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Noting that Pernod Ricard India’s (PRI) petition against the refusal order of its L-1 license application was “not maintainable”, the Delhi High Court on Tuesday allowed the company to approach the appeal authority under the Excise Act against the refusal.
PRI approached the Supreme Court earlier this year and the court on March 29 asked the Delhi government tax department to take a decision on the company’s L-1 license application. Subsequently, on 13 April, the Delhi Government’s Excise, Entertainment and Luxury Tax Commissioner’s Office (licensing authority) rejected PRI’s application and subsequently moved the HC again.
L-1 License Application is an application for the “Wholesale of Indian Liquor Liquor License” to be granted by the Tax Department.
One panel of Judge Prathiba Singh noted in her order that the order issued by the Office of the Excise Commissioner and signed by the Deputy Commissioner (Excise) is appealable under the Excise Act 2009. The court also said that the order is under appeal itself saying PRI is free to file an appeal.
“A petitioner can request a hearing before an appellate authority that can enter issues of fact and law… Therefore, the question of whether or not a petitioner deserves to be granted an L-1 license under the provisions of the Excise Act of 2009, and the High Commissioner said, The rules contained therein are open to its determination by the appellate authority.
“Accordingly, this Court finds that the present order cannot be maintained in view of the express statutory provision allowing the petitioner to appeal to the Appellate Body against the contested order of 13 April 2023, under Section 72 of the Excise Act, 2009,” said the High Commissioner.
It directed that the PRI was allowed to approach the appellate authority under the Excise Act 2009 by filing an appeal within two weeks. It said that if such an appeal was made it would not be dismissed on the grounds of delay. She added that if the PRI seeks an oral hearing, appellate power is granted and the order must be passed within one month of the hearing.
The Supreme Court also made it clear that because the petition was dismissed on the grounds of “unmaintainability”, it did not enter into the merits of the parties’ claims. It added that “the petitioner’s remedies in accordance with the law and to raise all the reasons available to him are not prohibited.”
The Supreme Court also noted that the licensing authority had considered certain documents, including the CBI FIR and the charge sheet in the excise case, which revealed a “stark situation”.
“The allegations contained therein against the petitioner and his employees are serious and cannot be expressly dismissed because these allegations relate to the petitioner’s liquor business and are therefore directly related to the excise license… It is recognized that neither the petitioner nor any of his employees has been convicted of any offense punishable pursuant to this Act or other relevant laws … While a petitioner could argue that he could not be blamed for any unauthorized conduct by his employees, no such argument has been brought before this Court,”
“In the case of a legal entity such as the petitioner, whose employees were not alleged to have acted in their personal capacity and continued to work for the petitioner, the licensing authority could not have ignored the allegations made. Furthermore, the allegations also reveal that the employees put themselves forward to work for Pernod Ricard The HC noted that the allegations go back to the roots of good corporate governance like the petitioner.
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