Allowed

K Sundara Bangera v. the Deputy Commissioner of Excise

Karnataka HC18 Apr 2024WP/10675/2024

Case brief

AI extract

What is this about?

Petitioner, a liquor licensee, challenged a demand notice requiring full fee payment for excise years following a license suspension. The court held that during the suspension, renewal conditions under Rule 5-A were not applicable. The petitioner must pay 50% fees for the post-acquittal period but no fees for the suspension duration where an existing valid license technically persisted.

What did the court decide?

Impugned notice quashed regarding 2015-16 to 2018-19. Respondent directed to grant license for 2024-25 collecting 50% fee for 2019-20 to 2023-24.

K Sundara Bangera Vs the Deputy Commissioner of… — Writ and Judicial Review | Karnataka HC (2024)

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1 - NC: 2024:KHC:15403 WP No. 10675 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF APRIL, 2024

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 10675 OF 2024 (EXCISE)

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BETWEEN:

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K SUNDARA BANGERA S/O SHESHAPPA AGED ABOUT 66 YEARS, R/AT KALLAPAPU HOUSE BADAGULIPADY, MALALI VILLAGE P.O.MALALI - 574151 MANGALURU TALUK (D.K.)

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…PETITIONER

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(BY SRI. M SUDHAKAR PAI., ADVOCATE)

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AND:

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THE DEPUTY COMMISSIONER OF EXCISE DAKSHINA KANNADA DISTRICT MARY HILL, MANGALURU-575 008 (D.K)

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THE EXCISE INSPECTOR MANGALURU EAST RANGE-1

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Digitally signed by R HEMALATHA Location: HIGH COURT OF KARNATAKA

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MANGALURU-575 001 (D.K)

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…RESPONDENTS (BY SRI. S R KHAMROZ KHAN, AGA FOR RESPONDENTS/STATE)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE NOTICE DATED 30/12/2023 IN NO. J¸ïrPÉ/LJAJ¯ï/04/2015-16 ISSUED BY THE R1 THE DEPUTY COMMISSIONER OF EXCISE D.K. DISTRICT, MANGALURU (VIDE ANNEXURE-F TO THE WP) IN SO FAR AS IT RELATES TO DEMAND FOR LICENSE FEE FOR THE EXCISE YEAR 2015-16, 2016-17, 2017-18 AND 2018-19 AND ETC.

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

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NC: 2024:KHC:15403 WP No. 10675 of 2024

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O R D E R

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The petitioner was granted with CL-9 licence for the excise year 1990-91, and subsequently, it was renewed from time to time, and during the subsistence of the licence for the excise year 2015-16, a criminal case was registered against the petitioner for the offences punishable under Sections 34 and 38(A) of the Karnataka Excise Act, 1965 (for short `the Act, 1965'). Pending consideration of the criminal case, CL-9 licence granted to the petitioner was kept under suspension on 28.7.2015 in exercise of power under Section 29 of the Act, 1965. The petitioner was acquitted by the jurisdictional Magistrate on 22.9.2018 in CC No.2740/2016.

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The petitioner after acquittal did not choose to renew the license. However, the respondent No.1 issued a notice on 30.12.2023 calling upon the petitioner to renew the suspended licence after depositing the license fee for the excise period 2015-16 till the date, to which, the petitioner suitably replied.

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The learned counsel for the petitioner submits that the CL-9 licence granted was suspended in exercise of power under Section 29 of the Act, 1965 for having violated the terms and conditions of the license. The petitioner was acquitted by the jurisdictional Magistrate on 22.9.2018. Therefore, during the said period, the petitioner was prevented from operating the licence, and for the subsequent excise year 2019-20 till 2023-24, the petitioner did not choose to file an application for renewal even after he was acquitted by the jurisdictional Magistrate. Thereafter, the petitioner is not liable to pay 50% of the license fee for the period 2019-20 till 2023-24 as stated in Rule 8 of the Karnataka Excise

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3 - NC: 2024:KHC:15403 WP No. 10675 of 2024

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(Sale of Indian & Foreign Liquors) Rules, 1968 (for short `Rules, 1968') from the excise period 2015-16 as of today.

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The learned Additional Government Advocate for the respondent - State submits that the acquittal of the petitioner will not absolve his liability to pay 50% of the licence fee from the date of suspension till the date of his acquittal. In support, he places reliance on the order passed by the co-ordinate Bench of this Court in WP No.2021/2013 (DD 5.8.2013).

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Rule 5-A of the Rules, 1968 deals with renewal of licence and Clause (3) states that the licences granted prior to the first of July, 1999 may be renewed at the discretion of the Excise Commissioner or the Deputy Commissioner, as the case may be on payment of 50% of the fee prescribed under Rule 8 in respect of the entire period for which licence was not granted, for the purpose of maintaining continuity of the licences. In the instant case, the licence was not renewed, since the petitioner was facing trial for the offences punishable under Sections 34 and 38A of the Act, 1965, which resulted in acquittal of the petitioner on 22.9.2018. Therefore, from the date of suspension of licence till the date of his acquittal, he is not liable to pay 50% of the fee in respect of excise year 2016-17 and 2018-19. But, however, after acquittal, the petitioner is liable to pay 50% of the fee prescribed in Rule 8 of the Rules, 1968 in respect of excise period from 2018-19 to 2023-24, and the full licence fee for the current excise year 2024-25.

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A perusal of the order dated 5.8.2013 passed by this Court in the aforesaid case indicated that the licence granted in favour of the petitioner therein was suspended, and this Court held that Rule 5-A of the Rules, 1968 makes it clear that an application for renewal must be

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NC: 2024:KHC:15403 WP No. 10675 of 2024

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accompanied by the prescribed fee in terms of Rule 8. Even licence sought to be renewed, must, as on the date of the application be an existing licence, otherwise, the question of making an application for renewal at least one month before expiry of licence period does not arise. Rule 5-A envisages renewal of licence only in case the same is duly renewed or previous year also, and the Rules do not provide for a situation where a licence can be renewed intermittently. However, in the said decision, Rule 5-A(3) of the Rules, 1968 which provides for renewal of licence granted prior to 1^st July, 1999 for the entire period for which it was not granted/renewed on payment of 50% of the fee prescribed under Rule 8. The petitioner herein was prevented from renewal of licence on the ground that he was facing criminal prosecution by virtue of an order suspending the licence and from the date of suspension till he was acquitted, it is inferred that the licence was kept under suspension and it cannot be said that the licence was not granted/renewed. Therefore, the decision relied by the learned Additional Government Advocate does not apply to the facts and circumstances of the case. Accordingly, I pass the following:

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ORDER

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i) The petition is allowed.

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ii) The impugned notice dated 30.12.2023 issued by the respondent No.1 at Annexure-F is hereby quashed insofar as it relates to demanding the licence fee for the excise year 2015-16, and 2016-17 to 2018-19 is hereby quashed.

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iii) The respondent No.1 is hereby directed to grant licence to the petitioner for the excise year 2024-25 by collecting 50% of licence fee from the excise year 2019-20 to 2023-24, and full licence fee as prescribed under Rule 8 of the Rules, 1968 for the current excise year

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NC: 2024:KHC:15403 WP No. 10675 of 2024

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2024-25. The said exercise shall be concluded within two months from the date of receipt of certified copy of this order.

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Sd/JUDGE

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BKM

K Sundara Bangera v. the Deputy Commissioner of Excise

Case brief

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K Sundara Bangera v. the Deputy Commissioner of Excise

Case brief

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