Karnataka High Court
M/S. Heaven Inn (Bar Attached) vs The State Of Karnataka on 25 April, 2016
Equivalent citations: AIRONLINE 2016 KAR 43
Author: Vineet Kothari
Bench: Vineet Kothari
1
IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 25th DAY OF APRIL 2016
BEFORE
THE HON'BLE Dr.JUSTICE VINEET KOTHARI
WRIT PETITION Nos.21272-293/2016(T-RES)
BETWEEN:
M/S. HEAVEN INN (BAR ATTACHED)
NEAR K.S.S.I.D.C. INDUSTRIAL AREA
SAGAR ROAD, SHIVAMOGGA - 577201.
REP. BY ITS PARTNER
SRI. M. MALLESH
AGED ABOUT 49 YEARS.
...PETITIONER
(BY SRI. K.J. KAMATH, ADV.)
AND:
1. THE STATE OF KARNATAKA
THROUGH SECRETARY (FINANCE)
VIDHANA SOUDHA
BANGALORE - 560 001.
2. ASSISTANT COMMISSIONER OF
COMMERCIAL TAXES
LOCAL VAT OFFICE - 220
SUVARNA KARNATAKA VANIJYA
TERIGE BHAVANA
100 FEET ROAD, A-BLOCK
12TH CROSS, GOPALAGOWDA EXTENSION
SHIVAMOGGA - 577 204.
...RESPONDENTS
(BY SRI. T.K. VEDAMURTHY, AGA)
THESE PETITIONS ARE FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO HOLD THAT
THE NOTIFICATION DTD:28.2.2014 VIDE ANNEX-A IS
DISCRIMINATORY IN NATURE AND AS SUCH QUASH THE SAME
AS UN-CONSTITUTIONAL.
THESE PETITIONS COMING ON FOR PRELIMINARY
HEARING THIS DAY, THE COURT MADE THE FOLLOWING:-
2
ORDER
The petitioner in the present case has laid challenge to the Notification No.FD 21 CSL 2014(II) dated 28.02.2014 which is quoted below:-
"In exercise of the powers conferred by sub-section (1) of Section 5 of the Karnataka Value Added Tax Act, 2003 (Karnataka Act 32 of 2004), the Government of Karnataka hereby exempts with effect from the First day of March, 2014, the tax payable under the said Act on the sale of liquor including beer, fenny, liqueur and wine by a dealer who is not a person holding licence in Form.-]
(i) CL-9 for vending in the Bruhat Bangalore Mahanagara Palike area, City Municipal Corporation areas, City Municipal Council areas and Town Municipal Council or Town Panchayat areas issued under Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968; of
(ii) CL-4 or CL-6A of CL-7 issued under Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968.
Note: For amendment please see Notification No.FD 41 CSL 2014, Bangalore, dated 21st April, 2014 [Sl.No.198] 3
2. The petitioner has made following prayers in the writ petition:-
(a) To hold that the Notification bearing No.FD 21 CSL 2014 (II) dated 28.02.2014 (Annexure-"A") issued by 1st respondent is discriminatory in nature and as such quash the same as un-constitutional;
(b) The petitioner most respectfully pray that this Hon'ble High Court may be pleased to issue a Writ of Certiorari or a direction in the nature of a Writ of Certiorari quashing the impugned order dated 05.02.2016 (Annexure-B) passed by the 2nd respondent.
(c) To kindly issue any other writ/(s), order/(s) or direction/(s) for granting any other relief/(s) this Hon'ble Court deems fit and proper in the facts Acts and circumstances of the case.
3. The learned counsel for the petitioner Mr. K.J. Kamath has brought to the notice of the Court that on 30.09.2015, a learned Single Judge has dismissed the bunch of similar writ petitions laying similar challenge to the same Notification dated 28.02.2014 against which the appeals have been preferred by the petitioner before the Division Bench of 4 this Court. He further submitted that later on, in an identical writ petition filed in W.P.No.16317/2016 (T- Res) (M. Srinivas Kumar vs. The State of Karnataka)., another learned Single Judge of this Court passed the following order on 11.04.2016 placing the matter before the appropriate Division Bench which is seized of the appeals in W.A.No.4893/2016 and connected matters, after obtaining necessary orders from the Hon'ble Chief Justice.
"Since similar challenge has already been turned down by this Court and since a large number of appeals are pending before the Division Bench against the said order, the petitioner would do well to join those appellants and pursue his case.
Accordingly, the petitioner is directed to file a second set of papers within a week.
The matter shall be placed before the appropriate Division Bench which is seized of the appeals in W.A.4893/2015 and connected matters, after obtaining necessary orders fro the Honourable Chief Justice."
He therefore submitted that the same order may be passed by this Court in the present writ petition also. 5
4. Mr. T.K. Vedamurthy, learned Additional Government Advocate appearing for the Revenue, however, submitted that the present writ petitions have been unnecessarily filed and they deserve to be dismissed in the light of the judgment of the learned Single Judge dated 30.09.2015, against which an appeal is already said to be pending before the Division Bench. He also submitted that the question of validity of the aforesaid Notification dated 28.02.2014 is already a subject matter of consideration before the Division Bench and as far as Annexure-B-notice given in the prescribed Form VAT 100 to the present assessee is concerned, the present writ petition is premature and assessee should raise all the objections on factual aspects of the matter before the Assessing Authority himself. He therefore urged that the writ petition deserves to be dismissed.
5. I have heard the learned counsels.
6. This Court respectfully agrees with the submission at bar by the learned Additional 6 Government Advocate for the Revenue and having gone through the detailed judgment of the learned Single Judge dated 30.09.2015 (Sri. M.Madhava Gowda vs. Under Secretary to Government and others) and other connected cases, dismissing similar writ petitions, this Court is of the opinion that the present writ petition also deserves to be dismissed for the same reasons and in the light of the observations made by the learned Single Judge in the judgment dated 30.09.2015 and the relevant operative portion of the said judgment of learned Single Judge relying upon various decisions of the Hon'ble Supreme Court is also quoted for ready reference:-
"47. At this juncture, it would be appropriate to note that licence fee fixed for a dealer holding licence in Form No.9 and operating in urban areas is `6.00 lakhs, whereas licence fee prescribed for a similar licence holder who is running Bar and Restaurant business in rural area is `2.00 lakhs though both the class of licence holders run the same business. This exemption is extended to Bar and Restaurants operating in rural areas 7 considering the fact of no value addition between the price at which liquor is purchased and sold to customers in rural areas. However, a Hotel, Boarding House and Lodge holding licence in Form CL-7 though located in rural area, liquor is served only to the residents of the Hotel and their guests who obviously would come from far off places. The customers of this category are affordable class who are willing to pay more for the comfort with varying degree of facilities. Hence, it enables the dealer to fix the rates of liquor without any restriction. Thus, the Legislature with the sole intention of capturing substantial value addition taking place on liquor consumed in the premises of a Boarding House and Lodge, has brought this class of dealer under the net of tax, but Bar and Restaurants located in rural area which do not have the advantage of catering to the class of customers of economic superiority are exempted. Thus, the impugned notification dated 28.02.2014 which exempts liquor sold by dealers holding licence in Form No.CL-9 operating in rural areas in comparison with liquor sold by a person operating a Boarding House and Lodge in a rural area holding 8 licence in Form No.CL-7 would form separate class of dealers. The State Legislature in its economic wisdom of taxation having chosen to provide for levy of tax on liquor sold by certain licence holders, considering the potential for tax collection on the huge value addition while exempting others whose sale price is regulated by the MRP indicated on the label of the container cannot be construed as discriminatory. The classification of dealers based on value addition criteria for the purpose of tax levy and exempting the dealers based on area criteria cannot be held to be discriminatory.
48. In view of the aforesaid discussion, this Court is of the considered view that contentions raised by the petitioners are without merit and they are hereby rejected.
Hence, I proceed to pass the following:-
ORDER (1) Writ petitions are hereby dismissed. (2) Rule discharged.
(3) Costs made easy."
7. This Court is not inclined to adopt the course of action suggested by the learned counsel for petitioner that the matter should be allowed to be 9 placed before the Division bench along with W.A.No.4893/2015 and connected matters by filing a second set of papers in the present case. It is needless to say that if the petitioner-assessee wants to file appeal against this order passed by the learned Single Judge, they are free to do so in accordance with law.
8. Therefore, respectfully agreeing with the observation of the learned Single Judge in the judgment dated 30.09.2015, the present writ petition is also dismissed. No order as to costs.
Sd/-
JUDGE Srl.