2026:HHC:10864

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Review Petition No. 114 of 2025

Reserved on: 23.3.2026

Date of decision: 8.4. 2026

State of H.P. & others. …Review-Petitioners.

Versus

Mars Bottlers Una & Another. …Respondents.

Corum

Hon’ble Mr. Justice Vivek Singh Thakur, Judge.

Hon’ble Mr. Justice Sushil Kukreja, Judge.

Whether approved for reporting?

1

Yes

For the Petitioners. Mr.Anup Rattan, Advocate General, with

Mr.SushantKeprate, Additional Advocate

General and Ms.Swati Draik, Deputy

Advocate General.

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

Vivek Singh Thakur, Judge

This Review Petition has been preferred by the State against

the impugned judgment dated 23.9.2025 passed in CWP No. 8561 of 2024,

which was preferred by respondent No. 1-Mars Bottlers (respondent herein)

against the petitioners are as well as respondent No. 2. Following

directions have been passed by this Court vide judgment dated 23.9.2025

allowing the Writ Petition:

“39. In view of above, orders dated 15.6.2024 and 9.12.2024 are quashed

and set aside and the Commissioner, State Taxes and Excise is directed

to determine appropriate compounding fee in consonance with the

1

Whether the reporters of the local papers may be allowed to see the Judgment? Yes

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relevant provisions, in the light of aforesaid observations, within 15 days

of passing of this order and, thereafter, to pass an appropriate order with

respect to renewal of licence of the petitioner.”

2. Learned Advocate General has submitted that Review Petition

has been preferred on three grounds. First that plea of learned counsel for

respondent No. 1-Petitioner that application for renewal of old licence can

be made even at delayed stage and on such application, Commissioner

Excise with approval of Financial Commissioner, on payment of fee

chargeable for renewal of such application, can renew the licence, was

disputed on behalf of review petitioners-State, but in para 36 of the

impugned judgment, it has been recorded that aforesaid plea has not been

disputed. It has been submitted that Punjab Distillery Rules, 1932 are

applicable in State of Himachal Pradesh, but subject to amendment carried

out therein time to time and vide Notification dated 31.3.1994 issued by

Excise and Taxation Department of Himachal Pradesh, Punjab Distillery

Rules, 1932 stand amended, wherein Rule 9.7 of the said Rules has been

substituted and in the said substituted Rule 9.7, there is no provision for

permitting to file an application for renewal, if not already filed at least 90

days before the expiry of year, for which licence has been granted or

renewed.

3. Second, that in para 28 of the impugned judgment, it has been

stated that offence alleged to have been committed under Sections 26, 43,

44, 45, 46, 47 or 59 of the Act were and are compoundable and it has been

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observed that in view of Section 66 of the Act, penalty imposed by the

Commissioner was highly disproportionate. It has been stated on behalf of

review petitioners-State that this Court has referred Section 66 of the H.P.

Excise Act, 2011 for issuing direction wherein Sections 39 III and IV of H.P.

Excise Act, 2011 are not compoundable under Sections 66 or 67 of the

Excise Act because illicit liquor recovered from a Truck No. HR-39D-8993,

found in premises of bottling plant was 4274.640 BLS and quantity of the

compounded illicit liquor was beyond the quantity of liquor for which

compounding would be permissible and, therefore, penalty, imposed by the

Review Petitioners-respondents, did not deserve to be interfered with.

4. Lastly, it has been submitted that validity of licence granted

for the year 2023-24, stands expired on 31.3.2024 and as such licence

stands canceled automatically as per Rule 9.7(1) and 9.7(2) of Punjab

Distillery Rules, 1932, as applicable in the State of Himachal Pradesh,

whereas there is no provision for considering application for renewal, if not

filed at least 90 days before the expiry of year for which the licence had

been granted or renewed.

5. With regard to first contention, it is clarified that so far as we

remember, the plea of the Review Petitioners that Punjab Distillery Rules,

1932, as amended on 27.11.1963 contained provision of permitting filing of

application at belated stage, if not already filed at least 90 days before the

expiry of the permit/licence , was not rebutted by producing any notification

or modification, as now has been done by producing copy of notification

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dated 31.3.1994. Be that as it may, even if para 36 of the impugned

judgment is omitted, the said omission shall not have any impact on the

findings returned by this Court in the impugned judgment, because the

impugned judgment has not been passed on the basis of any concession of

learned Advocate General or Review Petitioners-respondents. Even if

para 36 of the impugned judgment is modified to the extent that aforesaid

plea has been disputed by the Review Petitioners-respondents, there was

and is nothing on record to rebut the plea of respondent No. 1-petitioner,

and impugned judgment has been passed by considering the material

placed before the Court and not on the basis of or referring any provisions

of the Punjab Distillery Rules, 1932, as amended on 27.11.1963 or on the

basis of notification dated 31.3.1994. In the given facts and circumstances,

including the circumstances mentioned in paras 34 and 37 of the impugned

judgment read with para 38 thereof, we are of the considered opinion that

even if plea taken by learned counsel for respondent No.1-petitioner in para

35 is recorded as disputed submission, in para 36, the facts and

circumstances on the basis of which direction has been given to the Review

Petitioners-respondents, especially Commissioner State Taxes and Excise,

shall not be impacted in any manner.

6. Though, we have clarified hereinbefore that the directions

passed by the Court in impugned judgment are not based on para 36

thereof and the provisions of Punjab Distillery Rules, 1932, as amended on

27.11.1963 or the Punjab Distillery Rules, 1932, as amended vide

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notification dated 31.3.1994, are not basis of directions issued by the Court,

but the directions has been issued by exercising inherent powers vested

with the Court on the basis of judicial review of administrative action which

on the basis of facts on record has been found doubtful and action taken by

the Review Petitioners-respondents with regard to imposing penalty, has

been held highly disproportionate.

7. Though, as clarified supra, we have not based our findings on

the basis of provisions contained in Punjab Distillery Rules, 1932, as

amended on 27.11.1963, however, to avoid any misconception, we are

recording the submissions made by learned Advocate General as well as

learned counsel for respondent No. 1-petitioner in this regard with our

observation thereafter.

8. Admittedly, area in which distillery is located, earlier was part

of State of Punjab before 1.11.1966 and it was transferred from Punjab to

Himachal Pradesh on enactment of Punjab Reorganisation Act, 1966 with

appointed day 1.11.1966. Referring Sections 5, 88 and 89 of The Punjab

Reorganisation Act, 1966 Act, it has been contended that in the area in

question prior to 1966 Punjab Distillery Rules, 1932 as amended on

27.11.1963 were in force and by virtue of Section 88 of the Punjab

Reorganisation Act, they were continued to remain in force until otherwise

provided by competent legislature or other competent authority, and in

absence of expressed modification, substitution or amendment, the law

which were in force before 1.1.1966 shall not be deemed to have been

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effected any change. It has been submitted that Section 89 of Punjab

Reorganisation Act provides that any laws made before the appointed day

could have been adopted, modified either by repeal or amendment before

expiration of 2 years from the appointed day, and thereupon every law shall

have effect subject to adaptation and modification so made until altered,

repealed or amended by competent legislature or any other competent

authority.

9. Sections 5, 88 and 89 of the Punjab Reorganisation Act, 1966

read as under:-

“5. Transfer of territory from Punjab to Himachal Pradesh.—(1) On

and from the appointed day, there shall be added to the Union territory of

Himachal Pradesh the territories in the existing State of Punjab comprised

in-

(a) Simla, Kangra, Kulu and Lahaul and Spiti districts;

(b) Nalagarh tahsil of Ambala district;

(c) Lohara, Amb and Una kanungo circles of Una tahsil of

Hoshiarpur district;

(d) the territories in Santokhgarh kanungo circle of Una tahsil of

Hoshiarpur district specified in Part I of the Third Schedule;

(e) the territories in Una tahsil of Hoshiarpur district specified in

Part II of the Third Schedule; and

…. …. ….

88. Territorial extent of laws.—The provisions of Part II shall not be

deemed to have effected any change in the territories to which any law in

force immediately before the appointed day extends or applies, and

territorial references in any such law to the State of Punjab shall, until

otherwise provided by a competent Legislature or other competent

authority, be construed as meaning the territories within that State

immediately before the appointed day.

7 2026:HHC:10864

89. Power to adapt laws.—For the purpose of facilitating the application

in relation to the State of Punjab or Haryana or to the Union territory of

Himachal Pradesh or Chandigarh of any law made before the appointed

day, the appropriate Government may, before the expiration of two years

from that day, by order, make such adaptations and modifications of the

law, whether by way of repeal or amendment, as may be necessary or

expedient, and thereupon every such law shall have effect subject to the

adaptations and modifications so made until altered, repealed or

amended by a competent legislature or other competent authority.

Explanation.—In this section, the expression “appropriate Government”

means—

(a) as respects any law relating to a matter enumerated in the Union

List, the Central Government; and

(b) as respects any other law,—

(i) in its application to a State, the State Government, and

(ii) in its application to a Union territory, the Central Government.”

10. It has been submitted by learned counsel for respondent No.

1-Petitioner that there is nothing on record or otherwise available anywhere

that the Punjab Distillery Rules, 1932, as amended on 27.11.1963, which

were applicable to the area in reference before 1966, were ever modified,

repealed or substituted by invoking Sections 88 and 89 of the Punjab

Reorganisation Act, 1966.

11. It has been further contended by learned counsel for

respondent No. 1-petitioner that State of Himachal Pradesh was

established by the State of Himachal Pradesh Act, 1970 which was enacted

on 25.12.1970 and was given effect from 25.1.1971, comprising the

territories which immediately before appointed day were comprised in the

existing Union Territory of Himachal Pradesh. He has submitted that the

8 2026:HHC:10864

law in force immediately before appointed day in the existing Union

Territory of Himachal Pradesh by virtue of Section 49 of State of H.P. Act,

1970 were continued to be in force in the State of Himachal Pradesh until

altered, repealed or amended by competent legislature or competent

authority.

12. Sections 3 and 49 of the State of Himachal Pradesh Act, 1970

referred by learned counsel for respondent No. 1-petitioner are as under:-

“3. Establishment of State of Himachal Pradesh.—On and from the

appointed day, there shall be established a new State, to be known as the

State of Himachal Pradesh, comprising the territories which immediately

before that day were comprised in the existing Union territory of Himachal

Pradesh.

49. Continuance of existing laws and their adaptation.—(1) All laws in

force, immediately before the appointed day, in the existing Union territory

of Himachal Pradesh shall continue to be in force in the State of Himachal

Pradesh until altered, repealed or amended by a competent Legislature or

other competent authority.

(2) For the purpose of facilitating the application in relation to the State of

Himachal Pradesh of any law made before the appointed day, the

appropriate Government may, within two years from that day, by order,

make such adaptations and modifications of the law, whether by way of

repeal or amendment, as may be necessary or expedient, and thereupon

every such law shall have effect subject to the adaptations and

modifications so made until altered, repealed or amended by a competent

Legislature or other competent authority.

Explanation.—In this section, the expression “appropriate Government”

means, as respects any law relating to a matter enumerated in the Union

List in the Seventh Schedule to the Constitution, the Central Government;

and as respects any other law, the Government of the State of Himachal

Pradesh.”

9 2026:HHC:10864

13. According to learned counsel for respondent No. 1-petitioner,

the laws especially Punjab Distillery Rules, 1932 which amendment dated

27.11.1963, as applicable to the area in reference prior to 1.1.1966, were

never replaced till, 1971 and after 1971, there is no change in the

application of Punjab Distillery Rules, 1932 to the area in reference and

thus Rule 7 providing filing of application for renewal of licence, even at a

later stage, if not filed at least 90 days before expiry of licence, is applicable

to the area in reference.

14. Learned Advocate General has submitted that in view of

amendment carried out by Himachal Pradesh in Punjab Distillery Rules,

1932 vide notification dated 31.3.1994, relevant provisions of the Punjab

Distillery Rules, 1932, as amended on 27.11.1963 have lost its efficacy and

the rules as amended by the State of Himachal Pradesh in 1994 shall be

applicable, and in these Rules, there is no provision for submitting

application at delayed stage, if not filed 90 days prior to expiry of licence.

15. Learned counsel for respondent No. 1-petitioner has

submitted that notification dated 31.3.1994 deals with amendment in

Punjab Distillery Rules, 1932, as applicable in the area, which were part of

State of Himachal Pradesh, immediately before 1.11.1966 and, therefore,

this notification does not modify or amend the Punjab Distillery Rules, 1932,

as applicable to the area in reference which was not part of Himachal

Pradesh before 1.11.1966, because for doing so Review Petitioners-

Respondents-State had to carry out necessary amendment by invoking

10 2026:HHC:10864

Sections 88 and 89 of the Punjab Reorganisation Act, 1966 and Section 49

of the Himachal Pradesh Act, 1970, but there is no such notification

available and thus the notification dated 31.3.1994 does not have any

impact on the law, i.e. Punjab Distillery Rules, 1932, as applicable to the

said area.

16. The plea of learned counsel for respondent No. 1-petitioner

appears to be correct. The notification dated 31.3.1994 speaks about

amendment in the Punjab Distillery Rules, 1932, which were applicable to

the area of Himachal Pradesh immediately before 1.11.1966. Una was not

part of Himachal Pradesh immediately before 1.11.1966. For carrying

amendment or substitution in Rules applicable in Una, necessary

notification in terms of Sections 88 and 89 of the Punjab Reorganisation

Act, 1966 had to be issued firstly replacing the Punjab Distillery Rules,

1932, as applicable to other areas of Himachal Pradesh and to make

uniform applicability of the Punjab Distillery Rules, 1932 in the entire State

of Himachal Pradesh including the newly added area on 1.11.1966.

17. Before 1.11.1966 Una was in Punjab. The Punjab Distillery

Rules, 1932 was adopted in Union Territory of Himachal Pradesh. These

Rules became applicable to the areas included in Union Territory of

Himachal Pradesh prior to 1.11.1966. Thus in the old Himachal Pradesh,

Rules as enacted or made applicable continued to be in force as adopted at

the time of constitution of C State of Himachal Pradesh on 15.4.1948. In

newly added area in the State of Himachal Pradesh on 1.11.1966, the

11 2026:HHC:10864

Rules, as applicable prior to 1.11.1966, continued to be in force. Therefore,

for the Una area, the Punjab Distillery Rules, 1932, as amended on

27.11.1963 continued to be in force. Vide notification dated 31.3.1994,

Punjab Distillery Rules, 1932, which were applicable to the area, i.e. old

Himachal Pradesh before 1.11.1966 were amended. There is nothing on

record that Rules which became to be applicable to Una area, including the

Punjab Distillery Rules, 1932, as amended on 27.11.1963, were ever

modified and, therefore, the Punjab Distillery Rules, 1932 amended on

27.11.1963 are applicable to the present area in reference.

18. For making aforesaid observations, we have one more reason

as transpiring on comparison of the Punjab Distillery Rules, 1932, as

amended on 27.11.1963 with the provisions substituted by amendment

notified vide notification dated 31.3.1994. The Punjab Distillery Rules,

1932, as existing on 1963 contains Rule 7, providing annual renewal of

licence. The same reads as under:-

“7. (1) A license granted under these rules shall be valid for a period of

one year from the date of issue unless it is cancelled determined or

surrendered earlier and shall be renewable annually by the [Excise

Commissioner with prior approval of the Financial Commissioner] on the

application of the licensee on payment of [rupees eighty lakh]]: Provided

that such a license may be cancelled for breach of the terms thereof or

may be determined by the [Excise Commissioner with prior approval of

the Financial Commissioner] after giving the licensee six months notice.

(2) An application for the renewal of the license shall be made by the

licensee to the Excise Commissioner as so to reach him at least 90 days

before the expiry of the old license:

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Provided that if such application is not made within such period, the

[Excise Commissioner with prior approval of the Financial Commissioner]

may renew the license, on payment off the fee chargeable for a new

license.”

19. Vide notification dated 31.3.1994, provisions of Rule 9.7, have

been substituted, which clearly indicates that amendment carried out vide

notification dated 31.3.1994 is in the Punjab Distillery Rules, 1932, as

applicable to the areas of Himachal Pradesh as existing before 1.11.1966,

i.e. in old Himachal, which may have been opted in 1948. Whereas Una

area came to be included in Himachal Pradesh in the year 1966 with the

Punjab Distillery Rules, 1932, as existed on 27.11.1963, which are different

than the unamended Punjab Distillery Rules, 1932 as existing in the year

1948. Therefore, also plea of the Review Petitioners-respondents-State

with respect to applicability and non-applicability of the Punjab Distillery

Rules, 1932 and amendment carried thereon is misconceived and is of no

help to them.

20. It is also apt to record that even in absence of provision in the

Rules for allowing the filing of application for renewal at a delayed stage,

than the time provided for the same in the Rules, does not take away the

power of this Court to allow renewal of licence, even in absence of such

application or directing respondent No. 1-petitioner to file such application

with further direction to the Commissioner, State Excise and Taxation to

consider and allow such application in the given facts and circumstances of

the present case.

13 2026:HHC:10864

21. Plea of Review Petitioners-State that in view of non-

compounding Section of 39 III and IV of the Excise and Taxation Act, the

directions for compounding offence deserves to be reviewed, is also not

only misconceived, but unfounded. This Court in the given facts and

circumstances is competent to issue any directions for the ends of justice

by exercising the power under Article 226 of the Constitution of India.

Therefore, this plea is liable to be rejected on this sole ground. It is also apt

to notice that we have no where recorded that Section 39 (III) and (IV) of

the H.P. Excise and Taxation Act is compoundable. As already stated

supra that even on non-compoundable offence, the High Court is not

inhibited for issuing direction to compound the same, but in present case

Review Petitioners-respondents-State is claiming recovery of illicit liquor of

4274.640 BLS, loaded in truck No. HP-39D-8993. This recovery has been

found highly unreliable and doubtful by this Court and, therefore, it has

been concluded that action of Review Petitioners-respondents-State was

and is highly disproportionate. Though, it has been already observed in the

judgment under review, however, we would like to reiterate that in report

submitted by the raiding party, violation of Sections 43 and 44 of the H.P.

Excise and Taxation Act, has been reported. However, in the FIR dated

26.3.2024, which was registered about 9-10 days of alleged incident, it has

been stated that liquor seized in the Truck was not bottled in the bottling

plant, whereas in the report submitted on 16.3.2024, it has been stated that

bottles loaded in the Truck were bottled in the plant.

14 2026:HHC:10864

22. It is also apt to record that in fact there is no physical evidence

of recovery of alleged liquor from the Truck, because it itself is case of the

Review Petitioner-State that the Truck was found abandoned on the road

and the liquor found therein a day before, was also missing to a large

extent. The entire material on record creates doubt about the veracity of

the allegations leveled by the raiding party on respondent No. 2-petitioner

and for that benefit of doubt, we are of the considered opinion that

respondent No. 2-petitioner cannot be made to suffer for faulty

inspection/interrogation or investigation. The benefit is likely to be extended

to it.

23. We, for variation in the contents of the report of the raiding

party and FIR, have found the story of the Review Petitioner-State highly

improbable and thus we had directed the Commissioner Excise and

Taxation to renew the licence of respondent No. 2 suo moto.

24. Before parting we would like to record that it appears from the

pleadings of the Review Petition that Commissioner Excise and Taxation is

making it an issue that direction has been given to compound the case of

respondent No. 1-petitioner at his own level by compounding any

appropriate penalty, whereas petitioner has not approached with any

application for such renewal or extension. Though directions of the Court

are self speaking and indicating clearly what action has to be taken by the

Commissioner Excise and Taxation, for which no application as such is

15 2026:HHC:10864

required. The Commissioner Excise and Taxation has to abide by the

judgment in accordance with law.

25. In view of above observations to avoid multiplicity of litigation,

para 36 of the impugned judgment is ordered to be deleted. Despite that

we do not find any error apparent on record, depicting any material

irregularity or illegality so as to warranting exercise of discretion of review

and accordingly Review Petition is dismissed with direction to omit para 36

from the impugned judgment. Necessary correction be carried out in the

record by the Registry. Corrected judgment also be replaced from the

judgment already uploaded on the website of High Court.

26. Needless to say that respondent No. 1-petitioner shall be at

liberty to file appropriate application for renewal of its licence and if the

same is filed within 15 days, the same shall be considered for grant and/or

for renewal of licence and shall be decided with positive order by

granting/allowing the licence after payment of compounding fee to be

determined by the Commissioner Excise and Taxation, in consonance with

the judgment/direction passed by this Court.

The Review Petition is disposed of in aforesaid terms.

(Vivek Singh Thakur),

Judge.

(Sushil Kukreja),

Judge.

8

th

April, 2026

(Keshav)