TaxTMI 
TaxTMI 
TaxTMI 
2001 (3) TMI 1008
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....liquor in National Capital Territory of Delhi is governed by Punjab Excise Act, 1914 (hereinafter referred to as 'the Act') and the grant of licence for vending liquor is regulated by Delhi Liquor Licence Rules, 1976 (hereinafter "the Rules"). Respondent No. 1 - Delhi Administration in exercise of its powers under Section 5 of the Act has been taking policy decisions from time to time and issuing notifications dealing with Registration of Brands and Eligibility of Brands of IMFL for its sale in the National Capital Territory of Delhi. The eligibility for grant of licence L-l, which enables the supplier to supply his brands of IMFL in Delhi, is regulated by those policy decisions and includes compliance with specific MSF requirements for a particular year. According to the petitioner, the policy of Delhi Government pursuant to which impugned notification, laying down MSF criteria for the year 2000-2001 has been issued, is arbitrary and discriminatory as against small scale manufacturers and has no nexus with the object of providing liquor of good quality for consumption within the territory of Delhi and is as such violative of Articles 14, 16 and 19(l)(g) of the Constitution and, th....
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....lows : "Section 26 - Sale of intoxicants - No liquor shall be bottled for sale and no intoxicant shall be sold except under the authority and subject to the terms and conditions of a licence granted in that behalf provided that : (1) a person licensed under Section 20 to cultivate the hemp plant may sell without a licence those portions of the plant from which any intoxicating drug can be manufactured to any person licensed under this Act to deal in the same or to any officer whom the Financial Commissioner may appoint in this behalf; (2) a person having the right to the tari drawn from any tree may sell the same without a licence to a person licensed to manufacture or sell tari under this Act; (3) on such conditions as the Financial Commissioner may determine a licence for sale under the Excise Law for the time being in force in other parts of the whole of the India except Part B States may be deemed to be a licence granted in that behalf under this Act; (4) nothing in t....
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....t shall be disposed of in such manner as may be directed by the Collector of Excise. (iv) The licensee shall not store or sell any liquor which does not conform to the specifications required in an order made by the Excise Commissioner with the provisions approval of the Lt. Governor, or if no such order has been made, which does not conform to the specifications laid down by the Indian Standards Institution. (v) The Excise Commissioner shall fix the price of Country Liquor applied to the BWH by different Distilleries, and, if necessary the prices shall be fixed Brandwise. Substituted vide Notification No. F. 10/68/80 - Fin (G) dated 18.4.1980." Having noticed some of the relevant provisions of the Act and the Rules, we now consider the validity of the challenge to the impugned notification as raised before us. That there is no fundamental right to trade in intoxicants, like liquor, has been conclusively held by this Court in State of A.P. & Ors. v. Mc Dowell & Co. & Ors., [1996] 3 SCC 709, where taking note of some of the earlier Constitution Bench decisions of this Court, the argument that a citizen of this countr....
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....otherwise". The said words cannot be read as militating against the express propositions enunciated in clauses (b), (c), (d), (e) and (f) of the said summary. The said decision, as a matter of fact, emphatically reiterates the holding in Har Shanker, [1975] 1 SSC 737, that a citizen has no fundamental right to trade in intoxicating liquors. In this view of the matter, any argument based upon Article 19(l)(g) is out of place". (Emphasis ours) In Har Shankar & Ors. v. The Dy. Excise and Taxation Commr. & Ors, [1975] 1 SCC 737, Chandrachud, J. (as the learned Chief Justice then was) in para 53 of the judgment opined : "In our opinion, the true position governing dealings in intoxicants is as stated and reflected in the Constitution Bench decisions of this Court in Balsam's case (supra), Cooverjee's case (supra), Kidwai's case (supra), Nagendra Nath's case (supra) Afar Chakraborty's case (supra) and the R.M.D.C. case (supra), as interpreted in Harinarayan Jaiswal's case (supra) and Nashirwar's case (supra). There is no fundamental right to do trade or business in intoxicants. The State, under its regulatory powers, has the ....
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....ugned notification based on Article 14 principally on the ground that the policy as reflected in the impugned notification was irrational and that raising of MSF requirements over the previous year's figures with a view to regulate the "quality of liquor" being sold in Delhi was arbitrary and has no nexus with the object sought to be achieved viz., to provide liquor of good quality to the consumers in the National Capital Territory of Delhi. It was also urged that the policy is discriminatory and as a result of the policy, small scale manufactures with good quality of liquor, were likely to be deprived of their marketing brand within the potential market of Delhi, in case they do not achieve the prescribed MSF outside Delhi and that would result in leaving the field wide open only for big business houses who would retain their monopoly in Delhi market. The challenge, thus, in effect, is to the executive policy regulating trade in liquor in Delhi. It is well settled that the Courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitra....
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.... ground that it is 'unfair' and 'unreasonable' besides being 'arbitrary' and has no nexus with the object sought to be achieved. We are unable to agree. The State has every right to regulate the supply of liquor within its territorial jurisdiction to ensure that what is supplied is 'liquor of good quality' in the interest of health, morals and welfare of the people. One of the modes for determining that the quality of liquor is 'good' is to ascertain whether that particular brand of liquor has been tested and tried extensively elsewhere and has found its acceptability in other States. The manner in which the Government chooses to ascertain the factor of higher acceptability, must in the very nature of things, fall within the discretion of the Government so long as the discretion is not exercised mala fide, unreasonably or arbitrarily. The allegations of mala fide made in the writ petition are totally bereft of any factual matrix and we, therefore, do not detain ourselves at all to consider challenge on that ground, in fairness to learned counsel for the petitioner we may record that challenge to notification on grounds of mala fide was not pressed during arguments. Laying down requ....
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....n is mala fide, unreasonable or irrational as a criterion. As already observed the Court, in exercise of its power of judicial review, cannot sit in judgment over the policy of Administration except on the limited grounds already noted. Each State is empowered to formulate its own liquor policy keeping in view the interest of its citizens. Determination of wide scale acceptability of a particular brand of liquor, on the basis of national sales figures, does not strike us as being unreasonable, much less irrational. The basis for determination is not only relevant but also fair. No direction can be given or expected from the Court regarding the 'correctness' of an executive policy unless while implementing such policies, there is infringement or violation of any constitutional or statutory provision. In the present case, not only there is no such violation but on other hand, the State in formulating its policy has exercised its statutory powers and applied them uniformly. Through, we are not required to test the correctness of the 'reason' for increase of MSF over the previous years' figures, but it is relevant to point out that increase of sale from 60,000 cases to 75,000 cases in....