MARWAR ROAD CARRIERS PRIVATE LIMITED v. THE STATE OF KARNATAKA

ORDER Heard learned counsel for the petitioner and learned AGA for respondents No.1 to 4-State.

#2. This petition is filed by the petitioner seeking to quash the impugned order dated 08.01.2024 passed by the 3rd respondent/Deputy Commissioner of Excise, Bagalkote vide Annexure-A. Petitioner is a company incorporated under the provisions of Companies Act, 1956 is engaged in the business of carriers and transport of goods throughout India. The petitioner undertook a consignment the supply of medicines/pharmaceutical products manufactured by ‘Puniska Injectables Pvt. Ltd.’ from Ponda, Goa to Kamareddy, Telangana to two different distributors under the proper invoices. - 3 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024

#3. This being the case, on 21.10.2023 respondent No.4 along with other staff members apprehended the vehicle in which the said pharmaceutical goods were being transported and allegedly found that certain ‘liquor bottles’ were being transported in the same vehicle. Respondent No.4 not only seized the alleged excisable liquor products, but also seized the pharmaceutical products which were being transported in the vehicle Lorry bearing No.AP-13-X-9395 Ashok Leyland. It is contended by learned counsel for the petitioner that though said pharmaceutical goods/medicines do not fall within the category of excisable commodities under the Karnataka Excise Act, 1965 (for short, ‘the Act’) same are seized and confiscated by the respondent authorities.

#4. Respondent No.4 filed complaint under Section 200 of the Cr.P.C. before the Jurisdictional Magistrate against the driver of the vehicle and a FIR came to be registered in FIR No.17/2023-24/061E/060206 against the driver of the Lorry for the offences punishable under Sections 11, 14, 32(1), 38(A) and 43 of the Karnataka Excise Act, 1965. It is contention of learned counsel for the petitioner that the goods which are medicines and pharmaceuticals are not excisable goods. He - 4 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 filed an application dated 31.10.2023 before respondent No.3 under Section 457 of Cr.P.C. seeking for release of seized medicines/pharmaceutical goods. Respondent No.3 issued a notice dated 08.01.2024 on the said application to the applicant intimating that his application shall be considered after submitting a bank guarantee from any nationalized bank for a sum of Rs.6,47,207/- and thereafter respondent No.3 passed an order on 08.01.2024 directing the release of the seized goods only after furnishing bank guarantee to a sum equivalent to that of the value of the seized medicines. It is this order i.e., questioned by the petitioner herein.

#5. It is vehement contention of learned counsel Sri Shivaraj Balloli appearing for the petitioner that the impugned order passed by the 3rd respondent is illegal, arbitrary and without jurisdiction and hence warrants interference at the hands of this Court. He further contends that admittedly, the pharmaceutical goods/medicines are not ‘excisable article’ under the Act. Therefore, the very seizure/confiscation of the medicines/drugs by respondent No.4 is without jurisdiction and is not sustainable as it is not coming within the definition ‘Excisable article’ as defined under the Act and hence, the - 5 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 impugned order is liable to be quashed. He also contends that respondents ought to have released the medicines which are not excisable articles under the Act and could have initiated action against the other seized goods which fall within the Act. The question of asking the petitioner to furnish the bank guarantee with regard to non-excisable articles is arbitrary, illegal and is without jurisdiction by the respondents.

#6. It is also contended that with regard to the medicines and pharmaceutical articles, proper bills, invoices and the source have been mentioned and the same are produced before the authority. However, without taking into consideration these aspects, the 3rd respondent has passed the impugned order. It is also contended by learned counsel for the petitioner that the seized medicines/drugs if exposed to sunlight, there are chances of the same getting spoiled and these medicines (drugs) are being transported to various places for treatment and un-authorizedly respondent No.3 has confiscated and seized these medicines in the guise of it falling under the ‘excisable article’ under the Act. Therefore, he contends that the very jurisdiction exercised by the 3rd respondent is questioned and he does not has the jurisdiction to seize or - 6 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 confiscate the products or goods or articles which does not fall within the ambit of the Karnataka Excise Act, 1964 On these grounds, he contends that the impugned order passed by the 3rd respondent is liable to be quashed and the seized goods are required to be released forthwith in favour of the petitioner.

#7. Per contra, the learned AGA representing the State vehemently contends that there is no violation of prohibition as per the Act to confiscate the articles which are in violation as per the Act and the Rules. It is contended by learned AGA that the impugned order is passed by seizing the articles that are transported by the petitioner, out of which, the excisable goods and articles namely ‘whisky bottles’ were transported and therefore there is no illegality committed by the 3rd respondent in passing the impugned order on the application filed by the petitioner seeking release of the goods i.e., medicines (drugs) by asking the petitioner to furnish bank guarantee for a sum of Rs.6,47,207/-.

#8. Learned AGA further contends that though the petitioner claims that the goods to be released are non excisable articles under the Act, since the same were used to transport along with excisable articles in the same vehicle, by - 7 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 means of which, offence has been committed. The said goods are liable to be confiscated as contemplated under Section 43 of the Act. Learned AGA also further contends that Section 43- A of the Act deals with confiscation by Excise Officers in certain cases, more specifically he relies on Section 43-A(2) of the Act, which reads as under : “43A. Confiscation by Excise Officers in certain cases.- (1) XXXXX (2) On production of the seized property under sub-section (1), the authorised officer, if satisfied that an offence under this Act has been committed may, whether or not a prosecution is instituted for the commission of such offence, order confiscation of such property: Provided that the authorised officer may pending final disposal of the proceedings in respect of the property seized under sub-section (1) and subject to this section and sections 43B to 43G,- (i) release the seized property except excisable articles to the owner of such property; (ii) release the seized excisable articles to their owner if he possesses a licence under the Act or the rules made thereunder; on production of a Bank Guarantee issued from a Scheduled Bank for a sum equal to the value as - 8 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 estimated by the authorised officer, (which shall be renewable by him from time to time till final disposal of such proceeding) and on execution by the owner thereof a bond for production of such property or as the case may be, excisable articles so released, if and when so required, before the authorised officer.”

#9. Therefore, he contends that there is no illegality or arbitrariness or violation of any of the Act in seizing and confiscating the goods i.e., medicines/pharmaceutical goods of the petitioner, which were confiscated along with the excisable articles and which were used to transport the excisable articles in the same vehicle, by means of which, the said offence has been committed. He also contends that the application filed by the petitioner for release of the seized articles has been considered and an order is passed under Section 43-A(2) proviso of the Act, requiring the petitioner to furnish bank guarantee for release of the said goods/medicines (drugs). He relies on the Judgments of co-ordinate Bench of this Court in the case Finolex Cables Limited, Pune and Others vs. State of Karnataka and Others, reported in 2009(1) Kar. L.J. 448 and also in the case of State of Karnataka vs. K.Krishnan, reported in (2000) 7 SCC 80 in support of his case. - 9 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024

#10. Learned AGA also contends that there is an appeal provision provided, if any of the parties aggrieved by any of the orders passed under Section 43 of the Act, is appealable under Section 43-E of the Act, which can be explored by the petitioner, if he so aggrieved by the order passed under Section 43-A of the Act, which has not been exhausted and the petitioner is before this Court invoking the writ jurisdiction under Article 226 of the Constitution of India. Therefore, he contends that on two counts, one being there is no illegality in the order passed by the 3rd respondent and on the ground of alternative efficacious remedy being available to the petitioner, the present petition does not merit consideration and the same is required to be dismissed.

#11. Having heard learned counsel for the petitioner and learned AGA, it is not in dispute that the petitioner is the transporter and while transporting the certain goods, respondent No.3 confiscated the goods portion/part of it is falling within the category of excisable goods being ‘whisky bottles’ along with other goods namely medicines/(drugs) pharmaceuticals have been also confiscated. On such confiscation on the application preferred by the petitioner, the - 10 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 same was ordered to be considered. Same was ordered to be released, if the petitioner furnishes the bank guarantee from any Nationalized Bank for a sum of Rs.6,47,207/-, which is the subject matter of the present writ petition. Though, it is vehemently contended by the leaned counsel that these medicines(drugs) do not fall within the category of ‘excisable articles’ under the Karnataka Excise Act, 1965 and they cannot be confiscated. I am afraid to the same cannot be aceeded to for the simple reason that Section 43 of the Act reads as under: “43. Liability of certain things to confiscation.- Whenever an offence has been committed, which is punishable under this Act, the following things shall be liable to confiscation, namely :- (1) any intoxicant, material, still, utensil, implement or apparatus in respect of, or by means of which, such offence has been committed; (2) any intoxicant lawfully imported, transported, manufactured, had in possession or sold along with, or in addition to, any intoxicant liable to confiscation under clause (1); and (3) any receptacle, package, or covering in which anything liable to confiscation under clause (1) or clause (2), is found, and the other contents, if any, of such receptacle, package or covering and any animal, vehicle, except the vehicles owned by the State Road - 11 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 Transport Undertaking or Corporation vessel, raft or other conveyance used for carrying the same ;”

#12. On carefully going through the provisions of Section 43 of the Act, it clearly indicates that any intoxicant materials, still, utensil, implement or apparatus in respect of, or by means of which, such offence has been committed, is punishable and liable for confiscation. It also deals with any receptacle, package, or covering in which anything liable to confiscation as contemplated under Section 43(3) of the Act. This aspect as the matter has been dealt with by co-ordinate bench of this Court squarely covering the present case on hand in the case of Finolex referred(supra). Where this Court dealing with similar situation did not find any good ground to interfere with the submissions so made therein, which is made in the present case as well. I do not agree with the submission of learned counsel for the petitioner that respondent No.3 does not have the authority or lacks jurisdiction for confiscation and seizure of the medicines (drugs), which was taken in the same vehicle as that of the intoxicant i.e., ‘whisky bottles’ which falls within the category of excisable articles, as the said intoxicant was taken in the same vehicle along with medicines(drugs) for commission - 12 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 of the offence and accordingly, the same has been confiscated by the respondent.

#13. Therefore, the provisions of Section 43 of the Act is very clear and unambiguous with regard to intoxicant and materials or by means of which any such offence is committed and any receptacle, package or covering liable confiscation. Having considered the application filed by the petitioner for release of the medicines, the authorities passed an order for payment of bank guarantee, which is contemplated under Section 43-A sub Section (2) proviso of the Act, therefore such an order of production of bank guarantee from a Nationalized Bank equivalent to the value estimated is also proper and illegally justified. Under the circumstances, the impugned order passed for confiscation and imposition of furnishing of bank guarantee for the value imposing such condition by the respondent authorities is not tainted with any illegality or arbitrariness as it is so contemplated under the Act and powers are vested with the authorities. Accordingly, the submissions made by the learned AGA is acceptable and I am not inclined to accept the submission of learned counsel for the petitioner that there is no violation or bar of jurisdiction by the - 13 - NC: 2024:KHC-D:10345 WP No. 102168 of 2024 authorities to seize or confiscate the articles of medicines (drugs) which is not excisable article. Under the circumstances, I pass the following : ORDER (i) Petition is devoid of merits, the same is dismissed. (ii) It is needless to mention that petitioner is at liberty to invoke the appeal provision as contemplated under the Karnataka Excise Act, 1965. Sd/- JUDGE CKK CT:BCK LIST NO.: 1 SL NO.: 19