M/S. Bhagavathi Traders vs. The State Of Telangana

Facts

M/s. Bhagavathi Traders, a proprietorship dealing in jaggery, filed a writ petition challenging the continuous interference by respondents (State of Telangana, Enforcement of Prohibition and Excise, and Station House Officer) in its business activities. The petitioner claimed to operate lawfully under a valid license and GST registration, with all transactions disclosed in monthly returns. The respondents, however, allegedly threatened to close the business or open a rowdy sheet against the proprietor. The petitioner argued that the sale of jaggery, including black jaggery, is not prohibited by law and that authorities can only search and seize if there's a contravention of regulations, which the petitioner claims is not the case. The respondents contended that the petitioner was storing, transporting, and selling black jaggery without disclosing purchaser details and not producing monthly statements, thus violating license conditions and Excise Rules.

Held

The Court held that the manufacture and sale of black jaggery, or jaggery of any kind, is not prohibited under any law in Telangana. The Government itself had previously considered black jaggery as an agricultural produce or its bio-product. The Court found that once a person conducts a permitted business, the State's decision to eradicate illicit liquor manufacture does not grant respondents the power to interfere with the business without due process. No material was placed before the Court to show that the petitioner failed to furnish requested details or was involved in the manufacture of illicit liquor. The Court reasoned that without prescribed rules or guidelines, the State cannot assume that the sale of black jaggery is solely for illicit liquor production. The existence of trade licenses and VAT/GST registrations indicates the legality of such business. The Court concluded that the respondents' actions in interfering with the petitioner's business contravened Articles 14, 19(1)(g), and 21 of the Constitution. The Writ Petition was allowed, declaring the respondents' interference illegal and arbitrary, with a direction not to interfere with the petitioner's business except in accordance with law or until the sale of jaggery is otherwise prohibited.

Key Issues

1. Whether the respondents' continuous interference with the petitioner's lawful business activities, including the sale of black jaggery, is illegal, arbitrary, and violative of Articles 14, 19, and 21 of the Constitution of India, particularly when the sale of jaggery is not prohibited by law and the petitioner possesses a valid license and GST registration. Petitioner's Arguments: The petitioner argued that its business of buying and selling jaggery is lawful, permitted by a valid license and GST registration, and all transactions are disclosed in returns. The interference by respondents is arbitrary, illegal, and violates fundamental rights. The GUR (Regulation of Use) Order, 1968, allows search and seizure only upon reasonable belief of contravention, which is absent here. The respondents' actions are baseless and based on a pretext of the petitioner selling black jaggery to ID liquor manufacturers, which is not a prohibited trade. Respondents' Arguments: The respondents contended that the petitioner, under the guise of a trade license, was storing, transporting, and selling black jaggery without disclosing purchaser details and failing to produce monthly statements and waybills, thereby violating license conditions and Excise Rules.