Emergent Powers U/S 41 Of Assam Excise Act Do Not Include Closing Of Premises Not Engaged In Liquor Manufacturing Possession Or Sale: Gauhati HC

Justice Devashish Baruah while hearing a plea challenging the action of excise authorities in sealing the factory of the petitioner involved in manufacturing of PET bottles, caps etc., held that although Excise Act gives emergency powers to police officers and excise officers to dispense with the need of issuance of warrant pertaining to arrest or searching the premises, and empowers such officers to enter a place where they believe an offence under S. 53, S.54, S.55, S.56, S.57 or S.61 has been committed, and confiscate any material evidence or documentary evidence, however, the power of closure of premises is not encompassed within that Section.

The facts of the case are as follows: The Excise Inspector received a tip that petitioner no. 2's factory was (M/s Shiva Beverages Private Limited) was involved in liquor manufacturing illegally and a sudden raid was conducted by the excise inspector under the direct supervision of Superintendent Excise, during which various objectionable materials and liquor were found and the same was seized and a seizure memo was made.

Simultaneously, another raid was conducted at petitioner's company (M/s Shiva bottles Pvt. Ltd. & Anr.), during which objectionable material and IMFL of various brands and sizes, fake holograms, labels, bottle caps were then recovered and seized and the person in charge of such seized exhibits was arrested.

The former company was owned by the petitioner's father and in the latter company as well, the father was listed as one of the directors. A show-cause notice was then issued to the licensee of the Beverages Company and an extension of 15 days was sought to submit an effective reply.

In the meantime, both petitioner's father and petitioner's factories were sealed. Thus, the petitioner filed this writ petition against the action of the excise authority to close his factory premises.

The question for consideration before the High Court was whether the excise department or any authority under Excise Act, 2018 and the rules therein has the authority to seal and close petitioner's premises that were not even engaged in manufacture, possession and sale of Liquor?

The High Court referred to S.37 of Assam Excise Act, 2000 and stated that the powers encompassed therein only extend to making inspections in a place where licensed manufacturers are manufacturing or storing intoxicants and places where intoxicants are being sold.

The High Court further noted that while S.38 related to the powers of officials pertaining to carrying out arrest, seizure and search without a warrant in any public place, S.39 stipulates the necessity of issuance of a warrant if a Collector or Judicial Magistrate is of the opinion that an offence has been committed under S.53, 54, 55, 56, 57 or 61.

Thus, the court specified the distinction between S.37 and S.39 and clarified that while S.37 deals with inspection of license premises/persons, S.39 deals with search and arrest of any person involved in offences mentioned in S.53-S.57 or S.61, after the issuance of a warrant by a Collector or Magistrate regarding the same. This warrant shall only be issued once the judicial magistrate or collector have recorded their reasons in writing for believing that an offence under the aforementioned sections has been committed.

Further, moving to S.41 of the Act which does away with the requirement of issuing a warrant and empowers police and excise officers to conduct search, seizure and arrest in emergent cases, the court iterated that nowhere in the provisions it has been laid out or even implied that this emergent power is inclusive of the power to seal/close a premise regardless of whether it is a license premise or non-licensed one.

And even this power can also only be exercised if the Police officer or excise officer has reasons to believe and "having recorded the grounds of his belief that an offence under Sections 53,54,55,56,57,61 has been or is being or is likely to be committed in any place during day or night"

Hence, the Court stated that "a perusal of the said provisions do not show that there is the power to seal/close any premises be it licensed or any other place" and allowed the writ petition without any order to costs.

Case: M/s Shiva bottles Pvt. Ltd. And Anr. v. State of Assam & four others

Citation: 2022 LiveLaw (Gau) 5

Coram: Hon'ble Mr. Justice Devashish Baruah

Counsel for Petitioners: Mr. K.N. Choudhary with Mr. R.M. Deka

Counsel for Respondents: Mr. P.N. Goswami