- 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 TH DAY OF JUNE 2015 BEFORE THE HON BLE MR. JUSTICE H.G.RAMESH WRIT PETITION NOS.22969/2015 & (EXCISE) BETWEEN: 1. D.V.RAGHUNATH AGE MAJOR PREMISES AT CHAITANYA ENTERTAINMENT NO.17/1, RESIDENCY ROAD 2. D.V.RAGHUNATH AGE MAJOR PREMISES AT ADITYA ENTERTAINMENT NO.80/1, SHRUNGAR SHOPPING COMPLEX, M.G.ROAD 3. JEWELS INDIA HOTEL PVT. LTD REPRESENTED BY ITS MANAGING DIRECTOR, B.S.CHADDA AGE-MAJOR, CL-9 LICENSE HOLDER IN RESPECT OF PREMISES AT NO.28, M.G.ROAD, 4. PRAVIN MANSATA AGE-MAJOR, CL-9 LICENSE HOLDER IN RESPECT OF PREMISES AT DÉJÀ VU BAR AND RESTAURANT NO.776, 2 ND FLOOR, TERRACE FLOOR 100 FT. ROAD, INDIRANAGAR
- 2-5. CRYSTAL NETWORK PRIVATE LIMITED A PRIVATE LIMITED COMPANY REPRESENTED BY ITS MANAGING PARTNER VIRAJ SUVARNA, AGE MAJOR PREMISES AT TAKE FIVE BAR AND RESTAURANT NO.54, 2 ND FLOOR, 3 RD MAIN DEFENCE COLONY, INDIRANAGAR 6. D.RAMESH BABU AGE-MAJOR PREMISES AT: COPACABANA BAR AND RESTAURANT NO.18/1, CAMBRIDGE ROAD ULSOOR, 7. V.RAJESH, AGE-MAJOR PREMISES AT PRINCESS BAR AND RESTAURANT BUBBLES BITE BAR AND RESTAURANT NO.3, PALACE GROUND, PRINCE ACADEMY, BELLARY ROAD 8. RAJESH RAJA RAM AGE-MAJOR PREMISES AT: ASHWATHI INN BAR AND RESTAURANT, NO.84, 13 TH FLOOR BURTON CENTER, M.G.ROAD 9. SIDDHI ENTERPRISES A REGISTERED PARTNERSHIP FIRM REPRESENTED BY ITS MANAGING PARTNER, P.M.ANANTHANARAYANA AGE-MAJOR, PREMISES AT FUSION LOUNGE BAR AND RESTAURANT NO.185, 2 ND FLOOR DEENA BUILDING, BRIGADE ROAD
- 3-10. P.M.ANANTHANARAYANA AGE-MAJOR PREMISES AT SIDDHI ENTERPRISES FUSION LOUNGE BAR AND RESTAURANT NO.185, 2 ND FLOOR DEENA BUILDING, BRIGADE ROAD 11. VITTAL KAMATH, AGE-MAJOR PREMISES AT ROADHOUSE BELL BAR AND RESTAURANT, NO.657, 100 TH CROSS 1 ST STAGE, INDIRANAGAR 12. VITTAL KAMATH, AGE-MAJOR PREMISES AT: I AND MONKEY BAR AND RESTAURANT NO.968, 12 TH MAIN ROAD HAL 2 ND STAGE INDIRANAGAR 13. RENUKA PHILLIP, AGE-MAJOR PREMISES AT UPBEAT BAR AND RESTAURANT NO.15/7, FAVOURITE PLAZA 4 TH AND 5 TH FLOOR, 14. K.P.GROUP A REGISTERED PARTNERSHIP FIRM REPRESENTED BY ITS MANAGING PARTNER, KHAINDRE BARMAN AGE-MAJOR PREMISES AT ISLAND BAR AND RESTAURANT NO.3, 80 FT. ROAD, HAL 3 RD STAGE 15. JUDE KOSHY, AGE-MAJOR PREMISES AT VILLERS BAR AND RESTAURANT NO.46, VASANTHNAGAR,
- 4-16. AVANT GARDE HOSPITALITY PVT. LTD. REPRESENTED BY ITS DIRECTOR ABHIJIT SAHA, AGE-MAJOR PREMISES AT NO.48/1, GROUND FLOOR DICKENSON ROAD, MANIPAL CENTRE 17. HIGH POINT HOTELS LTD. A REGISTERED COMPANY REPRESENTED BY ITS MANAGING DIRECTOR, KANCHAN LULLA AGE-MAJOR, PREMISES AT NO.1, 5 TH FLOOR, 1 MG MALL MUNICIPAL NO.1/2, SWAMI VIVEKANANDA ROAD ULSOOR, 18. D.V.RAGHUNATH, AGE-MAJOR PREMISES AT ADITYA ENTERPRISES NO.90/3, VARTHUR HOBLI RING ROAD, MARATHAHALLI 19. D.V.RAGHUNATH, AGE-MAJOR PREMISES AT: FINE FOOD HOTEL NO.65, JNC ROAD, 5 TH BLOCK KORAMANGALA INDUSTRIAL LAYOUT 20. B. ROOPA, AGE-MAJOR PREMISES AT: MISH MASH BAR AND RESTAURANT NO.232, 17 TH CROSS, 27 TH MAIN 1 ST SECTOR, HSR LAYOUT 21. VENSURA VENTURES REPRESENTED BY ITS MANAGING PARTNER, S.A.RAJASHEKAR REDDY AGE-MAJOR, PREMISES AT: ENIGMA HOTEL NO.2, 100 FT ROAD, OPP. CANARA BANK 5 TH BLOCK, KORAMANGALA,
- 5-22. ANGAD BATHIJA, AGE-MAJOR PREMISES AT: PUNJABI TIMES BAR AND RESTAURANT NO.23, 24, 25 OUTER RING ROAD BELLANDUR, 23. M.P.HARICHARAN AGE-MAJOR PREMISES AT: DUCK OUT BAR AND RESTAURANT NO.77/A, SIGNUS CHAMBERS 3 RD FLOOR, INDUSTRIAL LAYOUT KORAMANGALA, 24. K.A.SATYA, AGE-MAJOR PREMISES AT: NIZAMS BAR AND RESTAURANT NO.1085, 14 TH MAIN, 18 TH CROSS HSR LAYOUT, 3 RD SECTOR 25. RAJIV RAMNANE, AGE-MAJOR PREMISES AT: JIMMIES BAR AND RESTAURANT NO.467, GROUND FLOOR, 1 ST FLOOR AND 2 ND FLOOR 80 FT. ROAD, 6 TH BLOCK, KORAMANGALA 26. V.MANJUNATH JANNU, AGE-MAJOR PREMISES AT: PAVA BAR AND RESTAURANT NO.203, 2 ND FLOOR, UB CITY VITTAL MALLYA ROAD 27. BHUVAN SINGH, AGE-MAJOR PREMISES AT: GUZZLERS INN BAR AND RESTAURANT, NO.4, NEW NO.48 REST HOUSE ROAD, 28. D.V.RAGHUNATH, AGE-MAJOR PREMISES AT: ADITYA ENTERTAINMENT BULL AND BUSH BAR AND RESTAURANT NO.18 AND 27, 5 TH, 6 TH AND TERRACE
- 6 - FLOOR, GARUDA MALL, MARGRATH ROAD 29. TOTAL ENVIRONMENT HOSPITALITY PVT LTD REPRESENTED BY ITS DIRECTOR AJAY NAGARAJAN, PREMISES AT: NO.149C, SURVEY NO.157 AND 162 EPIP 2 ND STAGE, INDUSTRIAL AREA, HOODI VILLAGE K.R.PURAM, 30. J.SHIVARAJ, AGE-MAJOR PREMISES AT: COUNTER CULTURE BAR AND RESTAURANT, NO.D-2, 4 TH CROSS, DEVASANDRA INDUSTRIAL ZONE, WHITEFIELD 31. L.KASTURIBAI AGE-MAJOR, PREMISES AT: THE HUMMING TREE BAR AND RESTAURANT, NO.949, 3 RD FLOOR INDIRANAGAR,... PETITIONERS (BY SRI DHANANJAY K.V., ADVOCATE) AND: 1. STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, FINANCE DEPARTMENT (EXCISE) VIDHANA SOUDHA 560 001 2. THE EXCISE COMMISSIONER GOVERNMENT OF KARNATAKA 2 ND FLOOR, TTMC BUILDING A BLOCK, BMTC, K.H.ROAD SHANTHINAGARA, 560 027 3. DEPUTY COMMISSIONER (REVENUE) URBAN DISTRICT GOVERNMENT OF KARNATAKA FOURTH FLOOR, DC OFFICE BUILDING REVENUE COMPLEX, K.G.ROAD 560 009
- 7-4. DEPUTY COMMISSIONER OF EXCISE URBAN EAST GOVERNMENT OF KARNATAKA C/O THE EXCISE COMMISSIONER GOVERNMENT OF KARNATAKA 2 ND FLOOR, TTMC BUILDING A BLOCK BMTC, KH ROAD SHANTHINAGARA 560 027 5. KARNATAKA STATE BEVERAGES CORPORATION LIMITED 4 TH FLOOR, TTMC A BLOCK BMTC BUILDING, K.H.ROAD SHANTINAGAR 560 027... RESPONDENTS (BY SRI BHANU PRAKASH V.G., HCGP FOR R1 TO R4; R5 NOTICE DISPENSED WITH V/O DTD. 11.6.2015) WRIT PETITIONS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DECLARE THAT RULE 14(2) OF THE KARNATAKA EXCISE (SALE OF INDIAN AND FOREIGN LIQUORS) RULES 1968 WHILE IN FORCE WAS ULTRA VIRES THE KARNATAKA EXCISE ACT 1965 AND WAS OPPOSED TO THE SCHEME OF THE KARNATAKA PROHIBITION ACT, 1961 AND WAS LIABLE TO BE STRUCK DOWN ACCORDINGLY ETC. WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING IN B GROUP, THIS DAY, THE COURT MADE THE FOLLOWING: H.G.RAMESH, J. (Oral): O R D E R 1. Heard. It is stated that the petitioners are engaged in the business of operating Bar and Restaurants in the city of Bengaluru. In these writ petitions, the petitioners have made the following prayers:
- 8 - a) declare that Rule 14(2) of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 while in force was ultra-vires the Karnataka Excise Act, 1965 and was opposed to the scheme of the Karnataka Prohibition Act, 1961 and was liable to be struck down accordingly. b) quash the demand notices (Annexure-C1 to C36) issued by the Deputy Commissioner of Revenue, the Third Respondent, upon the petitioners in enforcement of the said Rule 14(2); c) pass any other order or to issue any direction as may be deemed necessary, appropriate or expedient in the facts and circumstances of this case in the interest of justice and equity. 2. The validity of the Rule referred to above fell for consideration before a Division Bench of this Court in State of Karnataka & Ors. vs. H.B.I.L. & Ors. [ILR 2005 KAR 1397]. The Division Bench upheld the validity of the Rule by holding that it was not violative of Act 14 of the Constitution. It is relevant to refer to the following observations made therein: 12. It is now well settled that Article 14 does not forbid reasonable clarification for the purpose of legislation. In the present case, among the various categories of licencees, it is CL-2 and CL-9 licencees who come into contact with public at large and offer liquor for sale. According to the information collected by the State, the business transacted by these categories of licencees is so meagre and insufficient even to meet the prescribed licence fee. This clearly indicates that there was purchase and sale of liquor clandestinely leading to evasion of huge amounts of excise duty. In order to plug
- 9 - these loopholes and in the interest of revenue, the State under the impugned notification referred only CL-2 and CL-9 licencees and excluded the other categories of licencees. This classification by the State can neither be said to be arbitrary nor discriminatory. To achieve the object which is expedient, the State in its wisdom included the CL-2 and CL-9 licencees in the impugned notification. It is clear that the differentiation has a rational relation to the object sought to be achieved by the impugned notification. Therefore, the contention of respondents that the impugned notification is violative of Article 14 of the Constitution is liable to be rejected. (Underlining supplied) 3. However, learned counsel for the petitioners want this Court to re-examine the validity of the Rule on grounds other than the one referred to in the judgment of the Division Bench. He submitted that the same is permissible in law. In support of his submission, he relied on the following decisions: 1. AIR 1964 Supreme Court 1013 (V 51 C 130) 2. 1972 JLJ 348 3. (1979)3 Supreme Court Cases 135 4. (1991)4 Supreme Court Cases 139 5. (1993)3 Supreme Court Cases 123 6. (1995)6 Supreme Court Cases 614 7. (1998)9 Supreme Court Cases 358 4. In my opinion, in the light of the Division Bench judgment of this Court, upholding the validity of the Rule impugned in these petitions, it is not permissible for this Court to again examine the validity of the Rule on other grounds. In this context, it is relevant to refer to the
- 10 - following observations made by the Supreme Court in D.C.& G. Mills v. Shambhu Nath [AIR 1978 SC 8]: 10. With regard to the objection on the score of Art.14 of the Constitution, it is sufficient to state that the matter is concluded by the principle laid down by this Court in Niemla Textile Finishing Mills Ltd. v. The 2nd Punjab Industrial Tribunal 1957 SCR 335: (AIR 1957 SC 329). In that case a challenge was made, inter alia, to S. 10 of the Act as being invalid on the ground of violation of Article 14 of the Constitution. In an exhaustive judgment, this Court repelled the contention. 11. It is submitted by Mr. Dial that in that decision this Court was only required to consider the objection raised on the score of Art.14 on a ground which is different from the one he would like to take before us. We are, however, unable to accept this submission. If this Court held S.10 as intra vires and repelled the objection under Art.14 of the Constitution it would not be permissible to raise the question again by submitting that a new ground could be raised to sustain the objection. It is certainly easy to discover fresh grounds of attack to sustain the same objection, but that cannot be permitted once the law has been laid down by this Court holding that S.10 of the Act does not violate Art.14 of the Constitution. The ratio decidendi of Niemla Textile Finishing Mills (supra) will apply while dealing with the objection under Art.14 of the Constitution in respect of the present reference under S.10(1)(c) of the Act. The submission of the learned counsel is, therefore, devoid of substance. In the light of the above observations made by the Supreme Court, in my opinion, it is not permissible for this Court to re-examine the validity of the Rule on grounds other than the one referred to in the Division Bench judgment referred to above. The writ petitions are devoid of merit and are accordingly dismissed.
- 11-5. As against the demand notices at Annexures-C1 to C36, the petitioners are at liberty to prefer appeals under Section 61(2) of the Karnataka Excise Act, 1965,in accordance with law. Petitions dismissed. hkh. Sd/- JUDGE