Rajasthan High Court Directs Timely Refunds for Extended Liquor License Security Deposits

Court Mandates Resolution of Refund Claims within 30 Days, Ensures Interest on Delayed Payments

In a significant ruling, the Rajasthan High Court, Jaipur Bench, addressed the grievances of liquor licensees regarding the non-refund of security deposits and advanced annual guarantee amounts following an extended license period imposed due to the Model Code of Conduct during elections. The case, led by Atar Singh and others against the State of Rajasthan, highlighted administrative inaction resulting in the indefinite retention of lawful dues.

Presided over by Justice Sameer Jain, the court examined multiple writ petitions challenging the extension of liquor shop licenses and the arbitrary retention of security deposits despite successful completion of the extended license period from April 1, 2024, to June 30, 2024. The court found that the Excise Commissioner’s circular dated August 28, 2024, which mandated arbitrary calculations of shortfall, was beyond statutory authority and misinterpreted existing policies.

The court ordered the Excise Department to adjudicate refund claims within 30 days of receiving representations, emphasizing the need for a speaking order that considers individual circumstances. Failure to do so would result in the automatic release of funds, with interest at 12% per annum for delays beyond the stipulated period. The court's decision highlights the importance of fairness and non-arbitrariness in administrative actions.

Bottom Line:

Excise Policy - Refund of security deposits and advanced annual guarantee amounts - Administrative inaction leading to indefinite retention of lawful dues cannot be countenanced.

Statutory provision(s): Article 14, Article 19, Article 21, Article 299 of the Constitution of India, Rajasthan Excise Act, 1950

Atar Singh v. State of Rajasthan, (Rajasthan)(Jaipur Bench) : Law Finder Doc Id # 2794926