Liquor licence conditions upheld as a targeted revenue-protection measure, with procedural and constitutional challenges rejected.

The Karnataka HC upheld an amended excise notification that imposed a minimum monthly lifting requirement on CL-2 and CL-9 liquor licensees. Procedural objections failed because draft publication, invitation of objections, and consideration at various levels were sufficient; consultation under the Business Rules was treated as directory, and no separate hearing was required. The Article 19(1)(g) challenge also failed because trade in intoxicating liquor is subject to broad State regulation and is not a protected fundamental right in the same sense as ordinary trade. The Article 14 challenge was rejected because the targeted classification had a rational nexus with preventing clandestine sales and protecting excise revenue.

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Issues: (i) Whether the amended excise notification was invalid for want of compliance with the procedure under the Karnataka Government (Transaction of Business) Rules, 1977, including consultation of the Law Department and consideration of objections; (ii) Whether the requirement imposed only on CL-2 and CL-9 licensees to lift a minimum quantity of liquor per month violated Article 19(1)(g) of the Constitution of India; (iii) Whether the selective application of the amendment to CL-2 and CL-9 licensees was discriminatory and violative of Article 14 of the Constitution of India.

Issue (i): Whether the amended excise notification was invalid for want of compliance with the procedure under the Karnataka Government (Transaction of Business) Rules, 1977, including consultation of the Law Department and consideration of objections.

Analysis: The amendment was issued after draft publication and invitation of objections. The record showed that the objections were considered at various levels and that the absence of a separate formal order rejecting each objection did not amount to non-consideration. The consultation requirement under the Business Rules was treated as directory, not mandatory, and the amendment process under Section 71 of the Karnataka Excise Act, 1965 did not require a personal hearing. The challenge on procedural invalidity therefore failed.

Conclusion: The notification was not invalid on procedural grounds.

Issue (ii): Whether the requirement imposed only on CL-2 and CL-9 licensees to lift a minimum quantity of liquor per month violated Article 19(1)(g) of the Constitution of India.

Analysis: Trading in intoxicating liquor is not a fundamental right. The State has wide regulatory and even prohibitory power in respect of liquor, and conditions imposed on liquor licences are matters within that regulatory domain. The challenged condition was therefore examined in the light of settled constitutional law governing liquor trade rather than as an infringement of a protected fundamental right.

Conclusion: The condition did not violate Article 19(1)(g) of the Constitution of India.

Issue (iii): Whether the selective application of the amendment to CL-2 and CL-9 licensees was discriminatory and violative of Article 14 of the Constitution of India.

Analysis: The classification was upheld because CL-2 and CL-9 licensees directly dealt with the public and, on the material collected by the State, their business figures suggested clandestine sales and possible excise revenue leakage. The State was entitled to address the mischief in a phased and targeted manner, and the classification had a rational relation to the object of protecting revenue and public interest. It was therefore neither arbitrary nor discriminatory.

Conclusion: The amendment was not violative of Article 14 of the Constitution of India.

Final Conclusion: The State's amendment to the excise rules was upheld, and the writ petitions failed because the procedural challenge, the Article 19(1)(g) challenge, and the Article 14 challenge were all rejected.

Ratio Decidendi: In liquor regulation, the State may impose targeted licensing conditions to protect revenue and public interest, and such classification will be sustained if it has a rational nexus with the regulatory object and does not infringe any fundamental right to trade in intoxicating liquor.

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