Fair price shop licence cancellation cannot stand when authorities ignore connectivity and offline distribution evidence.

The petitioner held a Fair Price Shop licence in Cachar, Assam. His licence was cancelled by the Superintendent, Food and Civil Supplies and Consumer Affairs, Silchar, by order dated 11.05.2023 under Clause 15(2) of the Assam Public Distribution Articles Order, 1982, primarily for alleged non-compliance with the electronic Point of Sale (ePoS) system.

The petitioner contended that his locality suffered from inadequate internet connectivity and that the applicable ePoS guidelines permitted transactions in occasional offline mode. He further relied on records showing substantial offline distribution, allegedly amounting to 60.77% during the relevant period.

His appeal was rejected by the District Commissioner, Cachar, on 20.10.2023.

The petitioner also asserted that the required mobile-footprint survey or inspection had not been conducted despite complaints regarding connectivity.

Whether the appellate authority’s order rejecting the petitioner’s appeal was sustainable when it failed to consider the pleaded internet-connectivity difficulties and the applicable provisions permitting occasional offline ePoS transactions.

Whether the authority was required to consider the petitioner’s specific defence and supporting material regarding offline distribution before affirming cancellation of the Fair Price Shop licence.

Whether the matter required remand for fresh consideration in accordance with law and principles of fair administrative decision-making.

The Court applied Clause 15(2) of the Assam Public Distribution Articles Order, 1982, under which a Fair Price Shop licence may be cancelled for established violations.

It relied on Clause 2.6.2 of the ePoS Request for Proposal, which permits both online and occasional offline transactions depending on internet availability, with transaction details being stored locally for subsequent processing.

Clause 5.1.1 requires a mobile-footprint survey to identify the most reliable mobile-internet service provider for Fair Price Shops.

The Court also followed Santanu Medhi v. State of Assam & Ors., 2014 (3) GLT 253, for the principle that all material grounds raised in response to a show-cause notice must be considered before cancellation of a licence.

The Court referred to K.S. Puttaswamy (Retd.) v. Union of India, (2019) 1 SCC 1, which recognised that the functioning of PoS machines and biometric verification in the public distribution system depends upon internet connectivity.

The Court found that internet connectivity was a material issue because the petitioner’s alleged failure to operate through ePoS could not be assessed independently of the technical conditions governing the system.

The RFP itself contemplated occasional offline transactions and required a mobile-footprint survey, yet there was no apparent consideration of whether such an inspection had been conducted or whether the petitioner’s locality had reliable connectivity.

Further, the petitioner’s specific assertion that substantial distribution had occurred through offline mode, supported by material indicating 60.77% offline distribution, was not addressed in either the cancellation order or the appellate order.

Applying the principle that relevant grounds and supporting material must be considered, the Court held that the appellate decision suffered from non-consideration of material factors and therefore required fresh examination.

The authority was directed to consider, in particular, the internet-connectivity issue, the provisions concerning occasional offline ePoS transactions, the requirement of mobile-footprint inspection, and the petitioner’s material regarding offline distribution.

The petitioner was to be given an opportunity of hearing, and the exercise was directed to be completed preferably within three months from receipt of the certified copy of the judgment, with the result communicated to him.