Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 1/12 Karnataka and Others. ® IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE27H DAY OF JUNE, 2017 BEFORE THE HON’BLE Dr. JUSTICE VINEET KOTHARI WRIT PETITION No.10335/2017 (EXCISE) BETWEEN LAKSHMI BAR & RESTAURANT, #866/951/33 SHOP NO.3, GROUND FLOOR, UTTARAHALLI, KENGERI MAIN ROAD, CHANNASANDRA, BENGALURU - 560 061. REP. BY ITS OWNER, SMT. T. N. VARALAKSHMI. (BY SRI. K. G. NAYAK, ADVOCATE) AND1 … PETITIONER THE STATE OF KARNATAKA, BY ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT, VIDHANA SOUDHA, BENGALURU - 560 001. THE DEPUTY COMMISSIONER OF EXCISE, VOKKALIGARA BHAVANA, RANICHENNAMMA CIRCLE, BENGALURU - 560 001. THE DEPUTY COMMISSIONER, BANGALORE DISTRICT, BENGALURU - 560 001.
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3. Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of Karnataka and Others. 2/12 4. THE INSPECTOR OF EXCISE, WEST RANGE, BENGALURU - 560 022. … RESPONDENTS (BY SRI. A. M. SURESH REDDY, AGA FOR R-1 TO R-4 ) THIS WRIT PETITION IS FILED UNDER ARTICLES226& 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE DEMAND ORDER
DTD.16.8.2016 VIDE ANNEXURE-E ISSUED BY THE R-3 AND TO GRANT AN INTERIM ORDER
TO STAY THE DEMAND ORDER
DTD. 16.8.2016 VIDE ANNEXURE-E ISSUED BY THE R-3. THE COURT MADE THE FOLLOWING: THIS PETITION COMING ON FOR ORDER
S THIS DAY, ORDER
Mr.K.G. Nayak, Adv. For petitioner Mr. A.M. Suresh Reddy, AGA for R1 to R4. The petitioner – Lakshmi Bar and Restaurant a CL-9 Licencee is aggrieved by the demand notice raised to the tune of Rs.7,73,1010/- by the respondent – Excise Department for the alleged short lifting of liquor under Rule 14(2) of the Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968.
2. The said demand was raised by the respondent – Excise Department under the provisions of Sub Rule (2) of Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 3/12 Karnataka and Others. Rule 14 of the Karnataka Excise (Sale of Indian & Foreign liquor) Rules, 1968.
3. Referring to the two previous orders passed by the co-ordinate bench of this court vide Annexures G & H placed on record, the learned counsel for the petitioner submits that Annexure-D dated 28.5.2016 and Annexure-E dated 16.8.2016, are the demand notices which are straight away issued by the Deputy Commissioner, Bengaluru, raising demand of Rs.7,73,100/- without giving any opportunity of hearing the petitioner. Hence, the petitioner prays that the said demand notices deserve to be quashed by this court.
4. He further submitted that Rule 14(2) of the above said Rules, as existed prior to its deletion with effect from 1.8.2014, provided for an opportunity be given to the licencee for explaining reasons for the alleged short lifting of liquor as per the Licence terms and said Rules.
5. On the other hand, Mr. Suresh Reddy, learned Addl. Government Advocate for the respondents has submitted before the court that the petitioner never raised any objection to the said demand notices to the tune of Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 4/12 Karnataka and Others. Rs.7,73,100/- for the short lifting of the liquor during the year 2015-16 as he had CL-9 Licence for the Bar and Restaurant run by her and on the contrary, the said licencee while seeking the renewal of the licence for the next year 2016-17 gave an Undertaking to the respondent - Excise Department on 28.6.2016 vide Annexure-R1 that due to financial constraints, she was unable to pay the said penalty of Rs.7,73,100/- for the year 2015-16 for the short lifting of liquor but the same would be paid by her and subject to such payment, the licence for the year 2016-17 may be renewed. He has further submitted that based on these Undertaking and previous Demand Notices and the reports of the Inspector, the Deputy Commissioner, Bengaluru, who is the Licence Granting authority had then passed an order at Annexure-R2 dated 30.6.2016 itself affixing demand of Rs.7,73,100/- and directing the petitioner to pay the same, but the Petitioner has concealed these facts in the Writ Petition.
6. The present Writ Petition has been filed in this court on 7.3.2017. Even much earlier to that, the said order was passed by the Deputy Commissioner i.e., on 30.06.2016, Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 5/12 Karnataka and Others. but no challenge to the said order of the Deputy Commissioner, was made in the present Writ Petition.
7. Having heard the learned counsels, this court is of the opinion that the present Writ Petition has no force and is liable to be dismissed. The reasons are as follows.
8. Before deletion of Sub Rule (2) of Rule 14 of the Karnataka Excise (Sale of Indian & Foreign liquor) Rules, 1968, although the second proviso to the said Rule provided for an opportunity of hearing to the licencee, if he fails to lift the minimum quantity of liquor so fixed per month, which quantity was specified in the said rule itself, before the penalty at the rate of Rs.100/- for every bulk litre on the quantity short lifted, is imposed and if there are two such monthly defaults, the licence itself was liable to be cancelled and the second proviso to Rule 14 provided that the licencing authority shall give a reasonable opportunity of being heard, before levying the penalty or canceling the licence.
9. As stated above, the said Rule 14(2) itself stands deleted from the statute book with effect from 1.8.2014 and Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 6/12 Karnataka and Others. the impugned demand notices and the order was passed by the Deputy Commissioner are all after the said deletion of the said Rule 14(2) of the Rules. So no enforcement of that Proviso can be claimed as of right now. Even otherwise, this court is of the opinion that if the petitioner had any objection to the fact of the short lifting of the liquor, it was fully open to her to raise such an objection after the first demand notice Annexure-D dated 20.5.2016 was served upon her. But, not only after the Annexure-D demand notice dated 28.5.2016, even after second demand notice Annexure-E dated 16.8.2016, the petitioner never raised any demur or objection before the respondent – authority against the demand of penalty for such short lifting for condoning or waiving such penalty.
10. On the contrary, for seeking the renewal of the licence for the next year 2016-17, she gave a clear Undertaking before the Department that she would pay the said penalty for short lifting of the liquor for the previous year 2015-16 vide Annexure-R1 dated 28.6.2016. Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 7/12 Karnataka and Others.
11. It is also seen from the perusal of Rule 14 which is quoted herein below in extenso that it is not actually a penalty requiring any mensrea or guilty animus on the part of the licencee. It is rather a fiscal liability or the price for deficit in full assured supply to be taken as fixed on the licencee to compensate the respondent – Department or the authorized Distillery company, for the short lifting of the liquor. The said Rule was introduced in the statute book to regulate the supply of only authorized and properly manufactured liquor from the authorized licencees only to avoid the smuggling of illegal liquor into the market through illegal outlets or source. To check such a menace, if a liability is fixed under the Rule for payment of price for the short lifted quantity of liquor, the same cannot be said to be a penalty requiring any guilty animus on the part of the licencee so as to require prior opportunity of hearing. The fact of short lifting is to be computed as per the minimum quantity prescribed under Rule 14 itself and the rate of penalty of Rs.100/- per bulk litre is also provided therein. Therefore, nothing much can be achieved to the contrary by giving an opportunity of hearing as demanded in the present Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of 8/12 Karnataka and Others. case for explaining the reasons for such short lifting of the liquor, attracting the imposition of penalty under Rule 14(2) of the said Rules which now stands deleted from the statute book itself w.e.f. 1.8.2014. The said 2nd Proviso for giving opportunity of hearing can be more usefully pressed into service if the other consequence under Rule 14(2) is to follow namely the cancellation of licence itself and therefore, the application of the said 2nd proviso should be limited for that part of first proviso to Rule 14(2) of the said Rules. “Rule 14 – Licensee to abide by the provisions of the Act etc. [(1)]. The licensee or his successors or assignees shall have no claim whatsoever to the continuance or renewal of the licence as the case may be, after the expiry of the period for which such licence was granted. [(2) The licensees holding retail shop licenses in Form CL-2 and Bar licences in Form CL-9 shall lift for sale [from a distributor licensee (CL-11) or a distributor licensee for vend of foreign liquor (CL-11A)]., the minimum quantity of liquor (excluding fenny, wine and beer) fixed per month for the shop based on the license fee prescribed Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of Karnataka and Others. 9/12 for each type of license, overheads, other expenses incurred, location of the shop, area of operation, sale of liquor in the previous years, and similar factors to ensure that illicit liquor is not obtained by the licensees and sold in the shop, to ensure that no attempt is made to undersell the liquor and thereby wholesome liquor obtained only from authorized sources is sold to the consumers. In case the licensee fail to lift the minimum quantity of liquor so fixed per month, he shall be liable to pay a penalty at the rate of Rs.100.00 for every bulk litre on the quantity short lifted: Provided that in case the licensee fails to lift the minimum quantity so fixed consecutively for two months, the license may liable to be cancelled: Provided further that the licensing Authority shall give the licensee, a reasonable opportunity of being heard before levying the penalty or canceling the license. The minimum quantity of liquor (excluding fenny, wine and beer) to be lifted in a month by a CL-2 (Retail shop)/ CL-9 (Bar) licensee is as follows: Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of Karnataka and Others. 10/12 Sl. No.Type of Licence Licence fee Minimum quantity of liquor to be lifted in a month (excluding fenny, wine and beer) (1 case = 9 B.L) (01) Retail Shop (CL-2) Municipal (a)City Corporation areas having population more than 20 Lakhs Rs. 2,23,000 47 cases or 423 bulk litres (b) Other city Municipal Corporation areas Rs. 1,82,000 44 cases or 396 bulk litres (c) Municipal Council Areas City Town Municipal (d) Council/Town Panchayat Areas (e) Other Areas Rs. 1,65,000 Rs. 1,25,000 Rs. 1,00,000 38 cases or 342 bulk litres 32 cases or 288 bulk litres 23 cases 207 bulk litres. (02) Refreshment Room (Bar) (CL-9) Municipal (a)City Corporation areas having population more than 20 Lakhs: (b) Other city Municipal Corporation areas City Municipal (c) Council Areas Town Municipal (d) Council/Town Panchayat Areas (e) Other Areas Rs. 3,00,000 Rs. 2,31,000 Rs. 1,82,000 Rs. 1,30,000 Rs. 1,00,000 52 cases or 468 bulk litres 47 cases or 423 bulk litres 42 cases or 378 bulk litres 34 cases or 2306 bulk litres 25 cases 225 bulk litres. Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of Karnataka and Others. 11/12 12. From the facts in the present case, it is not seen anywhere that the petitioner had raised any objection or has given any explanation suitable or otherwise for such short lifting of the liquor from the respondent – Department or its authorized licencee/manufacturer. Even if the principles of natural justice were to be complied with as argued by the learned counsel for the petitioner, the same cannot yield anything in the facts of the present case. Being already aware of the fact situation, the petitioner was expected at least to raise the objection or give the reasons for such short lifting of the liquor, but nothing of this sort is seen in the present case.
13. On the other hand, the petitioner seems to have even concealed the material facts from this court, interalia, the fact of the subsequent order having been passed on the Undertaking given by the petitioner herself on 28.06.2016 and such order having been passed by the Deputy Commissioner on 30.06.2016.
14. Thus the petitioner has presented this Writ Petition with incomplete picture of the facts. Dated 27th June, 2017 W.P.No.10335/2017 (Excise) Lakshmi Bar and Restaurant Vs. The State of Karnataka and Others. 12/12 15. It is well settled that those who have approached under Article 226 of the Constitution of India, exercising writ jurisdiction has to come to the court with absolutely clean hands and complete facts presented to the Court and if the court finds that there is a concealment of material facts, the court can refuse to go into the merits of the case at all and dismiss such Writ Petition only on the short ground of concealment of material facts.
16. In either of the case, this court is not inclined to entertain this petition on the short ground of alleged breach of principles of natural justice and on the contrary, this court is fully satisfied that the case does not merit any relief in the present case. Therefore, the Writ Petition is liable to be dismissed. Accordingly, the petition is dismissed. No costs. Sd/- JUDGE PL