S P SRIDHAR Vs. GOVERNMENT OF KARNATAKA

JUDGEMENT

(1.) THE petitioners who are CL-1 licence holders assailing the legality and validity of the impugned Rules dated 30. 6. 2003 vide Annexure-G have presented these Writ Petitions. Further, the learned Counsel appearing for the petitioners fairly submitted that so far as prayers B and C are concerned, those two prayers may be dismissed as having become infructuous in view of the order passed by the Apex Court in (STATE OF KARNATAKA AND ANR. v. K. V. AMARNATH AND ORS. Civil Petition No. 3610/1998 DD 30. 8. 03 ). The submissions made by the learned Counsel is placed on record. Prayers (b) and (c) are accordingly dismissed as having become infructuous.

(2.) NOW, the learned Counsel appearing for the petitioners confines these petitions so far as prayer (a) is concerned as stated supra. These petitioners claiming to be CL-1 licencee challenged the constitutional validity of the rules notified in the official gazette dated 30. 6. 2003 vide Annexures A1 to A6, respectively thereby amending the Karnataka Excise (sale of Indian and Foreign Liquors) Rules, 1968, Karnataka Excise (Manufacture of Wine from Grapes) Rules, 1968, Karnataka Excise (Breweries) Rules, 1967, Karnataka Excise (Distillery and Warehouse)Rules, 1968, Karnataka Excise (Bottling of Liquor) Rules, 1967, Karnataka Excise (Excise duties and Fees) Rules, 1968, whereby a state owned company (Karnataka State Beverages corporation Ltd. ,) is made "sole Distributor" in liquor trade. Further the case of the petitioners is that the system prevalent in the liquor trade is that the petitioner (CL-1 licencee) obtained transport permits from the Excise Department in respect of the products of the particular manufacturers and thereafter the petitioner sell the said products to a retailer (CL-2 licencee)and/or to a Bar (CL-9 licencee), and other retail licencees, and subsequently the product passess on to the consumers. The petitioners also have an option of getting their requirement from the distributor (CL-II licencee ).

(3.) WHEN things stood thus, on 13. 9. 1989, the Government of Karnataka on the ground that there is a leakage of excise revenue in the sale of seconds, that is, alleged non-duty paid liquors, amended the Karnataka Excise (Sale of Indian and Foreign Liquor) Rules, 1968 and other corresponding rules introducing the concept of sole distributorship in a Government owned company or agency, the Mysore Sales International Limited was specified as the Government owned agency. By the said amendments wholesaler was mandated to purchase his requirements only from the distributor licencees (Government owned agency) and thus he was prohibited from purchasing his requirements directly from the manufacturers. In pursuance of the draft notification issued by the respondents, the Association of the CL-1 licencees and other CL-1 licencee holders have filed the objections. The said objections filed by the associations and the other licencee holders have not been considered and the impugned notification was issued for amending the impugned rules. This is nothing but a devious back door method adopted by the government and the said Rules affect the petitioners and the notice dated 13. 6. 2003 specifying the Karnataka State Breweries Corporation Limited as a state owned company also effected the petitioners and the petitioners, feeling aggrieved by the same had left with no other equally efficacious remedy, presented these Writ Petitions assailing the impugned notification as stated supra.