M J Antony: Liquor licence not a legal right

A high court cannot direct the state to part with its exclusive privilege in the matter of granting licence for establishing distilleries under the Foreign Liquor (Compounding, Blending and Bottling) Rules, 1975 and the Abkari Act. The Supreme Court stated so last week while allowing the appeal of the Kerala government in the case, State of Kerala vs Kandath Distilleries. It overturned the judgment of the Kerala high court on this question. In this case, the government received a large number of applications from liquor manufacturers for setting up units in different districts of the state. However, Kandath was not granted licence as the government maintained that its application was defective. The distillery moved the high court which stated that the government had ingenuously made a classification to weed out the firm and ordered it to grant licence. The government appealed to the Supreme Court and it set aside the high court judgment. It said that no one has a right to get the licence and it is a grant from the government.

Tax payment no proof of title
The Supreme Court last week ruled that payment of municipal or agricultural tax on a property or even a revenue record would not confer ownership of the property on the claimant. There is no presumption of ownership even if a bank had granted a loan hypothecating the property. The court stated so while setting aside the judgment of the Andhra Pradesh high court in the appeal case, State of AP vs Star Bone Mill & Fertiliser Co. The City Improvement Board, Hyderabad, had given the disputed land to the Forest Department. It gave the land on lease to one firm with certain conditions. However, the lessee raised some structures and then sold it to another firm. The government invoked the Land Encroachment Act to evict the new occupant. It was challenged in the civil court and the high court, both maintaining that the occupant had a better title to the land than the government. In the appeal of the government, the Supreme Court rejected the argument of the buyer-firm that the previous owner was paying taxes and the entries in the revenue records showed it was the owner. No one can claim a title better than he himself possesses, the judgment said and emphasised that the government owned the land since 1920.

Excessive collection of toll

The Supreme Court last week dismissed the appeal of AS Motors Ltd against the judgment of the Madhya Pradesh high court in a dispute involving the National Highway Authority of India (NHAI). The firm was awarded a contract for collection of fee for the use of Morena-Gwalior section of the national highway. Later NHAI received complaints of charging excess fee from the users and it also noticed certain violations of the tender conditions. The contract was therefore terminated, leading to protracted litigation in the high court. It rejected the petition of the contractor. It appealed to the Supreme Court which said: It had breached the contractual stipulations, harassed innocent citizens to cough up more than what they were in law required to pay and thus undeservedly enriched itself before it turned to the court to claim relief in the extraordinary jurisdiction of the high court.

Closed trial not to be reopened
Courts should constantly endeavour to follow the time schedule set in the Civil Procedure Code. If it is not followed, the purpose of the code would be defeated, the Supreme Court observed last week, while setting aside the judgment of the Delhi high court in the appeal case, Bagai Constructions vs Gupta Building Material Store. The first was an interior decoration firm and the latter supplier of building materials. They had certain disputes and the arguments were concluded in the civil court. Later, the Gupta firm wanted to produce more documents and recall a witness. It was allowed by the high court. Holding the high court wrong, the Supreme Court stated that applications for adjournments, reopening and recalling could as far as possible avoided and only in compelling and acceptable reasons those applications are to be considered. After the arguments are concluded, no party can be allowed to improve his case with more evidence.

SC exemption cancelled
The Supreme Court has quashed the judgment of the Punjab and Haryana high court and upheld the cancellation of the sales tax exemption granted to certain industries for violation of the terms. In one appeal case, State of Haryana vs Polar Industries, the company manufacturing electrical goods was granted exemption for five years. But during this period, it was found that the industry had availed tax exemption, but made sales outside Haryana by way of transfer of goods manufactured by it. This was a violation of the rules. The exemption was therefore withdrawn. The firm moved the high court which stated that the government action was wrong as it was imposing tax on the inter-state sales transaction or branch transfers which was impermissible in view of the specific bar under the Constitution and the Central Sales Tax Act.