HP High Court Quashes FIR Against Liquor Bottling Unit Over Failure To Affix Holograms, Imposes ₹1 Lakh Penalty Under Excise Act

The Himachal Pradesh High Court has held that the mere failure to affix holograms on liquor bottles does not constitute a criminal offence under Sections 39(1) and 39(2) of the Himachal Pradesh Excise Act, 2011. The Court observed that such omission is specifically covered under Section 43 of the Act, which provides for imposition of a monetary penalty and is compoundable. Accordingly, the Court quashed the FIR and criminal proceedings initiated against the proprietor of a liquor bottling unit while imposing a penalty of ₹1 lakh for the statutory violation.Justice Sandeep Sharma remarked that: “As has been observed herein above, omission, if any, of licensee to put hologram, doesn't constitute an offense under Sections 39(1) and 39(2) of the Act, rather, qua aforesaid omission, licensee can be imposed penalty in terms of Section 43 of the Act.” Background: The petitioner, proprietor of M/s Mars Bottlers, approached the High Court under Section 482 CrPC seeking quashing of an FIR registered under Sections 39(1) and 39(2) of the Himachal Pradesh Excise Act. The FIR alleged that liquor bottles were being transported without a valid licence and without holograms. However, during investigation, no evidence was found of illegal transportation without licence. Despite the Excise Department informing the police that such contravention attracted only Section 43 of the Act, the investigating agency filed a charge sheet under Sections 39(1) and 39(2).The Court held that the allegations in the FIR did not disclose any offence under Sections 39(1) and 39(2) of the Excise Act, as there was no allegation of unlawful production, transport or sale of liquor. The Court observed that the only omission attributed to the petitioner was failure to affix holograms on certain bottles, which is governed by Section 43 of the Act and is punishable by way of penalty.The Court further noted that the Excise Department itself had communicated to the police that omission to affix holograms due to human error constituted a compoundable contravention under Section 43 and requested transfer of the matter to the Excise authorities. Ignoring this, the police nevertheless proceeded with prosecution under Section 39.The Court also observed that the duty to ensure affixation of holograms rested not only upon the licensee but also upon the Excise and Taxation Officer deputed at the factory. It noted that the FIR against the Excise Officer involved in the same incident had already been quashed by a coordinate Bench.Holding that continuation of the prosecution would amount to an abuse of the process of law, the Court quashed the FIR and consequential proceedings against the petitioner. However, considering the admitted violation of Section 43, the Court exercised its jurisdiction to impose a penalty of ₹1 lakh upon the petitioner, directing that the amount be deposited with the Excise Department within four weeks, whereupon the pending proceedings under Section 43 would stand concluded.Case Name: Manik Kumar v/s State of H.P. & anotherCase No.: Cr.MMO No.1191 of 2023Date of Decision: 14.07.2026Click Here To Read/Download Order

HP High Court Quashes FIR Against Liquor Bottling Unit Over Failure To Affix Holograms, Imposes ₹1 Lakh Penalty Under Excise Act

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HP High Court Quashes FIR Against Liquor Bottling Unit Over Failure To Affix Holograms, Imposes ₹1 Lakh Penalty Under Excise Act

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