The Delhi High Court has stayed a notice by the Commissioner of Excise Entertainment and Luxury Tax Department to a dining establishment that was asked to stop serving liquor in the absence of a valid ‘Eating House License’.
Justice Sachin Datta, in an order on April 9, also termed the authorities’ actions against the South Delhi eatery, Hauz Khas Social, as “ex-facie misconceived”.
Hauz Khas Social, through its operator ‘Epiphany Hospitality Pvt. Ltd.’, filed a petition earlier this month owing to sudden disruption in its operations after the excise department conducted an inspection and issued a written direction on April 3 to put the sale of liquor on hold as the establishment did not have a valid “Eating House License”. The direction was issued despite Hauz Khas Social holding a valid licence to serve liquor until March 31.
According to the establishment, it has been “facing repeated administrative obstacles” from the licensing unit of the Delhi Police in connection with licence renewal “despite submitting complete documentation and compliance with all requisite conditions.”
The restaurant also informed the court that instead of renewing the ‘Eating House License’, they received a show cause notice dated January 21 from the licensing unit of the Delhi Police on February 6. It alleged that the petitioner’s restaurant was illegally serving alcohol within 100 metres of a government school and village temples (based on information from the Delhi Fire Service).
The notice claimed that such action on the part of the petitioner violated the provisions of the Delhi Eating House Regulations, 2023. It called upon the petitioner to respond as to why its Eating House Registration Certificate should not be cancelled. While the establishment submitted its reply on February 19, no further action has been taken.
Subsequently, on April 3, the excise department inspected the premises and seized the entire stock of liquor, citing the absence of a valid Eating House Licence. On April 8, the excise authorities also issued a show cause notice seeking a response as to why their excise licence must not be suspended for not having a valid mandatory link licence, which is the ‘Eating House License’. The notice also directed the restaurant to suspend serving of liquor temporarily.
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Terming the action to be unjustified and untenable, the petitioner contended that the ‘Eating House License’ has been validly issued in their favour and only its renewal is under process. The restaurant submitted that the Delhi Police are unreasonably delaying the process of licence renewal.
The Delhi Police, on the other hand, said the licence renewal is held up “only for want of “area suitability report‟ from the concerned unit/officials of the Delhi Police.”
Recording that the “responsibility and consequences” of Delhi Police’s delay “cannot be fastened upon the petitioner”, Justice Datta concluded that under the Delhi Eating House, Registration Regulations, 2023, unless and until the petitioner‟s renewal application is declined, the petitioner‟s operations cannot be precluded for want of an Eating House Registration Certificate/licence.
Justice Datta held that the restaurant shall be deemed to be duly registered till the time their ‘Eating House License’ is renewed or refused for renewal.
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It also directed the Delhi Police to process the petitioner’s application, preferably within two weeks.