Jai Gayathri Traders And General Merchants vs. The Prohibition And Excise Inspector

Held

The Court held that the Prohibition and Excise authorities had sufficient material to justify their actions. The Court referred to a previous decision concerning black jaggery, stating that for an offence under Section 34(e) of the A.P. Excise Act, it is not necessary for a person to be caught in the act of manufacturing intoxicants. It is sufficient if excise officials have reason to believe that an offence is likely to be committed, empowering them to search and seize under Sections 53 to 55 of the Act. The Court found that the analysis report indicated the seized jaggery could be used as raw material for illicit liquor manufacture, making the ratio of the cited case applicable. The Court noted that the petitioners failed to produce material showing compliance with Rule 5 of the GUR (Regulation of Use) Order, 1968, and did not dispute the issuance of notices under that rule. The Court also considered the previous case registered against a family member of the petitioner and the failure of the petitioner to produce bills and invoices for the seized commodities on the date of the search. Therefore, the Court concluded that the seizure was justified and the case registration was appropriate. Regarding the release of seized commodities, the Court directed the petitioners to approach the Deputy Commissioner of Prohibition and Excise, who was ordered to pass an order on merits expeditiously, citing the decision in Md. Akbar v. State of Telangana.

Facts

The petitioners, Jai Gayathri Traders and General Merchants, a joint family firm dealing in essential commodities including white jaggery and alum, filed a writ petition challenging proceedings initiated by the Prohibition and Excise authorities. The authorities seized 16,146 KGs of white jaggery and 4,900 KGs of alum from the petitioners' premises and arrested the second petitioner. A case was registered under Section 7-A r/w Section 8(e) of the A.P. Prohibition Act, 1995, Section 34(e) of the A.P. Excise Act, 1968, and clause 3(b) and 4(i) (iii) of the GUR (Regulation of Excise) Order, 1968. This action followed a previous writ petition where the Court had directed authorities not to interfere with the petitioners' lawful business without material and to issue notice before taking action. The petitioners contended that their business is lawful, supported by valid bills and VAT registration, and that the raids are based on mere suspicion that jaggery and alum are used for manufacturing illegal liquor. The respondents argued that the seizure was based on material, including previous cases against a family member, failure to provide purchase/sale details of jaggery and alum, and a chemical analysis report indicating the jaggery could be used for illicit liquor manufacture.

Key Issues

1. Whether the Prohibition and Excise authorities had sufficient material or reason to believe that an offence under Section 34(e) of the A.P. Excise Act, 1968, was likely to be committed, justifying the search, seizure, and registration of a case against the petitioners, despite a previous High Court order directing notice before action? Petitioner's arguments: The petitioners contended that their business is lawful, supported by valid bills and VAT registration. They argued that the excise authorities were harassing them without reliable additional material showing their intent to sell jaggery and alum for illicit liquor manufacture. They asserted that the previous High Court order directing notice before action was violated. They also claimed that the registration of a case under Sections 332 and 352 IPC was a ruse, as no obstruction occurred. Revenue/State's arguments: The respondents argued that the previous High Court order permitted search and seizure if there was material regarding unlawful activity. They contended that they had such material, including previous cases against a family member, the petitioners' failure to furnish details of jaggery purchases and sales as required under Rule 5 of the GUR (Regulation of Use) Order, 1968, and a chemical analysis report showing the jaggery could be used for illicit liquor manufacture. They also submitted that the petitioners failed to produce bills and invoices for the seized commodities on the date of the search.