Liquor trade has no fundamental right, but consent-letter selection must remain fair, transparent, and non-arbitrary.

Potable liquor is outside ordinary commerce, so Article 19(1)(g) does not confer a fundamental right to trade in intoxicants; the State may prohibit, monopolise, or regulate such trade subject to Article 47. The creation of the L-1A licence category under the Excise Policy for 2016-17 and the amended liquor rules was valid because it was supported by the statutory scheme and a permissible revenue-regulating licensing structure. Clause 2.14(ii), however, was invalid to the extent it allowed consent letters to be restricted without any transparent, objective, or fair selection method, as this offended Article 14 and created room for arbitrariness and favoritism.

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Issues: (i) Whether there is any fundamental right to trade or business in liquor. (ii) Whether the creation of the L-1A category in the Excise Policy for 2016-17 and the amended liquor licence rules was legally valid. (iii) Whether clause 2.14(ii) of the Excise Policy for 2016-17 was valid to the extent it restricted issue of consent letters by manufacturers without prescribing a transparent and objective method.

Issue (i): Whether there is any fundamental right to trade or business in liquor.

Analysis: Potable liquor was treated as a commodity outside ordinary commerce, and the settled constitutional position was that Article 19(1)(g) does not confer a fundamental right to carry on trade in intoxicants. The State may prohibit the trade altogether, create a monopoly, or regulate the trade with restrictions, and such activity remains subject to the directive principle under Article 47.

Conclusion: There is no fundamental right to trade or business in liquor.

Issue (ii): Whether the creation of the L-1A category in the Excise Policy for 2016-17 and the amended liquor licence rules was legally valid.

Analysis: The power to frame rules for regulating manufacture, supply, storage, sale, fees, conditions, and security for liquor licences was traceable to the statutory scheme under the Excise Act and the Rules. The L-1A category had already been introduced earlier, and the 2016 amendment only modified its form before the policy took effect. The State was entitled to structure liquor licensing to augment revenue so long as the measure was not discriminatory or arbitrary.

Conclusion: The creation of the L-1A category in the amended rules was held to be legal and valid.

Issue (iii): Whether clause 2.14(ii) of the Excise Policy for 2016-17 was valid to the extent it restricted issue of consent letters by manufacturers without prescribing a transparent and objective method.

Analysis: Even in liquor matters, State action must satisfy Article 14 and the requirements of fairness, transparency, and non-arbitrariness. Clause 2.14(ii) allowed the manufacturer to limit consent to one applicant but did not lay down any criterion, method, or safeguards for selection. That absence of an objective procedure denied a level playing field and left room for arbitrariness, discrimination, and favoritism.

Conclusion: Clause 2.14(ii) was invalid and inoperative to the extent it did not prescribe a transparent and objective method for issue of consent letters.

Final Conclusion: The challenge failed insofar as it attacked the creation of the L-1A category, but succeeded to the limited extent that the consent-letter mechanism was held unsustainable without a fair, transparent, and objective selection process.

Ratio Decidendi: In liquor regulation, the State may create and modify licensing regimes, but any method governing selection or grant of privilege must conform to Article 14 by being fair, transparent, non-arbitrary, and non-discriminatory.

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