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IN THE HIGH COURT OF KARNATAKA

DHARWAD BENCH

DATED THIS THE 25^TH DAY OF MARCH, 2021

BEFORE

THE HON9BLE MR. JUSTICE HEMANT CHANDANGOUDAR

Writ Petition No.101168/2021 (GM-EXCISE)

BETWEEN

M/S VINAYAKA HOTELS

CTS No.4880/11

AIR PORT ROAD

NEAR HOSUR BRIDGE

HUBBALLI REPRESENTED BY ITS

PARTNER

SRI ASHOK S/O GIRIMALLAPPA

KOTI, AGED ABOUT 62 YEARS

OCC: BUSINESS

R/O LINGARAJ NAGAR (SOUTH)

29^TH CROSS, VIDYA NAGAR

HUBBALLI, TQ: HUBBALLI

DIST. DHARWAD-580 001

...PETITIONER

(BY SRI. G.I. GACHICHINAMATH, ADVOCATE)

A N D

1.

THE STATE OF KARNATAKA,

REPRESENTED BY ITS SECRETARY

TO EXCISE DEPARTEMENT

BENGALURU-560 001.

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2.

THE DEPUTY COMMISSIONER

OF EXCISE

DHARWAD DISTRICT

DHARWAD-580 001.

... RESPONDENTS

(By Sri. B. RAJENDRA PRASAD HCGP)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 &

227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE

IMPUGNED

ENDORSEMENT

DATED

30.12.2020

BEARING

NO.EXE/IML/CL-6A/ES2020070641/20-21

PRODUCED

AS

ANNEXURE-F ISSUED BY THE RESPONDENT NO.2 BY ISSUE OF

WRIT OF CERTIORARI OF ANY OTHER SUITABLE WRIT OR

ORDER OR DIRECTIONS

THIS WRIT PETITION COMING ON FOR ORDERS, THIS

DAY, THE COURT MADE THE FOLLOWING:

ORDER

Sri Rajendra Prasad, learned HCGP accepts notice for the

respondents.

2.

The petitioner has invoked writ jurisdiction under

Article 226 and 227 of the Constitution of India, challenging the

impugned endorsement dated 30.12.2020 issued by the 2^nd

respondent at Annexure-F.

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3.

The petitioner firm is a registered partnership firm,

came into existence on 30.04.2007 initially was named as <Gokul

Residency= and thereafter on 28.05.2008 the firm was renamed

and running in the name and style of <M/S Vinayaka Hotels near

Hosur bridge represented by its Partner Sri Ashok after obtaining

CL-6A license under Rule 3 of Clause 6-A of Karnataka Excise

(Sale of Indian and Foreign Liquors) Rules, 1968

4.

The firm was re-constituted on 01.04.2017 inducting

Rahul Koti as one of the partner who acquired 15% share in the

partnership. The said reconstitution of the firm was notified with

the respondent No.2. However, respondent No.2 has issued

endorsement dated 30.12.2020 vide Annexure-F calling upon

the petitioner to pay a sum of Rs. 23,00,000/- towards transfer

fee as contemplated under Rule 17 (B) of the Karnataka Excise

Licenses (General Conditions) Rules, 1967. Taking exception to

the same, the petitioner has filed this writ petition.

5.

Learned counsel for the petitioner would submit that,

Ashok Koti, who is the father of Rahul Koti, had 50% of share

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and he parted 15% of his share to his son Rahul Koti and

permitted him to be one of the partner of the firm consisting of

five partners. The request was accepted and the same was

notified with the respondents. However, the respondent No.2 has

passed the impugned order imposing penalty by invoking Rule

17-B of the Rules on the ground that the petitioner has failed to

furnish the change in reconstitution of the firm with the

authorities. He submits that, Rule 17-B of Rules, 1967 are

invoked only when transfer of share is over and above 50% is

made in favour of a new partner.

6.

In support of his submission, he has placed reliance

on

the

decision

of

a

Division

Bench

Judgment

in

W.P.No.30590/2014

and

connected

matter

between

M/s.

Shankar Wines Vs. The Commissioner of Excise in Karnataka and

2 others. He further submits that the impugned endorsement

has been issued without providing an opportunity of being heard

to the petitioner and the same is in violation of principles of

natural

justice.

Hence,

he

submits

that,

the

impugned

endorsement passed by the respondent No.2 may be quashed.

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7.

Learned HCGP appearing for the respondents would

submit that, the writ petition is not maintainable since the

petitioner has got an alternative remedy of appeal as provided

under Section 61(2) of the Karnataka Excise