TaxTMI 
TaxTMI 
2019 (12) TMI 622
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.... Government of Karnataka under FSS Act provides to carry on the business of distributor, supplier, transporter, wherein the petitioner is permitted to carry on food business relating to (1) Ready-to-eat savouries; (2) Beverages, excluding dairy products. It is contended that on the request made by the petitioner highlighting the Digital Wallet Technology of the Company exclusively meant for the adult beverages industry, a cashless transaction seeking support for the digital initiative, Letter of Authority dated 01.08.2017 was issued by the respondent for Online Order Processing and Delivery of Indian and Foreign Liquor including Beer, Wine and LAB (Low Alcoholic Beverages) by the petitioner - Hip Bar with certain conditions. It is alleged that pursuant to the coverage against the petitioner executed by a Kannada News TV Channel, the said Letter of Authority was withdrawn abruptly sans providing an opportunity to show cause. Further, the petitioner was compelled by the respondent to give an affidavit dated 15.11.2018 stating that it has disabled the online delivery of liquor, without prejudice to its rights. Being aggrieved by the aforesaid action of the respondent, petitioner is be....
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....erchant (licensee) to the consumer (purchaser) through the Digital Wallet. 4. Reliance was placed on the following judgments of the Hon'ble Apex Court:- (i) Kerala Bar Hotels Association v. State of Kerala [2015] 16 SCC 421, (ii) Coffee Board, Karnataka v. CST [1988] 3 SCC 263; (iii) New India Sugar Mills Ltd., v. Commissioner of Sales Tax, 1963 Supp (3) SCR 459. 5. Learned Advocate General for the State argued that the writ petition is misconceived. No fundamental right is vested with the petitioner to carry on trade/business in liquor, no writ of mandamus can be issued against the petitioner. It is the contention of the State that the transaction of the petitioner is trade/business in liquor. There is no provision under the Act, 1965 for conducting the business on prepaid instruments for alcoholic beverages. According to the State, the petitioner using the mobile application initiates the transaction of purchasing the liquor from CL-2 customer and transports/delivers to the end consumer. In this scenario, it is clear that the petitioner sells the goods-liquor to the end consumer and gets the profit. 6. Reliance is placed on the following ju....
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....tands on a different footing from other trades, the State possesses the right of control over all aspects of intoxicants. Imposing fetters or restrictions by the State is mandatory though there is no prohibition policy in the State. In such circumstances, a right is vested with the State to monitor, regulate, and prevent from conducting the activities/trade in liquor. Any such restriction imposed on the petitioner to achieve the laudable object of the Act, 1965 cannot be termed as an infringement of fundamental right guaranteed under Article 19(1) (g) of the Constitution of India. 11. It is apt to refer to the judgment of the Hon'ble Apex Court in the case of Kerala Bar Hotels,supra, wherein it is held thus; "32. We disagree with the submissions of the respondents that there is no right to trade in liquor because it is res extra commercium. The interpretation of Khoday put forward by Mr. Sundaram is, in our opinion, more acceptable. A right under Article 19 (1) (g) to trade in liquor does exist provided the State permits any person to undertake this business. It is further qualified by Articles 19 (6) and 47. The question, then, is whether the restrictions imposed o....
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....s bringing down the consumption of alcohol, or as preparatory to prohibition. 38. We now move to the arguments predicated on Article 19 of the Constitution. We have already noted that the business in potable liquor is in the nature of res extra commercium and would therefore be subject to more stringent restrictions than any other trade or business. Thus, while the ground of Article 19(1)(g) can be raised, in light of the arguments discussed with regard to Article 14, it cannot be said that the qualification on that right is unreasonable." (Emphasis Supplied) Thus, the Hon'ble Apex Court has categorically held that business in potable liquor is in the nature of res extra commercium and stringent restrictions are imperative. Hence, the arguments of the learned senior counsel that Articles 14 and 19(1) (g) are infringed by the act of the State is untenable. Transaction of petitioner whether is sale of liquor: 12. It is the contention of the petitioner that the transaction effected by it is not sale of liquor. The petitioner is claiming to be a mobile wallet platform governed by the payment and settlement systems, engaged in the business of (1) facilitat....
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....ffee delivered pursuant to the mandatory provisions of section 25(1) of the Act. It was urged that Section 17 of the Coffee Act read with Sections 25 and 47 enacts what since 1944 is a total prohibition against the sale of coffee by growers and corresponding purchase of coffee from growers. In view of Section 17 read with Section 25, purchase by the Coffee Board of coffee delivered under Section 25(1) was also impliedly prohibited. It is in view of this express prohibition of sale and corresponding implied prohibition of purchase that the Act provided the only method of disposal of coffee, viz., by the delivery of all coffee to the Coffee Board with no rights attached on such delivery, save and except the statutory right under Section 34. It was also argued that the legislature has made a conscious difference between acquisition of coffee by compulsory delivery by the growers under Section 25(1) of the Act and purchase of coffee by the Board under Section 26(2) and, as such, compulsory delivery of coffee under Section 25(1) cannot constitute a sale transaction as known to law between the growers and the Coffee Board. We are, however, unable to accept the submissions of the learned ....
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....ase and sale of liquor and intoxicating drugs and the levy of duties of excise thereon, in the State of Karnataka, and for certain other matters hereinafter appearing;" 16. This enactment provides for an uniform law relating to the production, manufacture, possession, import, export, transport, purchase and sale of liquor and intoxicating drugs. In the present set of facts, the petitioner is placing orders on the CL-2 licence holders to supply required quantity of liquor on payment basis and in turn sells the same to the person who is an end consumer by receiving the amount which is more than the MRP fixed by the CL-2 licence holder in the pretext of service charges. In terms of Act, 1965 "any" transfer otherwise than by way of gift being 'sale', the transaction of the petitioner certainly comes under the term 'sale', as such the provisions of the Act, 1965 are applicable. Transportation of liquor: 17. The State has prescribed the permissible quantity in terms of Rule 21 of the Excise (Possession, Transport, Import and Export) Rules, 1967. The said rule does not provide for delivery/transport of liquor beyond the limits prescribed therein. It is the content....
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.... conformity with the provisions of the Act. On realizing the mistake, the same has been withdrawn at its own discretion in the interest of the stake holders and the public at large. Any LOA issued by the respondent without jurisdiction is non est in the eye of law. Source of power to issue LOA is not traceable to any of the provisions under the Act, 1965. Standard of morality: 19. The petitioner placing reliance on the case of Krishna Kumar Narula v. Jammu and Kashmir AIR 1967 SC 1368 submitted that standards of morality can afford a guidance to impose restrictions, but cannot limit the scope of the right. There is no quarrel on this legal proposition. Indisputably, liquor is deleterious to the health of mankind. The social stigma attached to it as far as the family and the society is concerned cannot be lost sight of. Younger generation including the children below the permissible age succumbing to this temptation of liquor consumption may not be stringently regulated through online orders. The eligibility of the age and sound mind to receive and consume liquor is difficult to monitor with the trade carried out by the petitioner. 20. There are various types of licences on....
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....can be issued in favour of an applicant who establishes a legal right in himself and is issued against an authority which has a legal duty to perform, but has failed and/or neglected to do so, but such a legal duty should emanate either in discharge of the public duty or operation of law. We have found that there is no legal duty cast on the Commissioner or the State Government exercising powers under Section 14 of the Act read with Rule 4 of the 1975 Rules to grant the licence applied for. The High Court, in our view, cannot direct the State Government to part with its exclusive privilege. At best, it can direct consideration of an application for licence. If the High Court feels, in spite of its direction, the application has not been properly considered or arbitrarily rejected, the High Court is not powerless to deal with such a situation that does not mean that the High Court can bend or break the law. Granting liquor licence is not like granting licence to drive a cab or parking a vehicle or issuing a municipal licence to set up a grocery or a fruit shop. Before issuing a writ of mandamus, the High Court should have, at the back of its mind, the legislative scheme, its object ....
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....hus, the writ does not lie to create or establish a legal right but, to enforce one that stood already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances, inter-alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant or refusal. Hence, discretion must be exercised by the court on grounds of public policy, public interest and public good. The writ is equitable in nature and thus, its issuance is governed by equitable principles. Refusal of relief must be for reasons which would lead to injustice. The prime consideration for issuance of the writ is, whether or not substantial justice will be promoted. Furthermore, while granting such a writ, the court must make every effort to ensure from the averments of the writ petition, whether proper pleadings are being made. Further in order to maintain the writ of mandamus, the first and foremost requirement is that, the petition must not be frivolous and it is filed in good faith. Additionally, the app....