IN THE HIGH COURT OF KARNATAKA AT BENGALURU
M. NAGAPRASANNA, J.
S.B. MANJUNATH S/O G. BARAMAPPA – Petitioner
Versus
THE EXCISE COMMISSIONER IN KARNATAKA – Respondent
Writ Petition No. 18327 of 2024
Decided On : 12-09-2024
Natural Justice - Excise License - Karnataka Excise Act, 1965; Karnataka Excise Licenses (General Conditions) Rules, 1967 - The court emphasized the necessity of a fair hearing before any adverse action is taken against a license holder, ruling that the failure to provide such a hearing rendered the orders null and void.
Fact of the Case:
The petitioner, a holder of a CL-9 license, sought to shift their bar and restaurant location. The Deputy Commissioner initially approved the shift, but an appeal by a third party led to the appellate authority reversing this decision without hearing the petitioner, resulting in the closure of the petitioner's business.
Finding of the Court:
The court found that the petitioner was not given an opportunity to be heard before the appellate authority's decision, violating principles of natural justice. Consequently, the orders issued by the appellate authority and the Deputy Commissioner were deemed null and void.
Issues: Whether the petitioner was afforded a fair opportunity to be heard before the appellate authority's decision, which led to the closure of their business.
Ratio Decidendi: The court held that the failure to provide a hearing to the petitioner constituted a violation of natural justice, rendering the subsequent orders invalid.
Result: The writ petition is allowed, and the orders of the appellate authority and Deputy Commissioner are quashed, with the matter remitted for a fresh hearing.
ORDER :
1. The petitioner is before this Court calling in question an order dated 13.06.2024, passed by respondent No. 1, the Appellate Authority-Commissioner of Excise in the Sate of Karnataka and the consequential order of the Deputy Commissioner of Excise dated 05.07.2024.
2. Heard Sri G.K. Bhat, learned senior counsel along with Smt. Sudha D. learned counsel for the petitioner, Sri Radha Ramaswamy, learned Additional Government Advocate for respondent Nos. 1 and 2 and Sri Mohan Bhat, learned counsel for respondent No. 3.
3. Facts in brief, germane, are as follows:
4. This is called in question by respondent No. 3 who had sought to file an appeal against the petitioner for shifting of the business from one place to another. The appellate authority-the Commissioner of Excise by an order dated 13.06.2024 allows the appeal in part, and remits the matter back to the hands of the Deputy Commissioner of Excise to afford an opportunity of hearing to the appellant-respondent No. 3 herein. Pursuant to the said order, two events happen as the license was coming to an end at the financial year and the impugned order emerges on 05.07.2024, by which the Deputy Commissioner of Excise implements the order of the appellate authority. The order of the Deputy Commissioner closed the business of the petitioner. It is therefore, the petitioner has now rushed to this Court in the subject petition.
5. Sri G.K. Bhat, learned senior counsel would take this Court through the documents appended to the petition to submit that the petitioner was not heard by the appellate authority and there is no flaw in the order granting to shift the business in favour of the petitioner. He would further contend that the Deputy Commissioner of Excise could not have closed the business of the petitioner when the license that was subsisting, was renewed at his own hands. He would submit that the orders are contrary to law and should be annulled.
6. Sri Mohan Bhat, learned counsel for the caveator - respondent No. 3 would submit that the petitioner was issued a notice by the appellate authority. The notice is appended as Annexure-R1 to the statement of objections. It is his submission that despite of receipt of notice, the petitioner chose not to appear before the appellate authority. Therefore, the appellate authority was right in passing the order impugned in the subject petition. He would further take this Court through a communication of the petitioner to the Deputy Commissioner of Excise at the time of renewal of license, which narrates that the appeal, so filed and the appeal being remitted to the hands of the Deputy Commissioner for further consideration. This according to the learned counsel is knowledge enough for it to be in compliance with the principles of natural justice. He would further contend that this Court could not entertain the writ petition filed under Section 226 of the Constitution of India as the petitioner has alternative statutory efficacy remedy of filing an appeal before the Karnataka Appellate Tribunal. Learned counsel for respondent No. 3 would seek to dismiss the petition.
7. Learned Additional State Public Prosecutor for respondent Nos. 2 and 3 would toe the lines of the learned counsel for respondent No. 3 in defending the order of the Commissioner of Excise that though notice is issued to the petitioner has failed to appear before the Commissioner of Excise for which the Commissioner has passed the order, which according to the learned counsel is assailable.
8. I
The court established that any administrative action affecting rights must comply with the principles of natural justice, including the right to a fair hearing.
Administrative orders must provide clear reasoning and specify durations to comply with natural justice principles, ensuring transparency and fairness.
Suspension of a bar licence without disclosing relevant materials and failing to specify a duration violates principles of natural justice, rendering the order unsustainable.
The main legal point established in the judgment is the requirement for compliance with the provisions of the SGST Act and the CGST Act, including the consequences of clerical errors in filling up fo....
The cancellation of a license under the Odisha Excise Act, 2008 without providing reasonable notice or opportunity to be heard violates the principles of natural justice, rendering the order invalid.
The State Government holds the authority to regulate excise shop locations and close them without notice if due procedure was followed.
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