Gauhati High Court
Aether Breweries Llp vs The State Of Assam And 3 Ors on 2 April, 2026
Page No.# 1/15
GAHC010067482026
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THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/1932/2026
AETHER BREWERIES LLP
2ND MILE, NAMSAI, DISTRICT- NAMSAI, ARUNACHAL PRADESH, 792103,
REPRESENTED BY ONE OF ITS PARTNERS
VERSUS
THE STATE OF ASSAM AND 3 ORS
REPRESENTED BY THE CHIEF SECRETARY TO THE GOVERNMENT OF
ASSAM, ASSAM SECRETARIAT, DISPUR, ASSAM- 781006
2:THE COMMISSIONER AND SECRETARY
GOVERNMENT OF ASSAM
EXCISE DEPARTMENT
GOVERNMENT OF ASSAM
ASSAM SECRETARIAT
DISPUR- 781006
3:THE COMMISSIONER OF EXCISE
GOVERNMENT OF ASSAM
EXCISE DEPARTMENT
HOUSE-FED COMPLEX
DISPUR
GUWAHATI- 781006
4:ELECTION COMMISSION OF INDIA
NIRVACHAN SADAN
ASHOKA ROAD
NEW DELHI- 11000
Advocate for the Petitioner : DR. ASHOK SARAF, MR. N SARMA,MR. S P SHARMA,S DAS
Advocate for the Respondent : GA, ASSAM, SC, ECI,SC, EXCISE DEPTT.
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BEFORE
HONOURABLE MR. JUSTICE ANJAN MONI KALITA
ORDER
Date : 02.04.2026
Heard Mr. A. Saraf, learned Senior Counsel, assisted by Mr. S. P. Sharma,
learned counsel appearing on behalf of the petitioner. Also heard Mr. P. N. Goswami,
learned Addl. Advocate General, representing the State respondent nos. 1, 2 & 3 and
Mr. A. I. Ali, learned Standing Counsel, representing the Election Commission of
India (ECI).
2. The instant petition, under Article 226 of the Constitution of India has been
filed by the petitioner, which is a registered Limited Liability Partnership firm in the
State of Arunachal Pradesh, being aggrieved by the impugned order dated
24.03.2026, issued by the Excise Commissioner, Govt. of Assam, whereby, issuance
of Transit Pass has been completely prohibited for movement of liquor
consignments originating from outside the State of Assam, destined to other States,
passing through the State of Assam during the operation of the Model Code of
Conduct (MCC) for the election of Assam Legislative Assembly, 2026.
3. The petitioner’s case is that the petitioner is engaged in the business of
manufacturing, bottling, packaging and manufacturing-export of beer or beer
related drinks and as the petitioner’s factory is located at Namsai, Arunachal
Pradesh, the petitioner is required to transit, cross Assam border for delivering it’s
manufactured goods in different States of India. In usual course, for travelling to the
Consignee State (importer) via Assam, a Transit Pass is required to be issued to the
petitioner by the Assam Excise Department in terms of Rule 338 (a) of Assam
Excise Rule, 2016. On issuance of such Transit Pass, once the vehicle enters the
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designated entry check gate of Assam Excise Department, the same is checked and
endorsed digitally and manually by the officers of the Excise Department and it is
sealed and signed by them and when the said vehicle exits Assam, then the said exit
post of Assam Excise Department, the Excise Department officers, redo the entire
exercise for ensuring that no tampering has been done to the seal that was
endorsed in the entry check gate. It is also stated that for ensuring that no
unauthorized liquor is being sold in the State of Assam while transporting the
liquor, the State Excise Department of Arunachal Pradesh, as per the requirements
of Rule 338 (a) of the Assam Excise Rule ensures that only container vehicle which
is closed from all sides and having single rebated door are being used along with
digital lock and this lock can only be opened via an OTP, which is generated once
the vehicle reaches the consignee destination.
4. It is the case of the petitioner that the petitioner is in receipt of import
permits for delivering liquor beverages issued by different consignee located in
different States of India and those import permits which are issued to the consignee
have their own validity dates and in the event of expiry of those validity dates, the
petitioner will suffer irreparable loss and injury. Against the aforesaid import
permits, the petitioner applied for export permits to the Excise Department of
Arunachal Pradesh and after due verification of the import permits, the export
permits were issued to the petitioner, which too have their respective expiry dates.
In this connection, 2(two) charts, one for import permits and other for export
permits are provided in the writ petition. It is also contended that the export
permits so issued, the route from origin to destination is mentioned and it is
mandatory for the vehicle carrying the liquor beverages to follow the aforesaid
routes and in case, the vehicle fails to follow the specified routes as mentioned in
the export permit, the vehicle is liable to be detained and the goods are liable to be
confiscated by the Excise department of the concerned state.
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5. In view of the aforesaid issuance of the import and export permits, the
petitioner had applied for Transit Passes, under Rule 338 (a) of the Assam Excise
Rules, 2016, to the Excise Department of Assam for crossing and entering the
border of Assam. However, the petitioner was denied of such Transit Passes by the
Excise Department, Govt. of Assam, in view of the order dated 24.03.2026, which
has been impugned in the instant writ petition. The impugned order dated
24.03.2026, provides that no Transit Pass shall be issued for movement of any
liquor consignment meant for other States through the State of Assam during the
period of MCC for the election of the Assam State Legislative Assembly, 2026, being
in force.
6. Mr. A. Saraf, learned Senior Counsel, appearing for the petitioner submits that
the denial of Transit Pass, in view of the order dated 24.03.2026, is in gross
violation of the mandates of the Constitution of India, being violative of Article 301
of the Constitution, which guarantees freedom of trade, commerce and intercourse
throughout India. He submits that the impugned order has been issued by the
Assam Excise Department in violation of Rule 338 (a) of the Assam Excise Rules,
2016 (as amended). He submits that the Rule 338 (a) has been brought in for
providing safe transit of liquor though the State by issuing Transit Pass with due
compliance to the aforesaid provision. He submits that the Rule 338 (a) is a very
detailed and complete rule, which stipulates the terms and conditions under which
the Transit Pass will be issued to a party. Therefore, if the aforesaid terms and
conditions as laid down in Rule 338 (a) are being complied with by a party, there is
no question of any further restrictions in the movement of the vehicle of the party.
He submits that since the provisions are detailed and exhaustive, the same protects
the concern of the Assam Excise Department about illegal selling of liquor in the
State of Assam, while transporting the same.
7. The learned Senior Counsel submits that the impugned order is in violation of
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Article 301 of the Constitution of India, which guarantees freedom in its widest
amplitude, freedom of prohibition, control, burden or impediment in commercial
intercourse. He submits that any restrictions of such free trade, commerce and
intercourse, the validity of such restrictions can only be sustained if it satisfies the
requirements of Article 302 and 304 of the Constitution of India. He submits that
for a restriction to be reasonable, it has to satisfy that such restrictions has been
done in the public interest or for levy of tax on goods manufactured in the State or
likewise and that can only be done by the Parliament or the State Legislature. He
submits that the impugned order is neither passed by the Parliament or a State
Legislation and the same is simply an administrative order and therefore, the same
cannot be sustained under the law. He further submits that the impugned order is
in violation of fundamental rights of the petitioner guaranteed under Article 19(1)
(g) of the Constitution. He submits that the restriction by a State is permitted under
Article 19(6) of the Constitution of India. However, the same restriction is to be
reasonable, striking a proper balance between the freedom of Article 19(1) (g) and
the restriction under Article 19(6) of the Constitution. He submits that the total ban
on issuance of Transit Pass to the petitioner in the instant case whose huge
consignments destined to other States are being stranded and since the
consignments were issued against the export permits, which have their respective
validity dates and in the event of expiry of such validity dates, the petitioner will
suffer irreparable loss, which cannot be compensated on a later stage. He submits
that the MCC issued by the ECI provides for monitoring of certain activities
involving liquor with the State of Assam is having it’s Assembly Election. However,
it does not provide any specific instructions for any such restrictions on transit of
liquor through the State of Assam before or during the election. Therefore, he
submits that though the impugned order seems to have been passed under the
instructions of the ECI, without any such instructions of ECI backed by any
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particular law and the same being not placed before this Court, the impugned order
cannot be sustained.
8. The learned Senior Counsel appearing for the petitioner has referred to the
case of Indian Cement and Others Vs. State of Andhra Pradesh and Others,
reported in (1998) 1 SCC 743, to support his argument that any restrictions on the
rights under Article 301 of the Constitution of India can be made by the Parliament
or the State Legislature. No power is vested in the Executive authority to act in any
manner which effects or hinders the very essence and thesis contained in the
scheme of Part XIII of the Constitution. The Hon’ble Supreme Court observed in the
case that the declaration contained in Part XIII of the Constitution is against
creation of economic barriers and/or pockets which would stand against the free
flow of trade, commerce and intercourse. The learned Senior Counsel emphasized
the aspect that the petitioner’s rights under Article 301 for freedom of trade,
commerce and intercourse throughout the territory of India has been curtailed
without being backed by any law enacted by the Parliament or the State Legislature.
9. Mr. P. N. Goswami, learned Addl. Advocate General, appearing for the Excise
Department, Assam, at the outset, on instructions, submits that the impugned
order, though mentioned that the order will be in effect during the period of MCC
for the election of the Assam Legislative Assembly, 2026, however, the same will be
in effect only till 9th April, 2026, when the polling of votes for the said election will
complete. Therefore, he clarified that the impugned order will be in effect only till
9th of April, 2026.
10. Mr. Goswami, learned AAG, submits that the impugned order has been passed
in pursuance of special instructions, issued by the ECI in the Inter State Border
Meeting held through video conferencing on 24.03.2026. He submits that in the
aforesaid video conferencing, various aspects of movement of liquor to other States
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during the Assembly election, 2026, was discussed and thereafter, a conscious
decision was taken for not issuing any Transit Pass for the movement of any liquor
consignments meant for other States through the State of Assam during the period
of in force of MCC for the Assam Legislative Assembly election, 2026.
11. The learned AAG submits that there is no violation of Article 301 of the
Constitution of India in the instant case by issuance of the impugned order by the
Excise Department of Assam. He submits that liquor is a commodity which falls
under the category of “Res Extra Commercium” and therefore, there is no
fundamental right to do trade or business in liquor. Therefore, he submits that the
impugned order which was passed in terms of the instructions of the ECI, due to the
Assam Legislative Assembly election, 2026, is issued only for a temporary
restriction in the transit for conducting the election in a free, fair and lawful
manner. He submits that the action of issuance of the impugned order has been
taken because of the fact that huge quantities of seizure of liquor not meant for sell
in Assam by the Excise Department, Assam. He submits that the surge in such
recovery and seizure of illicit liquor not meant for sell in Assam is due to the fact of
selling of such liquors by various parties transporting liquor through the State of
Assam to other States. In this connection, the learned AAG has submitted a chart
providing some details of such recovery in recent times.
12. The learned AAG has also referred to the provisions of Section 8, 9 & 10 of
the Assam Excise Act, 2000, which provides for restriction on import, restriction on
import and transport and prohibition of import, export and transport respectively.
He specifically emphasized on Section 10(b) which provides for prohibition to
transport of any intoxicant. In view of the provisions prescribed under the
aforesaid Sections, the learned AAG submits that the State Government has the
power to restrict or prohibit the transport of any intoxicant in the State of Assam.
He submits that since the Act 2000 specifically provides for a right to the State to
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restrict or prohibit the transport of any intoxicant which includes liquor, the
restriction put on Transit Pass, vide the order dated 24.03.2026 is in consonance
with the provisions of the Assam Excise Act, 2000, and therefore, the same cannot
be challenged by the writ petitioner by filing the instant writ petition. He further
submits that the restriction is only temporary in nature which will come to an end
on 9th of April, 2026, after completion of polling in the said election. Therefore, it is
submitted that there will be no harm caused to the petitioner by such temporary
restrictions.
13. The learned AAG, in support of his submission that there is no fundamental
right in doing trade, commerce and intercourse in liquor and such rights under
Article 301 of the Constitution can be restricted by the State Government, has
referred to the case of Khoday Distilleries Limited and Others Vs. State of
Karnataka and Others, reported in (1995) 1 SCC 574 and Sat Pal and Co. and
Others Vs. Lt. Governor of Delhi and Others, reported in (1979) 4 SCC 232.
Relying on the ratios laid down in the aforementioned two cases, the learned AAG
submits that if there is not fundamental right to carry on trade or business of liquor,
there is no question of its abridgement by any restriction which is reasonable. He
submits that State, under its regulatory power has a right to control or even to
prohibit absolutely every form of activity in relation to intoxicants apart from
anything else, its import and transportation too. He submits that the restriction that
has been brought in by way of the impugned order is only for the limited purpose of
conducting a free and fair election without being influenced by any external factors
like distribution of illicit liquor. In view of the aforesaid, the learned AAG submits
that the instant writ petition does not have any merit for any interference by this
Court and taking into account the welfare of general public and for completion of a
free and fair election, this Court may not grant any interim relief to the petitioner at
this stage.
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14. Mr. A. I. Ali, learned counsel appearing for the ECI, submits that he does not
have any instructions as to whether the impugned order passed by the Excise
Department, Govt. of Assam, is, in fact, passed on instructions of the ECI as stated in
the impugned order. However, he submits that the MCC issued by the ECI, provides
for restriction during 48 hours and the day of poll and re-poll. But, he could not
submit any provision in the MCC, which actually provides for any provision of
restrictions prior to the election as regards transit of vehicle carrying liquor
through the State of Assam.
15. It is seen from the impugned order dated 24.03.2026, issued by the
Commissioner of Excise Department, Assam, that the order was passed in
pursuance of instructions issued by the ECI in the Inter State Border Meeting held
through video conferencing on 24.03.2026, whereby, it was decided not to issue any
Transit Pass for movement of any consignment of liquor during the period the MCC
for the Assam Assembly election, 2026, being in force. Neither the counsel
appearing for the ECI nor the learned AAG appearing for the Excise Department
could produce any document to show that any such instructions, as mentioned in
the impugned order has been received by the Excise Department, Assam from the
ECI. It is also could not be ascertained as to under which provision of MCC, the ECI
has issued such instructions to the Excise Department, Assam.
16. Be that as it may, the facts of the instant case is that huge number of
consignments of liquor of the petitioner which are ready for delivery of their
consignments to the consignee, could not be done due to the ban on issuance of
Transit Pass by the Excise Department, Govt. of Assam. From the chart provided in
Paragraph-8 & 9 of the writ petition, it could be seen that in respect to many
consignments, the validity of export permits have already expired and some of
them are due to be expired soon. Therefore, there is no denial of the fact that the
export permits for delivering the liquor beverages of the petitioner will be expiring
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soon and the same may cause some loss to the petitioner.
17. This Court has also gone through the provisions as referred to by the learned
AAG of the Assam Excise Act, 2000. Section-8 refers to restriction on import and
therefore, the same will not be applicable in the instant case as there is no import of
liquor from the instant petitioner. Section-9 provides that no intoxicant shall be
exported or imported unless the duty, if any, payable under Chapter-V has been
paid or a bond has been executed for the payment thereof. This will also be not
applicable in the instant case. As far as Section-10 is concerned, it provides for
prohibition of import, export and transport. It provides that the State Government
may, by notification, (a) prohibit the import or export of any intoxicant into or from
the territories to which this Act applies or any part thereof or (b) prohibit the
transport of any intoxicant.
18. It is seen that Section-10(a) shall not be applicable in the instant case as
there is no issue of any import or export of any intoxicant in the instant case. As far
as Section-10(b) is concerned, there is no transport of any intoxicant in the instant
case. It is seen that though transport has not been defined in the Assam Excise Act,
2000, but, the same is defined under the Assam Excise Rules, 2016, under 1A of the
definitions at (xxxiii). “Transport” has been defined, which provides that
“Transport” means to move from one place to another within the territories to
which this Act applies. Therefore, it refers to any transportation of liquor to one
place to another within the State of Assam, but the same seems, cannot be applied
to any act of transportation from one State to another State through the State of
Assam. Apparently, it does not refer to any transit through the State of Assam.
Therefore, prima facie, it seems that the transit of vehicle carrying liquor may not
come under the definition of such transport as mentioned under Section-10(b) of
the Assam Excise Act, 2000. However, without proper examination of the provisions
of the Assam Excise Act, 2000 and Rules made there under in 2016, it cannot be
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said with certainty that the provisions of Section-10(b) will be applicable in the
instant case.
19. It is also seen that Rule 338 (a) of the Rules, 2016, provides for establishment
of check post or barrier and inspection of liquor while in transit etc., the same being
relevant is extracted herein below: –
“338. (a) Establishment of check post or barrier and inspection of liquor
while in transit etc.:-
(1) The State Government may, by notification, direct the setting up of check post
or the erection of a barrier or both at strategic point combined with other
commercial check post or gate with a view to preventing leakage of revenue.
(2) At every vigilance check gate or check post or barrier mentioned under sub-
rule (1) or at any other place when so required the excise officer-in-charge
concerned may stop the driver or any other person in charge of animal, vessel,
cart or other vehicle as the case may be and keep it stationary as long as may
reasonably be necessary and inspect the licence or permit obtained under the
provisions of the Act and Rules and may take necessary action as deem fit and
proper.
(b) Every officer may be supplied with the following forms:-
(1) Preliminary report to Collector of arrest, seizure or search in Form No. 28 of
Schedule XXXI (Section V-Miscellaneous).
(2) Report of Magistrate under the Excise Act in Form No. 29 of the Schedule
mentioned above.
(3) Final report to Collector after disposal of a case under the Excise Act of the
Schedule mentioned above.”
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20. It is discernible from the aforesaid provisions that Rule 338 (a) of the Rules
of 2016 is a detailed provision, under which, the Transit Pass can be issued with
due compliance of the provisions detailed therein.
21. The learned AAG, appearing for the Excise Department, Assam, did not place
any other provision which mandates the transit of vehicle through the State of
Assam and available for any restrictions that can be put on such transit other than
the aforesaid provision.
22. It is also seen that an order No. 757853/3, dated 17.12.2026, was issued by
the Commissioner of Excise Department, Assam, which provides that the ECI has
issued detailed instructions in the matter of monitoring cross-border movement of
liquor during elections. Therefore, in exercise of the powers conferred, vide Rule
338 (a) of the said Rules of 2016, as amended, the aforesaid Commissioner of
Excise Department, Assam, was pleased to issue certain instructions for proper
implementation and enforcement of the provisions related to transit of
spirit/liquor through the State of Assam for compliance by all concerned. The same
being relevant are extracted herein below: –
“1. For the purpose of transit of Spirit/Liquor, only container vehicles which are
closed from all sides and having a single rebated door shall be used, with
provision for Lock and key.
2. While entering into the State of Assam, after obtaining Transit Pass under sub-
rule (1) of rule 338A, the consignor/Transporter/Driver shall get the vehicle
locked by themselves at the designated entry points (as per annexure -1) to the
State of Assam.
3. The authorised officer of the Excise Department shall countersign the Transit
Pass with an endorsement that the quantity as shown in the Transit Pass have
been physically verified and found to be correct. Further he/she shall put a wax
Page No.# 13/15seal on the lock after the verification has been done.
4. Throughout the specified route of the vehicle, any excise officer of the State of
Assam or any other officer duly authorized in this regard, may cause verification
of the consignment so transited.
5. The stipulated hours of validity period of transit passes as per sub-rule (3) of
the rule 338A shall be invariably complied with. Any violation of the time limit
shall lead to seizure of the vehicle and the consignment.
6. At the designated exit points, the authorized excise officer shall again
physically verify the consignment and shall put an endorsement on the Transit
Pass to the effect that the quantity as per the transit pass has been physically
checked and found to be correct.
7. After satisfying himself that the transiting consignment is actually crossing over
to the destined State, the authorized excise officer shall remove the wax seal at the
exit point from the lock that was put at the entry point.
8. All entry into the State of Assam shall be allowed in two time shifts i.e. 9 AM to
12 noon and 3 PM to 6 PM. However the exit shall be allowed between 9 AM to 6
PM.
9. The aforesaid instructions shall also be applicable on all the consignment
exported from the manufactories located in Assam under rule 35 to 45 of the
Assam Excise Rules, 2016 as amended as well as from the Customs Bonded
Warehouses licensed under clause (e), sub-rule (2) of rule 458 of the Assam
Excise Rules, 2016 as amended.
10. Any deviation or violation of the aforesaid instructions shall be deemed to
violation of the rules and the consignment may be liable to be seized and
confiscated as per extant Rules apart from the consignor being liable for penalty
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This order shall come into force w.e.f. 23rd February, 2026.”
23. The aforesaid provisions clearly show that detailed instructions have already
been issued by the Excise Department, Govt. of Assam for issuance of Transit Pass.
The same provides for the power for seizure and confiscation of the consignment
and penalty to the consignor if any violation of the instructions contained in the
order.
24. This Court has heard the submissions made by the learned counsel
appearing for the respective parties as well as perused the relevant provisions and
the judicial pronouncements of the Hon’ble Supreme Court cited by the learned
counsel for the respective parties.
25. It is seen that the power to issue Transit Pass is available under Rule 338 (a)
of the Assam Excise Rules, 2016 and the same provides for detailed provisions that
have to be complied with while transporting the consignments through the State of
Assam in the usual course. It is also seen that the aforesaid order dated 17.02.2026,
issued by the Excise Department, Govt. of Assam, provides detailed instructions and
the mechanism for transportation of liquor consignment through the State of
Assam during the upcoming elections of Assam Legislative Assembly, 2026. It is
also seen that any violation of the instructions, the power is given to the Excise
Department, Assam, to seize and confiscate the consignment and levy of penalty
and prosecution of the consignor as per the provisions of the Act, 2000 and Rules
made there under.
26. Though the learned AAG has submitted that there is huge number of seizure
of illicit liquors which were not meant for sell in the State of Assam but, there are
no materials to show that such seizure of the liquor belongs to the petitioner.
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Therefore, there is a possibility that since the petitioner’s consignments are ready
for delivery and if those are not delivered before the expiry of the validity dates
provided in the export permits, the petitioner will suffer financial loss.
27. Since the matter will require further detailed consideration, this Court is of
the view that notice should go to the respondents, returnable on 21.04.2026. Since
parties are duly represented, no formal notice are required to be sent, however,
extra requisite number of copies of the petition be made available to the counsel
appearing for the respondents by the petitioner.
28. In view of the discussions made above, this Court is of the considered view
that the case merits some interim relief. Therefore, it is directed that the impugned
order dated 24.03.2026, shall be stayed in respect of the petitioner and the
petitioner shall be issued Transit Pass so that the consignments can be transported
through the State of Assam till the order dated 24.03.2026 is in force.
29. It is made clear that the order is only in respect of the petitioner’s
consignments.
30. List this matter again on 21.04.2026.
JUDGE
Comparing Assistant
