The Congress-led UDF government in Kerala appears to have changed its position on renewing bar licences for hotels that have not completed the mandatory star-classification process, a move that has brought its earlier criticism of the LDF government under scrutiny.

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The issue concerns the renewal of bar licences for hotels whose applications for star classification are pending or have been rejected by the Union Tourism Ministry. The previous LDF government had allowed such establishments to continue operating, citing delays in the Centre's inspection process.

The Congress, then in the Opposition, had strongly criticised the decision, describing it as one of the biggest organised corruption scandals in Kerala. However, the UDF government's position before the Kerala High Court reportedly supported the previous government's approach.

The controversy has resurfaced after Excise Minister M Liju said on Monday that the government would not renew bar licences for hotels whose applications for star classification had been rejected by the Union Tourism Ministry.

UDF government faces questions over its stand before High Court

The controversy centres on an affidavit submitted before the Kerala High Court on September 29 by the Additional Secretary in the Tax Department.

The affidavit reportedly defended the previous government's decision to renew bar licences for hotels awaiting star classification, maintaining that delays in the Union Tourism Ministry's inspection process should not force establishments to shut down.

The position has raised questions about whether the UDF government has departed from the stand taken by Congress leaders when the LDF was in power.

In 2024, the Comptroller and Auditor General (CAG) had reportedly flagged procedural irregularities in the renewal of bar licences without the required star classification. The audit observations also raised concerns about possible corruption in the process.

The previous government is accused of extending licences to around 200 bars without following the prescribed procedures.

Centre had reportedly blamed hotels for inspection delays

The LDF government had justified its decision by arguing that the Union Tourism Ministry was taking too long to complete star-classification inspections.

The delay had become particularly pronounced during the Covid-19 pandemic. The state had initially granted relaxations to hotels to obtain or renew bar licences even without completing the classification process.

The previous government subsequently continued with the arrangement, citing the Centre's inability to process applications within the stipulated period.

However, a communication from the Union Tourism Ministry in February 2025 reportedly presented a different picture.

According to the document, the Centre had informed the Kerala Government in writing that the delay in completing the classification process was attributable to the hotels concerned and not to any failure on the part of the ministry.

The communication indicated that the hotels themselves were responsible for the delay. Despite this, the previous government continued renewing their bar licences.

The issue has gained fresh significance because the UDF government reportedly defended the earlier decision in its affidavit before the High Court.

Minister says rejected applications will not qualify for renewal

Responding to questions about bar licences being renewed for hotels whose star-classification applications were still pending, Excise Minister M Liju said a valid star classification was mandatory for renewing a bar licence.

The classification is granted by the Union Tourism Ministry. However, delays in processing applications since the Covid-19 pandemic had led the state government to renew licences with the approval of the state Tourism Department, he said.

Liju said he had directed officials to collect details of hotels whose applications for renewal of star classification had been rejected by the Centre.

"Delay in processing an application cannot be attributed to the applicant. However, if the Union Tourism Ministry has rejected an application, it has to be viewed seriously," he said.

The minister added that the government had not yet received complete details of the rejected applications. The Tax Secretary had informed him that the required information was still awaited from the Union Tourism Ministry.

Liju said he had examined the affidavit filed before the High Court and understood that the government would maintain the same position before the court.

"The government has no responsibility to renew bar licences for hotels whose star classification applications have been rejected. Once the details of such hotels are received, the government will take a decision," he said.

He also maintained that the previous government had taken the position that hotels should not be forced to shut down merely because the Union Tourism Ministry could not complete inspections within a stipulated period owing to its workload.

The Centre had also informed the state about difficulties in completing the classification process on time, he said.

The minister's latest remarks, however, draw a distinction between applications awaiting a decision and those that have been rejected.

He said the government would examine the newly reported information and conduct a detailed investigation into the matter.