Case Note & Summary
The petitioner, M/s. Raviraj Enterprises, a partnership firm holding a CL-2 excise license, filed a writ petition under Articles 226 and 227 of the Constitution of India challenging an order dated 10-02-2015 passed by the Karnataka Appellate Tribunal (the Tribunal) in Appeal No. 21/2015. The Tribunal had dismissed I.A.No.1 filed by the petitioner, which sought interim relief pending appeal. The background facts reveal that the Deputy Commissioner of Excise (2nd respondent) issued a show cause notice to the petitioner alleging that its business premises was within objectionable distance from a certain institution, contrary to Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968. The petitioner submitted a reply seeking relaxation of the distance rule, stating that it had been carrying on business at the same place for several years and that the authority had power to relax the rule with prior approval of the Commissioner of Excise (1st respondent). The 2nd respondent passed an order directing the petitioner to shift the business. Aggrieved, the petitioner filed an appeal before the Tribunal under Section 61(3) of the Karnataka Excise Act, 1965, along with an application for interim relief. The Tribunal dismissed the interim application without considering the merits of the relaxation request and without affording an opportunity of hearing to the petitioner. The High Court found that the Tribunal's order was unsustainable as it failed to consider the petitioner's contention regarding relaxation of the distance rule and violated principles of natural justice. Consequently, the High Court quashed the impugned order and remitted the matter back to the Tribunal for fresh consideration of the interim application after hearing both sides. The writ petition was allowed.
Headnote
A) Excise Law - Natural Justice - Interim Relief - Section 61(3) Karnataka Excise Act, 1965 - Rule 5 Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 - The petitioner, a CL-2 licensee, challenged the dismissal of his interim application by the Karnataka Appellate Tribunal without considering the merits of relaxation of distance rule and without hearing. The High Court held that the Tribunal's order was unsustainable as it failed to consider the petitioner's request for relaxation and violated principles of natural justice. The matter was remitted back for fresh consideration after hearing both sides. (Paras 1-4)
B) Excise Law - Relaxation of Distance Rule - Rule 5 Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 - The petitioner sought relaxation of the distance requirement under Rule 5, claiming he had been carrying on business for several years. The High Court observed that the authority has power to relax the rule with prior approval of the Commissioner, and the Tribunal ought to have considered this aspect before dismissing the interim application. (Paras 2-4)
Issue of Consideration
Whether the Karnataka Appellate Tribunal erred in dismissing the petitioner's application for interim relief without considering the merits of the relaxation of distance rule under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968, and without affording an opportunity of hearing.
Final Decision
The High Court allowed the writ petition, quashed the order dated 10-02-2015 passed by the Karnataka Appellate Tribunal in Appeal No. 21/2015, and remitted the matter back to the Tribunal for fresh consideration of I.A.No.1 after hearing both sides.
Law Points
- Natural Justice
- Right to be Heard
- Relaxation of Distance Rule
- Section 61(3) Karnataka Excise Act
- 1965
- Rule 5 Karnataka Excise (Sale of Indian and Foreign Liquor) Rules
- 1968
Case Details
2015 LawText (KAR) (02) 41
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
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Nature of Litigation
Writ petition under Articles 226 and 227 of Constitution of India challenging an order of the Karnataka Appellate Tribunal dismissing an interim application in an excise appeal.
Remedy Sought
Quashing of the Tribunal's order dated 10-02-2015 dismissing I.A.No.1 and direction to consider the interim application afresh.
Filing Reason
The Tribunal dismissed the petitioner's interim application without considering the merits of relaxation of distance rule and without affording an opportunity of hearing.
Previous Decisions
The Deputy Commissioner of Excise issued a show cause notice and passed an order directing the petitioner to shift business. The petitioner appealed to the Karnataka Appellate Tribunal under Section 61(3) of the Karnataka Excise Act, 1965, and filed I.A.No.1 for interim relief. The Tribunal dismissed the interim application on 10-02-2015.
Issues
Whether the Karnataka Appellate Tribunal erred in dismissing the petitioner's interim application without considering the merits of relaxation of distance rule under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968.
Whether the Tribunal violated principles of natural justice by not affording an opportunity of hearing before dismissing the interim application.
Submissions/Arguments
Petitioner argued that the Tribunal dismissed the interim application without considering the request for relaxation of the distance rule and without hearing the petitioner.
Respondents argued in support of the Tribunal's order.
Ratio Decidendi
The Tribunal's order dismissing the interim application was unsustainable as it failed to consider the petitioner's contention regarding relaxation of the distance rule under Rule 5 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968, and violated principles of natural justice by not affording an opportunity of hearing. The matter was remitted for fresh consideration.
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. Aggrieved, the petitioner filed an appeal before the Tribunal under Section 61(3) of the Act and also filed I.A.No.1 for interim relief. The Tribunal dismissed the application without considering the request for relaxation and without hearing the petitioner.
Procedural History
The Deputy Commissioner of Excise issued a show cause notice to the petitioner regarding distance violation. After reply, the Deputy Commissioner passed an order directing shifting of business. The petitioner appealed to the Karnataka Appellate Tribunal under Section 61(3) of the Karnataka Excise Act, 1965, and filed I.A.No.1 for interim relief. The Tribunal dismissed the interim application on 10-02-2015. The petitioner then filed the present writ petition under Articles 226 and 227 of the Constitution of India.
Acts & Sections
- Karnataka Excise Act, 1965: 61(3)
- Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968: Rule 5
- Constitution of India: Articles 226, 227
