of Excise, Assam and the order dated 10.01.2023 issued by the Deputy Commissioner, Nalbari should be set Page No.# 4/9 aside. 8. Mr. R.R. Gogoi, learned counsel for the Excise Department submits that though he does not have any quarrel with the submission made by the petitioner’s counsel that the penalty could have been imposed only by a Magistrate of 2nd Class after a trial, the penalty that had been imposed can be compounded by the respondent authorities under Section 76 of the 2000 Act. 9. I have heard the learned counsels for the parties. 10. Rule 302 of the 2016 Rules, Section 58, 69, 70 & 84 of the 2000 Act states as follows:- “302. Name of salesmen and agents to be endorsed on licence before employment: No licensee for the retail vend of any intoxicant other than (1) the licensee of a Hotel, Restaurant, Bar, Club or (2) a chemist or druggists holding a licence or permit under the Act, shall allow any person to conduct sale in his licensed premises or to carry any intoxicant on his behalf unless the names of such persons have been previously submitted to the Collector or the Sub-divisional Officer or the Superintendent of Excise for approval and endorsed by him on the licence.” “58. Breach of rule or condition of licence.- Whoever being the holder of a licence, permit or pass granted under this Act, or being in the employ of such holder and acting on his behalf,- (a) fails to produce such licence, permit or pass on the demand of any Excise Officer or of any other officer duly empowered to make such demand, or (b) in any case not otherwise provided for in this Act willfully contravenes any rule made under section 84 or willfully does or omits to do anything Page No.# 5/9 in breach of any of the conditions of such licence, permit or pass, shall be punished in case of (a) with fine which may extend to five thousand rupees and in case (b) with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees and the convicting Magistrate shall direct the offender to be imprisoned in default of payment of fine for a term which may extend to six months.]” “69. Initiation of prosecution.- (1) No Magistrate shall take cognizance of an offence punishable- [(a) under Section 53, 54, 55, 61 or 61-B except on his own knowledge or suspicion or on the complaint or report of an Excise officer; (b) under Section 56, 57, 58, 58-A or 64 except on the complaint or report of a Collector or other officer empowered under Section 42, sub- section (2) to investigate the case; or] (c) under clause (d) and (e) of Section 62 except with the sanction of the District Collector. (2) Except with the special sanction of the State Government, no Magistrate shall take cognizance of any offence punishable under this Act, unless the prosecution is instituted within six months after the commission of the offence.” “70. Magistrate empowered to try case under this Act.- Offences under this Act shall be triable only by Magistrates exercising powers not less than those of a Magistrate of Second Class.” “84. Power to make rules.- Power of the State Government to make rules,- (1) The State Government may make rules for the purpose of carrying out the provisions of this Act or any other law for the time being in force relating to the excise revenue; (2) In particular and without prejudice to the generality of the foregoing provisions, the State Government may make rules- (a) regulating the delegation of any powers by the Government, the Excise Commissioner, Commissioners of Divisions and Collectors under clause (g), sub-section (2) of Section 6; Page No.# 6/9 (b) prescribing the powers, duties and subordination and control of officers of Excise Department; (c) regulating appeals and revisions and in particulars- (i) declaring the cases in which and authorities to whom appeals shall lie under sub-section (1) of Section 7; (ii) prescribing the time and manner for presenting appeals and the procedure for dealing with appeals under sub-section (1) of Section 7; (d) regulating the import, export, transport or possession of any intoxicant, excisable article and molasses;] (e) regulating the manufacture, supply, storage or sale of any intoxicant; and in particular regulating- (i) the erection, inspection, supervision, management and control of any place for the manufacture, supply, storage or sale of any such article; and the fittings, implements and apparatus to be maintained therein; (ii) the cultivation of the hemp plant (Canabis Sativa L) the collection of the sponteneous growth of such plant, and the preparation of any intoxicating drugs from such growth; (iii) the tapping of tari producing trees and the drawing of tari from such trees; (iv) the bottling of liquor for sale; (f) regulating the deposit of intoxicant in warehouses and the removal of such articles from warehouses, distilleries or breweries; (g) regulating the period for which and the persons to whom the licences for the sale of any intoxicant may be granted and providing for the selection of sites at which shops may be opened; (h) prescribing the procedure to be followed and the matters to be ascertained before any licence for such sale is granted in any local area; (i) prescribing in the case of any intoxicant the manner in which the duty on such article shall be levied; (j) prescribing the sale or fees or the manner of fixing the fees payable in Page No.# 7/9 respect of storing of any intoxicant; (k) prescribing the time, place and manner of payment of duty or fee; (l) prescribing the restrictions under and the conditions on which any licence, permit or pass may be granted; and in particulars providing for- (i) the prohibition of the admixture with any intoxicant of any foreign substance; (ii) the regulation or prohibition of the reduction of liquor by a licensed manufacturer or a licensed vendor from a higher to a lower strength: (iii) the fixing of the strength, price or quantity in excess of or below which any intoxicant shall not be supplied, sold or kept or exposed for sale, the fixing of the quantity in excess of which denatured spirit shall not be possessed, the fixing of a standard of quality and determining whether the price is excessive for any intoxicant; (iv) the regulation or prohibition of the employment of the license holder or any person or class of persons in or upon his business premises during business hours or to assist him in his business in any capacity whatsoever; (v) the specifications of the persons or classes of persons to whom any intoxicant may or may not be sold; (vi) the prohibition of sale except for cash; (vii) the prevention of drunkeness, intoxication, gambling or disorderly conduct in or near the business premises of the licence holder and of the meeting or remaining of persons of bad character in such premises; (viii) the fixing of the days and hours during which such premises may or may not be kept open, and the closure of such premises on special occasions; (ix) the specification of the nature of the premises in which any intoxicant may sold and the notice to be exposed at such premises; (x) the accounts to be maintained and the return to be submitted by licence holders; and (xi) regulating or prohibiting the transfer of licenses; Page No.# 8/9 (m) (i) declaring the process by which spirit manufactured in India shall be denatured; (ii) for causing such spirit to be denatured through the agency or under the supervision of its own officers; (iii) for ascertaining whether such spirit has been denatured; (n) providing for the destruction or other disposal of any intoxicant deemed to be unfit for use; (o) regulating the disposal of confiscated articles; (p) providing for the grant of expenses to witnessess; (q) regulating the power of Excise Officer to summon witnesses from a distance under the provisions of Section 43; and (r) providing for the grant of compensation to persons improperly arrested and subsequently released by an Excise Officer under Section 43 and persons charged before a Magistrate with offences under this Act and acquitted.” 10. A reading of Sections 58(b), 69, 70 & Section 84 of the 2000 Act goes to show that a breach of any Rule made under Section 84 or the omission to do anything in breach of the licence, shall be punished with a fine as per the decision made by the convicting Magistrate, who should not be less than a Magistrate of 2nd Class and that too, after prosecution is initiated under Section 69. In the present case, the provisions of Sections 69 & 70 have not been followed, while issuing the impugned letter dated 17.12.2022 by the Addl. Commissioner of Excise, Assam and the order dated 10.01.2023 issued by the Deputy Commissioner, Nalbari. 11. In view of the above reasons, this Court is of the view that the Addl. Commissioner of Excise, Assam and the Deputy Commissioner, Nalbari did not have the power to issue the said directions for recovery of Rs.1 lakh from the petitioner as penalty, pursuant to the letter dated 17.12.2022 and the order Page No.# 9/9 dated 10.01.2023 respectively. Consequently, the letter dated 17.12.2022 and the impugned order dated 10.01.2023 are hereby set aside, in so far as it relates to the petitioner herein. The enquiry report is not being interfered with by this Court, as the contents of the same pertain to questions of facts and as the penalty sought to be imposed therein is only a recommendation, which does not have any binding effect on the competent authority to decide on it’s own. 12. The writ petition is accordingly disposed of. JUDGE Comparing Assistant