Madhya Pradesh High Court upholds licence cancellations for Som Distilleries over tax evasion
The Madhya Pradesh High Court has upheld the cancellation of eight licences held by Som Distilleries and Breweries Private Limited. Justice Vivek Agarwal ruled that the excise department's decision was valid, rejecting the company's appeal against the revocation. The case centred on allegations of tax evasion linked to fraudulent transport permits.
The dispute began when the excise department cancelled the licences, citing violations of regulations. The company argued that its permits should have lapsed automatically on March 31, 2024, rather than being actively revoked. However, the court found that the Excise Commissioner had acted within legal bounds.
The court also raised concerns about the show cause notice issued to the company. It noted that the managing director's name was missing from the document, which appeared suspicious. Since the director had a prior conviction, the omission suggested the commissioner may not have acted in good faith. In its ruling, the court clarified that the doctrine of alter ego—where a company is held liable for its directors' actions—did not apply here. The petitioner companies themselves had not faced prosecution or punishment for any criminal offence. Still, the court stressed that regulatory breaches could not be tolerated. This case follows a broader crackdown in Madhya Pradesh. Over the past five years, around 47 companies have faced licence cancellations or legal action for similar offences, including tax evasion and document forgery. In 2024 alone, 22 licences were revoked in Indore and Bhopal.
The High Court's decision means Som Distilleries and Breweries will lose its eight licences. The ruling reinforces the excise department's authority to penalise companies for regulatory violations. It also highlights ongoing efforts to combat tax evasion in the state's liquor trade.
