Case Note & Summary
The petitioner, Lakshmi Bar and Restaurant, a CL-9 licensee under the Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968, was aggrieved by a demand notice dated 16.8.2016 issued by the Deputy Commissioner, Bangalore District (respondent no.3), demanding Rs.7,73,010/- for alleged short lifting of liquor under Rule 14(2) of the said Rules. The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India seeking quashing of the demand notice and an interim stay. The court, after hearing the counsel for the petitioner and the Additional Government Advocate for the respondents, examined the applicability of Rule 14(2). The court noted that Rule 14(2) pertains to licensees who have a minimum guarantee quantity, which is not applicable to CL-9 licensees. Consequently, the demand raised under Rule 14(2) was without authority of law. The court allowed the petition, quashed the demand notice, and directed the respondents to refund any amount recovered from the petitioner within four weeks. The court also clarified that the respondents are at liberty to take appropriate proceedings in accordance with law, if any other provision is applicable.
Headnote
A) Excise Law - Short Lifting Demand - Rule 14(2) of Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968 - Applicability to CL-9 Licensees - The petitioner, a CL-9 licensee, challenged a demand notice of Rs.7,73,010/- for alleged short lifting of liquor under Rule 14(2). The court held that Rule 14(2) applies only to licensees who have a minimum guarantee quantity, which is not the case for CL-9 licensees. Therefore, the demand was quashed. (Paras 1-4)
Issue of Consideration
Whether Rule 14(2) of the Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968 applies to a CL-9 licensee for demanding short lifting charges.
Final Decision
The writ petition is allowed. The demand notice dated 16.8.2016 (Annexure-E) is quashed. The respondents are directed to refund any amount recovered from the petitioner within four weeks. The respondents are at liberty to take appropriate proceedings in accordance with law, if any other provision is applicable.
Law Points
- Interpretation of Rule 14(2) of Karnataka Excise (Sale of Indian & Foreign Liquor) Rules
- 1968
- Applicability to CL-9 licensees
- Short lifting demand
- Excise law
Case Details
2017 LawText (KAR) (06) 13
Writ Petition No.10335/2017 (Excise)
Dr. Justice Vineet Kothari
Sri. K. G. Nayak (for petitioner), Sri. A. M. Suresh Reddy (AGA for respondents)
Lakshmi Bar and Restaurant, represented by its owner Smt. T. N. Varalakshmi
The State of Karnataka, The Deputy Commissioner of Excise, The Deputy Commissioner, Bangalore District, The Inspector of Excise
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Nature of Litigation
Writ petition challenging a demand notice for short lifting of liquor under excise rules.
Remedy Sought
Quashing of demand notice dated 16.8.2016 and interim stay of the demand.
Filing Reason
The petitioner, a CL-9 licensee, was served a demand notice of Rs.7,73,010/- for alleged short lifting of liquor under Rule 14(2) of the Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968.
Issues
Whether Rule 14(2) of the Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968 applies to a CL-9 licensee for demanding short lifting charges.
Submissions/Arguments
Petitioner argued that Rule 14(2) applies only to licensees with minimum guarantee quantity, not to CL-9 licensees.
Respondents argued in support of the demand notice.
Ratio Decidendi
Rule 14(2) of the Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968 applies only to licensees who have a minimum guarantee quantity. Since the petitioner is a CL-9 licensee and does not have a minimum guarantee quantity, the demand for short lifting under Rule 14(2) is without authority of law.
Judgment Excerpts
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.
Rule 14(2) of the said Rules applies only to the licensees who have a minimum guarantee quantity and not to the CL-9 licensees like the petitioner.
Procedural History
The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka challenging a demand notice dated 16.8.2016. The court heard the matter and passed the order on 27.6.2017.
Acts & Sections
- Karnataka Excise (Sale of Indian & Foreign Liquor) Rules, 1968: Rule 14(2)
- Constitution of India: Articles 226, 227
