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Delhi High Court adjourns liquor traders’ plea challenging new excise policy

The direction by the Bench of Chief Justice D.N. Patel and Justice Jyoti Singh came in light of Deputy Chief Minister Manish Sisodia and John Doe (unknown respondent) being impleaded in the array of parties by Delhi Liquor Traders Association

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The Delhi High Court adjourned to August 4, the hearing on a plea filed by liquor traders, challenging the New Excise Policy for 2021-22 announced by the Delhi Government in June this year, while refusing to stay the opening of tender by the Delhi Government. 

The direction by the Bench of Chief Justice D.N. Patel and Justice Jyoti Singh came in light of Deputy Chief Minister Manish Sisodia and John Doe (unknown respondent) being impleaded in the array of parties by the petitioners. 

The Bench remarked, “We are not going to issue even a notice, if you keep them as they are.” In this backdrop, the Bench directed the petitioners to file a revised memo of parties after deleting  Respondent 2 and 6 (Deputy CM and John Doe) from the array of parties.

The Delhi Liquor Traders Association was represented by Senior Counsel Dr Arun Mohan and other two petitioners by Senior Counsel Parag Tripathi. On the other hand, Delhi Government was represented by Senior Counsels Dr Abhishek Manu Singhvi and Rahul Mehra. 

The petition was filed by Advocates Arvind Bhatt and Siddharth Sharma on behalf of the Delhi Liquor Traders Association, an unregistered body of 143 liquor traders in Delhi; Kashish Electricity Services Pvt Ltd, a private limited company having a retail liquor vend in Delhi; and one Harish Chauhan, a retail liquor vendor.

The petitioners said they hold retail/wholesale licenses issued by the Excise Commissioner, in accordance with the Delhi Excise Act, 2009.

The plea contended that the Delhi Government constituted a committee of Group of Ministers (GoM) under the Chairmanship of the Deputy Chief Minister Manish Sisodia, and comprising ministers Kailash Gehlot and Satyendra Jain, to finalize a new excise policy for Delhi for the year 2021-22. The GoM made an announcement on March 22, 2021 on formulation of new excise policy. Pursuant to the report by the GoM, the new Excise Policy was introduced by the Delhi Government in June this year; however, the policy was released in public domain on July 5, 2021, after the direction of the Court.

On June 28, the Delhi Government floated a tender, inviting e-bids for grant of 32 zonal retail licenses for the year 2021-22 through e-tendering process in the form of L-7Z/L-7V for sale of Indian and Foreign Liquor in the region of NCT of Delhi, on the basis of the newly approved policy. The last date for submission of bids was July 20, 2021. The tender regime, however, fails to publish criteria for the fixation of maximum retail price.  

The plea averred that the policy facilitates monopolistic cartel, while debarring the non-super-rich from entering into the competition. It enables the licensee to recover taxes from the public and non-payment of the same to the Government. “Taxing is an essential legislative function. It cannot be delegated to its subordinate (executive). Excise Commissioner not empowered under the Act to impose fresh tax,” stated the plea.

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The plea sought quashing of the New Excise Policy as being ultra vires of Article 14 of the Constitution, and a direction to the Delhi Government to frame an Excise Policy in compliance with law so as to prevent monopoly and cartelization. Till such policy is formulated, the plea seeks direction for continuation of existing L-7/L-1 licenses issued by the Excise Commissioner. In addition, the plea also seeks quashing of tender dated June 28’2021, including all consequential action taken in furtherance of the said tender. 

Furthermore, the plea is seeking a declaration that the sovereign right to collect taxes cannot be auctioned by a State by way of the new excise policy. 

The Single-Judge Bench of Justice Rekha Palli, on July 5, 2021, discarded the plea by Delhi Liquor Traders Association seeking direction to make the New Excise Policy for the year 2021-22 available in public domain, after the Government undertook to upload the said policy on the website by the end of that day.

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