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This entry was published on 2014-09-22
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SECTION 421
Registration of distributors
Tax (TAX) CHAPTER 60, ARTICLE 18
§ 421. Registration of distributors. 1. General. The commissioner,
upon the application of a distributor, shall register such distributor
in suitable books to be kept by the department for that purpose,
conditioned upon the obtaining of appropriate licenses pursuant to the
alcoholic beverage control law, and the continuance of such license
shall be a continuing condition of registration as a distributor under
this article. The application shall be in a form and contain such data
as the commissioner shall prescribe. No distributor, unless so
registered, shall make any sale of alcoholic beverages within this
state, except a sale, if any, as to which this state is without power to
impose such condition. No person, unless so registered, shall (i) import
or cause any liquors to be imported in this state for sale or use within
this state, (ii) purchase a warehouse receipt and pursuant to such
purchase then cause liquors covered by such receipt to be removed from a
warehouse in this state or (iii) except in accordance with clause (i) or
(ii) of paragraph (b) of subdivision four of section four hundred twenty
of this article, produce, distill, manufacture, compound, mix or ferment
any such liquors within this state for sale. Provided, however, that the
commissioner may exclude from registration requirements any person who
is a distributor of liquors solely by reason of the importation into
this state of no more than ninety liters of liquors during a one-year
period for such person's personal use and consumption to register as a
distributor with respect to liquor. Provided, further, that an
abbreviated registration in the from of a permit, without a bond, may be
instituted by the commissioner for the purpose of authorizing the
importation of up to three hundred sixty liters of liquors per year into
this state by an individual for such individual's personal use and
consumption in this state.

2. Temporary restraining order and permanent injunction against
unlawful importation and a forfeiture of unlawfully imported or produced
liquors. (a) In an action commenced pursuant to this subdivision
whenever evidence is furnished by the commissioner showing a substantial
likelihood that a person not registered as a distributor as required by
this article has imported or may import liquors into this state or
caused or may cause liquors to be imported into this state for sale or
use in this state or has produced, distilled, manufactured, compounded,
mixed or fermented or may produce, distill, manufacture, compound, mix
or ferment liquors within the state or, pursuant to a purchase of a
warehouse receipt, has caused or may cause liquors covered by such
receipt to be removed from a warehouse in this state, the court, taking
into consideration the fungible nature of such liquors, may make a
temporary order without notice prohibiting such person and his agents
from selling, transferring or otherwise disposing of any liquors or any
liquors and also prohibiting all other persons in possession of or
having control over the same from selling, releasing, transferring or
otherwise disposing of any liquors imported or caused to be imported,
produced, distilled, manufactured, compounded, mixed or fermented, sold
or transferred or removed by such person not so registered pending a
hearing for a preliminary injunction.

(b) Upon granting a temporary order, the court shall direct that a
hearing be held at the earliest possible time upon such notice and
service as the court shall direct. Where, after such opportunity for a
hearing, the court determines that there is a likelihood that the
commissioner will prevail in such action, the court may grant a
preliminary injunction restraining the sale, release, transfer or other
disposition of liquors subject to the temporary order.

(c) (1) Whenever the commissioner shall discover that any person not
registered as a distributor as required by this article has imported
liquors into this state or caused liquors to be imported into this state
for sale or use in this state or has produced, distilled, manufactured,
compounded, mixed or fermented liquors within the state or, pursuant to
a purchase of a warehouse receipt, has caused liquors covered by such
receipt to be removed from a warehouse in this state, the commissioner
may commence an action in supreme court for a permanent injunction and
forfeiture of liquors. If it is established by a preponderance of the
evidence that liquors were imported or caused to be imported into this
state for sale or use in this state, were produced, distilled,
manufactured, compounded, mixed or fermented, or were caused to be
removed from a warehouse in this state by the purchaser of a warehouse
receipt with respect to such liquors, by any person not registered as a
distributor, as required by this article, the court shall grant a
judgment (i) permanently enjoining such person and his agents from
selling, transferring or otherwise disposing of any such liquors or any
liquors within this state and (ii) declaring the forfeiture of any
liquors that were so imported, caused to be imported, produced,
distilled, manufactured, compounded, mixed, fermented or removed by such
person.

(2) With respect to liquors that were imported, caused to be imported,
produced, distilled, manufactured, compounded, mixed, fermented or
removed by a person not registered as a distributor as required by this
article or that were unlawfully sold or transferred by such person, if
it is established by a preponderance of the evidence that any other
person in possession of or having control over such liquors was not a
purchaser or transferee in good faith of such liquors with respect to
the fact that such liquors were so imported, caused to be imported,
produced, distilled, manufactured, compounded, mixed, fermented or
removed by a person not registered as a distributor as required by this
article or that such liquors were so unlawfully sold or transferred by
such person, the court shall grant a judgment (i) permanently enjoining
such other person and such person's agents from selling, releasing,
transferring or otherwise disposing of any such liquors and (ii)
declaring the forfeiture of such liquors in the possession or under the
control of such other person.

(d) The commissioner may, at any time subsequent to the granting of
the temporary order pursuant to paragraph (a) of this subdivision, with
the approval of the court, consent to a sale of liquors subject to such
temporary order which is in the possession or under the control of a
person other than the person or the agent of the person who imported,
caused to be imported, produced, distilled, manufactured, compounded,
mixed, fermented, removed or unlawfully sold or transferred such
liquors. As a condition of granting permission to a sale of liquors
pursuant to this subdivision, the commissioner shall require the payment
of all taxes, penalties and interest imposed by and pursuant to the
authority of this chapter with respect to such liquors.

(e) (1) At any time during the pendency of an action under this
section, the liquors subject to a temporary, preliminary or permanent
order hereunder may be released from the scope of such order if there is
given an undertaking, in an amount equal to the market value of such
liquors plus any excise, state and local sales and use and federal
excise taxes, to the effect that there will be paid to the commissioner
the amount of the market value of such liquors and such taxes in the
event that such liquors are adjudged forfeited.

(2) Any person enjoined by a temporary order or a preliminary
injunction issued pursuant to this subdivision or other person
interested in any such liquors may move at any time, on notice to all
parties, to vacate or modify it.

(f) The procedures of the civil practice law and rules applicable to
temporary restraining orders, preliminary injunctions and permanent
injunctions not inconsistent with this subdivision shall apply to
temporary orders, preliminary injunctions and permanent injunctions
issued under this subdivision. The procedural provisions set forth in
paragraph three of subdivision (d) and in subdivision (j) of section
eighteen hundred forty-five of this chapter shall apply to the
forfeiture proceedings under this subdivision and, in respect to a
declaration of forfeiture under this subdivision, the court may direct
the commissioner to sell or otherwise dispose of such forfeited liquors
on such conditions the commissioner deems most advantageous and just
under the circumstances. The commissioner shall not be required to file
any undertaking in connection with an action pursuant to this
subdivision.