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Excise Licence Fee: SC Directs Maha State Excise To Continue Relief To Hotels & Restaurants, Grants Stay On Cost Imposed On Petitioners By Bombay HC

Friday, April 1, 2022, 19:10 Hrs  [IST]
HBI Staff | Hyderabad

The Hon’ble Supreme Court (SC) has issued a notice to the Maharashtra State Excise and continued the operation of the Bombay High Court’s (HC) former interim order dated 06.05.2021 allowing excise licence holders to pay 50 per cent of the fees for FY 2021-22 pending the petition. The Hotel and Restaurant Association of Western India (HRAWI) had approached the SC after the Bombay HC recently dismissed the petition and instead imposed a cost on the Associations. The Hon'ble Supreme Court today issued notice in the Special Leave Petitions and directed that the order dated 06.05.2021 will continue to operate. The Hon'ble Supreme Court has also granted a stay on the cost imposed on the Petitioners vide Order dated 29.03.2022.


“Back in May 2021, the Hon’ble Bombay HC in view of the pandemic and the State imposed lockdowns, had agreed to provide relief in the excise licence fee to the industry. It had allowed licence holders to pay 50 per cent of the fees pending the petition. However, we were surprised that when the matter was finally heard a couple of days ago, another Bench of the HC felt that the petition was worthless and instead imposed a cost on the Associations. So, we immediately approached the Hon’ble SC of which the hearing took place today and we are extremely pleased to inform that the SC has issued a notice to the State to continue the previous interim order which was passed in favour of the industry,” says Mr Sherry Bhatia, President, HRAWI.


“We are conducting lawful business under the licences issued by the State Government. However, when the Government issues licences to hotels, restaurants and bars, to vend or serve alcohol then we are entitled to all legal rights. There continues to be a prejudice against liquor business. However, liquor is only incidental to a hotel and restaurant business which is primarily about offering accommodation and serving food to guests,” adds Mr Bhatia.

Maharashtra has around 10,500 hotels and 210,000 restaurants and over the last 24 months around 3,000 hotels and 60,000 restaurants have permanently shut down. Around 50 lakh employees, roughly 40 per cent directly engaged in the industry in the State lost their jobs.


“Our Association has led from the front in matters of policy advocacy and liaising with policy makers. We were pained to have been saddled with the cost for having approached the Court, which we did in the interest of members who’ve been completely battered in the two successive waves of the pandemic. It is a matter of fact, which even the Central and the State Governments have acknowledged that hospitality is the most severely affected industry due to the pandemic induced lockdowns and restrictions. In the first wave, restaurants were under a complete lockdown for seven and a half months and thereafter, were operating under severe restrictions. Similarly, during the second wave, restaurants were fully shut for two months and twenty days and for the remaining days, were allowed to operate gradually up to 4 pm, 8 pm and 10 pm and so on with 50 per cent capacity limitation. It is unfair to make us pay licence fees for the period when we were made to shut down or business operations were restricted,” says Mr Pradeep Shetty, Sr. VP, HRAWI.


During the lockdown period, Maharashtra’s hospitality industry has suffered a revenue loss of approximately Rs.5,000 Cr monthly.


“50 per cent of the industry had already shut down and owners had no earnings for the last two years. Additionally, no financial institutions were and most still aren’t willing to lend to the industry. Owners of hotels, restaurants and bars are facing severe difficulties in raising capital. We feel, being in the legitimate business of serving alcohol along with food, we are also entitled to all rights including rights under Article 14 especially, when industry and licence holders are not treated fairly. For now, the SC interim order states that the Excise Licence fee of FY 2021-22 for members who have paid 50 per cent fees will be protected and won’t have to pay the additional 50 per cent demanded by the State Excise Department. We shall continue to exhaust our right to legal remedy before the SC to uphold the right of the Associations to advocate the interests of members in the larger interest of the industry,” concludes Mr Shetty.

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