Sambasiva Rao, C.J. - (1.) On 17th of September, 1974, some of these cases came up before Obul Reddi, C.J. and Ramachandra Raju, J. The respondents in the Writ Petitions, viz., the Government of Andhra Pradesh and the excise authorities relied on the Division Bench judgment reported in Commissioner of Excise v. P. Bhogeswara Rao. The petitioners, however, canvassed the correctness of that decision. Consequently, the learned Judges directed these matters to be posted before a Full Bench.
(2.) These cases relate to denatured spirit. We may treat Writ Petition No. 973 of 1974 as a typical case The relief sought in it is to issue a writ of mandamus directing the respondents to act according to law without reference to Board Circular Cr. No. 36759 Ex./73/B.3 dated 11th January, 1974, by suitably amending D.S. VII, IX and XI licences incorporating the normal annual quantity possessed by the petitioner in the previous years and to direct them for granting necessary transport and import permits for the said normal annual quantity enabling the petitioner to obtain supply from any distillery of his choice either in the State or outside the State.
(3.) The allegations made in the writ petition seeking the above relief are as follows :- The petitioner is a dealer in denatured spirit under D.S. VII, IX and XI licences granted to him by the Excise Superintendent, Nellore, and renewed from time to time for many years. The quantity which may be possessed by the licensee during a particular year is mentioned in the licence. D.S. VII, IX and XI licences were given to him for 67,183, 60,000 and 45,460 litres respectively. The petitioner was getting the licences renewed every year for the same quantity. In 1973, transport permits required to lift the quantities of the spirit were not issued to the petitioner, aggrieved by which he filed W.P. Nos. 12 and 13 of 1973. This Court directed the granting of those permits and accordingly the petitioner lifted the entire quantity during the year 1972-73. As per the A.P. Denatured Spirit and Spirituous Preparations Rules, 1971, which govern issue of the licences the respondents arc concerned only with the grant of licence and not with the total quantity of the spirit that is desired to be possessed by the licensee. The authorities have no discretion but to grant a licence for the quantity to which the applicant desires to possess during a particular licence year. Further condition No. 5' in D.S. VII licence provides that a licensee shall obtain his supplies of the spirit from (ay distillery in a State, (b) the holder of a similar licence and (c) from outside State by import. Condition No. 3 in D.S XI licence also is practically to the same effect. An import permit has to be obtained according to the manner prescribed in rule 7. The Excise Collector has to issue such permits. The provisions of the Excise Act and the rules show that the respondents have no power to fix the quota; nor are they under any obligation to supply the denatured spirit to the licensee as stated in the licences. Their only power is to grant licences and permits and that is with the sole object of regulating the business of the licensee and to have a check or supervision to see that the provisions of the Act and the rules are not violated. Likewise, obtaining of transport and import permits is required with a view to supervision and check the business activities of the licensee. The licensee alone has to make arrangements ior obtaining the supply of the spirit from the sources mentioned in the conditions of the licence. It is the tash and responsibility of the licensee to obtain supply of the spirit up to the quantity mentioned in the licences from any source of his choice mentioned in the conditions of the licence. The respondents have no power to impose any cuts in the quantities mentioned in the licences or while renewing them for the succeeding years. However, in Commissioner of Excise v. B.Bhogeswara Rao, a Division Bench of this Court upheld the contention of the respondents that from year to year the authority could determine the quotas while granting licences or renewing them keeping in view the total production of the commodities in a given year and the competitive requirement of the society. It was held in the same decision that the cuts imposed by the respondents were not unreasonable and the priority fixed could not be said to be based on no principle and that it is arbitrary. The stand taken by the respondents in those matters before the Division Bench was that the production of alcohol in the State was not sufficient to meet the requirements of the licensees and for that reason they imposed cuts on the basis of priorities in G.O. Rt. No. 616 dated 12th April, 1972 and G.O. Rt. No. 115 dated 23rd February, 1972. At the same time they stated that they had no objection to issue import permits to any licensee who applied for it. In substance, the stand taken by the respondents in the cases before the Division Bench was that having regard to the exigencies of the stock position in the State, they would impose cuts on priority basis, but allow the licensee to obtain supply from outside the State if they so chose. The petitioners were not parties to that judgment and in any case the decision is not correct and requires reconsideration. It is the duty of the respondents to mention the normal annual quantity desired to be possessed by the petitioner under a licence and unless the quantity is mentioned it is impossible for the Collector of Excise to issue import permits. For the Sugar year 1973-74, the Government of Andhra Pradesh issued instructions to impose a cut of 80 per cent on priority basis on supply of denatured spirit to the licensees from the stock manufactured in the distilleries in this State. Even according to this, the respondents should have renewed the licence of the petitioner mentioning the quantity he seeks to possess and issued transport permits only in respect of 20 per cent of the quantity mentioned therein. There is another complication created by the Commissioner of Excise by issuing instuctions dated 11th January, 1974, to the Superintendents to renew D.S. licences for 100 bulk litres per month under D.S. VII and IX licences and 200 bulk litres per month under D.S. XI licence. This fixation of flat rate is unreasonable, arbitrary and opposed even to the instructions issued by the Government. If all these instructions and cuts imposed on their basis are implemented, no licensee can carry on his business. With the consequence, the Excise Superintendent, who is the subordinate to the Commissioner of Excise, renewed the licence of the petitioner for 1973-74 fixing the quantities at 100, 100 and 200 bulk litres per month, respectively, for D.S. VII, IX and XI licences. With this quantity the petitioner was unable to carry on any business as he was prevented from obtaining supplies. That is because the petitioner, who has been obtaining a supply of 1,72,643 bulk litres per year is now asked to carry on his business with 4,800 bulk litres only. He is ready and willing to obtain supplies of the spirit from outside the State. Because of the attitude taken by the respondents no import permits have been issued. There are enough stocks in the distilleries in the State and the cut of 80 per cent imposed by the Government is unreasonable and has no rational connection with the stock availability situation. Moreover, when a cut of such severe dimension is imposed on D.S. licensees, no such restrictions have been placed on the arrack contractors. Arrack, denatured spirit and rectified spirit arc all alcoholic liquids, though they are manufactured through different process. All of them are liquors which are intoxicants. The petitioner feels that all these cuts are imposed on D.S. licensees for the purpose of favouring the arrack contractors. There is no provision under the A.P. Denatured Spirit and Spirituous Preparations Rules, 1971, empowering the Excise Commissioner to impose any cut in the quantities mentioned in the D.S. licences. It is on the basis of these allegations that the reliefs mentioned above are sought by the petitioner.;