Case Note & Summary
The judgment pertains to two writ petitions filed by M/s. Shankar Wines and M/s. Blue Peacock Ventures, both holders of CL-2 licences under the Karnataka Excise Act, 1965, for retail sale of Indian and foreign liquors. The petitioners challenged orders passed by the Commissioner of Excise and the Deputy Commissioner cancelling their licences on the ground that their shops were situated within 100 metres of a religious place, allegedly in violation of Rule 8(1) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968. The petitioners contended that their shops were in existence prior to the 2002 amendment to Rule 8(1), which introduced the distance restriction, and that the rule did not apply retrospectively. They also argued that the cancellation orders were passed without proper notice and in violation of principles of natural justice. The respondents, represented by the State, defended the orders. The court, after hearing arguments, held that Rule 8(1) does not apply to existing licences and that the cancellation was illegal. The court quashed the impugned orders and allowed the petitions, directing restoration of the licences.
Headnote
A) Excise Law - Cancellation of Licence - Rule 8(1) of Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 - Distance from Religious Place - The court considered whether the Commissioner of Excise could cancel CL-2 licences on the ground that the shops were within 100 metres of a religious place. Held that Rule 8(1) applies only to new licences and not to existing shops that were in operation before the 2002 amendment. The impugned orders were quashed as they were based on a misinterpretation of the rule and violated principles of natural justice. (Paras 1-10) B) Excise Law - Principles of Natural Justice - Notice and Hearing - The court held that the cancellation of a licence without proper notice and opportunity of hearing is illegal. The impugned orders were passed without giving the petitioners an adequate opportunity to be heard, and thus were set aside. (Paras 1-10)
Issue of Consideration
Whether the cancellation of CL-2 licences on the ground that the shops were situated within 100 metres of a religious place was valid under Rule 8(1) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968, and whether the orders were passed in violation of principles of natural justice.
Final Decision
The court allowed the writ petitions, quashed the impugned orders dated 07.04.2014, 28.10.2013, and 07.05.2012, and directed restoration of the CL-2 licences to the petitioners.
Law Points
- Rule 8(1) of Karnataka Excise (Sale of Indian and Foreign Liquors) Rules
- 1968
- does not apply retrospectively to existing licences
- principles of natural justice require notice and hearing before cancellation of licence
- licence cannot be cancelled on ground of distance from religious place if shop existed prior to amendment
