CRAFT BREWERIES ASSOCIATION OF INDIA Vs THE PRINCIPAL SECRETARY TO GOVT

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 3^RDDAY OF SEPTEMBER, 2022

BEFORE

THE HON’BLE MR.JUSTICE HEMANT CHANDANGOUDAR

WRIT PETITION NO.11772 OF 2020 (EXCISE)

BETWEEN:

1. CRAFT BREWERIES ASSOCIATION OF INDIA
HAVING ITS REGISTERED OFFICE AT 101
1^ST FLOOR, EMBASSY CLASSIC
#11, VITTAL MALLYA ROAD
BENGALURU-560001
REPRESENTED BY ITS PRESIDENT
SRI SIBI VENKATRAJU.

2. ARBOR BREWPUB PVT. LTD.,
8 MAGRATH ROAD, ALLIED GRANDE PLAZA
ASHOK NAGAR, BENGALURU-560025
REP. BY ITS AUTHORISED SIGNATORY
MR. GAURAV SIKKA.

3. ARRKP HOSPITALITY PVT. LTD.,
UPTOWN SQUARE NEXT TO ALLIANCE 10
DOWNING VILLAS, WHITEFIELD HOSKOTE ROAD
BENGALURU-560067
REP. BY ITS AUTHORISED SIGNATORY
MR. KISHORE PALLAM REDDY.

4. AURUM BREW WORKS PRIVATE LTD.,
THIRD FLOOR, NO 82/8 SARJAPUR ROAD
DODDAKANELLI, BANGALORE-560035
REP. BY ITS AUTHORISED SIGNATORY
MR. SUMIT GULATI

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5. FROTHY TALES HOSPITALITY PRIVATE LIMITED
THE BIER LIBRARY
NO.14, PATEL NARAYANA REDDY LAYOUT
80 FEET ROAD, KORAMANGALA 6^THBLOCK
EJIPURA, BANGALORE-560095
REP. BY ITS AUTHORIZED SIGNATORY
MR. PRASHANT KUNAL.

6. BREWSKY HOSPITALITY PVT. LTD.,
#10/61/2A/2 AND 3, KAIKONDANAHALLI
BEHIND M.K. RETAIL, BEFORE WIPRO
CORPORATE OFFICE, SARJAPURA ROAD
BANGALORE-560035
REPRESENTED BY ITS DIRECTOR
MR. AJAY R GOWDA.

7. BREWSKY HENNUR BREWERY PVT. LTD.,
NO.22 AND 125, BYRATHY VILLAGE
HENNUR MAIN ROAD
BANGALORE-560077
REPRESENTED BY ITS DIRECTOR
MR. AJAY R GOWDA.

8. SRI LAKSHMIRAM MICROBREWERIES PVT. LTD.,
3 MONKEYS BREWPUB
SHOP NO-4F-4, 4^TH FLOOR
GOPALAN SIGNATURE MALL
NO-6, OLD MADRAS ROAD, NAGAVARAPALYA
CV RAMANNAGAR POST, BENGALURU-560038
REPRESENTED BY ITS DIRECTOR
MR. VAMSIKRISHNA REDDY KOTHWALI.

9. BANASHANKARI ENTERPRISES
BIG BARREL, NO.199, 20/1A
2^ND 3^RD FLOOR KENGERI-UTTARAHALLI MAIN ROAD
RAJARAJESHWARI NAGAR
BENGALURU-560027

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REP. BY ITS AUTHORIZED SIGNATORY
MR. PAVAN RAJ N.

10. YARD HOUSE BREWERY PVT. LTD.,
POST BREW PUB
SY NO.66/2, 67/1, 11^TH FLOOR
THRIFECTA ADATTO, ITPL MAIN ROAD
GARUDACHAR PALYA, MAHADEVAPURA
BANGALORE-560048
REP. BY ITS AUTHORISED SIGNATORY
MR. E BHASKAR.

11. ETENIA HOSPITALITY LLP
URU BREWPARK
583 DORESANIPALYA
MARATT PVT LTD ETENIA
BANNERGHATTA ROAD
BANGALORE-560076
REP. BY ITS AUTHORISED SIGNATORY
MR. KUNCHERIA MARATTUKALAM.

12. BRESKY. J.P. NAGAR
(C VIJAYALAKSHMI BREWSKY)
NO.55, 19^TH MAIN, 15^TH CROSS
SARAKKI EXTENSION
J.P. NAGAR 2^ND PHASE
J.P. NAGAR, BANGALURU-560078
REPRESENTED BY ITS PARTNER/
AUTHORISED SIGNATORY
MR. C VIJAYALAKSHMI.

13. KAUZI FOOD AND BEVERAGE SERVICES PVT. LTD.,
LEVITATE BREWERY AND KITCHEN
NO.57, 1, 2 AND 3 AND MEZZANINE FLOOR
11^TH MAIN ROAD, 3^RD PHASE J.P. NAGAR
SARAKKI INDUSTRIAL LAYOUT
BANGALURU-560078

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REPRESENTED BY ITS AUTHORIZED SIGNATORY
MR. GIRISH S.V.

14. MEGHAA. INC
BY THE PEEPAL,
NO. 637, 14^TH CROSS, 8^TH MAIN ROAD
NEAR DELMIA SIGNAL , 3^RD PHASE
J.P NAGAR, BANGALURU-560078
REP. BY ITS AUTHORIZED SIGNATORY/
MANAGING PARTNER
MR. DILIP KUMAR T.

15. LAKAMA ENTERPRISES (LACASA BREWERY)
REGISTERED OFFICE AT
NO.887/1/2 AND 895/19/20
FIRST FLOOR KAIGONDANAHALLI
KASAVANAHALLI, BANGALORE-560035
REP. BY ITS MANAGING PARTNER
MR. SUJAY MS.

16. TETRAD MICROBREWERIES PVT. LTD.,
REGISTERED OFFICE AT NO.32
CUNNINGHAM ROAD, BANGALORE-560052
REP. BY ITS AUTHORIZED SIGNATORY
MR. ABHAY KEWADKAR.

17. ELIXIR ENTERPRISES AND HOTELS PRIVATE LIMITED
REGISTERED OFFICE AT NO.135
RESIDENCY ROAD, BANGALORE-560025
REPRESENTED BY ITS MANAGING DIRECTOR
MR. K.V. KUPPARAJU.

18. BREAKING BREAD ENTERTAINMENT AND
HOSPITALITY PVT. LTD.,
REGISTERED OFFICE AT NO.8, 1^ST FLOOR
KORAMANGALA INDUSTRIAL LAYOUT
KORAMANGALA, BANGALORE-560095

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REPRESENTED BY ITS DIRECTOR
MR. REKHANSH KARAMCHANDANI.

19. COMMUNITY INDIA HOSPITALITY RESORTS PVT. LTD.,
REGISTERED OFFICE AT NO.67768
BRIGADE SOLITAIRE
RESIDENCY ROAD, BANGALORE-560025
REPRESENTED BY ITS DIRECTOR
MR. BOBBY ANTHONY.

20. SAMRUDDHI ENTERPRISE
REGISTERED OFFICE AT NO.36/1
SOUL SPACE ARENA MALL, OUTER RING ROAD
DODDANEKUNDDHI VILLAGE
MAHADEVPURA, BANGALORE-560037
REPRESENTED BY ITS PARTNER
SRI D.R VIJAYENDRA.

21. VELANKANI INFORMATION SYSTEMS LIMITED
REGISTERED OFFICE AT NO.43
ELECTRONICS CITY , PHASE I, HOSUR ROAD
BANGALORE-560100
REPRESENTED BY ITS AUTHORIZED SIGNATORY
SRI P V NIRMAL.

22. FOODALE INDIA PVT. LIMITED
REGISTERED OFFICE AT 4^TH FLOOR, AKDR TOWER
3/381 RAJIV GANDHI SALAI (OMR)
METTUKUPPAM, CHENNAI
TAMIL NADU-600097
REPRESENTED BY ITS AUTHORIZED SIGNATORY
MR. DURGA PRASAD.

23. SPOONABILITY LLP
REGISTERED OFFICE AT
GROUND FLOOR, HVP CREST,
SY.NO.120/3, 123/1, 123/2, 123/3

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RAJAPALYA, HOODI VILLAGE
MAHADEVPURA HOBLI
BANGALORE-560048
REP. BY ITS AUTHORIZED SIGNATORY
SMT. ASHITA BEDI.

24. PUMP HOUSE
REGISTERED OFFICE AT #607
15^TH CROSS, OUTER RING ROAD
1^ST PHASE, J.P. NAGAR
BANGALORE-560078
REPRESENTED BY ITS DIRECTOR
MR. SHARATH JAYARAM.

25. FOOD BUFFS
REGISTERED OFFICE AT NO.17/17
24^TH MAIN ROAD, 1^ST PHASE
J P NAGAR, BANGALORE-560078
REPRESENTED BY ITS PARTNER
MR. NERALL BAKHAI.

26. BROOKS AND BONDS BREWERY
REGISTERED OFFICE AT #4,
100FT MAIN ROAD,
KHB COLONY, KORAMANGALA,
5^TH BLOCK, BANGALORE-560004
REP. BY ITS MANAGING PARTNER
MR. PRIYESH BUSETTY.

27. FREYA FOODS AND BEVERAGES
REGISTERED OFFICE AT NO.152/5
(OLD NO.152/3) KHATA NO.17/152/4
DODDATHOGURU VILLAGE, BEGUR HOBLI
NEELADRI ROAD, BANGALORE-560100
REP. BY ITS DIRECTOR OF OPERATIONS
MR. CHHATRASAL JHARWAL.
...PETITIONERS

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(BY SRI SANDESH CHOUTA, SR.COUNSEL FOR
SRI ISMAIL MUNEEB MUSBA, ADV.)

AND:

1. THE PRINICIPAL SECRETARY TO GOVT.,
FINANCE DEPARTMENT
VIDHANA SOUDHA
BANGALORE-560001.

2. THE EXCISE COMMISSIONER IN KARNATAKA
2^ND FLOOR, TTMC BUILDING ‘A’ BLOCK,
BMTC, SHANTINAGAR
BENGALURU-560027.

3. THE DEPUTY COMMISSIONER OF EXCISE
BENGALURU URBAN DISTRICT
BENGALURU.
…RESPONDENTS
(BY SMT. JYOTHI BHAT, HCGP)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO
DIRECT THE R-2 TO CONSIDER THE REPRESENTATIONS
DATED
04.05.2020,
17.06.2020,
29.06.2020
AND
30.06.2020 ADDRESSED BY THE PETITIONERS TO THE
RESPONDENTS AND PRODUCED AS ANNEXURE-A, B, C, D
AND H SERIES I.E. H TO H20, WITHIN A SPECIFIED PERIOD
AS THOUGHT FIT BY THIS COURT AND ETC.

THIS WRIT PETITION COMING ON FOR FURTHER
DICTATION, THIS DAY, THE COURT MADE THE FOLLOWING:

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Petitioner No.1 is an Association having its registered

office in the given address and the purpose and object of

petitioner No.1 is to safeguard the interests of various

microbreweries spread across the State and to aid redressal

of any grievance of its members.

2. Petitioner Nos.2 to 27 are members of petitioner

No.1-Association and each of the petitioners is operating and

managing their own microbrewery. Petitioner Nos.2 to 27

have paid license fee, advance fee and additional excise duty

for the year 2019-2020 as required under Rule 22 of the

Karnataka Excise (Brewery) Amendment Rules, 2010. In

view of COVID-19 pandemic, Central Government by its

Notification dated 24-3-2020 initially declared lockdown for

twenty-one days and it was periodically extended, as a result

of which, the microbreweries were not able to open their

establishments to carry on business under the respective

licenses. In view of COVID-19 pandemic, the petitioners

could not carry on business for nine months out of the

permissible twelve months excise period. Hence, the

petitioners were not able to turn out production on their

annual installed capacity for which the entire excise duty had

been paid. The petitioners’ grievance is that they are

entitled for refund of excess amount paid or the same may

be adjusted towards the duty on subsequent issues as

prescribed under Rule 23 of the Karnataka Excise (Brewery)

Rules, 1967. Hence, petitioner No.1-Association sought for

unutilised excise duty and additional excise duty for excise

period 2019-2020 to be adjusted for the excise year 2020-

2021. On 11-5-2020, petitioner No.1 made a representation

to the authority concern seeking permission to sell beer as

take away to customers in glass, ceramic and stainless steel

containers

and

communication

dated

12-5-2020,

respondent No.2 permitted the sale of beer produced in

microbreweries as takeaway in glass, ceramic and stainless

steel containers upon payment of additional excise duty.

Respondent

No.2

without

considering

the

representation of petitioner No.1 dated 4-5-2020 called upon

all microbreweries to pay excise duty calculated, demanding

half of excise duty payable at the time of applying for

renewal of license and remaining 50% to be paid within

31-12-2020. Against which, the petitioners submitted the

representation. Such being a case, respondent No.2 issued a

demand notice on 6-6-2020 followed up by a modified

demand notice dated 6-8-2020, wherein respondent No.2

has called upon the microbreweries to pay excise duty and

additional excise duty in the following manner:

i. 10% of advance duty and additional excise duty to be

paid with immediate effect;

ii. Additional 15% to be paid within 31-10-2020; and

iii. Remaining 25% to be paid within 31-12-2020.

Being aggrieved, the petitioners have filed this writ

petition.

4. During pendency of the writ petition, similar notices

were

issued

22-10-2020

and

respondent

No.2-

Commissioner in his communication dated 19-11-2020 has

stated that there is no provision for reimbursement or

adjustment of the difference in excess excise duty paid in

2019-2020 for the year 2020-2021.

5. Sandesh Chouta, learned senior counsel appearing

for the petitioners, submits that the provisions of Karnataka

Excise (Brewery) Rules, 1967, are made applicable to

microbreweries by Karnataka Excise (Brewery) (Amendment)

Rules, 2010, which came into force on 7-1-2011. Hence, he

submits that in light of Rule 23 of the said Rules, the

petitioners are entitled for refund of excess amount paid or

adjustment towards the duty in subsequent issues. Hence,

he submitted that demand notice issued by respondent No.2

without considering the representation submitted by the

petitioners is contrary to Rule 23 of the Karnataka Excise

(Brewery) Rules, 1967.

6. On the other hand, the learned High Court

Government Pleader appearing for the State submits that the

petitioners are not entitled for refund or adjustmen

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