Facts of the Case

M/S Wine Centre, a liquor vend licensee at Link Road, Jammu, challenged a demand for penal interest of Rs. 14.49 lakh under Section 24-A of the J&K Excise Act and the J&K Liquor Licence and Sales Rules, 1984. The dispute traced back to an enhancement of the excise vend licence fee (from Rs. 50,000 to Rs. 5 lakh) under SRO-68, following which the petitioner had sought to shift its premises and had a period during which the shop remained closed. This is a J&K state excise/liquor licensing matter and has no connection to GST law.

Issues Involved

  1. Whether the penal interest of Rs. 14.49 lakh demanded under Section 24-A of the J&K Excise Act could be validly levied, given that the licence fee had been paid pursuant to an earlier decision and court-directed timeline.

Petitioner's Arguments

  • Contended that the licence fee dispute had already been decided on 26.02.2002 and payment made accordingly by the licensee, and that under the excise policy applicable, the petitioner was in any event not obligated to pay the fee at all, relying on the Excise Commissioner's opinion in a similar case (M/S Kundal Brothers), later accepted by the Finance Department.

Respondent's Arguments

  • Represented by the Deputy Advocate General; the specific counter to the petitioner's timely-payment argument is not detailed at length in the available order excerpt.

Court Order / Findings

  • Held that the demand for penal interest under Section 24-A of the J&K Excise Act and Rule 20 of the J&K Liquor Licence and Sales Rules, 1984, could arise only in case of non-payment or delayed payment of the licence fee.
  • Found that since the licence fee had been deposited by the petitioner in terms of the earlier Court order, it could not be treated as a delayed payment attracting penal interest under Section 24-A.
  • Allowed the petition and quashed the impugned Demand Notice dated 17.03.2003, with no order as to costs.
  • Declared the matter disposed of.

Important Clarification

This is a State Excise Act dispute concerning liquor vend licence fees and penal interest — it does not touch GST law at all, and the 'GST' aspect noted in the initial screening reflected only the fact that this is a tax-adjacent government revenue matter, not that any CGST/SGST provision was involved.

Sections Involved

  • Section 24-A, Jammu & Kashmir Excise Act — penal interest on unpaid licence fee
  • Rule 20, J&K Liquor Licence and Sales Rules, 1984 — licence renewal/determination provisions

Decision – In Favour of

The petitioner (M/S Wine Centre) — petition allowed and the penal interest demand notice quashed; a J&K Excise Act outcome with no bearing on GST law.

Case Details

High Court of Jammu & Kashmir and Ladakh at Jammu; OWP No. 247/2003; Coram: Hon'ble Mr. Justice M A Chowdhary; Reserved: 19.09.2023; Pronounced: 22.09.2023.

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.