Licensees prevented from operating during COVID-19 lockdown may claim proportionate fee refunds in equity, subject to proof.

The appeals arose from a common order allowing writ petitions by FL2 and FL3 licensees seeking proportionate refunds of privilege and licence fees for periods when they could not transact business during the COVID-19 restrictions.

The claims concerned either 168 days—from 17 March to 3 September 2020—or 171 days across the relevant licence years.

The Single Judge had granted relief in terms of earlier common orders.

The State appealed, contending that surrender of the liquor licence was mandatory to claim a refund under Rule 24-A of the Tamil Nadu Liquor License and Permit Rules, 1981.

Whether surrender of a liquor licence is mandatory to claim a refund of privilege and licence fees for a period when business was not transacted, under the proviso to Rule 24-A of the 1981 Rules

Whether the licensees could nevertheless obtain refund or adjustment for the COVID-19 non-transaction period, and, if so, for what period and subject to what conditions

Rule 24-A of the Tamil Nadu Liquor License and Permit Rules, 1981, including its proviso, governed claims for refund of privilege and licence fees during periods when business was not transacted.

Relying on its prior decisions dated 10 August and 24 August 2026, the Court stated that, although the licensees’ claim did not succeed as a matter of law under the Rule, equity could justify refund or adjustment for the COVID-19 lockdown period, where non-operation was beyond the licensees’ control.

The equitable relief was limited to the applicable 168- or 171-day period and was conditional on proof of non-transaction.

The Court treated the question of mandatory surrender as already addressed in its recent decisions concerning Rule 24-A.

It followed the equitable approach adopted in those decisions: the licensees could seek relief for the period they were prevented from operating by the lockdown, despite not surrendering their licences.

Applying that approach to the claims before it, the Court limited each claim to the relevant period—168 days for W.P. Nos. 10108, 10116 and 10117 of 2021, and 171 days for the other identified petitions—and required supporting evidence for the Commissioner’s consideration.

The respondents were granted liberty to submit claims to the Commissioner for refund of licence and privilege fees for the applicable 168- or 171-day period.

They were directed to submit their claims within two weeks; the Commissioner was directed, if satisfied that the claims were genuine, to pass appropriate orders on the merits and in accordance with law, preferably within twelve weeks of receiving the claims and supporting evidence.

No costs were awarded.