Judgment :

Sabyasachi Bhattacharyya, J.

1. The present appeal has been preferred against a judgment dated December 6, 2023 passed in WPA No. 4873 of 2018, thereby declaring Clause (d) of the proviso to Rule 5(1) of the West Bengal Excise (Change in Management) Rules, 2009 (for short, the “2009 Rules”) to be ultra vires the Constitution of India and setting aside the impugned order of the Excise Commissioner dated February 16, 2018 along with the consequential revised demand issued by the appellant-Authority dated February 27, 2018.

2. The brief backdrop of the case is that the respondent no.1-Company owns and operates a four-star Hotel in Kolkata. Originally a Private Limited Company, respondent no.1 became a deemed Public Limited Company by operation of an amendment in Section 43-A(1B) of the Company Act, 1956. Again, on February 26, 2002, the respondent no.1-Company was converted into a Private Limited Company by operation of law.

3. In the year 2009, a query was raised by the State-Authority as to why renewal of the Excise license was made in the name of “New Kenilworth Hotel Private Limited”, whereas the original excise licenses were granted in the name of “New Kenilworth Hotel Limited”, to which the respondent no.1-Company responded by its letter dated November 3, 2009.

4. By a Memo dated September 9, 2013, the appellant No.4 demanded a sum of Rs.22,50,000/- on account, inter alia, of “change in management and in status of the Company”, as new Directors were inducted in the Company. Despite the ensuing correspondence between the parties, the respondent no.1 made payment of the said amount for renewal of its excise licenses under protest.

5. By a further Memo dated July 5, 2017, the State-Authority demanded an additional sum of Rs. 45,00000/- for the main bar and Rs. 25,00000/- toward non-realization of fees for the additional five bars. The said Memo was challenged by way of a writ petition, culminating in an order dated September 4, 2017 directing the respondent no.1 to approach the Appellate Authority. The Excise Commissioner, West Bengal, being the Appellate Authority, passed an order dated December 18, 2017 which, however, was set aside by an order dated December 21, 2017 passed in appeal, requiring the Appellate Authority to give a fresh hearing to the respondent No.1- Company and to pass a reasoned order in accordance with the applicable Rules/Regulations.

6. Pursuant thereto, a demand was issued by the appellant no.3, Collector of Excise, Kolkata (South) on February 27, 2018, demanding a sum of Rs. 22,00,000/- after giving credit to the previous payment made by the Company to the tune of Rs.42,50,000/- as against a total demand of Rs. 64,50,000/-.

7. The said demand was made pursuant to an order dated February 16, 2018 passed by the Appellate Authority, by which the Memo dated July 5, 2017, was set aside, directing the appellant no.3 to raise a fresh demand notice on the respondent no.1. The Appellate Authority, inter alia, observed that the change in status of the Company from a Public Limited company to a Private Limited Company had occurred due to amendment of law in the 1956 Act, based on cogent reasons.

8. However, in the Memo dated July 5, 2017, it was mentioned that it is a case of change from a Public Limited Company to a Private Limited Company and covered under Rule 5 of the said Rule.

9. The respondent thereafter filed WPA No.4873 of 2018, challenging the order dated February 16, 2018 and the consequential revised demand dated February 27, 2018, seeking refund of the payment made by the Company and challenging the vires of Clause (d) of the proviso to Rule 5 of the 2009 Rules.

10. By the judgment impugned herein dated December 6, 2013, the said writ petition was disposed of by declaring Clause (d) of the proviso to Rule 5(1) of the 2009 Rules to be ultra vires the Constitution of India. Consequentially, the order dated February 16, 2018 and the consequential revised demand dated February 27, 2018 were set aside.

11.