The main legal point established in the judgment is that the voluntary payment of licence fee for an expired period, with the intention to secure the renewal of the licence, disentitles the petitioner for any equitable relief.

P. VISHWANATHA SHETTY, J.

( 1 ) THE petitioner, in this petition, is an Industrial Unit engaged, inter alia, in the manufacture of acetic acid out of rectified spirit from molasses.

( 2 ) IN this petition, the petitioner has prayed for quashing order dated 17th of November, 2000, a copy of which has been produced as Annexure-C to the writ petition, passed by the second respondent-Commissioner for Excise, wherein the claim made by the petitioner for refund of licence fee came to be rejected; and also for a further direction to the respondents to refund a sum of Rs. 21,27,000/- to the petitioner with interest at 18 per cent from the date of the collection of the said amount from the petitioner till the date of the refund of the amount.

( 3 ) FEW facts, which may be relevant for the disposal of this petition and which are not in serious dispute, may be stated as hereunder: (A) The petitioner had initially obtained Distillery Licence in terms of the provisions contained in Karnataka Excise (Distillery and Warehouse) Rules, 1967 (hereinafter referred to as 'the Rules'), during the excise year 1979-80. The said licence was being renewed every year till the excise year 1993-94. (B) The distillery of the petitioner was closed for the excise year commencing from 1st July, 1994 to 30th June, 1995 to 1st July, 1998 to 30th June, 1999. However, on the application dated 24th September, 1998 made by the petitioner seeking renewal of the licence for the excise year 1998-99, the licence was renewed retrospectively for the excise years 1994-95 to 1997-98 and also for the year 1998-99.

( 4 ) MISS Birdy Aiyappa, learned Counsel appearing for the petitioner, in support of the prayer of the petitioner, made two submissions. Firstly, she submitted that there is no power conferred on the respondents to collect licence fee for the period during which there was no licence in existence, and for the period during which the petitioner had not carried on any business on the basis of any licence obtained. Therefore, she submitted that the licence fee paid for the excise years 1994-95 to 1997-98 and 1998-99 is required to be refunded to the petitioner. Secondly, she submitted that since the said payment was made by mistake by the petitioner on an erroneous impression that the petitioner was liable to make the said payment and the said amount has been collected by the respondents without any authority of law, the respondents are under an obligation to refund the said amount to the petitioner. In support of her submissions, she relied upon a Division Bench decision of this Court in the case of State of Karnataka v Patric D'souza1. She also relied upon the decision of the Hon'ble Supreme Court in the case of Sales Tax officer, Banaras and Others v Kanhaiya Lal Makund Lal Saraf and others and drew my attention to the observation made by the Supreme court at paragraph 26 in the said decision.

( 5 ) HOWEVER, Smt. Niloufer Akbar, learned High Court Government Pleader appearing for the respondents, strongly supporting the action of the respondents in refusing to refund the licence fee already paid by thepetitioner, made two submissions, Firstly, she submitted that unless the licence of the petitioner was made current by retrospectively renewing it for the excise years 1994-95 to 1997-98, the petitioner was not entitled for the renewal of the licence for the excise year 1998-99; and in that background, if the petitioner had voluntarily paid the licence fee to get the licence renewed for the Excise Years 1994-95 to 1997-98, the petitioner cannot now seek refund of the licence fee already paid by it. Elaborating this submission, the learned Government Pleader pointed out that whether a licence should be renewed in terms of Rule 6 of the rules or not, is a matter which lies in the discretion of the second respondent. The second respondent, while exercising his discretion, was entitled to take into consideration the financial loss the State was put to, on account of the

Click Here to Read the rest of this document