Courts Update Delhi HC issues notice on plea challenging New Excise...

Delhi HC issues notice on plea challenging New Excise Policy 2021-22

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New Delhi Aug 4(ILNS): The Delhi High Court today issued a notice in a plea filed by liquor traders and vendors challenging the New Excise Policy for the year 2021-22 announced by the Delhi Government in June this year.

The Division Bench comprising of Chief Justice D.N. Patel and Justice Jyoti Singh sought response from the Delhi Government, the Excise Commissioner, the Lieutenant Governor of Delhi as well as the Centre on the issue, and slated the matter for hearing on August 9, 2021. 

The development came after the senior counsel Dr. Arun Mohan, representing Delhi Liquor Traders Association, informed the Bench that an amended memo of parties, dropping Deputy Chief Minister Manish Sisodia and John Doe (unknown respondent) from the array of parties, has been filed in pursuance of the previous order.

The other two petitioners in the matter namely, Kashish Electricity Services Pvt. Ltd. and Mr. Harish Chauhan were represented by senior counsel Mr. Parag Tripathi. On the other hand, the Delhi Government was represented by senior counsels Dr. Abhishek Singhvi and Mr. Rahul Mehra.

The Bench, on the last date of hearing on July 22, 2021, refused to issue a notice in the matter till the time an amended memo of parties, after deleting Respondents No. 2 and 6 (i.e. Deputy CM and John Doe respectively) from the array of parties, is filed.

Filed through Advocates Arvind Bhatt and Siddharth Sharma by the Delhi Liquor Traders Association, an unregistered body of 143 liquor traders in Delhi; Kashish Electricity Services Pvt. Ltd., a private limited company having a retail liquor vend in Delhi; and one Harish Chauhan, a retail liquor vendor. The petitioners hold retail/wholesale licenses issued by the Excise Commissioner in accordance with the Delhi Excise Act, 2009. 

The plea contends that the Delhi Government constituted a committee of Group of Ministers (GoM) under the Chairmanship of the Deputy Chief Minister Manish Sisodia, and comprising ministers Kailash Gehlot and Satyendra Jain, to finalize a new excise policy for Delhi for the year 2021-22. The GoM made an announcement on March 22, 2021, on the formulation of a new excise policy. Pursuant to the report by the GoM, the new Excise Policy was introduced by the Delhi Government in June this year; however, the policy was released in the public domain on July 5, 2021, after the direction of the Court.

On June 28, 2021, the Delhi Government floated a tender, inviting e-bids for grant of 32 zonal retail licenses for the year 2021-22 through e-tendering process in the form of L-7Z/L-7V for sale of Indian and Foreign Liquor in the region of NCT of Delhi, on the basis of the newly approved policy. The last date for submission of bids was July 20, 2021. The tender regime, however, fails to publish criteria for fixation of the maximum retail price.  

The plea avers that the impugned policy facilitates monopolistic cartel while debarring the non-super-rich from entering into the competition. It enables the licensee to recover taxes from the public and non-payment of the same to the Government. “Taxing is an essential legislative function. It cannot be delegated to its subordinate (executive). Excise Commissioner not empowered under the Act to impose a fresh tax,” stated in the plea.


The plea seeks quashing of the New Excise Policy as being ultra vires of Article 14 of the Constitution, and a direction to the Delhi Government to frame an Excise Policy in compliance with the law so as to prevent monopoly and cartelization. Till such policy is formulated, the plea seeks direction for the continuation of existing L-7/L-1 licenses issued by the Excise Commissioner. In addition, the plea also seeks to quash of tender dated June 28, 2021, including all consequential action taken in furtherance of the said tender.

Furthermore, the plea is seeking a declaration that the sovereign right to collect taxes cannot be auctioned by a State by way of the new excise policy.

The Bench of Justice Rekha Palli of the Delhi High Court, on July 5, 2021, discarded the plea by Delhi Liquor Traders Association seeking direction to make the New Excise Policy for the year 2021-22 available in the public domain after the Government undertook to upload the said policy on the website by the end of that day./ILNS/BG/GM/SV/SNG

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