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1994 (10) TMI 269 - SC - VAT and Sales TaxWhether appellants have a fundamental right to carry on trade in liquor? Whether the State can prevent the petitioners from carrying on with the business of liquor as apart from trade, during the unexpired period of the licences? Held that - SLP dismissed. The word trade may include all the connotations of the word business . As in Article 19(1)(g) of our Constitution, the words trade and business are used synonymously. Hence, we reject the contention and hold that after the taking-over of the trade, viz., the activity of buying and selling liquor, no activity was left with the petitioners to carry on under the licence held by them.
Issues Involved
1. Constitutional validity of Karnataka Excise (Amendment) Rules, 1989. 2. Validity of the Kerala Government's order canceling foreign liquor licenses. 3. Validity of Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 amendments and the A.P. 1993 Act. 4. Whether the A.P. 1993 Act deals with the trade or business of liquor and the State's right to prevent business during the validity of licenses. Detailed Analysis 1. Constitutional Validity of Karnataka Excise (Amendment) Rules, 1989 The appellants challenged the constitutional validity of various Karnataka Excise (Amendment) Rules, 1989, arguing that these rules adversely affected their fundamental right to carry on trade or business in liquor and were violative of Articles 14, 19(1)(g), 47, 300-A, 301, and 304 of the Constitution of India. The High Court dismissed these challenges. The Supreme Court had to decide whether the appellants/petitioners have a fundamental right to carry on trade in liquor. 2. Validity of the Kerala Government's Order Canceling Foreign Liquor Licenses The Kerala High Court upheld the validity of a government order dated 9-12-1992, which canceled all foreign liquor licenses issued under Rule 13(3) of the Kerala Foreign Liquor Rules, 1974, to hotels, restaurants, and tourist homes. The Supreme Court was tasked with deciding whether the appellants have a fundamental right to carry on trade in liquor. 3. Validity of Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970 Amendments and the A.P. 1993 Act The Andhra Pradesh High Court upheld the validity of amendments to the Andhra Pradesh Foreign Liquor and Indian Liquor Rules, 1970, and the A.P. 1993 Act. The High Court ruled that these rules and the Act did not violate the right to carry on trade in liquor, as it is not a fundamental right. The Supreme Court had to consider whether the appellants/petitioners have a fundamental right to carry on trade in liquor. 4. Whether the A.P. 1993 Act Deals with Trade or Business of Liquor and the State's Right to Prevent Business During the Validity of Licenses The appellants argued that the A.P. 1993 Act deals only with the taking over of trade in liquor and not business, and thus the State had no right to prevent them from carrying on business during the validity of their licenses. The High Court dismissed this argument, and the Supreme Court had to decide whether the State can prevent the petitioners from carrying on with the business of liquor during the validity of their licenses. Supreme Court's Judgment Fundamental Right to Trade in Liquor The Supreme Court held that there is no fundamental right to trade or business in liquor. The State has the power to regulate the trade or business by placing restrictions in the interests of the general public, even to the extent of completely prohibiting such business or trade. The Court noted that liquor is classified into potable liquor, medicinal and toilet preparations, and industrial liquor. The State has the exclusive privilege to sell liquor and can also have a monopoly in manufacturing, possessing, and distributing liquor. Monopoly and Reasonable Restrictions The Court examined whether a monopoly for the manufacture, trade, or business in liquor can be created in favor of the State and whether reasonable restrictions under Article 19(6) of the Constitution can be placed only by an Act of Legislature or by subordinate legislation. The Court concluded that the State can create a monopoly and impose reasonable restrictions through either legislative or subordinate legislation. State's Power Under Article 47 The Court discussed the State's power to carry on trade in liquor under Article 47 of the Constitution, which mandates the State to endeavor to bring about prohibition of the consumption of intoxicating drinks and drugs injurious to health. The Court held that the State's power to regulate and restrict the business in potable liquor includes the power to carry on such trade to the exclusion of others. Analysis of Previous Judgments The Court reviewed various judgments, including State of Bombay v. F.N. Balsara, Cooverjee B. Bharucha v. Excise Commissioner, and Krishna Kumar Narula v. State of J & K. The Court reiterated that there is no fundamental right to trade or business in intoxicants and that the State has the power to prohibit absolutely every form of activity in relation to intoxicants. Conclusion The Supreme Court concluded that a citizen has no fundamental right to trade or business in liquor as a beverage. The State can prohibit completely the trade or business in potable liquor, create a monopoly in itself for such trade, and impose restrictions and limitations on such trade or business. The Court also held that the State can place restrictions under Article 19(6) through subordinate legislation. Specific Case of A.P. 1993 Act In the case of the A.P. 1993 Act, the Court held that the Act deals with taking over the wholesale trade and distribution of liquor and that the petitioners' licenses were terminated lawfully. The contention that the Act dealt only with trade and not business was rejected. Summary The Supreme Court's judgment clarified that there is no fundamental right to trade or business in liquor, and the State has the power to regulate, restrict, or prohibit such trade. The Court upheld the validity of the Karnataka, Kerala, and Andhra Pradesh Excise Rules and Acts, affirming the State's authority to control the liquor trade in the interest of public health and welfare.
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