Regulatory fee on industrial alcohol requires a reasonable nexus with supervisory cost; unsupported enhancement was invalidated.

A regulatory fee on industrial alcohol may be imposed only to recover administrative or supervisory expenses connected with preventing diversion to potable alcohol, and it must bear a reasonable nexus to the regulatory service rendered. Mathematical precision is not required, but credible particulars must support the levy. On the materials described, the State did not justify the enhanced collection from 50 paise to Re. 1 per bulk litre, so the increase was struck down as unsupported and excessive. The pre-existing 50 paise collection was left undisturbed, and the principle affirmed is that such fees cannot become revenue-generating imposts detached from regulatory cost.

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Issues: Whether the State could validly enhance the administrative/service fee on industrial alcohol from 50 paise to Re. 1 per bulk litre, and whether the levy satisfied the requirement of a reasonable nexus with the regulatory expenses incurred for preventing diversion of industrial alcohol to potable alcohol.

Analysis: The State's power was confined to regulation of industrial alcohol to prevent misuse or diversion, and it could recover only administrative or service charges bearing a perceptible correlation to the regulatory activity. A fee of this nature need not be supported by mathematical exactitude, but there must be a reasonable relationship between the levy and the services rendered. On the materials placed, the State failed to furnish credible particulars showing that the enhanced collection at Re. 1 per bulk litre was justified by regulatory expenditure. The existing collection at 50 paise per bulk litre was not disturbed, but the increase was found to be unsupported and excessive.

Conclusion: The enhancement to Re. 1 per bulk litre was invalid, and the dismissal of the State's challenge was warranted; the levy beyond 50 paise per bulk litre was not sustained.

Final Conclusion: The decision affirms that a regulatory fee on industrial alcohol must remain confined to genuine supervisory expenses and cannot be expanded into a revenue-generating impost unrelated to the regulatory burden.

Ratio Decidendi: A regulatory fee is permissible only where there is a reasonable nexus between the levy and the cost of the regulatory service, and an excessive collection unsupported by credible expenditure details is liable to be struck down as lacking quid pro quo.

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