§ 127. Surrender and cancellation of licenses; payment of refunds; notice to police officials. 1. If a person holding a license to traffic in alcoholic beverages under the provisions of this chapter, against whom no complaint, prosecution or action is pending on account of any violation thereof, shall voluntarily, and before arrest or indictment for a violation of this chapter, cease to traffic in alcoholic beverages during the term for which the license fee is paid, such person may surrender such license to the liquor authority for cancellation and refund, provided that such license shall have at least one month to run at the time of such surrender. Such refund shall be computed for full months less thirty dollars, commencing with the first day of the month succeeding the one in which such license is surrendered, unless such surrender be on the first day of the month; and at the same time such person shall present to the liquor authority a verified petition setting forth all facts required to be shown by the liquor authority upon such surrender. The liquor authority shall thereupon compute the amount of refund then due on said license for the unexpired term thereof, and shall execute a receipt therefor showing the name of the person to whom such license was issued, the number thereof, date when issued, amount of license fee paid therefor, and the date when surrendered for cancellation, together with the amount of refund due thereon at such date as computed by it, and the name of the person entitled to receive the refund. Such receipt shall be delivered by the liquor authority to the person entitled thereto. If within thirty days from the date of such surrender and application, the person surrendering such certificate shall be arrested or indicted for a violation of this chapter, or proceedings shall be instituted for the cancellation of such certificate, or an action shall be commenced against him for penalties, such petition shall not be granted until the final determination of such proceedings or actions; and if the said petitioner be convicted, or said action or proceedings be determined against him, the authority may direct that any refund due thereunder be forfeited or may impose such other penalty or conditions it may deem appropriate in the circumstances but if such petitioner be acquitted, or such proceedings or action against him be dismissed on the merits or, if within such time, no such action or proceeding shall be brought against such person, then the liquor authority shall prepare an order for the payment of such refund, directed to the comptroller, to be paid him, on his audit, upon the surrender of the receipt theretofore given such person; provided, however, that if any taxes or penalties imposed by article eighteen of the tax law or if any civil penalties imposed under this chapter are unpaid by such person, the amount of such taxes, penalties or civil penalties shall be deducted from the amount of such refund. Any refunds due on the surrender and cancellation of licenses pursuant to this section shall be paid by the comptroller from moneys in his custody, derived from license fees received pursuant to this chapter.

2. It shall be the duty of the liquor authority, upon the receipt of a license surrendered for cancellation and refund pursuant to this section, to immediately serve a written or printed notice upon the commissioner of police, chief of police, or chief police officer of the city, borough or village in which the place for which the surrendered license was issued is situated, or upon the sheriff of the county and a constable of the town, in case the license was issued for a place situated in a town and not within any city, borough or village, which notice shall include a statement of the number of the surrendered license, the name and place of residence of the holder of the license at the time of surrender, the location of the place for which the license was issued and was held at the time of surrender by street and number, if any, otherwise such apt description as will definitely locate the premises; the fact that such license has been surrendered; that the traffic in alcoholic beverages at said premises by any one is not authorized until a new license has been obtained therefor; and the date when such license was surrendered for cancellation. Such notice may be served by registered or certified mail, by inclosing the same in a post-paid sealed envelope, duly addressed to such officer.