Writ Petition No. 19478 of 2022 · The High Court
Case Details
- 1 - NC: 2025:KHC:10020 WP No. 19478 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 19478 OF 2022 (EXCISE) BETWEEN: 1. HIS HIGHNESS HIMANSHUINHJI JADEJA S/O LATE H.H. JYOTENDRASINHJI JADEJA, AGED ABOUT 56 YEARS, R/AT HAJUR PALACE ROAD, GONDAL RAJKOT, GUJARAT 360311, REPRESENTED BY THE SPA HOLDER, MR. GIRISH BARBHAYA. 2. HER HIGHNESS KUMUDKUMARI JYOTINDRASINHJI JADEJA W/O LATE H.H. JYOTENDRASINHJI JADEJA, AGED ABOUT 82 YEARS, R/AT HAJUR PALACE PALACE ROAD, GONDAL RAJKOT, GUJARAT 360311, REPRESENTED BY THE SPA HOLDER, MR. GIRISH BARBHAYA. …PETITIONERS (BY SRI.MAHESH ARKALGUD, ADVOCATE) AND: 1. THE COMMISSIONER OF EXCISE T.T.M.C. A BLOCK, 2ND FLOOR, B.M.T.C. SHANTHI NAGAR, BENGALURU 560027. 2. THE DEPUTY COMMISSIONER OF EXCISE BANGALORE URBAN DISTRICT -2, Digitally signed by VANAMALA N Location: High Court of Karnataka - 2 - NC: 2025:KHC:10020 WP No. 19478 of 2022 244, 8TH E MAIN ROAD, HRBR LAYOUT, 1ST BLOCK. HRBR LAYOUT, BANASWADI, BENGALURU-560043.
Legal Reasoning
(BY SRI.MANJUNATH B, AGA) …RESPONDENTS THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO-QUASH THE ENDORSEMENT DATED 14.6.2022 BEARING REF.NO.EXCISE/BUD-2/IML/VA-13/17A/135/2021-22 ANNEXURE-K ISSUED BY THE R2; DIRECT THE RESPONDENTS TO RENEW THE CL-6A LICENSE BEARING REGISTER NO.ES20210624994 IN FAVOUR OF THE 1ST PETITIONER IN TERMS OF RULE 17-A OF THE KARNATAKA EXCISE (GENERAL CONDITIONS OF LICENSE) RULES, 1967. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD ORAL ORDER The petitioners are the successors of late His Highness Jyotendrasinhji Jadeja [the deceased], and the deceased is issued with the license in Form CL- 6A and Form - II for retail sale of Beer under the Karnataka Excise [General Conditions of License] - 3 - NC: 2025:KHC:10020 WP No. 19478 of 2022 Rules, 1967 [for short, 'the 1967 Rules']. The petitioners are aggrieved by the Endorsement dated 14.06.2022 [Annexure-K] issued by the second respondent while seeking direction to the second respondent as also the Commissioner of Excise, Bengaluru to renew CL-6A and other license in favour of the first petitioner under Rule 17-A of the 1967 Rules. The second respondent has issued the impugned Endorsement dated 14.06.2022 informing the petitioners that their application under Section 17-A of the 1967 Rules cannot be considered because the licenses are secured suppressing that they and the deceased are partners in a partnership firm and calling upon them to apply for a transfer of licenses under Rule 17-B of the 1967 Rules and pay requisite fee and additional fee for such transfer. 2. This Court, on 04.11.2022, has granted interim order directing the respondents to renew the licenses without insisting for transfer fee under the - 4 - NC: 2025:KHC:10020 WP No. 19478 of 2022 1967 Rules subject to the petitioners satisfying all other parameters prescribed for the grant of such licenses. It is undisputed that with this interim order, licenses are renewed in favour of the first petitioner, son of the deceased. The second petitioner has also consented and concurred with the renewal of the licenses in favour of the first petitioner. 3. The deceased is the owner of an immovable property which is used for running a Restaurant with lodging and other facilities. This business, which was a proprietary concern, has later become a partnership firm with the first petitioner as a partner. This firm is reconstituted including the second petitioner as a partner. In the year 2008, for the first time the deceased has applied for and is issued with the licenses referred to. The licenses are renewed without any controversy during the deceased’s lifetime, and upon his demise, the first petitioner [with the consent and concurrence of the - 5 - NC: 2025:KHC:10020 WP No. 19478 of 2022 second petitioner] has applied for transfer of the licenses in his favour as a legal heir of the deceased as is contemplated under Rule 17-A of the 1967 Rules. After multiple exchange of correspondences with the Department, the petitioners have responded vide their reply notice dated 04.07.2022 stating that they are also willing to apply for a transfer of licenses as is contemplated under Rule 17-B of the 1967 Rules. The Rule 17-B comes into play when transfer is not by a legal heir of the deceased. 4. Sri Manjunath B., the learned Additional Government Advocate for the first and second respondents, relying upon this notice dated 04.07.2022, proposes to contend that it would be crucial because the licenses were operated by the Firm and in that event, the transfer must be under Rule 17-B of the 1967 Rules entailing a higher fee. The learned Additional Government Advocate next submits that the petitioners, who have caused this - 6 - NC: 2025:KHC:10020 WP No. 19478 of 2022 reply agreeing to apply under Rule 17-B of the 1967 Rules, are estopped from calling in question the impugned Endorsement which does not in any manner undermine their right to seek transfer as is contemplated under Rule 17-B of 1967 Rules. The learned Additional Government Advocate emphasizes that the petitioners are trying to avoid paying higher fee as would be applicable when there has to be a transfer under Section 17-B of the 1967 of the Act in perpetuating the suppression even during the lifetime of the deceased. 5. Sri Mahesh Arakalgud, the learned counsel for the petitioners, in rebuttal, submits that the petitioners cannot dispute that they have caused response dated 04.07.2022, but that is under duress. The learned counsel explains that with the licenses, which were coming up for renewal, had to be renewed before the end of Excise Calendar year, but no decision was taken which jeopardized the entire - 7 - NC: 2025:KHC:10020 WP No. 19478 of 2022 business possibilities and therefore, the petitioners have caused the response vide Reply dated 04.07.2022 and there is no suppression. The learned counsel asserts that these circumstances are stated in the memorandum of writ petition. 6. Sri Mahesh Arakalgud, on the question of the Firm operating Licenses, states categorically that even during the deceased's lifetime the Firm's Books of Account and the deceased's Books of Account as individual were maintained separately; the licensed business is kept separately in the deceased's individual Books of Account; and that this arrangement has continued even with the renewal in terms of the interim order granted by this Court. The learned counsel emphasizes that it is settled that there cannot be any inference that a particular asset of a partner is brought into the capital of the firm only because the deceased was also a partner and - 8 - NC: 2025:KHC:10020 WP No. 19478 of 2022 there must be specific instances or circumstances to justify an inference to that effect. 7. This Court must observe that the proposition that there cannot be inference that a particular individual asset of a partner is brought into the firm is trite, and it requires no reiteration. The respondents' insistence on an application under Rule 17-B of the 1967 Rules must be considered in the light of this settled proposition in law and the indisputable fact that the respondents, in issuing the impugned Endorsement, have examined no Books of Account or conducted any enquiry otherwise to substantiate the case that the licenses have been operated for the benefit of the Firm during the deceased’s lifetime. The respondents have premised their conclusion only on the Petitioners’ reply dated 04.07.2022. 8. This Court must opine that if the respondents have premised their insistence only in - 9 - NC: 2025:KHC:10020 WP No. 19478 of 2022 the statement made in the reply/notice dated 04.07.2022 and that is tenuous and cannot be accepted. Therefore, this Court must intervene and quash the impugned Endorsement dated 14.06.2022 [Annexure-K] and direct the respondents to transfer the licenses in favour of the first petitioner under Rule 17-A of the 1967 Rules but observing that this shall not foreclose any enquiry that would be permissible under the Karnataka Excise Act, 1965 to verify the actual working of the licenses and call for any dues that may become payable if indeed it is established that the licenses are not operated at an individual level but for the benefit of the firm. In the light of the afore, the following:
Decision
ORDER [A] The petition is allowed and the impugned Endorsement dated 14.06.2022 [Annexure-K] issued by the second respondent is quashed directing the second respondent to transfer licenses under Rule 17-A of the 1967 Rules - 10 - NC: 2025:KHC:10020 WP No. 19478 of 2022 subject to the petitioners remitting the prescribed fees. [B] The second respondent shall communicate in writing in this regard to the petitioners within eight [8] weeks from today and the transfer shall be affected immediately upon payment of the prescribed fees. [C] It is needless to observe that the respondents will be at liberty as referred to in the course of this order. Sd/- (B M SHYAM PRASAD) JUDGE SA ct:sr