JUDGMENT

P. S. KAILASAM, J.:—These batches of Civil Appeals, writ petitions and Special Leave Petitions raise the same question and can be disposed of by a common judgment.

2. C.A. No. 1130/76 is by the State. The other Appeals, Writ Petitions and Special Leave Petitions are by the aggrieved parties.

3. For the sake of convenience appellants in Civil Appeals by Special Leave except the State would be referred as the appellants in this judgment. Similarly the petitioners in Writ Petitions and Special Leave Petitions will be referred to as petitioners.

4. The appellants in Civil Appeals by Special Leave filed writ petitions before the High Court of Allahabad praying for quashing the Excise Commissioners order dated 18th September. 1974 whereby it was provided that the vend fee be continued to be charged for the wholesale license dealer of denatured spirit. They also prayed for a direction to the Excise Commissioner to refund the vend fee actually paid by the appellant for a period of three years prior to the institution of the writ petitions.

5. The appellants have licenses for the wholesale vend of denatured spirit. It was contended that the State was providing no service to the trade of the denatured spirit and, therefore, the levy of fee is not justified. The State, it was submitted, was not competent to authorise a levy of excise duty or tax so it was within the jurisdiction of the Parliament. On behalf of the State it was contended that in law the State had exclusive privilege to deal with intoxicating liquor which included denatured spirit and the levy of a licence fee and vend fee constituted consideration for permitting the appellants to carry on wholesale trade of the denatured spirit.

6. The main point that was considered by the High Court was whether the imposition of vend fee on denatured spirit for grant of licence for wholesale vend of denatured spirit is within the competence of State Government. This Court in Nashirwar v. State of Madhya Pradesh (1975) 2 SCR 861 and Har Shanker v. Deputy Excise and Taxation Commr. (1975) 3 SCR 254 held that the State has exclusive privilege to deal in intoxicating liquor and therefore the State can auction the right to vend by retail or wholesale foreign liquor. It also found that intoxicating liquor included denatured spirit and the validity of the levy of the vend fee by the State cannot be questioned. Following this view the High Court dismissed the Writ Petitions. Against the decision, the appeals have been preferred by special leave. A batch of Writ Petitions have been filed in this Court under Art. 32 of the Constitution of India challenging the validity of the levy of vend fee, Apart from the grounds taken in the Civil Appeals, the Constitutional validity of U. P. Excise (Amendment) Act 5 of 1976 has been challenged as unconstitutional and beyond the legislative competence of the State. It is further pleaded that the provisions of the Industries (Development and Regulation) Act, 1951 has taken control of fermentation industry and as such a right to legislate by the State with regard to denatured spirit and industrial alcohol is beyond the competence of the State Legislature.

7. U. P. Excise Act was enacted in the year 1910. It empowers the State to prohibit the import and export, transport manufacture sale and possession of liquor and all intoxicating drugs in the United Provinces. The vend fee was first imposed by the Government of U. P. on 18-3-1937 on denatured spirit. In 1972 the State legislature enacted the U. P. Excise Amendment Act 13 of 1972. By a notification dated 3-11-1972 the Government was authorised to sell by auction the right of retail or wholesale vend of foreign liquor. New Rules were framed the effect of which was that a vend fee of Rs. 1.10 p. per bulk liter was imposed payable in advance on denatured spirit issued for industrial purpose. The legality of the levy was challenged in the High Court of Allahabad and a Bench of that Court on 24th March 1973* held