2013 (4) TMI 756 - HC - Central Excise

Summary

Issues involved: Interpretation of Rule 17A and Rule 17B of Karnataka Excise Licences (General Conditions) Rules, 1967 in the context of partnership firms seeking to induct legal representative of deceased partner.

Summary:
The petitioners, partnership firms under the Partnership Act, 1932, sought to induct the widow of a deceased partner as a partner in place of the deceased partner. The Deputy Commissioner of Excise directed the petitioners to pay a transfer fee under Rule 17B instead of transferring the licence under Rule 17A. The dispute centered around the correct application of these rules.

It was established that the deceased partner was indeed a partner in the firms at the time of his death, as per the partnership deeds and CL-2 licences. The partnership deeds allowed for the induction of a legal representative in case of a partner's death, as per Clause-10.

The Court examined Rule 17A, which allows for the transfer of a licence to legal heirs in case of a partner's death, with the sanction of the Excise Commissioner. It was concluded that the legal representative of the deceased partner was entitled to be inducted as a partner in the firms, and the Deputy Commissioner was obligated to transfer the licences under Rule 17A, rendering Rule 17B inapplicable to the situation.

As a result, the petitions were allowed, and the demand notice along with subsequent notices were quashed. The Deputy Commissioner was directed to pass orders on the representation by the specified date, exercising jurisdiction under Rule 17A and in accordance with the law.