HC stays Telangana’s special privilege fee on bars for 4 weeks | Hyderabad News
Hyderabad: Telangana high court has granted temporary relief to bar owners by staying, for four weeks, the implementation of a GO imposing a special privilege fee on bars, while examining the legality of the new levy challenged by more than 100 licence holders.Justice Namavarapu Rajeshwar Rao passed the interim order on Oct 30 while hearing two writ petitions filed by bar owners from the erstwhile Warangal district challenging the fee introduced by the excise department through the GO issued on Oct 19. The court adjourned the matter to Nov 27 for further hearing.Senior counsel P Vishnuvardhan Reddy, appearing for the petitioners, argued that the govt lacked statutory authority under the Excise Act and the rules framed thereunder to impose the new levy. He contended that the fee was illegal and contrary to earlier judgments of both the high court and the Supreme Court on similar issues.The petitioners further argued that the imposition and collection of such a fee without specific legislative sanction violated Article 265 of the Constitution, which mandates that no tax shall be levied or collected except by authority of law.According to the petitions, the newly-introduced ‘privilege fee‘, ranging from 8% to 16% on liquor supplied to Form 2B bar licence holders, was imposed in the middle of the licence period.The bar owners submitted that their licences for the period Oct 2026 to Sept 2027 had already been renewed after payment of annual bar excise tax ranging between ₹42 lakh and ₹55 lakh and submission of the required bank guarantees.They contended that although the proposal was under consideration at the time of licence renewal, no prior notice, draft proposal or transition period was provided. The petitioners argued that the additional levy, apart from the existing turnover tax, imposed a significant financial burden that could adversely affect the viability of their businesses and lead to forfeiture of deposits.Opposing the petitions, govt pleader for the prohibition and excise department A Jagan argued that the licence holders had furnished undertakings agreeing to pay any fees that may be imposed by the govt in future. He contended that, having accepted those conditions, the petitioners could not subsequently challenge the GO and maintained that the levy was legally sustainable.After hearing both sides, Justice Rajeshwar Rao granted an interim stay on the implementation of the GO for four weeks and posted the matter for further hearing after the expiry of the stay period.
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