Parveez Ahmad Baba vs. Union Territory Of J And K And Ors. (Health And Medical Education Department)

Held

The High Court held that the Writ Court erred in placing an embargo on the powers of the competent authority to grant a license. The Court noted that neither the appellant nor respondent no. 5 held a valid license during the pendency of the writ petition, as the appellant's FSSA license had expired in January 2018 and respondent no. 5's license expired in May 2021. The appellant's GST registration was cancelled on April 16, 2021, while respondent no. 5's registration was active. The Court found that the proper course was to leave the concerned authority free to decide who fulfilled the criteria for holding a license, without restricting its powers. The Court also noted that the appellant had an application pending before the Deputy Commissioner (Appeals), Sales Tax Department, seeking revocation of his GST cancellation order. Accordingly, the Court set aside paragraphs 27 and 28 of the impugned judgment, allowing the appellant and respondent no. 5 to approach the concerned authority for issuance/renewal of licenses. The authority was directed to decide these claims within one month, without being influenced by the observations of either court. The pending application before the Deputy Commissioner (Appeals) was also to be decided after hearing respondent no. 5. Until a license was granted, Samci Restaurant was not to be operated by either party. The ratio decidendi is that a High Court should not unduly restrain the statutory powers of licensing and registering authorities, especially when the underlying dispute requires resolution by the appropriate forum.

Facts

The appellant, Parveez Ahmad Baba, challenged a Goods and Services Tax (GST) registration cancellation, a Food Safety and Standard Act (FSSA) license issued to respondent no. 5 for Samci Restaurant, and a communication from the Food Safety Department. The appellant claimed to be the sole proprietor of the restaurant, operating under valid licenses. He discovered that an FSSA license had been issued to respondent no. 5, his brother, for the same premises. The Food Safety Department suggested inserting the appellant's name as in-charge of operations. Subsequently, the appellant's GST registration was cancelled, effective April 16, 2021. The appellant filed a writ petition seeking quashing of these actions and restoration of his licenses. The respondents contended that the license was issued to the premises, not a person, and that respondent no. 5 had proof of possession and paid taxes.

Key Issues

1. Whether the Writ Court erred in restraining the designated authority from granting or renewing a license under the Food Safety and Standard Act, 2006, when the premises to be licensed remained under dispute between the petitioner and respondent no. 5, and whether the Court was correct in directing the parties to settle their dispute amicably or through court intervention, or apply jointly for a license? (Section 12 of FSSA, 2006) 2. Whether the Writ Court erred in directing the registering authority under the GST Act to act on similar lines as the FSSA authority, effectively restraining the grant or renewal of GST registration until the dispute was settled? Petitioner's Arguments: The appellant argued that the FSSA license and GST registration were transferred to respondent no. 5 fraudulently. He sought quashing of the impugned license, the communication from the Food Safety Department, the GST cancellation order, and restoration of his licenses, along with a direction to restrain respondent no. 5 from interfering with his business operations. Revenue/State's Arguments: The respondents denied transferring any document to respondent no. 5, stating a fresh license was issued to the premises after verification. They also contended that the appellant himself had applied for cancellation of his GST registration, which was an online process requiring confidential information, thus ruling out fraud by a third party. They further argued that the dispute over the property and business concern was evident.