Case Note & Summary
The appellant, Rockline Bar & Restaurant, operated a bar and restaurant under a license granted under the Karnataka Excise Act and the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968. On 07.03.2015, the Deputy Commissioner, Bengaluru City (Respondent No.3) issued a demand notice requiring the appellant to deposit a penalty of Rs. 15,30,200/- under Rule 14 of the 1968 Rules. Aggrieved, the appellant filed a writ petition challenging the notice on two grounds: first, that the power under Rule 14 lies with the Deputy Commissioner (Excise) and not the Deputy Commissioner (Revenue); and second, that the notice was issued without any prior show cause notice, violating principles of natural justice. The learned Single Judge, after hearing the parties, accepted the contention regarding violation of natural justice and directed that the demand notice be treated as a show cause notice, allowing the appellant to file objections within two weeks. The appellant was also directed to appear before the Deputy Commissioner (Excise) on a specified date. The appellant filed a writ appeal against this order. The Division Bench, after considering the submissions, found no error in the order of the learned Single Judge and dismissed the appeal, holding that the order was just and proper and did not warrant interference.
Headnote
A) Excise Law - Penalty - Rule 14 of Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 - Natural Justice - The appellant challenged a demand notice for penalty of Rs. 15,30,200/- issued by the Deputy Commissioner (Revenue) on the ground that the power under Rule 14 lies with the Deputy Commissioner (Excise) and that no show cause notice was given. The learned Single Judge treated the demand notice as a show cause notice and directed the appellant to file objections. The Division Bench upheld this order, finding no error. (Paras 1-4)
Issue of Consideration
Whether the demand notice issued by the Deputy Commissioner (Revenue) under Rule 14 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 was valid and whether it violated principles of natural justice.
Final Decision
The writ appeal is dismissed. The order of the learned Single Judge dated 05/05/2015 in Writ Petition No.19605/2015 is upheld. No order as to costs.
Law Points
- Principles of natural justice
- Rule 14 of Karnataka Excise (Sale of Indian and Foreign Liquor) Rules
- 1968
- Power of Deputy Commissioner
Case Details
2015 LawText (KAR) (07) 8
Vineet Saran, Aravind Kumar
Sri.Sandesh J. Chouta (for appellant), Sri.T.K.Vedamurthy, HCGP (for respondents)
Rockline Bar & Restaurant
The State of Karnataka, The Deputy Commissioner Excise, The Deputy Commissioner, Inspector of Excise
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Nature of Litigation
Writ appeal against order of learned Single Judge in excise matter regarding penalty demand notice.
Remedy Sought
Appellant sought setting aside of the order dated 05/05/2015 in Writ Petition No.19605/2015.
Filing Reason
Appellant challenged demand notice dated 07.03.2015 for penalty of Rs. 15,30,200/- under Rule 14 of the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968, on grounds of lack of authority and violation of natural justice.
Previous Decisions
Learned Single Judge in Writ Petition No.19605/2015 dated 05/05/2015 directed that the demand notice be treated as a show cause notice and allowed appellant to file objections.
Issues
Whether the demand notice issued by the Deputy Commissioner (Revenue) under Rule 14 was valid?
Whether the demand notice violated principles of natural justice for lack of show cause notice?
Submissions/Arguments
Appellant argued that power under Rule 14 lies with Deputy Commissioner (Excise) and not Deputy Commissioner (Revenue).
Appellant argued that no show cause notice was given before issuing demand notice, violating natural justice.
Ratio Decidendi
The order of the learned Single Judge treating the demand notice as a show cause notice and directing the appellant to file objections is just and proper, and does not call for interference in appeal.
Judgment Excerpts
The appellant is operating a `Bar and Restaurant’ for which it has been granted a license under the Karnataka Excise Act, read with Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968.
After hearing the parties, the learned Single Judge, after accepting the contention of the appellant that the demand notice has been issued in violation of principles of natural justice, directed that the demand notice to be treated as a show cause notice
Procedural History
The appellant filed Writ Petition No.19605/2015 challenging the demand notice dated 07.03.2015. The learned Single Judge, by order dated 05/05/2015, directed that the demand notice be treated as a show cause notice and allowed the appellant to file objections. Aggrieved, the appellant filed the present writ appeal under Section 4 of the Karnataka High Court Act.
Acts & Sections
- Karnataka Excise Act:
- Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968: Rule 14
