STATE OF U.P., ETC. ETC. versus SYNTHETICS & CHEMICALS LTD. & ORS. ETC. ETC .

Citation: [1980] 2 S.C.R. 531 · Decided: 19-12-1979 · Supreme Court of India · Bench: A.C. GUPTA · Disposal: Appeal(s) allowed
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Judgment (excerpt)

531 
STATE OF U.P., ETC. ETC. 
A 
v. 
SYNTHE11CS & CHEMICALS LTD. & ORS. ETC. ETC . 
• 
December 19, 1979 
[A. C. GUPTA AND P. S. KAILASAM, JJ.] 
Excise laws-"Denatured spirit" if an intoxicating liquor-Licence fee levied 
r 
011 sale d"latured spirit-If within the competence of the Stdte. 
) 
The respondents who were licensees for the whole.sale vend of denatured 
spirit in their v.Tit petitions before the High Court con.tended that levy of fees 
on denatured ~pirit was not justified because (i) the Sta•tci was not proViding 
any service to the trade and (ii) since it is. the; Parliament which has the power 
C: 
to levy excise, duty or tax on denatured spirit, th~ State was incompetent to levy 
the fees. 
llej~cting the contentions, the fligh Court held that the State had 
exclusive privilege to deal with any intoxicating liquor which included dena-tured 
spirit, that it had the right to vend liquor either in retail or wholesale and that 
therefore its power to levy fees cannot be' questioned. 
In appeal to this Court it was contended on behalf of the licensees that (I) 
}) 
levy o( vend fee on denatured spirit by thei State was without legislative com· 
petence (2) with the ena<:tment of Industrial (Development and Regulation) 
Act, 1951 the Union had taken under its control industries including fermentation 
of industrial alcohol and, therefore, it is only the Union which could levy the 
fees on denatured spirit or industrial alcohol. 
Atowing the State's appeal. 
IIELD : The levy of vend fee is for parting with the exclusive right of the 
State with regard to intoxicating liquors and for conferring a right on the 
licensees to sell surh liquors. A conspectus of the decisions of this 
Court 
esta·blbhes (i) that there is no fundamental right of a citizen to carry on tfade 
E 
or to do business in liquor because under its police pov/er, the State can enforce 
public morality, prohibit trade in noxious or dangerous goods (ii) the State 
F 
has pGwer to enforce an absolute prohibition on manufacture or sale of in1oxj, 
eating liquors pllfsuant to Atiicle 47 of the. Constitution and (iii) the history 
of excise laws in the country shows that the State has the exclusive right or 
privilege to n1anufacture· or sell liquors. [549 F-H] 
Stat!! of Bo1nbay and Anr. v. F. N .. Balsara [1951] S.C.R. 1582 referred to. 
(iv) The terms "intoxicating liquor" is not confined t'o potable liquor alone 
but would include allliquors which contain alcohol. [537 G] 
l'lasiiirwar v. State of Nladhya Pradesh [1975] 2 S.C.R. 861; Har Shankar v. 
The D~puty Excise and Taxation Co1nmisisoner [1975] 3 S.C.R. 254; State of 
Bornbay and Anr. v. F. i\l. Balsara & Ors. (1951] S.C.R. 682; B!zola Prasad v. 
The King Emperor [1942] F.C.R. 17 at p. 25 referred to. 
G 
-, 
(v) The torm "liquor" used in Abkari Acts not only covers alcoholic liquor 
H 
· ~ 
which is, generally used for beverage purposes and which produces intoxication 
but would also include liquids containing alcohols. [537 B-C] 
532 
SUPREME COURT REPORTS 
(1980] 2 S.C.R. 
A 
Cooverjec B. Bharucha v. The Exci!Je Commissioner and Chief Conzmfasioiier, 
B 
c 
D 
Ajn1er & Anr. [1954] S.C.R. 873; Mis. Guruswamy & Co. etc. v. State. of i\Jy.~ore 
& Ors. [1967] I S.C.R. 548;Swte of Orissa & Ors. v. Harinarayan laisiral & 
Ors. [1972] 3 S.C.R. 784; Anzar Chandra Chakraborty 
v. 
Collector of Excise, 
Gove1nnient of Tripura anti Ors. [1973] 1 S_._C.R. 533; Har Shankar & Ors. etc. 
v. The Dy. Excise & 1 axation Conunissioner & Ors. [1975] 3 S.C.R. 254 ·referred 
to. 
2(a) The power to reguJa_.te the notified industries is not e:LX.clusively within 
the jurisdiction of Parliament as Entry 33 in the Concurrent List enables a Jaw 
to be made regarding production, supply and distribution o.f products of notified 
industries. The exclusive. power of the State to provide for manufacture, distri· 
bution, sale nnd possession of intoxicating liquors is vested in the State. 
The 
power of the State Government to levy a fee for parting with its exclusive 
right regarding intoxicating liquors has been recognized as could be· seen from 
the various State Acts regulating the manufacture, sale, 
etc. of intoxicating 
liquors. [544 C, A-Bl 
Ch. Tika J?an1ji and Ors. etc. v. The State of Uttar Pradesh and Ors. [1956] 
S.C.R. 393; Baijnath Kedai v. State of Bihar & Ors. [1970] 2 S.C.R. 100 dlstin· 
guished. 
(b) The term "foreign liquor" cannot be given a restricted mooning because 
the \\'ord consu1nption can
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