The State Government on Friday heaved a sigh of relief as the Supreme Court dismissed the Odisha High Court’s order quashing its notification for e-auctioning of liquor shops.
The award of licences for liquor shops through e-auctioning is expected to fetch an additional Rs 200 crore to the exchequer. The Government would put on auction all the 1,600 India Made Foreign liquor (IMFl) and Country Spirit (CS) shops by the end of July 2014. Sources in the Department of Excise (DoE) said that under the present licensing system the Government was not getting much revenue due to cartel operations in the business. Now in an auction mode, new investors would come into this business and the State would get more revenue.
The Government had issued a notification on February 28, 2013, announcing allotment of liquor shop licences through e-auctioning and discontinuation of previous method of allotting it by lottery. The liquor shop owners went to the High Court challenging the Government’s decision. As many as 80 petitions were filed in the court against the Government’s decision. The High Court in July 2013 quashed the Government’s decision and laid down 10 conditions for the e-auctions. The Government went to the Supreme Court challenging the High Court order.
The apex court, in its order, has put a stay on six conditions laid down by the High Court for e-auctioning while allowing the State to start the process with four conditions. “If the State Government fulfils four conditions, it can go for e-auctioning of liquor shop licences for IMFl and CS,” the Supreme Court observed. The four conditions are: solvency certificate amount should be six times of reserve price; local surety and solvency certificate are must for auctioneers from outside the State; applicants with criminal backgrounds cannot participate in the process; and locals of an area would have a say on setting up of liquor shops as per Section 22 of the Government’s notification.
The Government had last allotted licences for liquor shops in 2005. Since then, the licences have been renewed every year with a token increase in the annual fees. There are about 1,131 IMFl and more than 500 country liquor shops in the State. The DoE is expecting to mop up excise revenue of Rs 1,700 crore against the target of Rs 1,900 crore for the fiscal 2013-14