- 1 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 6TH DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 107910 OF 2017 (EXCISE) BETWEEN: SURYAKANT S/O. SHANKRAPPA CHOUKANPALLI, AGED ABOUT: 57 YEARS, OCC: BUSINESS, R/O: NO.9-13-80, MAILUR ROAD, VIDYANAGAR COLONY, BIDAR-585403. …PETITIONER (BY SMT. VIDYAVATI M. KOTTURSHETTAR, ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF EXCISE, BAGALKOTE DISTRICT, BAGALKOTE. 2. THE KARNATAKA STATE TOURISM DEVELOPMENT CORPORATION LTD., NO.49, 2ND FLOOR, KHANIJA BHAVAN, RACE COURSE ROAD, BENGALURU-01, BY ITS MANAGING DIRECTOR. 3. OFFICE OF THE PR. ACCOUNTANT GENERAL, (E & RSA), C BLOCK, AUDIT BHAVAN, A-BLOCK, 1ST FLOOR, BENGALURU-560001. 4. OFFICE OF THE ACCOUNTANT GENERAL, (E & RSA), C BLOCK, AUDIT “BHAVAN”, NEAR VIDHAN SOUDHA, BENGALURU-01. 5. COMMISSIONER, EXCISE DEPARTMENT, 2ND FLOOR, T.T.M.C. BUILDING, A BLOCK, B.M.T.C. SHANTINAGAR, BENGALURU-02. …RESPONDENTS (BY SRI. M.M. KHANNUR, AGA FOR R1, R3-R5; SRI. GURURAJ JOSHI AND SRI. ANOOP G. DESHPANDE, ADVOCATES FOR R2) GIRIJA A BYAHATTI Digitally signed by GIRIJA A BYAHATTI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH - 2 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO: A. ISSUE A WRIT IN THE NATURE OF CERTIORARI TO QUASH ANNEXURE-‘E’ DATED 26.09.2014, ISSUED BY RESPONDENT NO.3 IN NO.PR.AG(E & RSA)/RA- III/A/2014-15/151. B. ISSUE A WRIT IN THE NATURE OF CERTIORARI TO QUASH ANNEXURE-‘K’ DATED 12.06.2017, ISSUED BY RESPONDENT NO.5 IN NO.SUM:ECE:09:IML:BAGALKOT: 2014-15 AND ENDORSEMENT NO.EXE/AUDIT/CR- 02/2014-15 DATED 29.06.2017 ISSUED BY RESPONDENT NO.1 WHICH IS BASED ON ANNEXURE-E. C. ISSUE A WRIT IN THE NATURE OF CERTIORARI TO QUASH ANNEXURE-‘L’ DATED 24.06.2017, ISSUED BY RESPONDENT NO.2 IN NO.KRAPRAANE/WAINE/504/ 2017-18 WHICH IS BASED ON ANNEXURE-E. D. ISSUE A WRIT IN THE NATURE OF CERTIORARI TO QUASH ANNEXURE-‘M’ DATED 03.07.2017 ISSUED BY RESPONDENT NO.2 IN NO.EXE/ADT/CR/2/2014-15 WHICH IS BASED ON ANNEXURE-E. E. ISSUE A WRIT IN THE NATURE OF MANDAMUS OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION, DIRECTING THE RESPONDENT NO.1 AND 3 TO CONSIDER THE CONCESSIONARY AGREEMENT MADE BY THE KSTDC IN FAVOUR OF PETITIONER AND DROP THE PROCEEDINGS OF RECOVERY OF ARREARS AND RENEW THE LICENCE UNDER CL-14 ITSELF. F. ISSUE SUCH OTHER WRIT, ORDER OR DIRECTION AS THIS HON’BLE COURT MAY DEEM FIT, IN THE INTEREST OF JUSTICE AND EQUITY. THIS PETITION, COMING ON FOR PRELIMINARY HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ) 1. The petitioner is before this Court seeking the following reliefs: a. Issue a writ in the nature of certiorari to quash Annexure-‘E’ dated 26.09.2014, issued by respondent no.3 in No.Pr.AG(E & RSA)/RA- III/A/2014-15/151. b. Issue a writ in the nature of certiorari to quash Annexure-‘K’ dated 12.06.2017, issued by respondent no.5 in No.SUM:ECE:09:IML:BAGALKOT:2014-15 and Endorsement No..exe/audit/cr-02/2014-15 dated 29.06.2017 issued by Respondent no.1 which is based on Annexure-E. c. Issue a writ in the nature of certiorari to quash Annexure-‘L’ dated 24.06.2017, issued by respondent no.2 in No.KRAPRAANE/WAINE/504/2017-18 which is based on Annexure-E. d. Issue a writ in the nature of certiorari to quash Annexure-‘M’ dated 03.07.2017 issued by respondent No.2 in No.exe/adt/cr/2/2014-15 which is based on Annexure-E. e. Issue a writ in the nature of mandamus or any other appropriate writ, order or direction, directing the respondent No.1 and 3 to consider the concessionary agreement made by the KSTDC in favour of petitioner and drop the proceedings of recovery of arrears and renew the licence under CL-14 itself. f. Issue such other writ, order or direction as this Hon’ble Court may deem fit, in the interest of justice and equity. - 4 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 2. The petitioner is a concessionaire agreement holder with respondent No.2, Karnataka State Tourism Development Corporation Limited (‘the KSTDC’, for short). It is stated that the KSTDC had entered into a concession agreement with the petitioner to run a hotel in Hunagund Taluka, Bagalkot District, for a period of 25 years and, while doing so, permitted the petitioner to make use of the CL-14 license issued in the name of KSTDC, by the petitioner. 3. In regard thereto, respondent No.4, the Office of the Accountant General, had raised an objection stating that the private person running the restaurant was required to obtain a fresh license in terms of CL-7, and the CL-14 license issued in the name of KSTDC could not be used by the petitioner. It is in pursuance thereof, that a demand for differential amount of ₹11,73,000/- has been raised by respondent No.1 - Deputy Commissioner of Excise, on the petitioner. - 5 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 4. The submission of Smt.Vidyavati M. Kotturshettar, learned counsel for the petitioner, is that the petitioner being only an agreement holder, the restaurant is being run in the name of KSTDC, and the accounts between the petitioner and KSTDC are drawn up in terms of the said agreement. There is no independent business which is being run by the petitioner at the said location requiring a CL-7 license. The use of the CL-14 license issued in favor of respondent No.2 by the petitioner cannot be faulted. 5. Her submission is partly supported by Sri.Anoop G. Deshpande, learned counsel appearing for KSTDC, insofar as the concessionaire agreement is concerned. However, he submits that any demand made for the differential license fee or otherwise is a matter between the petitioner and the respondent No.1. 6. Learned AGA appearing for the respondent No.1 would submit that the petitioner being a private party, could not have used the CL-14 license, but ought to - 6 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 have applied for and obtained CL-7 license. Respondent No.1 has been liberal in demanding only the differential amount between CL-7 and CL-14 licenses, and as such, he submits that no fault can be found therein. 7. Having heard the counsel and on perusing the records, the short question that would arise is; “Whether a private concessionaire agreement holder would be required to obtain one more license in furtherance of a concession agreement entered into as regards running of a restaurant?” 8. It is not in dispute that the restaurant in question is owned by the KSTDC. It is also not in dispute that KSTDC has entered into a concession agreement with the petitioner and the petitioner is running the restaurant of the KSTDC in the name of KSTDC at the said location and that the agreement between the petitioner and KSTDC has been implemented, and - 7 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 there is no default on the part of the petitioner insofar as the said agreement is concerned. 9. That being so, it is categorically clear that it is the business of KSTDC, which is being carried on by the petitioner at the said location. It is on account of KSTDC holding out that the petitioner would be entitled to use the CL-14 license, that the petitioner has come forward with the bid of a particular amount to run the restaurant at the said location. It was never made clear by KSTDC that the petitioner would have to obtain a separate excise license, but in fact, KSTDC has expressly permitted the petitioner to make use of the CL-14 license, and by doing KSTDC has derived benefits. This would categorically indicate that KSTDC having permitted the petitioner to use the said license, there is no requirement for obtaining a further license by the petitioner. The objection raised by the Accountant General’s office is a technical objection - 8 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 without looking into the terms of the agreement entered into between KSTDC and the petitioner. 10. On that basis, respondent No.1 could not have called upon the petitioner to make payment of the differential amount, inasmuch as not only the petitioner but KSTDC has also derived benefits by accounting for the license fees as a CL-14 license and not as CL-7 license requiring further payment. 11. In that view of the matter, the partial support extended by KSTDC in favor of the petitioner is, to say the least, not proper and contrary to the concession agreement entered into between the petitioner and KSTDC. In my considered opinion, KSTDC ought to have come clear and supported the petitioner in terms of the concession agreement and made it clear to both the Accountant General and the Deputy Commissioner of Excise that it is the business of KSTDC which is being run by the petitioner, and it is pursuant to the specific permission granted by - 9 - NC: 2025:KHC-D:25 WP No. 107910 of 2017 KSTDC that the petitioner is making use of the CL-14 license. 12. In that view of the matter, I pass the following: ORDER i. Writ petition is allowed. ii. A writ of certiorari is issued. Annexure-E dated 26.09.2014 issued by respondent No.3, Annexure-K dated 12.06.2017 issued by respondent No.5, Annexure-L dated 24.06.2017 and Annexure-M dated 03.07.2017 issued by respondent No.2, are quashed. iii. Any amount paid by the petitioner under protest or otherwise is directed to be refunded to the petitioner along with interest @ 6% per annum from the time that the amount was paid, the refund to be made within 60 days from the date of receipt of a copy of this order. Sd/- (SURAJ GOVINDARAJ) JUDGE gab CT-MCK List No.: 1 Sl No.: 0