M/S B K S Enterprises vs. The Director Of Karnataka
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M/s B K S Enterprises, a licensed dealer in onions and potatoes, filed a writ petition challenging a notice dated 04.04.2024 issued by the Agricultural Produce Market Committee (APMC), Yeshwanthpura (R2). The notice informed the petitioner that after a prior notice dated 29.12.2023 demanding Rs. 7,54,996/-, only Rs. 25,000/- was deposited, which was adjusted towards license fee for February and March 2018 with GST, and a remaining Rs. 6,828/- towards penalty. The petitioner contended that their default was due to COVID-19 restrictions and that the APMC's refusal to issue gate passes since February 2022 prevented them from conducting business and clearing arrears. The APMC argued the petitioner was in default since 2016 and had not cleared dues despite the notice.
Held
The Court disposed of the petition by permitting the petitioner to deposit 25% of the dues mentioned in the notice dated 29.12.2023, along with subsequent dues, within two months from the date of the order. Upon this deposit, the second respondent is directed to immediately issue gate passes to enable the petitioner to commence business. The petitioner is further directed to pay the remaining dues within the next six months. However, this six-month period is subject to the condition that if the petitioner seeks to retain benefits from accommodation in the Dasanapura sub-market yard, as per pending proceedings, they must clear all dues by the outer limit determined in those proceedings. The Court noted that the APMC had not yet taken further action for cancellation of the license or recovery of premises, which provided a window for the petitioner to pay outstanding amounts. The claim for concession in license fees for the COVID-19 period was not expressly decided but the petitioner was directed to pay the dues as per the notice.
Key Issues
1. Whether the petitioner is entitled to a direction for the issuance of gate passes by the second respondent to enable them to commence business, despite being in arrears of license fees and penalty. (Mixed question of law and fact, concerning the powers and duties of the APMC under relevant regulations). Petitioner's arguments: The petitioner argued that the non-issuance of gate passes by the second respondent is illegal and prevents them from conducting business and clearing their dues. They contended that if granted reasonable time and a direction to issue gate passes, they can clear the arrears. They also sought a concession in license fees for the COVID-19 period, similar to what was allegedly granted to others. Revenue/State's arguments: The second respondent argued that the petitioner has been in default since 2016 and only paid a small amount after receiving the demand notice. They emphasized that gate passes were refused in February 2022, and the petitioner took no steps thereafter. They submitted that any indulgence granted by the court must ensure the petitioner clears all dues.
Sections Cited
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ORAL ORDER
The petitioner is licensed by the second respondent to conduct business in onion and potato. The petitioner is aggrieved by the second respondent's Notice dated 04.04.2024 (Annexure-E). The second respondent has issued this Notice to the petitioner informing the petitioner that after he was served with Notice dated 29.12.2023 (Annexure-C) NC: 2025:KHC:13958 calling upon him to pay a sum of Rs. 7,54,996/-, he has deposited a sum of Rs.25,000/- by RTGS which is adjusted towards the License fee for the months of February and March 2018 with GST and the remaining sum of Rs.6,828/- is adjusted towards the penalty. The second respondent has also informed the petitioner that if the balance payable in terms of the earlier Notice is not paid, action will be taken in accordance with law.
Sri K V Sateeshchandra, the learned counsel for the petitioner, submits that the petitioner defaulted in paying License fee only because of Covid- 19 restrictions, but once those restrictions were eased, he has paid dues in parts. The learned counsel further submits that because the second respondent stopped issuing gate passes which would be the first requirement to continue business in the Market yard, he has not been able to pay the arrears or be in business. Crucially, the learned counsel submits that NC: 2025:KHC:13958 if reasonable time is granted, the petitioner will clear the dues, but this Court must direct the second respondent to issue gate pass forthwith so that he can commence his business and have a reasonable opportunity to pay the license fee and the demand otherwise.
Sri T Swaroop, the learned counsel for the second respondent, submits that the petitioner is in default from the year 2016 onwards and gate pass is refused only in February 2022, that the petitioner did not take any step even thereafter to clear the dues and the penalty, and as such, Notice dated 29.12.2023 (Annexure-C) is issued, and that even after receipt of this notice, the petitioner has only paid a sum of Rs.25,000/-. The learned counsel emphasizes that even if the petitioner is to be granted any reasonable indulgence, this Court must ensure that the petitioner abides by the decision that would NC: 2025:KHC:13958 ultimately be in terms of the Orders of this Court in the pending writ petition with no arrears.
The pivotal submission is that despite this Court's reasonable indulgence, the petitioner could continue to be in default, and hence he cannot be accommodated in the alternative sub market yard (Dasanapura sub-market yard), and that the petitioner must, within stipulated time, clear all dues in terms of the Notice (Annexure-C), and the upto date amount payable as of that relevant date.
This Court must observe that the second respondent, though has issued Notice dated 29.12.2023 (Annexure-C), and the impugned Notice dated 04.04.2024 (Annexure-E), has not taken further action for cancellation of license and recovery of the premises. This allows a window to the petitioner, if bona fide is shown, to pay the amount outstanding in terms of the Notice dated 29.12.2023 and further amount that would be due notwithstanding his case NC: 2025:KHC:13958 that he has not been able to conduct business from the month of February 2022. 6. When queried Sri K. V. Sateeshchandra submits that the petitioner will deposit 25% of the dues as aforesaid within two months and clear the remaining dues within the next one year, while emphasizing that this Court must direct the second respondent to allow concession in the License fee, which is allowed to others for Covid-19 period. In reply, Sri T. Swaroop, is categorical that no concession in the License fee is allowed to any person as there was no closure of business even during Covid-19. 7. Be this as it may, the petitioner, who has been in default from the year 2016 and who has had a rather extended opportunity, cannot seek for further indulgence. The petitioner must pay 25% of the dues as aforesaid within two [2] months and the remaining amount within the next six [6] months NC: 2025:KHC:13958 unless it becomes necessary in terms of the other pending writ proceedings to pay all dues much earlier if he is to be accommodated in terms of the outcome in such proceedings. If the petitioner deposits 25% of the amount, the second respondent must post-haste issue the gate pass so that there is no hindrance to the petitioner to commence business. In the light of the afore, the following: - ORDER [a] The petition stands disposed of permitting the petitioner to deposit within two [2] months from today, without waiting for a certified copy of this order, 25% of the dues as mentioned in the Notice (Annexure-C) and the subsequent dues that would be. [b] If the petitioner deposits 25% as aforesaid, the second respondent shall immediately NC: 2025:KHC:13958 issue gate pass and enable the petitioner to commence his business. [c] The petitioner shall pay the remaining dues as aforesaid within the next six [6] months subject to the condition that if the petitioner proposes to retain the benefits that could be by way of accommodation in Dasanapura sub-market yard in terms of the orders in the pending proceedings, as of such date, the petitioner must clear all dues which would be the outer limit. (B M SHYAM PRASAD) JUDGE
AN/-
Reproduced from the public record of the Karnataka High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.