- 1 - HC-KAR NC: 2025:KHC:38869 WP No. 19494 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE RAVI V HOSMANI WRIT PETITION NO. 19494 OF 2024 (EXCISE) BETWEEN: AVANT GARDE HOSPITALITY PVT LTD REPRESENTED BY ITS DIRECTOR SRI. ASHWIN KUMAR G AGED ABOUT 32 YEARS, NO. 24 UNITY NOs.202 & 203 COMMET BLOCK, 2nd FLOOR U B CITY VITTAL MALYA ROAD,BENGALURU 560 001. NATURE OF COMPANY HOSPITALITY UNDER COMPANIES ACT, 1956. …. PETITIONER (BY SRI DILIP KUMAR I.S., ADVOCATE) AND: 1. THE COMMISSIONR OF EXICSE 2nd FLOOR BMTC SATTELITE BUILDING, SHANTINAGAR, BENGALURU 560 027. 2. THE DISTRICT COMMISSIONER, EXCISE INSPECTOR OFFICE, BENGALURU DISTRICT, ZONE NO. 22, SAMPANGIRAMANAGARA, BENGALURU - 560 004. …RESPONDENTS (SRI BHOJEGOUDA T. KOLLER, AGA FOR R1 & R2) THIS WP IS FILED UNDER THE ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE NOTICE DATED 27.6.24 BEARING NUMBER EXE/BN4/BTM/ ZONE22/CL-9/6/2023-24 ISSUED BY R2 PRODUCED AT ANNEXURE-A. DECLARE THAT PETITIONER COMPANY IS NOT LIABLE TO TRANSFER OF LICENSE UNDER RULE 17 B KARNATAKA EXCISE LICENSES (GENERAL CONDITIONS) RULE, 1967. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN B-GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE RAVI V HOSMANI Digitally signed by GEETHAKUMARI PARLATTAYA S Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:38869 WP No. 19494 of 2024 ORAL ORDER Challenging order dated 27.06.2024 passed by respondentno.2 at Annexure-A and for declaration that petitioner is not liable to pay any transfer fee under Rule 17B of Karnataka Excise Licences (General Conditions) Rules, 1967,('Rules' for short) this writ petition is filed. 2. Sri Dilip Kumar, learned counsel for petitioner submitted, petitioner is incorporated under provisions of Companies Act, which was issued with CL-9 licence during Excise year 2023-24 in respect of premises bearing #24,Unit no.202 & 203, Comet Block, 2nd Floor, UB City, Vittal Mallya Road, Bengaluru. It was submitted, petitioner had several Directors, on its Board. It was submitted, there was change in Directorship of petitioner - company. It was submitted, that as on 07.06.2022 Sri Gaddehosur Panduranga Ashiwin Kumar, Moodera Veerappa Subbaiah and Moodera Veerappa Hemkumar were its Directors. On 06.03.2023 Mulenahalli Gangadharppa Preetham, also became Director of company. Consequently, there was reconstitution of Board of Directors. However, since - 3 - HC-KAR NC: 2025:KHC:38869 WP No. 19494 of 2024 licence was issued in name of petitioner - company, it continued to carry on business. 3. Such being case, respondent no.2 issued notice on 30.05.2024 calling upon petitioner to pay licence fee of Rs.15,00,000/- and transfer fee of Rs.2,25,000/- on account of reconstitution of Directors of petitioner - Company. Same was replied by petitioner on 07.06.2024 as per Annexure-C. It was submitted, this Court in its decision in Mysore- Intercontinental Hotels Private Limited v. Commissioner of Excise and Anr. reported in 2018 (2) Kant LJ 382, had held mere change in Directorship of private limited company, where company was issued with Excise licence would not attract levy of transfer fee under Rule 17B of Rules. Despite same, respondents were persisting with notice, constraining petitioner to approach this Court. It was submitted after grant of interim order of stay, respondents had renewed licence without insisting of transfer fee. In view of ratio laid down in Mysore-Intercontinental Hotels Private Limited (supra), learned counsel sought for allowing writ petition. - 4 - HC-KAR NC: 2025:KHC:38869 WP No. 19494 of 2024 4. On other hand, Sri Bhojegouda T Koller, learned Additional Government Advocate for respondents no.1 and 2 opposed writ petition. Referring to statement of objections filed, it was submitted, there was no dispute about change of Directorship of petitioner-company. It was submitted, petitioner-company was incorporated in 2008-09, at that time Sri Abhijith Saha and Kum Shibulal were Directors of Company holding 5000 shares each. On 07.06.2022 Sri Gaddehosur Panduranga Ashiwin Kumar, Moodera Veerappa Subbaiah and Moodera Veerappa Hemkumar were inducted as Directors of Company with 25% shares. In view of change in Directorship, Deputy Commissioner of Excise, sought clarification from Excise Commissioner about such change attracting transfer fee. As per opinion of Excise Commissioner that reconstitution would attract transfer fee, petitioner was issued with notice. It was submitted, petitioner had filed reply, which was not satisfactory. It was submitted, original Directors namely, Abhijith Saha and Kum Shibulal were not shown to be holding any shares in Petitioner - Company. It was submitted, after grant of interim order, petitioner had undertaken to pay licence fee and transfer fee at time of renewal and petitioner was - 5 - HC-KAR NC: 2025:KHC:38869 WP No. 19494 of 2024 backtracking from undertaking. Therefore, petition was liable to be dismissed. 5. Heard learned counsel and perused material on record. 6. From above, petitioner's grievance against impugned notice issued by respondent is that same was contrary to ratio laid down by this Court in Mysore- Intercontinental Hotels Private Limited (supra), wherein it was held when incorporated company was a licencee, mere change in directorship would not attract transfer fee. 7. On perusal of said decision and in view of ratio laid down that reconstitution of directorship and a private limited Company would not amount to transfer of licence, impugned demand would have no legs to stand. Consequently, writ petition is allowed. Impugned notice at Annexure-A dated 27.06.2024 bearing no.EXE/BN-4/- BTM/ZONE22/CL-9/06/2023-24 issued by respondent no.2 is quashed. It is held mere change in directorship of a Private Ltd. - 6 - HC-KAR NC: 2025:KHC:38869 WP No. 19494 of 2024 Company, would not attract transfer fee under Rule 17B of Rules. Sd/- (RAVI V HOSMANI) JUDGE Psg* List No.: 1 Sl No.: 31