HYDERABAD: The Telangana High Court on Friday set aside an interim order suspending the collection of special privilege fees from bars and restaurants and sent the matter to the single judge for fresh consideration.
A division bench comprising Acting Chief Justice P Sam Koshy and Justice Suddala Chalapathi Rao passed the order while hearing an appeal filed by the state government against the interim relief granted to 114 bars and restaurants.
The licensees had challenged a GO issued on October 19, and a consequential circular dated October 22 imposing special privilege fees. The single judge had stayed the collection of the additional fees for four weeks and directed the authorities not to recover any amounts under the impugned orders. The excise commissioner and senior officials of the Telangana State Beverages Corporation Limited were also directed to file counter-affidavits.
Senior advocate P Vishnuvardhan Reddy, appearing for the bar owners, argued that the government could not enhance licence fees midway through an ongoing excise year. Having paid the prescribed licence fee, the licensees were entitled to carry on business for the entire excise year without being subjected to a subsequent revision, he submitted, relying on Supreme Court judgments.
He contended that the fee hike should have been announced before October 1, 2026, allowing licensees to decide whether to continue their businesses. The sudden revision, introduced 15 days after the commencement of the excise year, would reduce profit margins by 20 per cent and cause financial hardship.
Additional Advocate General Imran Khan, appearing for the state, argued that the licensees had given undertakings agreeing to pay fees imposed by the government in future. He contended that their challenge was contrary to those undertakings and sought the quashing of the interim order.