Internal management changes, such as appointing new directors or firm partners, do not constitute reconstitution of the legal entity for licensing purposes. Penalties cannot be applied retrospectively if the fine amount has been statutorily enhanced after the date of the alleged initial violation.

JUDGMENT :

K. Natarajan, J.

[WA Nos.285/2025, 286/2025, 295/2025, 296/2025, 300/2025, 308/2025, 309/2025, 313/2025, 320/2025, 341/2025, 343/2025, 344/2025, 353/2025, 355/2025, 509/2025, 510/2025, 511/2025, 513/2025, 514/2025, 515/2025, 516/2025 & 517/2025]

1.The State has filed all the above-numbered writ appeals against the common judgment passed by the single Judge of this Court (in a batch of 22 W.P. (C) Nos.35003/2023, 2229/2024, 2778/2024, 13939/2021, 21968/2022, 18183/2021, 25407/2023, 30153/2022, 28577/2020, 3153/2024, 3229/2024, 34328/2023, 3377/2024, 40231/2023, 9792/2024, 10622/2024, 44186/2023, 44294/2023, 16596/2024, 28321/2024 30328/2024 & 30519/2024), allowing the writ petitions filed by the respondents for having set aside the imposition of penalty by the State under the Abkari Act and Rules.

2. We have heard the arguments of Sri.Vipin Das, learned Senior Government Pleader in all these appeals, and Sri. E.K. Nandakumar, Sri. Santhosh Mathew, Sri. N.Reghuraj, respective senior counsels, as well as Sri. M.G.Karthikeyan, Sri. M.Krishnakumar, Sri. Raju K.Mathews, Sri. Millu Dandapani, Sri. Saiby Jose Kindangoor, Sri. Jawahar Jose, Sri. M.Gopikrishnan Nambiar, Sri. Anil Sebastian, Sri. Tom Thomas (Kakkuzhiyil), Sri. Vivek Menon, Sri. Abraham Joseph Markos and Sri.P.B.Sahasranaman, counsel for the respondents.

3. The case of the writ petitioners before the single judge was that a batch of writ petitioners who were running private limited companies. Some of the writ petitioners were running public limited companies, some of them were running the business by a partnership firm, a limited liability partnership firm, and some of them were engaged in distilleries and breweries, and others engaged in the manufacture of liquor, beer/ wine. Some of the writ petitioners are running the star hotels by obtaining the FL-3 license. The State Government granted license to them under the Abkari Act and Rules. The Excise Commissioner, by exercising the power under Section 67 of the , imposed penalties on the above-mentioned writ petitioners on the ground that they have reconstituted the firm and companies without obtaining prior permission of the Commissioner under the and Rules. Being aggrieved by the same, the writ petitioners have approached the single bench for issuing the writ of certiorari to quash the order passed by the Excise Commissioner under the , for imposing a penalty. The same was allowed by the single Judge in the batch of writ petitions vide impugned common judgment, hence the state is before this Court.

4. The learned senior Government Pleader appearing for the State has strenuously contended that the learned single Judge ought to have held Section 67 (2) of the Abkari Act in all composite cases. It takes place within the reconstitution of partnership and Director Boards by the exit of existing persons or the entry of new persons or simultaneous entry or exit of persons into the arrangement, etc., and is also applicable to the distilleries, breweries, as well as to the FL-3 licenses.

5. It is further contended that, as per Section 67 (2) of the Abkari Act, the mandate is that prior permission of the Commissioner of Exci