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38. Penalty for possession or knowledge of possession of intoxicant.- If any person has (1) in his possession, without lawful authority, any liquor or intoxicant, knowing or having reason to believe the same to have been unlawfully imported, transported, manufactured, or knowing or having reason to believe that the prescribed duty has not been paid thereon; or

(2) any knowledge about the possession or storage without lawful authority, of liquor or intoxicant, in his premises or the premises that he is occupying and if he fails to inform the nearest excise officer or the police officer, then;

he shall be punished with imprisonment for a term which may not be less than eight years but which may extend to ten years and shall also be liable to fine which may extend to ten lakh rupees and in default of payment of fine, shall be punished with a further imprisonment for a term which may extend to one year.

Explanation.-"Possession "here means the possession by any family or member of that family and includes the knowledge of possession where any member of a family or the family itself know that such possession is illegal, whether it is in his or her own possession or with some other member of the family.