A.P Wine Dealers Association & Ors v. Deputy Director of Income Tax (Investigation) & Ors
In the Andhra Pradesh High Court
W.P.(C) 6009 of 2005
Before Justice G Bikshapathy and Justice P Narayana
Decided on April 13, 2005

Relevancy of the case: Scope of the definition of  word “document”

Relevant Facts

• Due to the decisions of this court holding certain portions of the excise policy of the State Government being bad, paving the way for issuance of No. DDIT/U-1(2)/2004-05, challenged by the first petitioner i.e. M/s. A. P. Wine Dealers Association, the second petitioner is M/s. Twin Cities Wine Merchants Association, another two, viz., Sri Pentala Ramesh Babu and Sri Aravapalli Laxminarayana. The first respondent is Deputy Director of Income Tax (Investigation), Unit 1(2), Hyderabad, the second respondent is Commissioner of Prohibition & Excise, Government of Andhra Pradesh. Respondents Nos. 3 to 26 are the Prohibition & Excise Superintendents in the State of A.P.
• The relief prayed is for a writ of mandamus declaring the action of first respondent in calling upon the Superintendents of Excise and Prohibition to produce the demand drafts submitted by various applicants within 24 hours of delivery of judgment by this court in the pending writ appeal as illegal, arbitrary and in excess of the powers conferred on first respondent and consequently direct the Excise Superintendents to release the original drafts to the various applicants.

Prominent Arguments by Advocates

• Sri S. Ravi, representing the writ petitioners reiterated that the petitioner would be ventilating the common grievances of the members of the association and concentrated on the aspect of power, jurisdiction of the respondent in issuing the impugned proceeding. Also, the demand draft is virtual money and would not fall under the expression “document” and that the traditional view of locus standi had undergone a change and on that technical plea the rights of the parties cannot be defeated.
• The counsel also explained the meaning of “document” and “negotiable instrument” and the procedure of the banking institutions, adopted by the Excise Department and the powers of the Income Tax Department. When a prejudicial action is taken, the professional bodies representing the trade would be espousing the cause and protecting the interests of the members of such association and hence writ petition cannot be thrown out on locus standi. It was concluded when a larger public interest is involved, such action may have to be held bad for lack of power and authority to exercise such power.
• Sri S.R. Ashok, learned senior counsel representing the IT Department raised an objection relating to locus standi of the writ petitioners, submitting that this is not a common cause of action and the applicants, having individual causes of action, may have to approach the court ventilating their individual grievances. The counsel submitted that this is not a PIL and inasmuch as the petitioners approached the court with an oblique motive for extraneous considerations to lend a helping hand to dishonest persons, concealing their wealth. In the interest of protecting the public exchequer due to numerous persons and large scale fraud involved, the Department had issued the impugned proceeding in relation to the enormous monetary dealings in the form of demand drafts.
• The counsel contended that if the crucial material is returned to applicants, the investigation cannot be completed by the department and the protection of public exchequer is of paramount importance and non-production of demand drafts would definitely jeopardize their interest especially in light of the fact that the petitioners had not approached this court with clean hands, the relief prayed cannot be granted.

Opinion of the Bench

• The demand draft is a “document” and merely because demand draft also happens to be a negotiable instrument under Negotiable Instruments Act it cannot lose its basic characteristic feature of being a document. For the purpose of invoking Section 131(1) of the Act, it is sufficient if it is a document and merely because it is valuable or invaluable document, it doesn’t cease to be a document. The expression “document” includes an electronic record as defined in Section 2(22AA) of the Income Tax Act.

Final Decision

• The petition is allowed with a direction to all the concerned Excise and Prohibition Superintendents to return the demand drafts to all the applicants within a period of two weeks. In the interest of public exchequer, this court makes no order as to costs.

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