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Judgment
R. Gururajan, J.—Petitioner/club is before this Court seeking for a writ of certiorari to quash the order dated 28.10.1999 passed u/s 10-A(4)(a) of the Karnataka Sales Tax Act and the consequent demand notice dated 29.10.1999. Petitioner is also seeking for a mandamus directing the Respondents to dispose of the rectification application dated 18.9.2000 filed by it.
According to the petition averments, Petitioner/club is a members club engaged in the activity of providing facilities for sports activities to its members. It also has a bar and restaurant, wherein the supply of food and liquor is made only to its members. Petitioner/Club is a dealer under the Karnataka Sales Tax Act and it also holds a licence issued in Cl-4 by the Deputy Commissioner under the Karnataka Excise Act. A show- cause notice was issued to the Petitioner in the matter of security deposit u/s 10-A(4)(a) of the Karnataka Sales Tax Act. A reply has been submitted by the Petitioner on 16.8.1999. Thereafter an order was passed as per Annexure-D followed by a recovery notice Annexure-E. Petitioner has also filed a rectification application and the same remains not considered. Petitioner wants that an order be made for early disposal of the rectification application.
Heard the learned Counsel for the Petitioner. Petitioner Counsel argues that the Petitioner is not liable to pay any additional security in terms of Section 10-A(4)(a) of the Act. Counsel says that statute provides for collection of deposits from a dealer. At the same time, a notification is issued by the State Government in terms of Section 10-A(4)(a) of the Act with regard to the quantum of Rs. 60,000/- in the matter by way of deposit. Counsel says that the quantum in terms of the said notification cannot be made applicable to the Petitioner on the ground that the Petitioner does not fit in to the categories of a dealer in terms of the notifications.
After hearing the learned Counsel on either side, the following order is passed.
The Karnataka Sales Tax provides for an additional security in terms of Section 10-A(4)(a) of the Act. The same is not disputed. Admittedly, the Petitioner is a dealer and therefore he is liable to pay the deposit. What is contended before me is that the quantum in terms of the notification cannot be made applicable to the Petitioner since the Petitioner/Club does not fall in any one of the categories of dealers. It is seen from the material on record that the Deputy Commissioner, Excise, has issued licence under Cl-4 which is meant for clubs established for supply of Indian made liquors other than arrack or foreign liquors or both to the members only. The notification no doubt did not say in unmistakable terms that the club is coverable under the Act. The notification has to be read along with the main provision of Section 10-A(4)(a) of the Act. Section 10-A(4)(a) provides for security deposit by the dealer. The notification covers distilleries manufacturing breweries, wholesale dealers doing business, retail dealers doing business, hotels and boarding houses doing business, Bars doing business.
In the case on hand, Respondents are demanding a deposit of Rs. 90,000/- in terms of Bars doing business in terms of Clause 6 of the said notification. Bar is not defined under the Act. The dictionary meaning of the bar reads as under:
A room or counter in a restaurant or hotel, etc., or a separate establishment, where alcoholic drinks are sold and drunk. (Chamber''s 2000)
A reading of the dictionary meaning in the context would show that a club is analogous to a bar doing business. Except the restricted entry, liquor is sold and money is obtained like any bar doing business. A mere restriction of entry by itself does not take away the rigour of the notification in the matter of deposit. Licence is obtained from the Excise Commissioner. In these circumstances, the argument of inapplicability of the notification to the Petitioner/club is rejected.
In so far as merits of the matter is concerned, the impugned order at Annexure-D is an appealable order. Petitioner is at liberty to file an appeal if he so chooses in accordance with law. In so far as rectification application is concerned, it is proper to direct the Respondents to dispose of the same within two months from the date of receipt of a copy of this order.
In the result, petition stands disposed of with the above observations. Sri Vedamurthy, learned High Court Government Pleader to file memo of appearance within four weeks.