Case Law Details
Bhagwati Transformer Corp. Vs Government of NCT of Delhi (Delhi High Court)
1. By this order, I shall decide the above applications seeking interim relief, inasmuch as to stay the impugned order.
2. The common case of the petitioners in these petitions, as contended by their counsel, is a challenge to an order dated February 28, 2022, whereby the Commissioner (Excise) of the Department of Excise, Entertainment and Luxury Tax, Government of NCT of Delhi („Government of Delhi‟, hereinafter) has directed that the L7Z licensees shall not give concession, rebate or discount on the Maximum Retail Price („MRP’, for short) of liquor and to strictly abide by Rule 54(3) of the Delhi Excise Rules, 2010 („Rules of 2010′, hereinafter). It is the submission of Mr. Mukul Rohatgi, learned Senior Counsel that some time in the month of June 2021, the Delhi Government approved the new Excise Policy for the year 2021-22. This policy set out the framework for various aspects pertaining to liquor business for the year 2021-22. Consequent to the Excise Policy being approved, the Government of Delhi floated tenders on June 28, 2021 and August 13, 2021 for zonal licences for retail vends of Indian and foreign liquor. The petitioners are private players who participated in the tenders floated on June 28, 2021 and August 13, 2021 and have emerged as successful bidders for different zones within the NCT of Delhi.
3. According to him, the Excise Policy and the Tender expressly permit the grant of discount / rebate / concession by the retail licensees. Clause 4.1.9(viii) of the Excise Policy towards the tail end states that “The licensee is free to give concession, rebate or discount on the MRP”. He also referred to Clause 3.5.1 of the Tender, which also states that “The licensee is free to give concession, rebate or discount on the MRP”. He submits that the grant of discount is based on the principles of free market and fair competition in operation. According to Mr. Rohatgi, Rule 53(1) of the Rules of 2010 had prohibited licensees from granting concession, rebate, discount and gift of liquor. However, by way of Delhi Excise (Amendment) Rules, 2021, inter-alia, Rule 53(1) of the Rules of 2010 has been omitted. Therefore, it is clear that the law as well as policy and even the Tender permits discounts on MRP. It is his submission that the reliance placed in the impugned order by the respondent on Rule 54 of the Rules of 2010 is clearly erroneous as the same does not relate to discounts. In fact, Rule 54 is inapplicable to the present case, and in any event cannot be cited as a valid basis for the impugned order. Much before the licences were granted, in the pre-bid queries, the response of the Department of Excise with regard to clarification sought on the maximum limit of the discount permissible on the sale of liquor and also with regard to the question when the price of any liquor is fixed, whether the licensee shall be bound to sell such liquor at such price, the answer was “not related to Tender”. In other words, it is his submission that the licensees were within their rights to provide maximum discount on the sale of liquor and the price of the liquor could not have been regulated by the respondent. That apart, it is his submission that the rules of the game cannot be changed after the game has begun. Power to amend the Tender does not exist after the bids are finalized and licences are issued. In this regard, he has drawn my attention to Clause 15.2 of the Tender document.
4. He stated, by the impugned order, the respondent completely takes away the petitioners‟ right to make business decisions with regard to discount, concession and rebate, which they are empowered to take under the new Excise Policy and as per the Tender document. In fact, the power to grant discount is an essential part of the new Excise Policy. Hence, the impugned order to discontinue / withdraw an important clause of the Tender document and the Policy is in complete contravention of the Excise Policy. He also stated that the fundamental policy of doing business cannot be changed midway when huge licence fee was levied and is still being demanded.
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