The court highlights procedural irregularities in inspection and subsequent license cancellation, directing fresh adjudication.
In a significant ruling, the Himachal Pradesh High Court, presided by Justice Jyotsna Rewal Dua, quashed the cancellation of licenses for M/s Tiloksons Brewery & Distillery due to procedural lapses in the inspection and adjudication processes. The court found that the inspection team, which conducted a surprise visit to the brewery's premises, was not constituted in compliance with the Himachal Pradesh Excise Act, 2011 and relevant notifications.
The petitioner, M/s Tiloksons Brewery & Distillery, challenged the orders for license cancellation, arguing that the inspection was carried out without the requisite presence of an Executive Magistrate and a Police Officer of the prescribed rank, as mandated by the notification dated April 26, 2025. The inspection uncovered alleged unauthorized manufacturing activities, leading to the cancellation of licenses by the Commissioner of State Taxes & Excise.
Justice Dua observed that while the absence of a properly constituted inspection team could vitiate the proceedings, the petitioner failed to demonstrate significant prejudice due to this procedural irregularity. However, the court was critical of the dual proceedings initiated by the Collector and the Commissioner of State Taxes & Excise, which led to the quashing of the cancellation order on grounds of bias and lack of independent adjudication.
The judgment emphasized that the Commissioner of State Taxes & Excise must conduct a fresh adjudication process, ensuring impartiality and adherence to the legal framework. The court directed that future inspections must strictly comply with statutory provisions to prevent procedural invalidation.
Bottom Line:
Himachal Pradesh Excise Act, 2011 - Inspection team composition - Mandatory compliance with statutory provisions and notifications governing the constitution of inspection teams under the Act - Breach of statutory procedure may vitiate the inspection process but prejudice must be shown by the aggrieved party - Procedural lapses do not automatically invalidate actions unless prejudice is demonstrated.
Statutory provision(s): Himachal Pradesh Excise Act, 2011 Sections 8, 10, 29, 68, and 69; Notification dated 26.04.2025; Bharatiya Nyaya Sanhita, 2023 Sections 318(4), 331(4), 305 & 61(2).
