State levy on potable liquor upheld where charge attached to finished IMFL, not imported rectified spirit, and quid pro quo was unnecessary.

A levy under Rule 106(Tha) was construed as attaching not to imported rectified spirit as industrial alcohol, but to the finished potable liquor/IMFL produced after conversion into ENA and bottling. On that construction, the State was acting within its regulatory competence over intoxicating liquor, and the challenge on lack of legislative competence and Article 301 failed. Because the impost was not a fee in the strict sense on non-potable alcohol, proof of quid pro quo was not required. The levy was therefore upheld as valid and operative.

---

---

Issues: Whether the impugned levy under Rule 106(Tha) was a levy on imported rectified spirit or a charge on the final product, namely potable liquor or IMFL, and whether the State was required to establish quid pro quo for such levy.

Analysis: The levy was construed on a reading of the notification as a charge that fructified only after the imported rectified spirit had undergone the process of conversion into ENA and then into IMFL, with collection deferred until bottling. On that construction, the impost was not on rectified spirit as industrial alcohol, but on the finished potable liquor produced by use of the imported spirit. The State was therefore acting within its competence to regulate and charge for activities relating to potable liquor. Since the levy was not on non-potable alcohol as such, the doctrine of quid pro quo, applicable to a fee in the strict sense, was not attracted. The challenge based on want of legislative competence and Article 301 consequently failed.

Conclusion: The levy was upheld as being within the State's competence and not invalid for want of quid pro quo.

Final Conclusion: The High Court's decision was set aside and the writ petition was dismissed, leaving the impugned levy operative.

Ratio Decidendi: A charge imposed on the final potable liquor produced from imported rectified spirit, rather than on rectified spirit as industrial alcohol, falls within the State's regulatory competence over intoxicating liquor and does not require proof of quid pro quo.

---