B. Diwakar Babu vs. The State Of Ap

Held

The Court, considering the facts and circumstances, directed the 3rd respondent to consider the petitioner's reply dated June 9, 2021, to the show cause notice dated May 19, 2021, in its proper perspective and as per rules. The 3rd respondent was instructed to pass a reasoned order without reference to any delay and communicate it to the petitioner. Crucially, the Court ordered that no coercive steps for the recovery of the balance license amount would be taken by the 3rd respondent until such an order was passed. The Court did not explicitly decide on the legality of the show cause notice itself or the refund request but focused on ensuring a proper process for consideration of the petitioner's explanation. The issue of whether the temple was liable to refund the amount paid after cancelling the license was not definitively decided.

Facts

The petitioner participated in an auction for a license to sell water bottles and cool drinks in a temple premises for the period April 1, 2021, to March 31, 2022. He was the highest bidder at Rs. 1,50,000 per month plus 18% GST. On March 31, 2021, he paid Rs. 11,24,000, comprising Rs. 10,00,000 towards license fee and Rs. 1,24,000 towards GST for six months. The balance amount was to be paid after approval. The petitioner operated the license from April 1, 2021, to April 25, 2021. Due to the COVID-19 pandemic and reduced devotee inflow, he requested cancellation of the license and refund of the paid amount, deducting one month's license fee. His representation was pending when the 3rd respondent issued a show cause notice on May 19, 2021, demanding Rs. 10,00,000 and threatening license cancellation if no explanation was submitted. The petitioner received this notice on June 4, 2021, and submitted his explanation on June 9, 2021.

Key Issues

1. Whether the impugned show cause notice dated May 19, 2021, issued by the 3rd respondent is illegal, arbitrary, without jurisdiction, and violative of the principles of natural justice and constitutional provisions (Articles 14, 19(1)(g), and 21)? Petitioner's arguments: The petitioner argued that the sale of goods was dependent on devotee inflow, which had drastically reduced due to the pandemic. He contended that the show cause notice was issued without considering his pending representation for refund. Furthermore, he claimed the notice was received on June 4, 2021, making the seven-day period for explanation expired even before receipt, thus violating natural justice. He sought a refund of the deposited amount after deducting one month's license fee. Revenue/State's arguments: The learned standing counsel for the 3rd respondent argued that there was no illegality or irregularity in the show cause notice. He stated that the petitioner was required to submit his explanation within seven days of receipt, and his apprehension was unfounded. He assured that the petitioner's explanation would be considered as per rules, and appropriate orders would be passed.