Excise teams probe alleged illegal bar at DSOI Palam Vihar

Officials will inspect liquor stock, procurement records and billing to check if CSD liquor was served commercially without a mandatory licence.

The Haryana excise department has formed teams to probe allegations that an illegal bar was operating inside the Defence Services Officers’ Institute (DSOI) in Palam Vihar serving liquor procured from the Canteen Stores Department (CSD), officials aware of the matter said on Tuesday. The alleged violation, if confirmed, could have resulted in significant loss of revenue to the state exchequer.

The club allegedly lacked an L-12C licence, raising concerns of tax evasion and misuse of subsidised CSD liquor meant for personal use. (Parveen Kumar/HT)

The issue surfaced after a complaint was submitted to the excise department, which alleged that the club was serving liquor sourced from CSD without obtaining the mandatory L-12C licence under the Haryana Excise Policy (HEP). Under the policy, any club or institution serving liquor is required to hold a valid licence and pay prescribed annual fees and applicable taxes.

Ashok Panchal, deputy excise and taxation commissioner (DETC), west Gurugram, said that as per department records, the club had never applied for permission to serve alcohol. “DSOI Palam Vihar has not applied for a liquor licence and does not have authorisation to serve liquor. We are not aware if a bar is being operated on the premises. Teams have been formed and inspections will be carried out on Wednesday. If violations are found, action will be taken.”

He added that unauthorised serving of liquor directly impacts government revenue. “Any activity involving sale or service of liquor without a licence results in a loss to the exchequer, which is a serious concern,” he said.

The club’s secretary, who asked not to be identified as he was not authorised to speak to the press, acknowledged that the club did not possess a liquor licence. “We have never applied for a liquor licence. Liquor was being purchased from the CSD canteen and served in the club bar. We were not aware that a separate licence was mandatory. The matter has now been referred to our senior authorities,” the officer said.

The complainant, Supreme Court advocate Rajeev Yadav, said the financial implications extend well beyond the licence fee. “The L-12C licence costs about ₹42 lakh annually. More importantly, licensed clubs are required to procure liquor from authorised vends and levy 18.9% VAT on the sale price per peg, which is substantially higher than the subsidised bottle rate.”

He alleged that sourcing liquor from CSD and serving it through a bar amounts to misuse of a government subsidy meant strictly for individual defence personnel. “CSD liquor is heavily subsidised and issued under individual quotas for personal consumption. Using it for commercial serving not only violates excise law but also leads to tax evasion and illegal diversion of subsidy. Even a single club could annually cause VAT losses running into crores,” Yadav said.

According to the complaint, procurement of liquor from CSD does not confer any exemption from excise licensing or taxation norms. Serving or billing such liquor through a bar setup constitutes commercial activity under the excise law, regardless of the institution’s nature.

Excise officials said the inspection at DSOI Palam Vihar will include verification of liquor stock, procurement records, billing practices and overall compliance with excise regulations. “If liquor meant for personal consumption is found to be served commercially, it will be treated as a clear violation,” an official said.

The case has also triggered questions over enforcement gaps and oversight at defence-linked institutions operating in civilian areas. Officials indicated that further action – including penalties, recovery of dues, seizure of liquor or sealing of premises – will depend on the outcome of the inspection and the evidence gathered.