Seized Foreign Liquor Emptied Into Nearest Nallah? Bombay HC Startled At Excise Procedure Of Destroying Contraband

Startled at a statement made by the Maharashtra State Excise Department that it will destroy seized foreign liquor by emptying it "into nearest available nallah(stream)," the Bombay High Court directed the officials to act prudently, cautiously and in accordance with law, while doing so.

"We expect the Excise Department to act prudently, cautiously and in accordance with law. If this means that the Excise Department must get clearance from a Pollution Control Board then so be it. In its anxiety to destroy this liquor, the Excise Department must not endanger the larger public health," directed a division bench of Justices Gautam Patel and Madhav Jamdar earlier this month.

The court was hearing two petitions – one by Vikramjeetsingh Dhall, proprietor of Dhall Foods and Beverages and the other by Pratik Popat. While Dhall's foreign liquor was seized by the State Excise authorities due to alleged irregularities and the premises in which those were stored were also sealed, Popat owned one of the premises and was seeking unsealing of his premises.

During the course of the hearing, Dhall told the court that he was not interested in the liquor anymore as the seizure was more than three years old and the stick mostly consisted of beer and wine with limited shelf life.

Expressing concern with the large amount of liquor, the court sought to know from the department about the procedure for destroying it. The court was shown a notification dated from the year 1953 which showed that part of the disposal process was by auction. The court, however, did not agree to that process and noted that the regulations only said that the foreign liquor had to be destroyed.

"On taking instructions from an officer who is present in Court, Mr Patki tells us that the foreign liquor will be emptied into nearest available nallah," the order then notes, after which the court asked the department to ensure that they follow the due process.

On the other aspect of the case, observing that the Maharashtra State Excise authorities had no right to seal any intoxicant or other article in respect of its import or export across the customs frontiers, the bench also directed the concerned authorities to unseal two premises sealed by them.

The court also granted Dhall and Popat the liberty to the license-holder and the owner of the premises to unseal them, in case the excise authorities did not do so.

Dhall held a Foreign Liquor-I license in respect of foreign liquor trade. He also held an import license to clear foreign liquor from Indian Customs. During one of the transactions in 2018, the State Excise department alleged that some of the liquor being brought by Dhall from New Delhi to Mumbai was not "duty paid imported foreign liquor."

Following this, a flying squad of the department inspected both the premises held by Dhall and allegedly found some violations and breaches, following which they sealed both the premises. One of these premises, at a prime location in South Mumbai called Worli, was owned by Popat and was given by him on leave-and-license basis to Dhall.

Popat's counsel Vivek Kantawala questioned the power of State Excise authorities to act in this manner at all. He submitted that under no circumstances could the licensed premises have been sealed to Popat's disadvantage as he wasn't doing any business in foreign liquor at all and he was not the one who had stored any liquor in the Worli premises.

He submitted that the department could have removed Dhall's goods and taken them to another location. "A default on Dhall's part, even assuming there was one, could not have consequences that were visited on Popat…..There is no case whatsoever against Popat and yet his premises have been virtually kept out of his reach since 2018," Kantawala argued.

The court observed that section 147 of the Maharashtra Prohibition Act 1949, specifically barred the application of that Act to exports and imports across customs frontiers and directed that the premises be unsealed. The section reads – "For removal of doubts it is hereby declared that nothing in this Act shall be deemed to apply to any intoxicant or other article in respect of its import or export across the customs frontiers."

Case Title: Vikramjeetsingh Dhall Proprietor of Dhall Foods and Beverages vs The Collector of Mumbai (City) & Ors

Citation:2022 LiveLaw (Bom) 158

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