APHC010701682017 IN THE HIGH COURT OF ANDHRA PRADESH WEDNESDAY, THE SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY SIX THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO WRIT PETITION No. BETWEEN: 1. E. RAMANA, S/o. E. PYDIYYA, AGED ABOUT 45 YEARS, OCC: BUSINESS R/o.7 VISAKHAPATNAM. 1. STATE OF ANDHRA PRADESH, REVENUE (EXCISE DEPARTMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI, GUNTUR DIST. REP BY ITS PRINCIPAL SECRETARY. 2. THE COMMISSIONER OF PROHIBITION AND EXCISE, GOVERNMENT OF ANDHRA PRADESH VIJAYAWADA, KRISHNA DIST. 3. THE DEPUTY COMMISSIONER OF PROHIBITION AND EXCISE, GOVERNMENT OF ANDHRA PRADESH VISHAKAPATNAM. 4. THE PROHIBITION AND EXCISE SUPERINTENDENT, VISHAKAPATNAM, VISHAKAPATNAM DIST. 5. THE PROHIBITION AND EXCISE SUPERINTENDENT, GAJUWAKA, VISHAKAPATANAM DIST. Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue writ, order or direction more particularly IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) WEDNESDAY, THE SEVENTH DAY OF JANUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO WRIT PETITION No. 18737/2017 E. RAMANA, S/o. E. PYDIYYA, AGED ABOUT 45 YEARS, OCC: BUSINESS R/o.7-67, BOYAPALEM, GAMBHEERAM VISAKHAPATNAM. ...PETITIONER AND STATE OF ANDHRA PRADESH, REVENUE (EXCISE DEPARTMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI, GUNTUR DIST. REP BY ITS PRINCIPAL SECRETARY. THE COMMISSIONER OF PROHIBITION AND EXCISE, GOVERNMENT OF ANDHRA PRADESH VIJAYAWADA, KRISHNA DIST. PUTY COMMISSIONER OF PROHIBITION AND EXCISE, GOVERNMENT OF ANDHRA PRADESH VISHAKAPATNAM. THE PROHIBITION AND EXCISE SUPERINTENDENT, VISHAKAPATNAM, VISHAKAPATNAM DIST. THE PROHIBITION AND EXCISE SUPERINTENDENT, GAJUWAKA, VISHAKAPATANAM DIST. ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue writ, order or direction more particularly IN THE HIGH COURT OF ANDHRA PRADESH [3330] WEDNESDAY, THE SEVENTH DAY OF JANUARY THE HONOURABLE SRI JUSTICE TARLADA RAJASEKHAR RAO E. RAMANA, S/o. E. PYDIYYA, AGED ABOUT 45 YEARS, OCC: 67, BOYAPALEM, GAMBHEERAM ...PETITIONER STATE OF ANDHRA PRADESH, REVENUE (EXCISE- II) DEPARTMENT, SECRETARIAT, VELAGAPUDI, AMARAVATHI, GUNTUR DIST. REP BY ITS PRINCIPAL SECRETARY. REP BY ITS PRINCIPAL SECRETARY. THE COMMISSIONER OF PROHIBITION AND EXCISE, GOVERNMENT OF ANDHRA PRADESH VIJAYAWADA, PUTY COMMISSIONER OF PROHIBITION AND EXCISE, GOVERNMENT OF ANDHRA PRADESH THE PROHIBITION AND EXCISE SUPERINTENDENT, THE PROHIBITION AND EXCISE SUPERINTENDENT, ...RESPONDENT(S): Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue writ, order or direction more particularly 2 one in the nature of WRIT OF MANDAMUS directing the respondents to consider the representation dated NIL of the petitioner for refund / adjust the amount already paid towards license fee of Rs.16.25 lakhs for the period commencing 1.4.2017 to 30.6.2017 by setting aside the impugned proceedings being Rc.No.36/2017/A2 dated 31.5.2017 issued by Respondent no.5 and be pleased to pass. Counsel for the Petitioner: 1. YOGESH KUMAR HEROOR Counsel for the Respondent(S): 1. GP FOR PROHIBITION & EXCISE (AP) 2. GP FOR PROHIBITION EXCISE (AP) The Court made the following: 3 ORDER: The Writ Petition has been filed under Article 226 of the Constitution of India for the following reliefs: “to issue writ, order or direction more particularly one in the nature of WRIT OF MANDAMUS directing the respondents to consider the representation dated NIL of the petitioner for refund/ adjust the amount already paid towards license fee of Rs.16.25 lakhs for the period commencing 1.4.2017 to 30.06.2017 by setting aside the impugned proceedings being Rc.No.36/2017/A2 dated 31.5.2017 issued by Respondent no.5 and be pleased to pass any such further order or orders….. 2. The 5th respondent-the Prohibition and Excise Superintendent, invited applicants to register their names on or before 5.00 pm of 30.03.2017 for consideration of grant of license for the period mentioned in the Gazette Notification No.19, dated 24.03.2017. 3. In pursuance of the Gazette Notification No.19, dated 24.03.2017, the petitioner submitted online application and he was selected in the draw conducted by the 5th respondent and the petitioner was allotted a shop notified as VP/172 on 31.03.2017 and the license was provided from 01.04.2017 to 30.06.2019 and the petitioner herein has deposited an amount of Rs.16,25,000/- from 01.04.2017 to 30.06.2017 at applicable rates as per G.O.Ms.No.217 Revenue (Excise.II) Department, dated 22.06.2015 and license fee of 4 Rs.16,25,000/- per annum from 01.04.2017 to 30.06.2019 and the petitioner was granted license falling within the 5 KM territory of Municipal Corporation and the licence fee was Rs.65,00,000/- per annum. 4. While so, the Hon’ble Supreme Court vide its Judgment in the case of State of Tamil Nadu v. K Balu and another1, given a direction to all States and Union Territories (UTs) shall forthwith cease and desist from granting license for sale of liquor along National and State Highways and existing licenses which have already been renewed prior to the date of order shall continue until the period of license expires but not later than 01.04.2017. 5. Be that as it may, subsequent to the directions given by the Apex Court in the case of State of Tamil Nadu v. K Balu and another, one Mr. K. Nagabhushana Rao and two others filed W.P. No.15855 of 2017 in the common High Court of Andhra Pradesh at Hyderabad and interim order came to be passed in the cited Writ Petition. Wherein, the Court passed the order in the following: “In as much as the petitioners were granted license based on allocation, if the second licensee is permitted within the same locality or area, the same would affect the revenue of the existing license holders, like the petitioners, for a period of three months. 1 2017 (2) SCC 281 5 In the circumstances, there shall be interim stay of new licenses within the area of operation in which the petitioners were granted license for the excise year 2015-17 which, admittedly, is valid till 30.06.2017.” 6. It is the case of the petitioner that although the 5th respondent has been allowed to move the shop, following the directives given in the judgment of the Hon'ble Apex Court in K Balu’s case (referred supra) the petitioner cannot relocate the A4 license shop due to a prohibition order in W.P. No.15855 of 2017. Therefore, he made an application / representation dated nil stating that the petitioner has been allotted A4 license from 01.04.2017 and as per the Gazette No.19, an amount of Rs.16,25,000/- per annum for the license period from 01.07.2017 to 30.06.2019, paid in view of the license fee for the period 01.04.2017 onwards, but due to the various writs filed against the Gazette No.19 dated 24.03.2017 questioning the allotment of A4 licenses from 01.04.2017 to 30.06.2017. The petitioner has not been permitted to either open a shop nor obtain any permanent license and run the shop as per the allotment, due to the prohibition orders from the High Court of Andhra Pradesh. Hence, requested that his license fee paid for the allotment of shop from 01.04.2017 to 30.06.2017 may be refunded or adjusted proportionately from 01.07.2017 to 30.06.2019. It appears that no communication on the said representation dated nil. 6 7. The 5th respondent issued a show-cause notice vide proceedings in RC No.36/2017/A2 dated 20.05.2017 to the petitioner regarding the forfeiture of Rs.16,25,000/- of the license fee as per the Rule 17 of the A.P. Excise and Prohibition (Grant of License of Selling by Shop and Conditions of License) Rules, 2012, and directed to submit proposals for establishment of A4 shop within seven days from the date of receipt of the show cause notice, failing which, further action will be taken against the petitioner as per the rules in force. And the said proceedings dated 31.05.2017 is impugned in the Writ Petition that he is unable to establish shop due to the prohibition orders of the High Court in W.P. No.15855 of 2017, and issuance of impugned show cause notice is arbitrary, illegal, and due to circumstances beyond the control of the petitioner he is unable to establish a shop and he ought not to have been penalised for no fault of the petitioner. 8. The 5th respondent has filed its counter asserting that in pursuance of the orders of the Hon’ble Apex Court of India in Civil Appeal No.12164-12166 of 2016, the Commissioner of Prohibition and Excise, instructed the licensing authorities to issue notices to the licensees of A4 shops of highway affected shops indicating that those A4 shops located within 500 meters from the highways, the license period shall stand automatically expires by 31.03.2017. And the Government has issued guidelines in G.O.Ms.No.113, Revenue (Ex.II) 7 Department, dated 22.03.2017, on excise policy for 2017-2019. And the A4 shops which were beyond 500 meters from the highways shall continue till the end of license period i.e. 30.06.2017 and the A4 shops which fall within the 500 meters from the highways as on 31.03.2017 stand automatically expired. 9. The A4 shops notified against the shops falling within 500 meters from the highways will function from 01.04.2017, and shops falling outside 500 meters of highways will function from 01.07.2017 till the end of license period. And it is further stated on completion of all formalities by the successful applicants, the ‘Provisional Licenses’ have been issued by the licensing authorities subject to fulfillment of procedure as per rules for obtaining of original license in Form-A4. The Government has issued new excise policy for the period 2017-2019, the Government notified A4 shops can locate in permitting the original license issued in Form-A4, to locate shops at Municipal Corporation/ Municipality/ Nagara Panchayat /Mandals as a single unit. As such, the selected applicant has right to establish his A4 shop at any place in the Municipal Corporation/ Municipality / Nagara Panchayat / Mandal. And it is further stated that it is a settled law that the right to carry on the business, more so in the sale of liquor which is res extra commercium, does not carry with it any obligation on the State to guarantee the licensees a particular rate of return or their investment. Any person 8 carrying on business may earn huge profits, or may suffer extensive losses. Neither does the State promise a businessman that it would make good the losses suffered by him nor would be businessman share his profits with the State if it is in excess of what he had earlier envisaged. Many an unexpected development may occur which may either cause loss to the contractor or result in large profit. Such contracts do not imply a warranty or a guarantee of profit to the contractor. It is a business for him profit and loss being normal incidents thereof. And it is only a lame excuse put forwarded by the petitioner to avoid taking license and seeking refund of the license fee paid. Further, by not establishing the A4 shop, the selected applicants have failed to comply with Rule 15 and 23 causing revenue loss to the Government by not commencing the business. Hence, prayed to dismiss the writ petition. 10. The petitioner was unable to relocate the premises as per the directions of the 5th respondent due to the interim order granted in W.P. No.15855 of 2017. The respondents have not taken any steps or made any endeavour to get the interim order granted in W.P. No.15855 of 2017 vacated. The lapse on the part of the respondents cannot be attributed to the petitioner, and, the petitioner cannot be penalised for no fault of him. In pursuant to the interim order granted by the High Court the petitioner did not carry any business for the period from 9 01.04.2017 to 30.06.2017. Therefore, there is genuine request on the part of the petitioner to consider his case for refund of license fee for the period from 01.04.2017 to 30.06.2017 for the period of three months and it does not fall any one of the causes mentioned in Section 31 to 33 of the A.P. Excise Act 1968, the petitioner is entitled for refund for proportionate licence fee paid. 11. In "Ramana Dayaram Shetty Vs. International Airport Authority of India and others2, the Hon’ble Apex Court held that: The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone, but if it does so, it must do so fairly without discrimination and without unfair procedure." This proposition would hold good in all cases of dealing by the Government with the public, where the interest sought to be protected is a privilege. It must, therefore, be taken to be the law that where the Government is dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largess, the Government cannot act arbitrarily at its sweet will and, like a private individual, deal with any person it pleases, but its action must be in conformity with standard or norms which is not arbitrary, irrational or irrelevant. The power or discretion of the Government in the matter of grant of largess including award of jobs, contracts, quotas, licences etc., must be 2 1979 (3) SCC 489 10 confined and structured by rational, relevant and non- discriminatory standard or norm and if the Government departs from standard or norm in any particular case or cases, the action of the Government would be liable to be struck down, unless it can be shown by the Government that the departure was not arbitrary, but was based on some valid principle which in itself was not irrational, unreasonable or discriminatory. 12. Accordingly, for the above reasons, the Writ Petition is allowed declaring that the petitioner is entitled for refund of the proportionate license fee from out of the part license fee paid for the Excise Year 2017 to 2019, for the period from 01.04.2017 to 30.06.2017. There shall be no order as to costs. As a sequel, interlocutory applications, if any, pending in this writ petition shall stand closed. __________________________________ JUSTICE TARLADA RAJASEKHAR RAO Date: 07.01.2026 Harin 11 241 THE HON’BLE SRI JUSTICE TARLADA RAJASEKHARA RAO W.P.No. 18737 OF 2017 Date: 07-01-2026 Harin