Uttarakhand HC issues notice to state govt on waiving off Rs 196 crore tax of liquor sellers

The Uttarakhand high court (HC) on Thursday issued notices to the state government through the chief secretary and excise commissioner to submit their replies within three weeks in response to a public interest litigation (PIL), which alleged that the authorities favoured liquor traders by waiving off tax worth Rs 196 crore on the unsold stock during the lockdown restrictions, said Gopal K Verma, the counsel of the petitioner, Umesh Kumar.

The state government adhered to the Central government’s nationwide lockdown restrictions, which were enforced from March 25 to contain the spread of the coronavirus disease (Covid-19) outbreak and were partially eased from May 4.

Dehradun-based Kumar had filed the plea, citing that the state government had waived off Rs 196-crore on the unsold liquor stock during the lockdown restrictions, even though the hill state is battling an acute financial crunch.

He singled out the powerful liquor lobby as a beneficiary of the state government’s largesse, when other industries and traders have been deprived of any benefit, despite suffering massive financial losses.

On May 17, the state government had approved a decision to waive off the tax on the unsold liquor stock, when shops were closed because of lockdown restrictions, including Rs 196 crore for the period between April 1 and May 3.

The government took the decision after liquor traders in Kumaon’s Nainital district had started an indefinite protest on May 15 by closing down their shops against the payment of Minimum Monthly Guaranteed Duty (MMGD) amid the lockdown.

They had demanded that the government should waive off the excise duty and instead collect taxes on the total sales until the lockdown restrictions were in place.

MMGD is the monthly fixed duty that every liquor shop in the state has to pay to the state excise department. It is fixed by the excise department at the start of a financial year and varies from one liquor shop to another in a district on the basis of the evaluation of its total sales. It may range from Rs 40 lakh to Rs 1 crore per month depending on the sales and the area, where a liquor shop is located.

Liquor traders said they would have paid MMGD, if the business was as usual.

However, they were peeved with the government, because the authorities wanted to levy excise duty on them, despite their sales had hit rock bottom due to the unprecedented viral outbreak.