Swagath Restaurants v. Govt. of NCT of Delhi & Ors.

1. This Court had examined the matter on 17.02.2025 and passed a detailed order. It is apposite to extract the order dated 17.02.2025 below: “1. A request for an adjournment is made on behalf of learned counsel for the Respondents. It is stated that he has just received the case file.

2. Learned Senior Counsel appearing on behalf of the Petitioner, on instructions, objects the request and submits that the matter is being pending since the year 2015 and the issue involved in the present case is limited.

3. The grievance of the Petitioner as has been articulated before this Court is that he has been asked to pay additional license fee which is applicable only in cases where there has been a transition in the number of seat covers during a licence fee year. It is the case of the Petitioner that the additional licence fee was paid in the transition year and for one year thereafter. However, a demand notice dated 26.05.2014 has been issued to the Petitioner to make the payment of Rs.6,05,949 for an extended period of time for the year 2008-09.

4. Learned Senior Counsel seeks to rely upon the Delhi Excise Rules, 2010 (hereinafter, referred to as ‘the Rules’), more specifically Rule 154 (1) (

┌─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────┐
│                           Sl.      Reference     Forms      Description           of Annual licence fee (in. Rs.)   │
│                           Nos.     of Rules      of         licenses                                                │
│                                                  Licence                                                            │
├─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────┤
│                           1.        xxx          xxx        xxx                       xxx              xxx          │
│                           21.       32(1)        L-17       Service of Indian Having seat Licence fee               │
│                                                             Liquor in independent covers                            │
│                                                             restaurant              up to 50       4,75,000         │
│                                                                                     51 to 100      6,75,000         │
│                                                                                    101 to 200      9,00,000         │
│                                                                                    201        and 11,50,000         │
│                                                                                    above                            │
│                           xxx      xxx         xxx          xxx                    xxx             xxx              │
│                           42       66(10),                  Additional area for                   Additional        │
│                                    (11), (16),              the holders of licence                seventy five      │
│                                    and (17)                 in Form L-16, L16F,                   percent of the    │
│                                                             417, L-17F, L-18, L-                  regular           │
│                                                             18F, L-19, L-19F, L-                  licence fee for   │
│                                                             21, L-21F, L-28, L-                   the               │
│                                                             28F, L-29, 429F                       corresponding     │
│                                                                                                   licences.         │
└─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────┘

31. Thus, the language of a taxing statute should ordinarily be read and understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative animation. A taxing statute should be strictly construed; common sense approach, equity, logic, ethics and morality have no role to play. Nothing is to be read in, nothing is to be implied; one can only look fairly at the language used and nothing more and nothing less. (J. Srinivasa Rao v. State of A.P. [(2006) 12 SCC 607: (2006) 13 Scale 27] and Jagdambika Pratap Narain Singh v. CBDT [(1975) 4 SCC 578 1975 SCC (Tax) 356: (1975) 100 ITR 698].) [Emphasis Supplied]

9. Thus, it is clear that even in the understanding of the Respondents, the license fee is to be ascertained on the basis of seat covers as well on the basis of the additional area. As stated above, by the Impugned Order, the Petitioner was directed to pay additional license fee for increase in the seating capacity. The covers [seating capacity] of the Petitioner was increased on 06.11.2007. During the said period, the number of seat covers in the Petitioner’s restaurant were increased by 84 and the annual license fee was paid for the increased seat covers. Thus, in the year in issue, the Petitioner had paid the license fee for 125 seat covers and an additional amount was paid in view of the expanded seat capacity of 84 covers as well. Once, the differential had been paid in a particular year when the covers increased, there was no need to continue to pay the differential amount each year, when the amount for increased covers was already being paid. 9.[1] The Petitioner, 2008 onwards, had 209 seat covers. In view of the fact that the total seat covers of the Petitioner were 209 as per Regulation 154, annual license fee required to be paid was at the rate of Rs.12.65 lakhs. These rates were also revised in the year 2011-12 as can be seen from the notice dated 15.06.2011. Since, the license fee for more than 200 covers is kept at Rs.12.65 lakhs, the Impugned order and notices which seek additional payment are without any basis.

10. In view of the aforegoing, the Impugned Order dated 09.06.2015 and all notices that emanate therefrom are set aside.

11. The Petition is accordingly allowed. All pending Applications are disposed of.