Decided on December 02,1963

K.RAMULU Appellant


- (1.) This Writ Petition is a sequel to an akbari auction held on 26-8-1963 in respect of the privilege to sell sendhi in the cities of Hyderabad and Secunderabad for the year 1963-64. The petitioners are abkari contractors who have been doing business in partnership in Hyderabad and Secunderabad for over ten years, but they were prevented from taking part in the said auction on the ground that they were defaulters and large abkari arrears were due from them to the Government. The 1st respondent in this Writ Petition is the Deputy Commissioner of Excise, who was the auctioning authority; the 2nd respondent is the Commissioner of Excise (Member, Board of Revenue); the 3rd respondent is the Government of Andhra Pradesh; and respondents 4 to 30 were the successful bidders at that auction, in whose favour the bids were knocked down and leases have been granted.
(2.) The sum and substance of the case of the petitioners is that they had been prevented from bidding at that auction by the unjust, arbitrary and illegal action of the auctioning authority and in consequence their fundamental right to carry on trade or business, as guaranteed by Art. 19 (1) (g) of the Constitution, has been infringed. they further challenge the legality and constitutionality of Circular No. 24648/- Ex. 63-E4 dated 17-8-1963, issued by the Commissioner of Excise to the Deputy Excise Commissioner, Hyderabad Division, and of Rule 7 (i) (b) and (ii) of the Rules framed by the Government under the Hyderabad Abkari Act ( No. 1 of 1316 F).
(3.) It is common ground that at the auction held on 26-8-1963 the petitioners were not issued hall tickets, with the result that they were effectively prevented from entering the auction-hall and bidding at the auction. The stand taken by the Excise Department is that the petitioners who had taken sendhi shops on lease in previous years, had systematically defaulted in paying the abkari dues and their arrears had mounted to several lakhs ; and the only effective way of preventing the accumulation of further arrears, was to stop defaulters like the petitioners from bidding at abkari auctions. This was done in the interests of public revenue and in the bona fide exercise of the powers vested in the authorities by the Abkari Act and the Rules framed thereunder. It is the further case of the department that as the arrears of excise revenue in the Hyderabad District were of the staggering order of 48 lakhs of rupees by July, 1963, and they remained uncollected in spite of the best efforts of the departmental officials, the Deputy Commissioner of Excise, Hyderabad, sought specific instructions from the Commissioner of Excise as to what was to be done at this years auction and in reply thereto, the Commissioner sent the impugned Circular. The Circular reads thus : "Copy of the Boards Circular No. 24648/ Ex. 63-E4 dated 17-8-1963 addressed to the Deputy Excise Commissioner, Hyderabad Division : Sub : Auctions - Admitting Persons who are in arrears to attend sales - Certain orders requested - Ref : D. O. Letter from Deputy Commissioner Hyderabad, on Circular No. 9847/ 63/ E2, dated 14-8-1963. -------------------------------------------- REFERENCE : The attention of the Deputy Commissioner of Excise, Hyderabad, is invited to the reference cited and he is informed that it is not desirable to allow defaulters of recent years to bid. Others need not be excluded since it was not done in the past. Any person whose arrears relate to 1960-61 or later may be excluded from this years auction in Hyderabad District unless he pays off the arrears. This need not apply to other Districts. The Collectors may exercise their own discretion there. ..................................................... Assistant Secretary." It was in pursuance of the instructions contained in this Circular that the Deputy Commissioner had in the instant case refused to issue hall tickets to the petitioners. In the Annexure to the additional counter-affidavit filed by the Deputy Commissioner of Excise, the arrears recoverable from the three writ petitioners are shown. They amount to Rs. 4,88,331-70 nP., out of which the figure for the year 1961-62 is Rs. 1,56,816-26 nP.;

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