Case: Government of Andhra Pradesh Vs. Messrs Anabeshahi Wine and Distilleries Private Limited

and Nashirwar case [Nashirwar v. State of M.P., (1975) 1 SCC 29 ]. There is no fundamental right to do trade or business in intoxicants. The State, under its regulatory powers, has the right to prohibit absolutely every form of activity in relation to intoxicants - its manufacture, storage, export, sale and possession. In all their manifestations, these rights are vested in the State and indeed without such vesting there can be no effective regulation of various forms of activities in relation to intoxicants. In "American Jurisprudence", Volume 30 it is stated that while engaging liquor traffic is not inherently lawful, nevertheless it is a privilege and not a right, subject to governmental control (p, 538). This power of control is an incident of the societys right to self-protection and it rests upon the right of the State to care for the health, morals and welfare of the people. Liquor traffic is a source of pauperism and crime (pp. 539, 540, 541) Since rights in regard to intoxicants belong to the State, it is open to the government to part with those rights for a consideration. By Article 298 of the Constitution, the executive power of the Constitution, the executive power of the State extends to the carrying on of any trade or business and to the making contracts for any purpose. As observed in Harinarayan Jaiswal case, [State of Orissa v. Harinarayan Jaiswal, [(1972) 2 SCC 36] (SCC p. 44, para 13)if the Government is the exclusive owner of those privileges, reliance on Article 19(1)(g) or Article 14 becomes irrelevant. Citizens cannot have any fundamental right to trade or carry on business in the properties or rights belonging to the government, nor can there by any infringement of Article 14, if the government tries to get the best available price for its valuable rights Section 27 of the Act recognises the right of the government to grant a lease of its right to manufacture, supply or sell intoxicants. Section 34 of the Act read with Section 59(d) empowers the Financial Commissioner to direct that a licence, permit or pass be granted under the Act on payment of such fees and subject to such restrictions and on such conditions as he may prescribe. In such a scheme, it is not of the essence whether the amount charged to the licensees is predetermined as in the appeals of Northern India Caterers and of Green Hotel or whether it is left to be determined by bids offered in actions held for granting those rights to licensees. The power of the government to charge a price for parting with its rights and not the mode of fixing that price is what constitutes the essence of the matter. Nor indeed does the label affixed to the price determine either the true nature of the charge levied by the government or its right to levy the same The principle of law enunciated in the case of Har Shankar [(1975) 3 SCR 254 : (1975) 1 SCC 737 ] was reiterated in State of Haryana v. Jage Ram [(1980) 3 SCR 746 : (1980) 4 SCC 599]. wherein Chandrachud, C.J. speaking for the court said : (SCC p. 607, para 22) The amount which the respondents agreed to pay to the State Government under the terms of the auction is neither a fee properly so called which would required the existence of a quid pro quo, nor indeed is the amount in the nature of excise duty, which by reason of the constitutional constraints has to be primarily a duty on the production or manufacture of goods produced or manufactured within the country. The respondents cannot therefore complain that they are being asked to pay "excise duty" or "still-head duty" on quota of liquor not taken, lifted or purchased by them. The respondents agreed to pay a certain sum under the terms of the auction and the rules only prescribe a convenient mode whereby their liability was spread over the entire year by splitting it up into fortnightly installments. The rules might as well have provided for payment of a lump sum and the very issuance of the licence could have been made to depend on the payment of such sum. If it could not be argued in that event the lump sum payment represented excise duty, it cannot be so argued in the present event merely because the quota for which the respondents gave their bid is required to be multiplied by a certain figure per proof litre and further because the respondents were given the facility of paying the amount by installments while lifting the quota from time to time. What the respondents agreed to pay was the price of a privilege which the State parted with in their favour. They cannot therefore avoid their liability by contending that the payment which they were called upon to make is truly in the nature of excise duty and that no such duty can be imposed on liquor not lifted or purchased by them 6. The principles laid down in the aforementioned cases will, in our opinion, apply to the instant case also. The fact of the demand being with regard to establishment charges will make no difference. A predetermined amount equivalent to or even higher than the amount which is sought to be recovered by the appellant from the respondent calculated for the entire period of the licence could have been demand in a lump sum as price for parting with the privilege and it could not have been challenged by the respondent in view of the principle enunciated by this Court in the aforesaid case. Simply because the demand was spread over with a view to making it just and reasonable so as to represent the actual expenditure incurred by the government to maintain the requisite excise staff at the factory premises of the respondent as contemplated by the relevant provisions of the Act and the Rules, it would not become illegal and vulnerable

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]4. Having considered the respective submissions made by learned counsel for the parties, we find substance in the submission made by learned counsel for the appellant. It has not been disputed, and in our opinion rightly, by learned counsel for the respondent that the business which the respondent has been carrying could not have been carried on by it unless licence had been granted to it under the Act and the Rules6. The principles laid down in the aforementioned cases will, in our opinion, apply to the instant case also. The fact of the demand being with regard to establishment charges will make no difference. A predetermined amount equivalent to or even higher than the amount which is sought to be recovered by the appellant from the respondent calculated for the entire period of the licence could have been demand in a lump sum as price for parting with the privilege and it could not have been challenged by the respondent in view of the principle enunciated by this Court in the aforesaid case. Simply because the demand was spread over with a view to making it just and reasonable so as to represent the actual expenditure incurred by the government to maintain the requisite excise staff at the factory premises of the respondent as contemplated by the relevant provisions of the Act and the Rules, it would not become illegal and vulnerable