"Can't let city become bootlegging, liquor hoarding hub:" Delhi govt defends decision to prohibit discounts on liquor

The Delhi government on Monday defended its order prohibiting discounts on liquor, stating before the Delhi High Court that the State cannot be a mute spectator to boot-legging, predatory pricing and efforts by some industry sharks to create a monopolistic market [Bhagwati Transformer Corp. and Ors v Government of NCT of Delhi]..Senior Advocates Abhishek Manu Singhvi and Rahul Mehra, appearing for the Delhi government, said that it is the sale of liquor that was being dealt with and therefore, the State cannot be blindfolded by revenue generation..The submission was made by the lawyers before Justice V Kameswar Rao, who has been dealing with a batch of petitions challenging a February 28 order of the Delhi excise commissioner that prohibited retailers from giving any discount or rebate on the Maximum Retail Price (MRP) of liquor..Singhvi argued that under the Excise Act and Excise Rules, the Excise Commissioner has the power to limit the extent of discount that can be provided on liquor.He submitted that liquor vendors cannot claim protection provided under Article 19(1)(g) of the Constitution (right to practice any profession, or to carry on any occupation, trade or business) since it is the trade of liquor that is being dealt with here..Mehra said that it is because of the exorbitant discounts being given on liquor that some individuals have started hoarding liquor and taking it outside Delhi for sale, which is prohibited under law.He said that just a few days back, authorities intercepted a lorry bound for Gujarat carrying several crates of liquor.“Individuals are also now hoarding liquor and taking it outside Delhi. This cannot be done. Bootlegging at large scale is being done. There are shops whose turnover has increased from 20,000 bottles to over 1,20,000 bottles, a six-fold increase… Where is this consumption? Is this Delhi? This is going to Haryana, Uttar Pradesh, Punjab and Himachal. We have already caught one going to Gujarat,” Mehra contended..Appearing for the petitioners, Senior Advocate Mukul Rohatgi, Sajan Poovayya and others, argued that the discount policy was part of the terms of the license that they received following the due process and therefore, the same promote healthy market practices ultimately benefitting customers.Rohatgi argued that all of the reasons cited by the Excise Commissioner in his order are without merit.“They are saying it is being done in view of Covid. This is laughable. Today every institution is open. There is no question of aggravation of Covid and that is not his function. All these reasons are completely arbitrary and outside his jurisdiction. They militate against my right to discount. He is saying that this is promoting unhealthy market forces. How can that be? He says it is destroying the market? He is not SEBI. Who is he to decide this?!” he submitted.Rohatgi said that the order was passed based on pleas of some ‘unidentified licensees' who are saying that since they cannot give discounts, therefore others should be prohibited as well.He also rebutted the argument that because of low prices boot-legging was going on."The order says the chances of boot-legging can’t be ruled out. The point is no one has has pointed it out that it is the clandestine sale without paying excise that constitutes bootlegging. How is someone giving discounts and customers buying from store promoting boot-legging,” he said..After hearing the arguments, the Court reserved its orders on the interim prayer seeking against quashing of the excise commissioner’s circular.The order will be pronounced at 4:15 pm on Tuesday.