ORDER
In pursuance of the enquiry report from Chief Minister's Special Vigilance Cell communicated in their letter No. SVC/E/26/99/C/ 217 dt. 18-9-99. Indicating serious irregularities by way of violation to the terms and conditions of the licence, the operation of the Bonded warehouse licence holding by Mrs. Rani Narah, Proprietor of M/S R.N. Bonded Warehouse, North Lakhimpur is hereby suspended temporarily with immediate effect under section 29 of Assam Excise Act, 1910 and Rule 24 of the Assam Bonded Warehouse Rules. 1965.
Sd/- B. Basumatary,
Commissioner of Excise, Assam,
Silpukhuri, Guwahati -3.'
7. As would appear from the impugned order the respondent No. 2 has exercised power under section 20 of the Assam Excise Act and Rule 24 of the Assam Bonded Warehouse Rules pursuant to a report submitted by the Chief Minister's Spl. Vigilance Cell. To appreciate the controversy in proper perspective, a quick survey of the sets of Act and Rules would become necessary.
8. Section 29 of the Assam excise Act, 1910 (Act 1 of 1910) (in short the Act) provides for cancellation or suspension of licences etc., in certain cases.
It reads :-
'29. Subject to such restrictions as the State Government may prescribe the authority who granted the licence, permit or pass under this Act may cancel or suspend the same-
(a) if any duty or fee payable by the holder thereof be not duly paid ; or
(b) in the event of any breach by the holder thereof or by his servants, or by any one acting on his behalf, with his express or implied permission, of any of the terms or conditions of such licence permit or pass ; or
(c) if the holder thereof is convicted of any offence punishable under this Act or any other law for the time being in force relating to revenue, or of any cognizable or non-bailable offence, or of any offence punishable under the Dangerous DrugsAct, 1930, or under the Indian merchandise Marks Act, 1899; or under Ss. 482 to 489 of the Indian Penal Code;
(d) if the holder thereof is punished for any offence referred to in Cl. (8) of S. 167 of the Sea Customs Act, 1874, or
(e) at will, if the conditions of the licence, permit or pass provided for such cancellation or suspension
(Italics is mine).
9. Further Rule 24 of the Assam Bonded Warehouse Rules, 1965 provides for cancellation or suspension of licence, It reads :-
The licence may be cancelled or suspended by the Excise Commissioner under the provisions of S. 29 of the Act.'
10. Rule 22 deals with the supervision and control over warehouse. It reads :-
'A bonded warehouse shall be under the supervision and control of the Collector and the Superintendent of Excise, but those officers shall be not pass order on technical matters connected with the working of a warehouse except with the approval of the Excise Commissioner.'
11. Rule 37 deals with periodical stock taking and levy of duty on excess defiency. It reads :-
'The Superintendent of Excise or in his absence, the officer-in-charge of the bonded warehouse shall take stock of all spirits in the warehouse on the last day of March, June, September andDecember in each year or on the preceding day, if the last day be a Sunday or a holiday prescribed under R.22 and the licensee shall pay to the State Government duty at the rates imposed under S. 21 of the Act on all spirits which may not be forthcoming and for which he may be unable to account for the satisfaction of the Excise Commissioner in excess of an allowance of 1 1/2 per cent which shall be made to him for wastage. Wastage for the purpose of collection of duty on the excess as aforesaid shall be calculated annually, that is, at the end of each financial year for which the licence is in force :
Provided that if it shall be proved to the satisfaction of the Excise Commissioner or of such officer as he shall appoint that such deficiency in excess of 1 1/2 per cent has been caused by accident or other unavoidable cause, the payment of duty at the above rates on such deficiency may not be required.'
12. Rule 38 of the Rules provides for imposition of fines in case of breach of conditions of licence or rules etc. It reads :-
'In case of any breach of these rules or of the conditions of the licence, or in case of any attempt by altering the capacities of receptacles or otherwise to deceive the officer-in-charge in gauging or proving, either by the licensee or by any person in his employment, it shall be competent for the Excise Commissioner to impose upon him, in lieu of cancellations of the licence, a fine not exceeding Rs. 100 for every such breach of the rules or donations, or subject to the control of the State Government, to impose a fine not exceeding Rs. 2,000 or to cancel the licence or/and declare the money, if any, deposited with the Government forfeited. It shall be lawful for the Collector to deduct the amount of fines imposed under this rule from the sum deposited by the licensee as security for the due performance of the conditions of the licence, and for this purpose, the Collector may sell any or all of the property hypothecated.'
13. The aforesaid Act has been enacted to consolidate and amend the law in the State of Assam regulating the procedure of import, export, transport, manufacture, sale and possession of intoxicating liquors, drugs and also devised the procedure for control including cancellation, suspension of licence and restrictions. Rules has also been framed to carry out the provision of the Act by the appropriate Govt. in exercise of power conferred under Section 36 of the Act.
14. The sole question that posed for determination is whether the Special Vigilance Cell of the Police attached to Chief Minister'soffice can exercise any power under Assam Excise Act and Rules with regard to inspection, conduct of surprise check and seizure.
15. POINT (a) :
Mr. J.M. Choudhury, learned counsel for the petitioner at the outset referred to a complaint dated Nil signed by as many as 40 complainants addressed to the Hon'ble Chief Minister of Assam complaining malpractices in respect of R. N. Bonded Warehouse, North Lakhimpur. The complaint petition is annexed as Annexure-D in the counter of the respondent No. 3. It is seen that the Chief Minister by its note dated 28-8-99 on the body of the petition itself directed the Superintendent of Police, Chief Minister's Special Vigilance Cell to take necessary action. Therefore, it clearly appears that there is direct nexus between the complaint petition and the passing of the impugned order. In other words, the report submitted by the Inspector of Police, Special Vigilance Cell pursuant to a complaint, culminates in the passing of the impugned order dated 18.9.1999. This position is further clarified from the impugned order itself. What is popularly known in legal parlance, res ipsa loquitur (facts speaks for itself) is being repeated in the impugned order.
16. A bare perusal of the impugned order as quoted above it clearly appears that the impugned order has been passed pursuant to enquiry report submitted by Chief Minister's Special Vigilance Cell. The jurisdiction of the Chief Minister's Special Vigilance Cell to conduct enquiry, raid and seizure of the Bonded Warehouse has been debated at the bar at length. The respondent No. 3 in his counter annexed various notifications issued by the State Government as Annexures-A, B and C. Let me deal with each Annexure one by one. Annexure-A is a notification dated 9th Feb.' 84 issued in exercise of power conferred by Clause (S) of Section 1 of the Code of Criminal Procedure, 1973, declaring the specified area as a Police Station and empowering them to make an enquiry and investigation of the offences under Prevention of Corruption Act, 1947 and 1988 under Sections 161 to 169, 406 to 409, 417 to 420 and Sections 471 to 477A IPC. Annexure-B notification dated 9th Feb. '84 relates to constitution of Special Vigilance Cell, Assam and sanction of the Governor for creation of Vigilance Cell along with the posts. Annexure-C relates to notification dated 30th April, 1997 issued in exercise of power under proviso to Section 17 of the Prevention of Corruption Act, 1988 authorising the Officer not below the rank of Inspector of Police posted in Chief Minister's Special Vigilance Cell inter-alia to investigate the offences under thePrevention of Corruption Act, 1988 under Sections 166 to 168, 406 to 409, 417 to 420 and Sections 471 to 477A IPC etc. Therefore, no where in the notifications the Special Vigilance Cell attached to the Chief Minister has been empowered to investigate, conduct raid and make seizure under Excise Act and Rules. The aforesaid notifications referred to by the respondents in their counter are, therefore, not relevant at all for the purpose of this case.
17. As already said the Act was enacted to consolidate with regard to import, export and other intoxicated offences and the Act and Rules are composite in itself. Rule 33 of the Rules as quoted above provides that the supervision and control of Warehouse shall be vested under the supervision of Collector and the Superintendent of Excise but the officers shall not pass any order on technical matters connected with the working of a warehouse except with the approval of the Excise Commissioner. Rule 37 of the Rules provides the periodical stock taking and levy of duty and the rules empower the Superintendent of Excise or in his absence, the Officer-in-Charge of the Bonded Warehouse shall exercise such power on the first day of March, June, September and December each year, Rule 24 of the Rules empower the Excise Commissioner to cancelled or suspend the licence under the provision of Section 29 of the Act.
18. A fascimle reading of the Act and Rules it clearly appears that the power of Excise Commissioner. Collector and Superintendent of Excise is all pervasive throughout the Act and Rules. It further provides that the power of Collector and Superintendent of Excise is subject to the overall control of the Excise Commissioner. The Act and Rules as quoted above nowhere empowers the regular Police, much less Special Vigilance cell with regard to the control, supervising, periodical stock taking and seizure of Bonded Warehouse. I am, therefore, clear of the view that the Inspector, Chief Minister's Special Vigilance Cell has exercised power not vested in him.
19. POINTS (b) & (c)
These 2 (two) issues are interlinked and as such they are tag together. Rule 24 of the Rules empowers the Excise Commissioner to cancell or suspend the licence for violation of any of the conditions enumerated in sub-section (a), (b),(c), (d) and (e) of Section 29 of the Act. Now the power under this section can be exercised by the Commissioner of Excise independently uninfluenced by any other agency. In other words, the power under Section 29 of the Act read with Rule 24 of the Rules can be exercised by Commissioner of Excise independently after the application ofmind and there must be subjective satisfaction of the Commissioner of Excise that any of the condition enumerated in section 29 of the Act has been violated by the holders of the licence. On perusal of the impugned order as quoted above would show that the impugned order dated 18.9.1999 has been passed pursuant to a report from Chief minister's special vigilance cell communicated by letter dated 18.9.1999. This would show that the commissioner of Excise has passed a mechanical order or the basis of the report submitted on 18.9.1999. The fact that the impunged order dated 18.9.1999 has been passes pursant to a report dated 18.9.1999 would clearly show that the impugned order has been passed without application of mind. Therefore, it cannot be said that the Commissioner of Excise has exercised his power under the Act Rules when such exercise of power flows from the report of an agency who is not a recognised authority under the Act and Rules.
20. Mr. P.G. Baruah, learned advocate General appearing for the respondents strenously submits that sitting as a judicial review, this court may not interfere with the decision taken by the Government. In this connection, Mr. Baruah referred to the decision in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation. In that case, the plaintiffs, proprietors of a cinema sought a declaration that the condition that no child under the age of fifteen years should be admitted to any Sunday entertainment whether accompanied by an adult or not to be ultra vires. The Court held that the power of the Court to interfer in each case is not as an appellate authority to override a decision of the local authority but as a judicial authority which is concerned to see whether the local authority had contravened the law by acting in excess of the powers which Parliament has confided to them. While there is no quarrel over the proposition of law, the ratio of this decision is not applicable in the facts of the case at hand for more than one reason. Firstly, in that case, the Corporation had the power under Sunday Entertainment Act, 1932 to legalise the opening of cinema on Sunday subject to conditions as the licensing authority thinks fit to impose. Secondly, the Court of Appeal found that the Corporation has not exercised its discretion in an improper way. In the instant case, the Inspector of the Special Vigilance cell had no power to investigate and inspect the Bonded Warehouse under the Act and Rules.
21. As already pointed out, in the instant case, the impugned order flows from the enquiry report submitted by the Inspector of Special Vigilance Cell attached to Chief Minister who has no jurisdiction under the Act and Rules. It is true that exercising the power ofjudicial review the Court is not sitting as an appeal against the decision but a judicial review is against the decision making process. If the decision making process is bad, it renders order equally bad. The decision making process is the foundation on which the pillar of the order is built and if the foundation is weak, the pillar falls. In the instant case, the Commissioner of Excise has not exercised his independent power. On the other hand, the power under Section 29 of the Act read with Rule 24 of the Rules is sought to be exercised solely on the basis of the report submitted by an agency who is not authorised either under the Act or Rules. It is in this sense that the Commissioner of Excise has abdicated his power to some other agency who has no authority at all. The contention of learned Advocate General is accordingly rejected.
22. Next, it is contended by learned Advocate General that the authority has exercised the power bona fide and therefore, this Court should not interfere. It must be borne in mind that any authority claiming bona fide action must first satisfy the requirement of non-arbitrariness. Non-arbitrariness is necessary concomitant of the rule of law. When an act is arbitrary, it is implicit in it that it is mala fide. In the instant case, the whole process of decision making is arbitrary. It would also appear from the order impugned as quoted above that the aforesaid order has been passed without any application of mind. It is further disclosed that the order impugned has been passed without hearing the petitioner is writ large and therefore, it is violative of the principle of natural justice inasmuch as the aforesaid impugned order have grave civil consequences and prejudiced the petitioner.
23. Next, it is contended by Mr. Baruah that under Section 38 of the Act, any officer employed in Excise including Police has been empowered to arrest without warrant any person found committing offences punishable under section 53 or 54 of the Act. This provision under section 38 of the Act is with regard to the excise offences committed under section 53 or 54 of the Act. It has no relation with the power of granting of licence, suspend or cancel of the licence as visualises under Section 29 of the Act and Rule 24 of the Rules.
24. Alternately it is argued by Mr. J. M. Chodhury that the impugned order passed by the Commissioner of Excise is contrary to section 29 of the Act and Rules 37and 38 of the Rules. It will be noticed that the starting words of Section 29 is 'Subject to such restrictions as the State Government may prescribe...' has great significance. Restrictions visualises under Section 29 of the Acthas been imposed by Rule 38 of the Rules. Rule 38 imposes restrictions that in case of breach of conditions of licence or rules, the Commissioner of Excise shall be competent to impose upon him in lieu of cancellation of licence, a line not exceeding Rs. 100 for every such breach of the rules or conditions, or may impose a line not exceeding Rs. 2000 subject to the control of the State Government. Admittedly, the provision of rule 38 of the Rules has not been resorted to by the Commissioner of Excise.
25. Mr. Choudhary also referred to memorandum of seizure list prepared by the Inspector of Police, Chief Minister's Special Vigilance Cell on 1.9.1999 in which the officer found the stock position as follows :-
'Name of itemsStock Position as per Stock registerStock physically available.
1.IMFL (India made Foreign Liquor)7167 as on 30-8-99 cases7155 cases and 4 (four) loose bottles.2.Beer1544 cases as on 30-8-991531 cases and 3 Loose BottlesShort fall of IMFL - 11 Cases 8 bottles.Short fall of Bear - 12 cases 9 bottles.'
26. Rule 37 of the Rules stipulates an allowance of 1 1/2 per cent to be made available to the licensee for wastage etc. proviso to rule 37 of the Rules provides that if it is proved to the satisfaction of the Excise Commissioner or such officer as he shall appoint that such deficiency in excess of 1 1/2 per cent has been caused by accident or other unavoidable cause, even the payment of duty of such deficiency may not be required. A reading of rule 37 it clearly appears that the licensee is entitled an allowance of deficiency 1 1/2 per cent of the stock position on account of wastage. From the stock position as revealed from the seizure memo, the shortfall of IMFL was 11 cases, 8 bottles. Stock position of the IMFL was 7167 cases as on 30-8-99 and allowance of 1 1/2 per cent as visualised under Rule 37 of the Rules would be about 105 cases. Therefore, even on merit of the case, no breach of conditions of licence or permit as visualised under section 29 of the Act has been made out. Even if assuming that the Commissioner of Excise did exercise the power under section 29 of the Act, in the instant case, the power has been exercised improperly and without application of mind.
27. In the result, this petition is allowed by quashing the Impugnedorder dated 18.9.1999 passed by the 2nd respondent. Parties are asked to bear their own costs.