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On Tuesday, the high court of Madhya Pradesh issued a notice forbidding the state government to take any coercive action against liquor contractors over action initiated against 30 liquor contractors who filed a request for interim protection.
The Division bench of Chief Justice AK Mittal and Justice VK Shukla issued interim notices to the Chief Secretary (Excise) and the Excise Commissioner; the High Court also issued a notice of 'Contempt of Court' to a number of officials, including the Excise Commissioner, the Principal Secretary of the Commercial Tax Department and others, instructing them to appear before the court and adding that the hearing will continue on Wednesday.
Nearly 70 per cent of liquor shops in the state have not opened because contractors want the license terms revised, arguing that they will incur huge losses if they open shops as the situation has changed dramatically due to Covid-19 and lockdown restrictions. In an effort to persuade contractors to open shops, the cash-strapped government loosened timing and increased the liquor price by 10 per cent. However, the contractors did not relent, arguing initially that opening shops would spread the infection, and subsequently moved the High Court to seek re-auction of the shops or revision of the original terms of licence.
Senior advocate Naman Nagrath said the petitioners were seeking interim cover in the petition, alleging that the government was threatening to encash their bank guarantees, deposit checks and take action under the excise act not to open the shops. Although the arguments from both sides could not be completed at HC on Monday, the petitioners (traders) informed the court that the state government, despite assuring the court not to take any action against them, initiated action by imposing penalties and issuing letters to encash the bank guarantee.
Liquor shops have remained closed in major centers such as Indore, Bhopal, Ujjain, Jabalpur, Gwalior, Khandwa and Chhindwara, but those in small places like Hoshangabad, Raisen and Rajgarh have opened.However, the state government issued various orders and circulars and even served notices to traders who did not open shops despite administrative orders. The fresh orders also said the shops could be open from 7 am to 9 pm.
Add to that, the government of Madhya Pradesh relies heavily on petroleum products and liquor excise revenue to generate revenue, and as other sources of income have dried up in the midst of the lockdown caused by coronavirus.
However, about 20 percent of liquor store owners work in Madhya Pradesh as most merchants are engaged in a legal battle with the state government, and in the meantime the excise department has threatened to revoke these liquor shops' contracts.
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