A writ petition challenged a CL-7 liquor licence granted to a respondent on the ground that she lacked proof of filing latest income tax returns as required by Rule 4B. The court held acceptance of her affidavit undertaking to file returns was proper, dismissed the petition.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE N S SANJAY GOWDA
WRIT PETITION NO. 4146 OF 2024 (EXCISE)
BETWEEN:
SRI. VEERESH M. S/O SHIVAPPA, AGED ABOUT 44 YEARS, RESIDING AT MANDAGATTI VILLAGE, SHIMOGA TALUK AND DISTRICT-577 211.
…PETITIONER
(BY SRI. MOHAN MAHABALESHWAR BHAT, ADVOCATE)
AND:
Digitally signed by KIRAN KUMAR R Location: HIGH COURT OF KARNATAKA
NC: 2024:KHC:29176 WP No. 4146 of 2024
…RESPONDENTS
(BY SMT. RADHA RAMASWAMY, AGA FOR R-1 TO R-3, SRI. G.K.BHAT, SR. COUNSEL FOR SMT. SUDHA D., ADV. FOR C/R-4.)
THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT QUASHING THE IMPUGNED ORDER DTD 19.01.2024 PASSED BY THE R-1 IN NO. ES2023121478/SHIMOGA/2023-24 VIDE ANNEXURE-M AND CONSEQUENTLY THE ENDORSEMENT ALLEGED TO BE DTD 09.01.2024 IN NO. ES2023121478/CL-7/SHIMOGA/2023-24 VIDE ANNEXURE-Q ISSUED BY THE R-1 AND THE ORDER DTD 20.01.2024 IN NO. EXE/SMG(2)/CL-7/13/2023-24 PASSED BY THE R-2 VIDE ANNEXURE-N AND CONSEQUENT CL-7 LICENSE BEARING REGISTRATION NO. EXE/IML/SMG(2)/CL-7/13/202324 ISSUED BY THE R-2 VIDE ANNEXURE-P RESPECTIVELY ETC.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING – B GROUP , THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE N S SANJAY GOWDA
NC: 2024:KHC:29176 WP No. 4146 of 2024
ORAL ORDER
(PER: HON'BLE MR JUSTICE N S SANJAY GOWDA)
grant of CL-7 licence and this was objected to by the petitioner, who contends, that he was the resident of Mandagadde in Shivamogga Taluk and is a social worker.
Commissioner and an endorsement was issued on 09.01.2024 giving reasons as to why the objections raised by the petitioner were not acceptable.
the petitioner, argued that the application of the 4th respondent could not have been considered at all as she suffered from a disqualification even to make an application.
perspective and therefore, the grant of licence in favour of the 4th respondent was improper.
requirement of filing income tax returns is non-est , in view of the judgment which had been rendered in the case Bhanu Liquor Shop, Banuvalli Village, Harihar Taluk vs. State of Karnataka and others – 2000 (5) Kar.L.J. 512 . He submitted that in the said case, this Court while dealing with the requirement of producing the Sales Tax Clearance Certificate, had struck down the said Rule, but notwithstanding that, by way of amendment, the Rule requiring production of income tax clearance certificate had been inserted.
the licence has been issued in favour of the 4th respondent. However, having regard to the nature of the objections raised by the petitioner, in my view, it would be appropriate to consider the same on merits.
NC: 2024:KHC:29176 WP No. 4146 of 2024
reasons mentioned in Rule 4B(1) of the Rules, a person
should not even be permitted to submit an application.
of the Rules does stipulate that a person would be
1 4-B. Disqualification.-(1) A person shall be disqualified from submitting an application for obtaining or renewal of licence under these rules if he.-
(i) has not paid the arrears of any excise dues in respect of liquor sold by him; (ii) has not produced a valid income-tax clearance certificate or has not produced any document in proof of filing the latest income-tax return before the Income-tax Department in respect of his income; (iii) is holding an office of profit under the State Government or Central Government;
(iv) is a minor or an undischarged insolvent or is of unsound mind;
Explanation.- For the purposes of this rule, a company, firm or other body corporate shall be deemed to have incurred the disqualification if the person in charge of and responsible for the conduct of the business of such company, firm or other body corporate has incurred the disqualification.
Provided that the authority which grants or renews the licence may in the interest of revenue and for any other reason to be recorded in writing relax the provisions of clause (1) and grant or renew the licence.
(2) A person shall not be disqualified under (i) of sub-rule(1) if the produces a certificate from a competent Revenue Excise Officer to the effect that the arrears have been paid.
disqualified in submitting the application if he has not produced the proof of filing of his/her latest income tax returns. This is obviously because the Rule intended to ensure that a person making an application is a person, who has declared his income as required under law and his financially solvency can also be determined.
NC: 2024:KHC:29176 WP No. 4146 of 2024
ensure that a qualified person is required to make an application, were justified in accepting the undertaking of the 4th respondent that she would file the income tax returns shortly, since proof of filing of income tax returns was not a requirement, which would inherently disqualify an applicant.
NC: 2024:KHC:29176 WP No. 4146 of 2024
petitioner that the 4th respondent was disqualified from making the application itself.
the petition and the same is accordingly dismissed .
Sd/- (N S SANJAY GOWDA) JUDGE
PKS/RK List No.: 1 Sl No.: 63
2 issues framed by the court
Whether acceptance of an affidavit undertaking to file income tax returns cured the disqualification under Rule 4B(1)(ii) for grant of a CL-7 licence?
Whether the objections raised against the fourth respondent's application justified rejection of her CL-7 licence request?
Colour shows how this judgement treated each authority
Bhanu Liquor Shop, Banuvalli Village, Harihar Taluk vs. State of Karnataka and othersReferred¶13
Bhanu Liquor Shop, Banuvalli Village, Harihar Taluk vs. State of Karnataka and others – 2000 (5) Kar.L.J. 512
3 provisions across 2 enactments
Veeresh M.
The Commissioner of Excise in Karnataka
The Deputy Commissioner, Shimoga District
The Deputy Commissioner of Excise
Pavithra S.
N S Sanjay Gowda
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
