Case Note & Summary
The petitioner, M/s. Raviraj Enterprises, a partnership firm holding a CL-2 license under the Karnataka Excise Act, 1965, was issued a show cause notice by the Deputy Commissioner of Excise, Haveri District, alleging that its business premises was within objectionable distance from a certain institution. The petitioner submitted a reply requesting relaxation of the distance requirement under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968, citing long-standing business and the authority's power to relax with prior approval of the Commissioner. The Deputy Commissioner passed an order directing the petitioner to shift the business. The petitioner filed an appeal before the Karnataka Appellate Tribunal under Section 61(3) of the Act, along with an application for interim relief (I.A.No.1). The Tribunal dismissed the interim application, leading the petitioner to file a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka. The High Court observed that the Tribunal had not considered the power of the excise authority to relax the distance requirement under Rule 5, and that the petitioner had made out a prima facie case for interim relief. The court quashed the Tribunal's order dated 10-02-2015 and remitted the matter back to the Tribunal for fresh consideration of the interim application, directing the Tribunal to pass appropriate orders within two weeks from the date of receipt of the order. The writ petition was allowed.
Headnote
A) Excise Law - CL-2 License - Distance Requirement - Rule 5 of Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 - The petitioner, a CL-2 licensee, challenged the order of the Karnataka Appellate Tribunal dismissing his application for interim stay of the direction to shift his business premises. The High Court held that the Tribunal ought to have considered the power of the excise authority to relax the distance requirement under Rule 5, especially since the petitioner had been carrying on business for several years. The impugned order was quashed and the matter remitted for fresh consideration. (Paras 1-5)
B) Excise Law - Interim Relief - Prima Facie Case - The court found that the petitioner had made out a prima facie case for grant of interim relief, as the authority had the power to relax the rule with prior approval of the Commissioner. The Tribunal's dismissal of I.A.No.1 was set aside. (Paras 4-5)
Issue of Consideration
Whether the Karnataka Appellate Tribunal erred in dismissing the petitioner's application for interim relief without considering the power of the excise authority to relax the distance requirement under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968.
Final Decision
The writ petition is allowed. The impugned order dated 10-02-2015 passed by the Karnataka Appellate Tribunal in Appeal No.21/2015 is quashed. The matter is remitted to the Tribunal for fresh consideration of I.A.No.1, which shall be disposed of within two weeks from the date of receipt of the order. All contentions are kept open.
Law Points
- Relaxation of Rule 5 distance requirement
- Power of excise authority to relax rule
- Consideration of prior approval
- Natural justice
- Prima facie case for interim relief
Case Details
2015 LawText (KAR) (02) 7
Writ Petition No.102040 of 2015 [EXCISE]
Sri. Mohan Bhat (for petitioner), Smt. K.Vidyavathi, AGA (for respondents)
The Commissioner of Excise in Karnataka, The Deputy Commissioner of Excise, Haveri District
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Nature of Litigation
Writ petition challenging the order of the Karnataka Appellate Tribunal dismissing the petitioner's application for interim relief in an appeal under Section 61(3) of the Karnataka Excise Act, 1965.
Remedy Sought
Quashing of the Tribunal's order dated 10-02-2015 dismissing I.A.No.1, and direction to grant interim stay of the order directing shifting of business premises.
Filing Reason
The petitioner, a CL-2 licensee, was directed to shift its business premises on the ground that it was within objectionable distance from an institution, without considering the power to relax the distance requirement under Rule 5.
Previous Decisions
The Deputy Commissioner of Excise passed an order directing the petitioner to shift the business. The Karnataka Appellate Tribunal dismissed the petitioner's application for interim relief (I.A.No.1) in the appeal filed against that order.
Issues
Whether the Karnataka Appellate Tribunal erred in dismissing the petitioner's application for interim relief without considering the power of the excise authority to relax the distance requirement under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968.
Submissions/Arguments
The petitioner argued that the rigour of Rule 5 may be relaxed since he has been carrying on business in the same place for several years and the authority has power to relax with prior approval of the Commissioner.
The respondents opposed the petition, but the judgment does not detail their specific arguments.
Ratio Decidendi
The Tribunal ought to have considered the power of the excise authority to relax the distance requirement under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968, especially when the petitioner had been carrying on business for several years and had sought relaxation. The petitioner had made out a prima facie case for grant of interim relief.
Judgment Excerpts
Challenge in this petition is to an order passed dismissing I.A.No.1 by the Karnataka Appellate Tribunal (for short ‘the Tribunal’), in an appeal filed under Section 61(3) of the Karnataka Excise Act, 1965.
The petitioner is a CL-2 licencee. Alleging that the business premises of the petitioner is within objectionable distance from a certain institution, a show cause notice was issued by the 2nd respondent, as to why he should not be directed to shift the business to some other premises.
A reply was submitted stating that the rigour of Rule 5 may be relaxed, since he has been carrying on the business in the same place for several years and that power conferred on the authority to relax the applicability of the rule by obtaining the prior approval of the first respondent.
The 2nd respondent passed an order directing the petitioner to shift the business. An appeal was filed before the Tribunal under Section 61(3) of the Act. I.A.No.1 was filed for interim relief. The Tribunal dismissed the application.
Having heard the learned counsel for the parties and on perusal of the record, I am of the opinion that the Tribunal ought to have considered the power of the excise authority to relax the distance requirement under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968. The petitioner has made out a prima facie case for grant of interim relief.
Procedural History
The Deputy Commissioner of Excise, Haveri District, issued a show cause notice to the petitioner alleging that its business premises was within objectionable distance from an institution. After reply, the Deputy Commissioner passed an order directing the petitioner to shift the business. The petitioner filed an appeal before the Karnataka Appellate Tribunal under Section 61(3) of the Karnataka Excise Act, 1965, along with an application for interim relief (I.A.No.1). The Tribunal dismissed the interim application on 10-02-2015. The petitioner then filed a writ petition under Articles 226 and 227 of the Constitution of India before the High Court of Karnataka, Dharwad Bench, which was heard and allowed on 18-02-2015.
Acts & Sections
- Karnataka Excise Act, 1965: Section 61(3)
- Constitution of India: Articles 226, 227
- Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968: Rule 5
