HP Excise Act | Suspension Of License For Illegal Liquor Possession Can Be Lifted After Penalty Is Paid: High Court

The Himachal Pradesh High Court has held that under Section 66(2) of the Excise Act, if a licence is cancelled or suspended for breach of licence conditions or non-payment of fees, the suspension can later be revoked after the penalty has been paid.

Division bench of Justice Vivek Singh Thakur and Justice Sushil Kukreja remarked that: “...in case of cancellation or suspension of licence under clauses (a), (b) or (c) of Section 29, such cancellation or suspension may be revoked or foregone after payment of penalty... Therefore, suspension... was compoundable... and the penalty imposed... is highly disproportionate.”

The petitioner company, Mars Bottlers Una Pvt. Ltd. filed a writ petition before the Himachal Pradesh High Court challenging the order passed by the Financial Commissioner (Excise), Himachal Pradesh, whereby the company's licences were suspended.

The inspection team of the Excise Department made a surprise visit to the petitioner's bottling plant, where the team allegedly found a truck parked inside the plant, loaded with liquor bottles of various brands that the petitioner was not authorised to bottle.

According to the report, the person present during the inspection was unable to produce any documents for the consignment. Thus, the truck and liquor were detained.

However, the next day, when the inspection team came back to the plant, the truck with illegal liquor was found missing and later reportedly found in an abandoned area.

Subsequently, an FIR was registered against the person present during the investigation under the Himachal Pradesh Excise Act, alleging unauthorised possession and movement of liquor.

In response, the company submitted that there was no loaded liquor in its premises and the inspection was fabricated as the person present was not its employee, but a contractor engaged for renovation work.

The Court observed that FIR was filed days later, and it is apparent that FIR was registered with consultation and was an afterthought to wrap the petition in a case alleging violation of provisions of the Act.

Further, the Court criticised that it cannot understand why the inspection team handed over the truck to the person from whom it was confiscated. It was remarked that if such a huge quantity of liquor was actually confiscated, the inspection team should have handed over the vehicle to the police instead of returning it to the same person.

Thus, the Court concluded that instead of keeping the licence suspended indefinitely, the authorities could have imposed a monetary fine, since the alleged offences were compoundable. The Court held that the punishment imposed was excessive and disproportionate to the alleged violations.

Case Name: Mars Bottlers Una Private Limited v/s State of Himachal and others

Case No.: CWP No. 8561 of 2024

Date of Decision: 23.09.2025

For the Petitioner : Mr. Desh Raj Thakur, Advocate.

For the respondent : Mr. Anup Rattan, Advocate General, with

Mr. Sushant Keprate, Additional Advocate General.

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