K G HANUMANTHA RAJU Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) In these petitions, petitioners are calling in question the validity of Act 2 of 1994 which came into force with effect from 8th October, ,1993 by which Section 24 of Karnataka Excise Act was substituted enabling the State Government to accept payment of a sum or levy such licence fee or privilege fee as may be prescribed in consideration of grant of lease or licence or both by or under the Karnataka Excise Act. Section 3 of the Validation Act provides that Rule 8 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 are valid notwithstanding any judgment to the contrary on the basis that the said rule had been framed under the Karnataka Excise Act as amended by Act 2 of 1994.

(2.) Identical contentions urged in support of the challenge to the validity of the said provisions of the Act or the reasonableness thereof have been considered in the case of Karnataka Wine Merchants' Association (Regd.), Bangalore and Others v State of Karnataka and Others, and rejected. Hence, I need not advert to these contentions.

(3.) The learned Counsel appearing for the petitioners in the secases, however, urged that there are some additional points to be considered in these cases. The petitioners had been granted licences for the period 1-7-1991 to 30-6-1992 and 1-7-1992 to 30-6-1993. The stand of the petitioners is that if as contended for the State that under Section 24 of the Act, the State Government parcels away its right or privilege to trade in liquor Indian or Foreign in consideration of a sum to be accepted by way of licence fee or privilege fee, the licences granted to the petitioners would be in the nature of a contract and the consideration for the contract is as set forth in the relevant licences and after the period of licence is over, it is not open to the State to unilaterally seek to enhance the licence fee and collect the same. In other words, the contention put forth on behalf of the petitioners is that the licence fee sought to be collected is by way of consideration for parting with the privilege to trade in liquor and the same could not be enhanced unilaterally after the period of licence is over as the licence is in the nature of a contract; (ii) that Act 2 of 1994 itself has come into force with effect from 8th October, 1993 and therefore in respect of those periods covered by the licences prior to that date, there is no power for enhancement on the part of the Government; (iii) that there is no specific provision under the statute to collect licence fee which had been short levied or collected at a lesser rate than fixed.