Supreme Court affirms High Court's judgment on renewal applications with modulated directions.

The Supreme Court dismissed the special leave petitions and affirmed the High Court's judgment with modulated directions. It directed the competent authority to consider renewal applications per the rules, including the minimum off-take condition. The privilege fee paid for the excise year 2002-2003 was to be adjusted, and the facility of renewal was available to those who remitted the requisite amount by July 31, 2002. The Court upheld the provisions for penalties and potential license cancellation for non-compliance with minimum off-take requirements.

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Issues Involved:
1. Validity of the Government Orders (G.O.Ms. Nos. 128, 129, and 130) issued by the State of Tamil Nadu.
2. Right to renewal of licenses for existing licensees.
3. Reasonableness and arbitrariness of the new excise policy.
4. Application of the doctrine of promissory estoppel and legitimate expectation.
5. Consequences of the non-lifting of the minimum off-take of liquor.

Issue-wise Detailed Analysis:

1. Validity of the Government Orders (G.O.Ms. Nos. 128, 129, and 130):
The Government of Tamil Nadu issued G.O.Ms. Nos. 128, 129, and 130 to increase the number of retail vending shops, re-categorize shops, and enhance the privilege amount to augment excise revenue. The High Court upheld the government orders related to fiscal policy and revenue augmentation but invalidated the provisions abolishing the renewal of existing licenses, deeming them arbitrary and unrelated to revenue augmentation.

2. Right to Renewal of Licenses for Existing Licensees:
The High Court found that the policy change to abolish renewal rights for existing licensees was arbitrary and unreasonable, as it had no nexus with the objective of revenue augmentation. The Supreme Court affirmed this view, stating that the existing licensees could not be deprived of renewal rights as per the excise policy for the block period 2001-2004, reflected in G.O.Ms. No. 115. The Court directed the competent authority to consider renewal applications per the rules and conditions, including the minimum off-take requirement.

3. Reasonableness and Arbitrariness of the New Excise Policy:
The High Court and the Supreme Court both scrutinized the reasonableness of the new excise policy. The policy was deemed reasonable concerning fiscal measures like increasing the number of shops and re-categorizing them. However, the abolition of renewal rights was found to be arbitrary and whimsical, lacking any connection to the stated objective of revenue augmentation.

4. Application of the Doctrine of Promissory Estoppel and Legitimate Expectation:
The High Court rejected the applicability of the doctrines of promissory estoppel and legitimate expectation, stating that the trade in intoxicating liquor is not a right but a privilege regulated by the state. The Supreme Court agreed, emphasizing that restrictions on such trade must be reasonable and within the purview of Article 19(6) of the Constitution.

5. Consequences of the Non-Lifting of the Minimum Off-take of Liquor:
The Supreme Court noted that the existing licensees had failed to lift the minimum off-take quantity, resulting in revenue loss. The new policy included provisions for penalties and potential cancellation of licenses for non-compliance. The Court upheld these provisions, emphasizing that the licensees must comply with the minimum off-take requirements.

Conclusion:
The Supreme Court dismissed the special leave petitions, affirming the High Court's judgment with modulated directions. The competent authority was directed to consider renewal applications per the rules, including the minimum off-take condition. The privilege fee paid for the excise year 2002-2003 was to be adjusted, and the facility of renewal was available to those who remitted the requisite amount by July 31, 2002. The directions in Clauses (i) and (v) of the High Court's judgment remained unchanged.

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