Exclusive privilege over intoxicating liquor supports State vend fee; central industrial control did not displace the levy.

State power to levy vend fee as consideration for its exclusive privilege in intoxicating liquor was treated as valid, and denatured spirit, including specially denatured spirit, was brought within the broader constitutional concept of intoxicating liquor for State control. Central industrial control legislation and price control orders did not oust that levy because no express or implied exclusion of State power was found. The validating legislation was also sustained, as retrospective validation removed defects in the earlier levy. The challenge under Article 19(1)(g) failed because there is no absolute fundamental right to trade in intoxicants, and the levy was not shown to be confiscatory.

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Issues: (i) whether the State had legislative competence and exclusive privilege to levy vend fee on denatured spirit, including specially denatured spirit, as part of the right to deal in intoxicating liquor; (ii) whether the Industries (Development and Regulation) Act, 1951 and the Ethyl Alcohol (Price Control) Orders displaced the State's power to impose and collect the levy; (iii) whether the levy and the validating legislation were unconstitutional or confiscatory, including under Article 19(1)(g) of the Constitution of India.

Issue (i): whether the State had legislative competence and exclusive privilege to levy vend fee on denatured spirit, including specially denatured spirit, as part of the right to deal in intoxicating liquor.

Analysis: The relevant constitutional entry relating to intoxicating liquor was construed broadly in earlier constitutional decisions, and the expression was held not to be confined to potable liquor alone. The State's power to regulate intoxicants was treated as embracing manufacture, possession, sale, and allied incidents of trade, and the State was recognised as having an exclusive privilege in respect of intoxicating liquor. On that basis, denatured spirit and specially denatured spirit, though used for industrial purposes, were treated as falling within the wider notion of liquor containing alcohol for the purpose of State control and levy associated with the grant of privilege.

Conclusion: The challenge to the State's competence on the footing that denatured spirit was outside the State's control failed, and the levy was upheld as within the State's exclusive privilege.

Issue (ii): whether the Industries (Development and Regulation) Act, 1951 and the Ethyl Alcohol (Price Control) Orders displaced the State's power to impose and collect the levy.

Analysis: The scheme of the Industries (Development and Regulation) Act, 1951, including the declaration under Section 2 and the control provisions in Section 18(G), was examined alongside the constitutional distribution of legislative powers. It was held that, even where Parliament had declared control over a scheduled industry, the constitutional scheme preserved concurrent State power over trade and commerce in the products of such industry, and the State's distinct power over intoxicating liquor remained unaffected unless expressly taken away. The price control orders were read as regulating price and related charges, but not as divesting the State of its power to exact consideration for parting with its exclusive privilege in respect of intoxicating liquor. No express or implied ouster of State power was found.

Conclusion: The central legislation and price control orders did not invalidate or exclude the State levy.

Issue (iii): whether the levy and the validating legislation were unconstitutional or confiscatory, including under Article 19(1)(g) of the Constitution of India.

Analysis: The levy was treated as referable to the State's lawful authority to charge consideration for grant of an exclusive privilege, not as an impermissible tax lacking competence. The retrospective validating enactment was sustained on the footing that it removed doubts and restored the legal position after the earlier levy had been struck down, and retrospective validation was not held invalid on the facts merely because it operated backward in time. The argument based on interference with the freedom to carry on trade did not succeed because there is no absolute fundamental right to trade in intoxicants, and the levy was not shown to be unconstitutional or confiscatory in the circumstances.

Conclusion: The levy and the validating legislation were upheld, and the Article 19(1)(g) challenge failed.

Final Conclusion: The common judgment sustained the levy and the validating scheme against the principal constitutional challenges, while the State's appeal succeeded and the connected appeals and petitions by the opposite parties failed.

Ratio Decidendi: A levy imposed by the State as consideration for parting with its exclusive privilege in intoxicating liquor is valid if the commodity falls within the broader constitutional concept of intoxicating liquor, and such State power is not displaced by central industrial control legislation unless the legislative field is expressly occupied or withdrawn.

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