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Excise Duty

Patna HC reduces Excise Penalty from 90% to 10% as Disproportionate to Insured Value

Case Law Details

TaxGuru Citation
2026 taxguru.in 338
Case Name
Alok Pandey Vs State of Bihar (Patna High Court)
Date of Judgement/Order
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Alok Pandey Vs State of Bihar (Patna High Court)

The Patna High Court considered a writ petition challenging an order passed by the Sub-Divisional Officer, Gopalganj Sadar, in an excise confiscation proceeding, whereby a penalty of ₹1,05,000 was imposed on a seized motorcycle. The vehicle had been intercepted in connection with an excise case in which 18 litres of liquor were allegedly recovered, leading to registration of an FIR under Section 30(a) of the Bihar Prohibition and Excise (Amendment) Act, 2018. During confiscation proceedings, the competent authority ordered release of the vehicle but imposed a penalty amounting to nearly 90% of its insured value of ₹1,25,123. The petitioner contended that such a penalty was excessive, particularly since the vehicle had not been repeatedly used for similar offences and the owner had no criminal antecedents. Reference was made to an earlier decision of the same court where a vehicle carrying a much larger quantity of liquor was released on payment of 30% of the insured value. During the hearing, the State did not seriously dispute that the penalty imposed was on the higher side. Considering the limited quantity of liquor involved and the applicable statutory framework, the Court held that payment of 10% of the insured value, being the minimum penalty prescribed under Rule 12A of the Bihar Prohibition and Excise Rules, 2021, would be reasonable. Accordingly, the impugned order was set aside, and directions were issued for release of the vehicle on payment of 10% of its insured value. The writ petition was allowed.

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Author Info

CA Sandeep Kanoi
Qualification: CA in Job / Business
Company: Taxguru Consultancy
Location: Mumbai, Maharashtra
Articles Published: 19,776

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