SECRETARY TO GOVT., TAMIL NADU AND ORS. versus K. VINAYAGAMURTHY

Citation: [2002] SUPP. 1 S.C.R. 683 · Decided: 26-08-2002 · Supreme Court of India · Bench: G.B. PATTANAIK · Disposal: Dismissed
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Judgment (excerpt)

SECRETARY TO GOVT., TAMIL NADU AND ORS. 
A 
v. 
K. VINA Y AGAMURTHY 
AUGUST 26, 2002 
[G.B. PATTANAIK, RUMA PAL AND K.G. BALAKRISHNAN, JJ.) B 
Excise p~licy : 
Tamil Nadu Prohibition Act, 1927-Tamil Nadu (Retail Vending) Rules, 
1989-Rules 13,14 and 30-Excise Policy-Retail vending of Indian made C 
foreign liquor-Augmentation of excise revenue-Grant of privilege and 
issuance of licence. therefor-Renewal of licence of existing licencees-Stare 
Government revising policy-Abolishing renewal of licence and directing fresh 
draw of lots-Revised policy challenged-High Court holding it to be 
arbitrary-On appeal held, High Court was right since the revised policy wqs D 
only to replace the existing licences by afresh set of persons by a fresh drawal 
of lot and not for augmentation of excise revenue. 
Appellant-State Government adopted a policy for licensing of Indian 
made foreign liquor retail vending shops. There was grant of privilege and 
issuance of licence therefor and existing licensees could apply for renewal E 
of license. State Government changed the existing policy doing away with 
the renewal of licences of existing licensees and directed fresh draw of lot. 
Existing licencees challenged the same. High Court held that abolition of 
·renewal of the existing licences and following the procedure of fresh draw 
of lot was unreasonable and arbitrary. Hence the present special leave 
petitions. 
F 
Petitioners contended that High Court was in error in interfering 
with revised policy since there is no inherent right of a citizen to deal with 
the liquor; that the legislature of a state or the executive government is 
fully competent to regulate business of vending intoxicating liquor to 
mitigate its evils or to suppress it entirely; that the State Government G 
altered the existing policy for augmentation of excise revenue; that there 
is no right of renewal of licences with the grantee of privilege and amended 
provisions has been engrafted for new excise year and also that since the 
existing licensees failed to lift the minimum off-take quantity of liquor new 
set of policy was formulated for augmentation of the excise revenue. 
683 
H 
684 
SUPREME COURT REPORTS [2002] SUPP. I S.C.R. 
A 
Respondent contended that High Court was justified in striking down 
B 
only that part of government order which was held to have no nexus with 
the object of augmentation of excise revenue. It was further contended 
that licensees are agreeable to pay privilege fee as decided by Government 
and also would be bound by limit of off-take of liquor to be decided by 
excise authorities. 
Dismissing the petitions, the Court 
• 
HELD:l. No citizen can claim any inherent right to sell intoxicating 
liquor by retail. It cannot be claimed as a privilege of a citizen of a State. 
Any restriction which State brings forth, must be a reasonable restriction 
C within the meaning of Article 19(6) of the Constitution and reasonableness 
of restriction would differ from trade to trade and no hard and fast rule 
concerning all trades can be laid down. (690-F, G) 
2.1. In the instant case, State Government did not purport to abol.ish 
trade in intoxicating liquor but purports to change its policy intended for 
D augmentation of excise revenue. Under the new set of Government orders, 
there have been large number of shops to deal with retail vending of Indian 
made foreign liquor, there has been re-categorisation of shops, re-
adjustment and 1elocation of retail shops and increase in the amount of 
privilege fee. High Court upheld all these conditions on the ground that 
E they related to the augmentatiOn of excise revenue. Right of renewal being 
unequivocally indic~ted in the excise policy of 2001-2002, as reflected in 
the G.O.Ms. No.115 for the block period of 2001-2004, State Government 
could not have annulled it and directed afresh the self same procedure to 
be adopted again by drawal of l6ts for settling of the privileges in respect 
of 7,000 shops since that has nothing to do with the augmentation of excise 
F revenue. High Court rightly concluded that the same was arbitrary and 
whimsical only to replace the existing licensees by a fresh set of persons 
by a fresh drawal of lot. Even though licensees under earlier policy may 
not claim an absolute right of renewal but it cannot be denied that under 
G.O.Ms. No.115 read with the excise policy evolved for the block period 
G 2001-2004 and relevant provisions of Act and Rules, contemplate
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