The High Court of Karnataka on Tuesday held that the State Excise Commissioner had no authority to collect stamp duty at the time of sanction, renewal or transfer of liquor licences.

Justice Ram Mohan Reddy passed the order, while quashing an order issued by the Excise Commissioner on April 15, 2014 authorising excise officers to collect stamp duty at the time of renewal of liquor licences related to liquor/wine shops,and bar and restaurants. The court passed the order, while allowing petitions filed by Veeranna V. and other liquor licence holders. The Commissioner’s order was not only for collecting the stamp duty for the current year at the rate of 0.5 per cent for sanction/renewal of licences and at the rate of 5 per cent for transfer of licences, but also for collecting stamp duty with retrospective effect from 2005–06 at different rates as specified in the Karnataka Stamps Act.

However, the court held that the Excise Commissioner, under the Karnataka Excise Act and Rules, had no power to collect stamp duty. It was the Inspector-General of Registration and Commissioner of Stamps, who was authorised to collect all types of stamp duties under the Karnataka Stamps Act.

The court has given liberty to the government to re-examine the matter.

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