A club challenged an excise demand of Rs.2,00,000 under Rule 19(iv) of the Foreign Liquor Rules for substituting its Secretary's name in its FL-4A licence. Following Cochin Gymkhana Club, the court held such changes do not alter the licensee's identity; the writ petition was allowed and the demand quashed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
WEDNESDAY, THE 10TH DAY OF JANUARY 2024 / 20TH POUSHA, 1945
WP(C) NO. 8339 OF 2018
PETITIONER/S:
RAMAVARMA CLUB REG.NO.ER 373/1991, CLUB ROAD, ERNAKULAM-682011, REPRESENTED BY ITS HONORARY SECRETARY, SRI.SHARATH KUMAR S., AGED 55 YEARS, S/O.LATE T.M.SUKUMARAN, HAVING ADDRESS OF SANGAMAM, MANIKKATH ROAD, COCHIN-682016.
BY ADV SRI.SREELAL N.WARRIER
RESPONDENT/S:
1 STATE OF KERALA REPRESENTED BY PRINCIPAL SECRETARY TAXES (A) DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM695001.
2 THE COMMISSIONER OF EXCISE COMMISSIONERATE OF EXCISE, NANDAVANAM, THIRUVANANTHAPURAM-695033.
3 THE DEPUTY COMMISSIONER OF EXCISE KACHERIPADY, ERNAKULAM, KOCHI-682018. 4 THE CIRCLE INSPECTOR OF EXCISE ERNAKULAM NORTH, ERNAKULAM, KOCHI-682018. BY ADVS. GOVERNMENT PLEADER ADVOCATE GENERAL OFFICE KERALA
OTHER PRESENT:
SRI. JUSTINE JACOB (SR GP)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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J U D G M E N T
Petitioner is a Club which was constituted as a Society under the Travancore-Cochin Literary, Scientific and Charitable Societies Registration Act, 1955. According to the petitioner it is started functioning in the year 1897. The petitioner has approached this court challenging Ext.P6 which is an order isued by the Deputy Excise Commissioner (Abkari) refusing to change / substitute name of the Secreary of the Club in the licence issued to the petitioner under Rule 13 (4A) of the Foreign Liquor Rules 1974. (Licence in Form FL-4A) The Deputy Excise Commisioner through Ext.P6 demanded payment of Rs.2,00,000/- in terms of the provisions contained in Rule 19 (iv) of the Foreign Liquor Rules, 1974, for teh same.
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“Provided further that no fee shall be levied for the change of name of licensee in respect of licence in Form FL 4A, due to the change in the office bearers of the club.”
communication was issued demanding payment of Rs.2,00,000/- in terms of the provisions contained in the Foreign Liquor Rules as it then stood. It is submitted that that amendment to the Foreign Liquor Rules pointed out by the learned counsel for the petitioner came into force with effect from 11-042020 and therefore the demand in Ext.P6 cannot be disputed. However, it is not seriously disputed that an identical issue was considered by this court in Cochin Gymkhana Club (supra) .
“7. A perusal of the above provision shows that, licenses are permitted to be issued to “existing Clubs” on payment of an annual rental of Rs.15,00,000/- (Rupees Fifteen lakhs only). Provided they satisfy the conditions stipulated by the Rule. A perusal of the conditions show that, all the conditions stipulated relate to the Club. In other words, the conditions stipulate that the Club should have completed 10 years of existence, it should be a registered society, the membership should not be less than 100
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and so on. Any condition touching upon the eligibility of its functionaries is conspicuously absent in the provision. Therefore, the power of the Excise Commissioner to issue a license under rule 13(4A) is available only in respect of a Club that satisfies the conditions stipulated by the said Rule. Of course as per the form of license appended to the Rules, the license is in fact issued to a responsible functionary of the Club. The said procedure is adopted only for the purpose of ensuring that a competent person is made responsible for discharging the duties that are cast on a licensee by the Abkari Act and the Rules thereunder. The Club which is an organization and an unnatural person is necessary to be represented by a real, natural person so as to be available for being fastened with the liability that may arise under the Act and the Rules. However, the fact remains that the licensee which could only be the Club, would continue to remain the same, though its functionaries may change from time to time. Rule 19(iv) provides as under:
(iv) change of name of licensee may be allowed on payment of Rs.2 lakhs (Rupees two lakhs only)
8. A perusal of the above provision leaves no doubt in our minds that the same applies only to a case where a change of name of the licensee is sought for. In the present case, the licensee being the Club, there is no change in the identity of the licensee. It is only the name of the functionaries that are changed in these cases by being substituted with the person who has been elected as a President or Secretary as the case may be. Such changes cannot and does not attract payment of the fee under Rule 19(iv) of the Rules as rightly held by the learned single Judge. The above issue has been considered by this Court in State of Kerala and others Vs. M/s. Panamoottil Investments and others (2010 (1) KHC 353). The question was considered, in the case of a partnership firm that wanted to change the name of its Managing Partner. Considering the question, this Court has held in paragraphs 10 to 12 as follows:
10. In this case, the appellant submits, there is no change in the partners, constituting the partnership firm, which is an
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FL-3 licensee. Hitherto, the partnership was being represented by Mr. Mathew Philip, Managing Partner. Now, Mr. Sunoj Kurian is also nominated as a Joint Managing Partner to represent the licensee. That means, hereafter, there will be two joint Managing Partners to represent the licensee. The same is also treated as reconstitution of the partnership by the Commissioner and the amounts payable under sub-rules (iii) and (iv) of Rule 19 of the Foreign Liquor Rules, have been demanded. It is submitted that the payment as demanded, has been made, subject to the result of the Writ Appeal. The learned Senior Counsel for the appellant submitted that there is no change in the constitution of the partnership. The same partners continue even now. But, instead of one partner, two partners are authorised to manage the affairs of the partnership firm. The same cannot be described as a reconstitution. Even going by the deeming provision under sub-rule (ii) of Rule 19 of the Rules, it is submitted, the direction to pay the amount under Rule 19(iii), is unsustainable. The learned Senior Counsel also submitted that there is no change of name of the licensee. The name of the licensee continues to be M/s. Panamootil Investments, Kadavanthra, Kochi-20. So, the demand made for payment of the amount under sub-rule (iv) of Rule 19 is also unjustified, it is submitted.
11. The learned Advocate General submitted that the earlier licence was granted in the name of Mr. Mathew Philip and now, it is sought to be granted in the joint names of M/s. Mathew Philip and Sunoj Kurian. So, according to the learned Advocate General, the demand for the amount was rightly made under Ext. P3.
12. Going by the facts of the case, we find that the licence has been granted in favour of a partnership firm called Panamootil Investments, Kadavanthra, Kochi-20. It was being represented by Mr. Mathew Philip, Managing Partner. Now, the firm has requested that hereafter, it will be represented by Joint Managing Partners M/s. Mathew Philip and Sunoj Kurian. Permission for the same is sought from the Commissioner, so that hereafter, the names of these persons can be shown in the licence. We think, in this case, neither the partnership is reconstituted nor the name of the licensee is changed. So, sub-rule (iii) of Rule 19 and the main part of sub-rule (iv) under Rule 19 of the Rules have no application to the facts of this case. Therefore, the direction to collect Rs.50,000/- (Rupees Fifty Thousand only) and RS.2,00,000/- (Rupees Two Lakhs only) respectively under
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sub-rules (iii) and (iv) of Rule 19 of the Foreign Liquor Rules is illegal and unauthorised. It is so declared. The above said amounts, which have already been paid, shall be adjusted towards the amounts payable by the partnership firm in future. Thus, the appellant is entitled to succeed, not on the ground that his application was filed before the amendment to the Rules, but because of the fact that there is no reconstitution of the partnership firm. This appeal is allowed as above.
xxx xxx xxx
10. The above dictum applies a fortiori in the case of a Club also. This is for the reason that, in the case of a partnership, the firm has no separate identity of its own other than the combined identity of its partners. However, in the case of an organization like a Club, it has necessarily to be a society which is governed by the provisions of its bylaws which provide for an organisational set up, as also the election of its functionaries and for their terms of office. The changes that are necessitated upon expiry of the term of office of its respective functionaries, cannot be said to amount to a change in the identity of the licensee, attracting the fee that is stipulated by Rule 19(iv) of the Rules. The above being the position, we find no grounds to interfere with the judgment of the learned single Judge. The same is therefore, confirmed .”
The learned Government Pleader is right in contending that the amendment brought in by adding proviso prior to Rule 19 (iv) will apply only prospectively with effect from 01-04-2020. However even in respect of the law as it stood prior to the introduction of the proviso this court has clearly held in the Cochin Gymkhana Club (supra) that the change in the name of the office bearers of a club in the licence does not amount to change the identity of the licencee and therefore the fees stipulated by the provisions of Rule 19
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(iv) of the Foreign Liquor Rules cannot be levied when the club requests a change in the name of the office bearers in the licence issued to the Club. Therefore this writ petition is allowed and Ext.P6 communication is quashed. It is directed that any application filed by the petitioner for change the name of the licencee by virtue of the change in the office bearers of the Club shall not be treated as a situation requiring payment of fee as contemplated by the provisions of Rule 19 (iv) of the Foreign Liquor Rules.
Sd/- GOPINATH P. JUDGE
AMG
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APPENDIX OF WP(C) 8339/2018
PETITIONER EXHIBITS
| EXHIBIT P1- | TRUE PHOTOCOPY OF THE FL.4A LICENSE NO.2/2003-04-55555O4 ISSUED BY THE COMMISSIONER OF EXCISE. |
|---|---|
| EXHIBIT P2- | TRUE PHOTOCOPY OF THE INTIMATION AS TO CHANGES OF THE HONY. SECRETARY OF THE PETITIONER SUBMITTED TO THE DEPUTY COMMISSIONER EXCISE ERNAKULAM. |
| EXHIBIT P3- | TRUE PHOTOCOPY OF THE LETTER ISSUED BY THE DEPUTY COMMISSIONER TO THE HONY. SECRETARY OF THE PETITIONER CLUB. |
| EXHIBIT P4- | TRUE PHOTOCOPY OF APPLICATION FOR CHANGE OF NAME OF SECRETARY IN THE LICENSE ISSUED TO THE CLUB. |
| EXHIBIT P5- | TRUE PHOTOCOPY OF HE FL.4A LICENSE RENEWAL CERTIFICATE FOR THE YEAR 2017-2018 ISSUED BY THE DEPUTY EXCISE COMMISSIONER. |
| EXHIBIT P6- | TRUE PHOTOCOPY OF THE REJECTION ORDER NO.EXC/6242/17XC.6 OF THE EXCISE COMMISSIONER (REFERRING TO THE PROCEEDINGS OF THE EXCISE COMMISSIONER. |
| EXHIBIT P7 | TRUE PHOTOCOPIES OF THE POSTAL RECEIPTS AND POSTAL ACKNOWLEDGMENTS FOR SERVICE OF COPY OF COVERING LETTER AND INTERIM ORDER ON THE RESPONDENTS 2 TO 4. |
| EXHIBIT P8 | TRUE PHOTOCOPY OF THE ONLINE APPLICATION DATED 26.3.2018 FOR RENEWAL OF FL4A LICENCE IN THE NAME OF T HE PETITIONER CLUB. |
| EXHIBIT P9 | THE OFFICIAL ACKNOWLEDGMENT ISSUED BY THE RESPONDENTS FOR THE RECEIPT OF THE REQUIRED APPLICATION FOR RENEWAL. |
| EXHIBIT P10 | TRUE PHOTOCOPY OF THE MESSAGE COLUMN IN THE OFFICIAL WEBSITE OF THE RESPONDENT. |
| EXHIBIT P11 | TRUE PHOTOCOPY OF THE ACKNOWLEDGEMENT OF THE CLOSURE SERVED BY THE 4TH RESPONDENT TO THE PETITIONER. |
2 issues framed by the court
Whether a change in office bearers of a club holding an FL-4A licence attracts the Rs.2 lakh fee under Rule 19(iv) of the Foreign Liquor Rules, 1974.
Whether Ext.P6 demand of Rs.2,00,000/- by the Deputy Excise Commissioner was sustainable in light of Cochin Gymkhana Club.
Colour shows how this judgement treated each authority
State of Kerala and others v. Cochin Gymkhana ClubFollowed¶4
2016 (3) KLT 55
State of Kerala and others Vs. M/s. Panamoottil Investments and othersRelied on
2010 (1) KHC 353
3 provisions across 2 enactments
Ramavarma Club, Ernakulam
State of Kerala
The Commissioner of Excise
The Deputy Commissioner of Excise
The Circle Inspector of Excise Ernakulam North
Gopinath P.
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
