MYSORE INTERCONTINENTAL HOTELS Vs. COMMISSIONER OF EXCISE

JUDGEMENT

(1.) The petitioner-M/s.Mysore-Intercontinental Hotels, a Private Limited Company enacted under the provisions of the Companies Act, 1956, has filed this writ petition aggrieved by the impugned Endorsement issued by the Respondent-Deputy Commissioner of Excise, Bangalore Urban District, (East), Bangalore, demanding Transfer Fee under Rule 17-B of the Karnataka Excise Licences (General Condition of Licence) Rules, 1967, while renewing the Excise licence CL-7 of the petitioner-company for the year 2016-17.

(2.) The said Transfer Fee was demanded on the ground that one of the Directors of the said Limited Company Mr.J.P.Narayana Swamy, had expired on 09.02.2017 and the said company inducted two new Directors on the Board of Directors, who were not the legal representatives of the deceased Director Mr.J.P.Narayana Swamy and therefore, the renewal of the Excise licence for the year 2016-17 with the photographs and names of these two new co-opted Directors amounted to "Transfer of the Excise Licence " within the meaning of the Rule 17-B of the Rules and hence, the impugned Endorsement was issued.

(3.) Having heard the learned counsels for the parties, this Court is satisfied that the impugned Endorsement cannot be sustained and essentially because it is based on the fallacious premise taken by the Respondents-Department and not understanding of the basic concept of corporate law that all the Directors of the Limited Company are separate from the juristic person or the corporate body of the company itself. The Excise licencee in question is the corporate body or the limited company and not the Directors of the company. Therefore, after the death of one of the Directors in the present case, if two different persons were taken on the Board of the Directors of the said Company, who may or may not be the relatives of the deceased Director, the independent existence of the company continued in the same manner and the Excise licence in question could not be said to have been transferred to a different person or a different company at all.