In Brief
The State of Jharkhand challenged a High Court judgment that had quashed a notification levying an import fee on rectified spirit (non-potable alcohol) used to manufacture Indian Made Foreign Liquor (IMFL). The Supreme Court reversed the High Court. It held that the fee was not on rectified spirit itself but on the final potable liquor product produced after two-stage distillation and processing. Since intoxicating liquor regulation falls within State competence under List II of the Constitution, and the State has exclusive rights regarding intoxicants, it may impose charges for parting with those rights without establishing quid pro quo. The levy was upheld as a valid regulatory impost for controlling potable liquor production and preserving public health and morality."
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