Allowed

Craft Breweries Association of India v. the Principal Secretary to Govt

Karnataka HC29 Mar 2023WP/384/2022

Case brief

AI extract

What is this about?

The High Court allowed this writ petition, quashing a rejection order and direct excise officers to refund or adjust unutilized excise duty for petitioners operating microbreweries for the relevant excise year, citing the earlier judgment in WP No. 11772/2020.

What did the court decide?

The impugned endorsements and notifications were quashed. The Excise Commissioner was directed to refund or adjust the unutilized excise duty and additional excise duty paid by the petitioners for the

Craft Breweries Association of India… — Constitutional and Fundamental Rights | Karnataka HC (2023)

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WP No. 384 of 2022

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 29^TH DAY OF MARCH, 2023

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 384 OF 2022 (EXCISE)

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BETWEEN:

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CRAFT BREWERIES ASSOCIATION OF INDIA HAVING ITS REGISTERED OFFICE AT 101 1ST FLOOR EMBASSY CLASSIC NO.11 VITTAL MALLYA ROAD

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BENGALURU-560 001 REPRESENTED BY ITS PRESIDENT SRI SIBI VENKATARAJU.

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ELITE INDIA CONSTRUCTIONS PVT LTD HAVING ITS REGISTERED OFFICE AT NO.59 36TH MAIN, 4TH CROSS, MADIWALA DOLLARS SCEHEME BTM LAYOUT 1ST STAGE BENGALURU -560 068 REPRESENTED BY ITS DIRECTOR

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ARVIND KUMAR S.

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Digitally signed by B K MAHENDRAKUMAR Location: HIGH COURT OF KARNATAKA

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PH4 FOOD AND BEVERAGES PVT LTD HAVING ITS REGISTERED OFFICE AT 298 100 FEET ROAD INDIRA NAGAR BENGALURU-560 038 REPRESENTED BY ITS DIRECTOR SIBI VENKATARAJU.

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ARIA BREW AND DINE PVT LTD HAVING ITS REGISTERED OFFICE AT NO.40/1 CENTURY CORBEL COMMERCIAL, 3RD FLOOR SAHARANAGAR, BENGALURU -560 092 REPRESENTED BY ITS AUTHORIZED SIGNATORY.

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M/S BREWSKY HOSPITALITY PVT LTD R/AT NO.10/62/2A/1 AND 10/62/2A/3

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WP No. 384 of 2022

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KAIKONDANAHALLI, SARJAPURA ROAD BENGALURU -560 035 REPRESENTED BY ITS DIRECTOR AJAY R GOWDA.

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SREE SURYODAYA INDUSTRIES PVT LTD HAVING ITS REGISTERED OFFICE AT NO.14./4 JHANSI LAKSHMI BHAI ROAD LAKSHMIPURAM MYSORE -570 004 REPRESENTED BY ITS AUTHORIZED SIGNATORY VASUMATT R SHENOY.

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…PETITIONERS

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(BY SRI. SANDESH P CHOUTA, SENIOR COUNSEL FOR; SRI. ISMAIL MUNEEB MUSBA, ADVOCATE)

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AND:

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THE PRINCIPAL SECRETARY TO GOVT FINANCE DEPARTMENT VIDHANA SOUDHA BANGALORE-560 001.

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THE EXCISE COMMISSIONER IN KARNATAKA 2ND FLOOR, TTMC BUILDING 'A' BLOCK BMTC SHANTHINAGAR BENGALURU-560 027.

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THE DEPUTY COMMISSIONER OF EXCISE BENGALURU URBAN DISTRICT BENGALURU-560 001.

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…RESPONDENTS

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(BY SRI. G M CHANDRASHEKAR, AGA FOR R1 TO R3)

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ENDORSEMENT DATED 29.12.2021, PASSED BY THE R-2 COMMISSIONER VIDE ANNEXURE-S, S1, S2, S3 AND S4.

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THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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WP No. 384 of 2022

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ORDER

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The petitioners, who are running Microbreweries, submitted a representation with the 2nd respondent for adjusting ununtilized excise duty and additional excise duty for the excise year 2019-2020 be adjusted for the excise duty for the excise year 2021-2022 or in the alternative refund the additional excise duty paid by the petitioners. The representation submitted by the petitioners was rejected on the ground that they were not entitled for refund or adjustment for unutilized excise duty or additional excise duty for the excise year 2021-2022.

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The issue as to whether the Microbreweries are entitled for refund or adjustment of unutilized excise duty and additional excise duty paid during the COVID-19 pandemic was examined by this Court in WP No.11772/2020 (DD 3.9.2022). This Court at paras-16 to 19 has held as follows:

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"16. The Literal rule of interpretation of the Rules makes it crystal clear that microbrewery does fall under 17 Karnataka Excise (Brewery) Rules and there is no separate legislation under which the microbrewery is governed. Having brought the term "microbrewery" under the Rules by way of an amendment, it has become an integral part of the Rules and does not isolate itself from the Rules. Hence, the Rule 23 of the Rules is also applicable to the microbreweries.

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The Hon'ble Apex Court in the case of Modified Voluntary Retirement Scheme of 2002 of Azam Jahi Mill Workers Association v. National Textile Corporation Limited and Others reported in 2021 SCC OnLine SC 972 has held as follows: "48. ... Right to equality guaranteed under Article 14 of the

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WP No. 384 of 2022

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Constitution of India is vested right in favour of the person who claims equality and parity and the same is enforceable against State/State instrumentalities in exercise of powers under Article 226 of the Constitution of India. ... . 49. The concept of equality before the law and equal protection of the laws emerges from the fundamental right expressed in Article 14 of the Constitution. Equality is a definite concept. 50. The concept of equality has an inherent limitation arising from the very nature of the 18 constitutional guarantee. Those who are similarly circumstanced are entitled to an equal treatment. Equality is amongst equals. Classification is therefore to be founded on substantial differences which distinguish persons grouped together from those left out of the groups and such differential attributes must bear in just and rational relation to the object sought to be achieved. 51. In a given case Article 14 of the Constitution may permit a valid classification.

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The petitioners, who are having license to operate micro breweries, are similarly situated to that of the persons, who are possessing license to operate breweries, and the petitioners are also entitled for refund under Rule 23 of the Rules, 1967 which would otherwise be discriminatory and violative of Article 14 of the Constitution of India.

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In view of the preceding analysis, the petitioners are entitled for refund of unutilised excise duty and additional excise duty for excise period 2019-2020 or to be adjusted for the excise year 2020-2021 as specified under Rule 23 of the Rules and the impugned demand notices are not sustainable in law."

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Therefore, this writ petition requires to be disposed of in light of the order passed by this Court in the aforesaid writ petition. Accordingly, I pass the following:

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WP No. 384 of 2022

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ORDER

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i) Writ petition is allowed.

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ii) The impugned endorsements dated 29.12.2021 issued by the 2nd respondent at Annexures-S, S-1, S-2, S-3 & S4 and also notification dated 14.6.2021 issued by the respondent No.2 at Annexure-P insofar as it relates to the petitioners are hereby quashed.

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iii) The respondent No.2 is hereby directed to refund or adjust the sum for the unutilized excise duty and additional excise duty paid by the petitioner for the excise year 20192020. The said exercise shall be concluded within a period of three months from the date of receipt of certified copy of this order.

Sd/JUDGE

BKM

WP No. 384 of 2022

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HCJ

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26.06.2023

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(VIDEO CONFERENCING / PHYSICAL HEARING)

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' ORDER ON FOR BEING SPOKEN TO '

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This Court vide order dated 29.03.2023 has allowed

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the writ petition, but through over-sight and due to typographical mistake, for the year of excise is wrongly typed as '2019-2020' , instead of ' 2020-2021' in the order of first paragraph and operative portion of third paragraph.

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Hence, the aforesaid mistakes are corrected as

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under:-

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for the excise year ' 2020-2021 ' in the first

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paragraph and the third paragraph of operative portion.

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This order will be read in conjunction to the earlier

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order.