Judgment :- 1. The original petitions seek to declare S.18 (3) (2) a (i) and 18A of the Abkari Act,1 of 1077 and R.13 (1) substituted by SRO. 70/70 dated 18 21970 in the rules relating to licences for the sale of foreign liquor unconstitutional and for the issue of writ of mandamus to direct the Commissioner of Excise to renew the licences. 2. The petitioners were the holders of Foreign Liquor 1 Wholesable licences for sale of foreign liquor for the year 1969 70. The period of their licences expired on 31-3-1970. 3. The Cochin Abkari Act,1 of 1077 and the Travancore Abkari Act, IV of 1073 were continued in force by the Travancore-Cochin State Administration and Application of Laws Act VI of 1125. By S.2 of the Cochin Abkari (Extension and Amendment) Act, 1967 (Act 10 of 1967) the Cochin Abkari Act,1 of 1077 and the Rules, Orders and Notifications made and issued thereunder were extended to the areas of the State of Kerala where the said Act was not in force. S.5 amended the name of the Act as Abkari Act. S.41 repealed the Travancore Abkari Act, IV of 1073 as also the Madras Act,1 of 1886 as was in force in the Malabar area. 4. The Government of Travancore-Cochin by notification No. SR41859/ 52/ RD dated 17th January 1953 which came into force from April 1, 1953, prescribed revised rules under the Cochin Abkari Act 1 of 1077, in supersession of all earlier rules, on the subject, for the levy of gallonage fees etc., and for the issue of licences for the sale of foreign liquor. R.13 provided for the issue of six kinds of licences for sale of foreign liquor. It is sufficient for our discussion to note the first three kinds. They are: (1) Foreign Liquor 1 Wholesale Licence (hereinafter referred to as F.L.1 licence). (2) Foreign Liquor 2 Retail (Tavern) Licence (hereinafter referred to as F.L. 2 licence.) (3) Foreign Liquor 3 Hotel (Restaurant) Licence (hereinafter referred to as FL. 3 licence). Rule 13 (1) provided that F. L.1 licence would be issued by the Excise Commissioner for an annual fee of Rs. (2) Foreign Liquor 2 Retail (Tavern) Licence (hereinafter referred to as F.L. 2 licence.) (3) Foreign Liquor 3 Hotel (Restaurant) Licence (hereinafter referred to as FL. 3 licence). Rule 13 (1) provided that F. L.1 licence would be issued by the Excise Commissioner for an annual fee of Rs. 3000/-; R.13 (2) provided that the privilege under F.L. 2 licence would be sold in public auction subject to the conditions of the sale notification published by Government from time to time; R.13 (3) provided for the issue of F.L. 3 licence by the Excise Commissioner on an annual fee of Rs. 2000/ . 5. Sub-rules (1) and (3) of R.13 were amended by notification SRO. 323/63 Rev. dated 25 31963 enhancing the fee for F.L. I licence to Rs. 5000/-and F.L. 3 licence to Rs. 3000/-. The amendment came into force from 1-4-1963. A holder of F.L. 3 licence contested the validity of SRO. 323/63 in proceedings under Art.226 of the Constitution. Vaidialingam J. declared the notification illegal and void. The decision is reported in Antony v. Excise Commissioner 1964 KLT.189. To get over the situation created by the decision, the Kerala Abkari Laws (Amendment and Validation) Ordinance 2 of 1964 was passed. This was followed by the Kerala Abkari Laws (Amendment and Validation) Act, 1964 (President's Act 1 of 1964) which came into force on 12 10 1964- These enactments apart from validating the notification SRO. 323/63 and the collections made thereunder, amended the provisions of the Cochin Abkari Act, 1077. It is enough for our purposes to note that S.18 (2) and (3) and I8A were introduced. S.18 (2) provided for the levy of luxury tax on liquor and intoxicating drugs; S.18 (3) fixed the rates of the duty of Excise and rates of the luxury tax and gallonage; S.18A provided for the grant of exclusive or other privilege of manufacture, sale, etc., of liquor or intoxicating drugs on payment of rentals. 6. It is necessary to remember that the rules framed under the Cochin Abkari Act,1 of 1077 including those for the levy of the gallonage fee and for the issue of licence for the sale of foreign liquor were by virtue of Act 10 of 1967 extended to the areas of Kerala State where the said rules were not in force. 7. S.18 (3) (2) (a) (i) of the Abkari Act(1 of 1077) fixed Rs. 7. S.18 (3) (2) (a) (i) of the Abkari Act(1 of 1077) fixed Rs. 5000/- as luxury tax when levied in the form of a fee for sale of foreign liquor in wholesale. S.18 of the Abkari Act,1 of 1077 was again amended by the Abkari (Amendment) Act, 1969 (Act 16 of 1669). The rate of Excise duty under S.18 (3) (1) (i) and the rates of luxury tax under S.18 (3) (2) were enhanced The rate of luxury tax under S.18 (3) (2) (a) (i) was enhanced from Rs. 5000 to Rs. 15000 with effect from 1-4-1968. The validity of this amendment was challenged before this Court in OP. No. 1182 of 1969. Mathew J. held that the levy of Rs. 15,000 could not be a luxury tax or as a fee simpliciter and declared that the petitioners before him were entitled to get F.L. 1 licences on payment of Rs. 5000, the amount due under the Abkari Act 1 of 1C77 before it was amended 'by Act 16 of 1969. This was for the reason that the liability to pay Rs. 3000 for obtaining F.L.1 licence under the unamended Act was conceded. The learned judge did not express any opinion on the question whether the imposition of Rs. 15000 for the issue of F.L.I licence would violate Art.19(1) (g) or Art.301 of the Constitution. 8. We shall now extract S.18 and 18A of the Abkari Act,1 of 1077 and R.13 (1) introduced by S.R.O. 70/70 dated 18 21970 which are challenged in the petitions,, "18. How duty may be imposed. (I) Such duty of Excise may be levied (a) in the case of spirits or beer, either on the quantity produced in or passed out of a distillery, brewery or warehouse licensed or established under S.12 or S.14 as the case may be, or in accordance with such scale of equivalents, calculated on the quantity or materials used or by the degree of attenuation of the wash or wort, as the case may be, as the Government may prescribe; (b) it) the case of intoxicating drugs on the quantity produced or manufactured or issued from a whare house licensed or established under S.14; (e)xxxxxx (d)xxxxxx (e) in the case of toddy, or spirits manufactured from toddy, in the form of a tax. on each tree from which toddy is drawn, to be paid in such instalments and for such period as the Government may direct; or (f) by import, export or transpot duties assessed in such manner as the Government may direct. (2) The luxury tax on liquor or intoxicating drugs shall be levied, (i) in the case of any liquor, in the form of a fee for licence for the sale, of the liquor and in the form of a gallonage fee or vending fee, or in any one of such forms; and (ii) in the case of an intoxicating drug, in the form of a fee for licence for the sale of the intoxicating drug. (3) The duty of excise under sub-section (1) and the luxury tax under sub-section (2) shall be levied at such rates as may be fixed by the Government, from time to time, by notification in the Gazette, not exceeding the rates specified below: (1) Duty of excise Maximum rates (i) Duty of excise on liquors Rs. 20 per proof litre or Rs. 90.92 per (Indian made). proof gallon. (ii) Duty of excise on intoxicat Rs.1 per gram or Rs. 933.10 per seer ing drugs (iii) Duty of excise in the form of Rs. 50 per tree per half-year or part there tax on trees tapped for toddy. of. (2) Luxury tax: (a) When levied in the form of a fee for licence for sale of foreign liquor (i) for licence for sale of foreign Rs. 15,000 for a year or part thereof, liquor in whole-sale. (ii) for licence for sale of for- Rs. 12,000 for a year or part thereof, eign liquor in hotels or restaurants. (iii) for licence for sale of medi- Rs. 1,000 for a year or part thereof, cated wines. (iv) for licence for sale of for. Rs 1,500 for a year or part thereof eign liquor in non-proprietary clubs to members. (v) for special licence for sale Rs. 500 for a year or part thereof, of foreign liquor. (b) When levied in the form of Rs. 10 per bulk litre or Rs. 45.46 per bulk gallonage fee. gallon. (e) When levied in the form of Re.1 per bulk litre or Rs. 4.54 per bulk vending fee on denatured spirit including gallon, methylated spirit. 500 for a year or part thereof, of foreign liquor. (b) When levied in the form of Rs. 10 per bulk litre or Rs. 45.46 per bulk gallonage fee. gallon. (e) When levied in the form of Re.1 per bulk litre or Rs. 4.54 per bulk vending fee on denatured spirit including gallon, methylated spirit. Provided that where there is a difference of duty of execise or laxury tax as between two licence periods, such difference maybe collected in respect of all stocks of country liquor or intoxicating drugs held by licensees at the close of the former period. 18A. Grant of exclusive or other privilege of manufacture, etc., on payment of rentals. (1) It shall be lawful for the Government to grant to any person or persons, on such conditions and for such period as they may deem fit, the exclusive or other privilege (i) of manufacturing or supplying by wholesale; or (ii) of selling by retail; or (iii) of manufacturing or supplying by wholesale; and selling by retail. any liquor or intoxicating drugs within any local area on his or their payment to the Government of an amount as rental in consideration of the grant of such privilege. The amount of rental may be settled by auction; negotiation or by any other method as may be determined by the Government, from time to time, and may be collected to the exclusion of, or in addition to, the duty or tax leviable under S.17 and 18. (2) No grantee of any privilege under sub-section (1) shall exercise the same until he has received a licence in that behalf from the Commissioner. (3) In such cases, if the Government shall by notification so direct, the provisions of S.12 relating to toddy and toddy producing trees shall not apply." Rule 13(1) as amended reads: "13(1). Foreign Liquor 1 Wholesale licence. The privilege under this, licence wilt be sold in public auction subject to the conditions of the sale notification published by Government from time to time. Under this licence, the sale of liquor in any quantity less than 300 M. L. bottles at a time is prohibited. Liquor sold under this licence shall not be allowed to be consumed on the premises. The licence shall be in Form F. L. I." 9. The position after the above amendment is that R.13 (1) & (2) are brought on identical lines. Liquor sold under this licence shall not be allowed to be consumed on the premises. The licence shall be in Form F. L. I." 9. The position after the above amendment is that R.13 (1) & (2) are brought on identical lines. R.13(1) is only intended to implement S.18A of the Abkari Act,1 of 1077. 10. The challenge against S.18 (3) (2) (i) was not pressed at the bar apparently for the reason that the luxury tax under the said provision is not now sought to be levied against F.L.1 licencees. The only question argued is that S.18 A and R.13(1) are unconstitutional. Counsel for the petitioners said that, 11. (a) S.18A and R.13(1) impose unreasonable restriction on the petitioners' fundamental right to carry on trade in foreign liquor and are therefore violative of Art.19(1)(g) of the Constitution; 12. (b) The rental sought to be collected by S.18A is in the nature of a tax and cannot be justified by any of the entries in List II or List HI of the Constitution. The Section therefore creates an unreasonable restriction in the matter of the petitioners' carrying on trade in liquor; 13. (c) If the rental is in the nature of a tax, it can only be a tax in respect of profession or trade in liquor and will therefore offend Art.276 of the Constitution; and 14. (d) There is no legislative competence for farming out the privilege under S.18A by public auction for a rental. 15. Before dealing with these contentions, we shall examine those provisions of the Abkari Act 1 of 1077 which are necessary for our discussion. The said Act is a measure as its preamble shows to consolidate and amend the law relating to the import, export, transport, manufacture, sale and possession of intoxicating liquor and of intoxicating drugs in the State of Kerala. 16. Chapter III contains provisions dealing with the import, export and transport of liquor and intoxicating drugs. 17. Chapter IV deals with manufacture, possession and sale of liquor or intoxicating drugs. S.15 therein prohibits sale of liquor or intoxicating drugs without licence. 18. Chapter V contains provisions for the levy of taxes and rentals. 16. Chapter III contains provisions dealing with the import, export and transport of liquor and intoxicating drugs. 17. Chapter IV deals with manufacture, possession and sale of liquor or intoxicating drugs. S.15 therein prohibits sale of liquor or intoxicating drugs without licence. 18. Chapter V contains provisions for the levy of taxes and rentals. S.17 provides for the levy of duties of excise or luxury tax or both if the Government so direct on activities referred to in clauses (a) to (g) therein, in respect of liquor and intoxicating drugs; S.18 (1) deals with the levy of the duty of excise, while S.18 (2) deals with the levy of luxury tax. The rates of levy of duty of excise and the luxury tax are prescribed by S.18 (3) of the Act. 19. Chapter VI deals with licences. S.24 therein prescribes the forms and conditions of licences. S.29 deals with the power of the Government to make rules for the purpose of carrying out the provisions of the Act and particularly in respect of matters enumerated in clauses (a) to (r) therein. S.69 provides that all rules made and notifications issued shall be made and issued by publication in the Gazette and that all such rules and notifications shall thereupon have the force of law and be read as part of the Act and may in like manner be varied, suspended or annulled. 20. Article 19 (1) (g) of the Constitution guarantees the fundamental right of all citizens to practise any profession, or to carry on any occupation, trade or business. The said right is not absolute but subject to reasonable restrictions which may be imposed by any law made by the State in the interests of the general public. Art.19 (1) (g) and (6) which are relevant for our discussion read: '19 (1) All citizens shall have the right (a) (g) to practise any profession, or to carry on any occupation, trade or business. Art.19 (1) (g) and (6) which are relevant for our discussion read: '19 (1) All citizens shall have the right (a) (g) to practise any profession, or to carry on any occupation, trade or business. (6) Nothing in sub-clause (g) or the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the light conferred by the said sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevent the state from making any law relating to, (i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or (ii) the carrying on by the State, or by Corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial of citizens or otherwise." 21. Clause (6) of Art.19 thus specifies the kind of limitations that can be imposed on the fundamental right guaranteed by clause (1) (g) of Art.19. Firstly, it recognises the validity of any existing law imposing reasonable restrictions and empowers the Legislature whether of the Union or the State to impose such restrictions. Secondly, reasonable restriction must be in the interests of the general public. Thirdly, freedom conferred by Art.19 (1) (g) shall not affect the operation of any existing law in so far as it prescribes or empowers any authority to prescribe or prevent the State from making any law prescribing or empowering any authority to prescribe the professional or technical qualification necessary for practising any profession or for carrying on any occupation, trade or business. Fourthly, Art.19 (1) (g) shall not affect the validity of any law empowering the State or a State owned or State controlled Proportion to carry on any trade, business, industry or service whether to the exclusion, complete or partial, of citizens or otherwise. 22. Dealing in liquor is also a trade or business and the fundamental right guaranteed by Art.19 (1) (g) is available to a citizen to deal in that commodity only subject to any law imposing reasonable restrictions under Art.19 (6) of . the Constitution. 22. Dealing in liquor is also a trade or business and the fundamental right guaranteed by Art.19 (1) (g) is available to a citizen to deal in that commodity only subject to any law imposing reasonable restrictions under Art.19 (6) of . the Constitution. This point has now been settled by the decision of the Supreme Court in Krishnan Kumar v. J. & K. State (AIR. 1967 SC. 1368) where it was held that dealing in liquor is business and a citizen has a right to do business in that commodity but the State can make a law imposing reasonable restrictions on the said right in public interests. Subba Rao, C. J..speaking for the Court observed at page 1371: "A combined reading of cls. (1) and (6) of Art.19 makes it clear that a citizen has a fundamental right to carry on any trade or business, and the State can make a law imposing reasonable restrictions on the said right in the interests of the general public. It is, therefore, obvious that unless dealing in liquor is not trade or business, a citizen has a fundamental right to deal in the commodity Liquor can be manufactured, bought or sold like any other commodity. It is consumed throughout the world, though some countries restrict or prohibit the same on economic or moral grounds. The morality or otherwise of a deal does not affect the quality of the activity though it may be a ground for imposing a restriction on the said activity. The illegality of an activity does not affect the character of the activity but operates as a restriction on it. If a law prohibits dealing in liquor, the dealing does not cease to be business, but the said law imposes a restriction on the said dealing." 23. Their Lordships construed the decisions in Cooverjee v. Excise Commr. Ajmer (AIR. 1954 SC. 220) and Assam State v. Sristikar (AIR. 1957 SC. 414) as not laying down any proposition to the contrary. The doctrine of res extra commer-cium enunciated by Das, C. J., in R.M.D.C. v. Union of India (AIR. 1957 SC. 628 at p. 631) was, not applied to liquor trade. The fundamental right of a citizen to carry on business or trade in liquor subject to Art.19 (6) cannot therefore be doubted. 24. The doctrine of res extra commer-cium enunciated by Das, C. J., in R.M.D.C. v. Union of India (AIR. 1957 SC. 628 at p. 631) was, not applied to liquor trade. The fundamental right of a citizen to carry on business or trade in liquor subject to Art.19 (6) cannot therefore be doubted. 24. The question to be considered is whether S.18A and R.13 (1) satisfy the test of reasonableness under Art.19 (6) of the Constitution. In view of the decision in Akardasi v. State of Orissa (AIR. 1963 SC. 1047) it was not contended before us that S.18A creates a monopoly in favour of the State for sale of foreign liquor. Gajendagadlkar, J., observed in the said decision: "If the agent acquires a personal interest in the working of the monopoly, ceases to be accountable to the principal at every stage, is not able to bind the principal by his acts, or if there are any other terms of the agency which indicate that the trade or business is not carried on solely on behalf of the State but at least partially on behalf of the individual concerned, that would fall out side Art.19 (6) (ii). S.18A does not therefore; create a monopoly in fauour of the State for sale of foreign liquor. That apart, the language of S.18A cannot lend any support to a plea that the said provision creates a monopoly in favour of the State. 25. The question whether S.18A of the Abkari Act 1 of 1077 infringes Art.19 (1) (g) arose for decision before T. C. Raghavan and P. Narayana Pillai, JJ. in Damodaran v. State of Kerala (1969 KLT. 587). It was held that S, 18A creates a trade monopoly in liquor which is passed on to the highest bidder in public auction and this is only a reasonable restriction considering the nature of the trade. It was also decided that the said monopoly could be justified under Entry 21 of List III of Schedule VII and Art.298 of the Constitution. The correctness of the decision was canvassed before us by counsel for the petitioners. It was also decided that the said monopoly could be justified under Entry 21 of List III of Schedule VII and Art.298 of the Constitution. The correctness of the decision was canvassed before us by counsel for the petitioners. Art.298 reads.;; "The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws be subject to legislation by Parliament." It merely recognises the executive power of the Union and the State to carry on trade or business and to acquire, hold and dispose of property and to make contracts. It does not concern creation of monopolies. Nor does S.18A create a monopoly in favour of any person or persons within the meaning of Entry 21 in List III of Schedule VII of the Constitution. 26. S. 29(2) of the Abkari Act, 1 of 1077 enables the Government to frame rules for determining the number of licences of each description to be granted in any local area. This is necessary in the ease of liquor trade in the general interests of the public. The words "in the interests of general public" in Art.19(6) are of wide import comprehending public order, public health, public security, public morals, economic welfare of the community and the objects mentioned in Part IV of the Constitution. It has been held 6y the Supreme Court that prohibition of possession, consumption, buying or selling of liquor by a law of prohibition would only be a reasonable restriction upon the fundamental right under Art.19(1) (f) in view of the directory principle in Art.47. The manufacture, import and sale etc., of liquors have been the subject of legislative regulation in India from a very long time. Mahajan, C. J., observed in Cooverjee v. Excise Commr., Ajmer (AIR. 1954 SC. The manufacture, import and sale etc., of liquors have been the subject of legislative regulation in India from a very long time. Mahajan, C. J., observed in Cooverjee v. Excise Commr., Ajmer (AIR. 1954 SC. 220 at page 223): "Elimination and exclusion from business is inherent in the nature of liquor business and it will hardly be proper to apply to such a business principles applicable to trades which all could carry." 27. If determination of the number of licences for sale of liquor is only a reasonable restriction within the meaning of Art.19(6) there would be elimination and exclusion of several people from trading in liquor. This will not amount to creation of monopoly by the State in favour of the grantees of the licences for sale in liquor. It is also necessary to point out that under the notification issued by the Government under the Abkari Act I of 1077, every member of the general public has got a right to take part in the auction. The fact that for economic reasons, he is not in a position to compete with the others and bid at the auction is no reason for holding that S.18A creates a monopoly in favour of the highest bidder for sale of liquor in any local area. Mahajan, C. J., in Cooverjee v. Excise Commr., Ajmer (AIR. 1954 SC. 220) already cited observed at page 283: "Properly speaking, there can be a monopoly only when a trade which could be carried on by all persons is entrusted by law to one or more persons to the exclusion of the general public. Such, however, is not the case with the business of liquor. Further it seems to us that this argument suffers from a fallacy. Under the rules every member of the public who wishes to carry on trade in liquor is invited to make bids. This is the only method by which carrying on of liquor trade can be regulated. When the contract is thrown open to public auction, it cannot be said that there is exclusion of competition and thereby a monopoly is created." 28. Without expressing an opinion on the question whether the rental collected under S.18A of the Abkari Act, I of 1077 is tax or fee, it was held in Damodaran v. State of Kerala (1969 KLT. Without expressing an opinion on the question whether the rental collected under S.18A of the Abkari Act, I of 1077 is tax or fee, it was held in Damodaran v. State of Kerala (1969 KLT. 587) that the State has power to raise revenue in the imposition of restrictions under Art.19 (6) and the restrictions are intended not only for the preservation of public health and morals but also for raising revenue. Since this view was very sharply criticised by the learned counsel for the petitioners it is necessary to examine the same in the light of the decisions placed before us. 29. A reading of S.18 A of the Abkari Act, I of 1077 may convey the impression that the right to vend liquor is treated as the exclusive privilege of the State which can be granted by the Government on receipt of an amount as rental in consideration of the grant of privilege. But on a close scrutiny of S.18 A, in the light of the other provisions of the Act especially S.15, 24 and 22 and the policy behind the enactment, this impression will vanish. S.18A primarily restricts and controls the sale of liquor by issue of licences to a limited number of persons. It was not contended before us that licensing of liquor trade is an unreasonable restriction upon the fundamental right under Art.19 (1) (g) of the Constitution. 30. The test for determining the reasonableness of a restriction within the meaning of Art.19 was laid down by Patanjali Sastri, C. J., in State of Madras v. V. G. Row (AIR. 1952 SC. 196) in the following words: "It is important to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part, and the limit to their interference with legislative judgment in such cases can only be dictated by their sense of responsibility" and self restraint and the sobering reflection that the Constitution is meant not only for people of their way of thinking but for all, and that the majority of the elected representatives of the people have, in authorising the imposition of the restrictions, considered them to be reasonable." The term 'reasonable restriction' was interpreted by Mahajan J., in Chintaman Rao v. State of M. P. (AIR. 1951 SC. 118) saying: "that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The word 'reasonable' implies intelligent care and deliberation, that is, the choice of a course which reason dictates. Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Art.19 (1) (g) and the social control permitted by clause (6) of Art.19, it must be held to be wanting in that quality." But in Cooverjee v. Excise Commr., Ajmer (AIR. 1954 SC. 220) the reasonableness of restriction under Art.19 (1) with reference to a trade in liquor was specifically considered and it was pointed out by Mahajan, C. J.: "... in order to determine the reasonableness of the restriction regard must be had to the nature of the business... It can also not be denied that the State has the power to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public. Law prohibiting trades in noxious or dangerous goods or trafficking in women cannot be held to be illegal as enacting a prohibition and not a mere regulation. It can also not be denied that the State has the power to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public. Law prohibiting trades in noxious or dangerous goods or trafficking in women cannot be held to be illegal as enacting a prohibition and not a mere regulation. The nature of the business is, therefore, an important element in deciding the reasonableness of the restrictions. The right of every citizen to pursue any lawful trade or business is obviously subject to such reasonable conditions as may be deemed by the governing authority of the country essential to the safety, health, peace, order and morals of the community. Some occupations by the noise made in their pursuit, some by the odowrs they engender, and some by the dangers accompanying them, require regulations as to the locality in which they may be conducted. Some, by the dangerous character of the articles used, manufactured or sold, require also special qualifications in the parties permitted to use, manufacture or sell them." 31. Counsel for the petitioners submitted that the above observations were made by the learned judge because of his view that there is no fundamental right guaranteed to a citizen under Art.19 (1) to trade in liquor. The criticism by the learned counsel for the petitioners, in our view, has no force. If the conclusion of the learned judge was that there was no fundamental right to carry on a trade in liquor it was unnecessary to discuss the import of reasonable restrictions with reference to the liquor trade. The injuries resulting from consumption of liquor in excess are stated by Field, J., in Crowley v. Christensen (1890) 34 Law. Ed. 620): "There is in this position an assumption of a fact which does not exist, that when the liquors are taken in excess the injuries are confined to the party offending. The injury, it is true, first falls upon him in his health, which the habit undermines; in his morals, which it weakens; and in the self-abasement which it creates. But, as it leads to neglect of business and waste of property and general demoralisation, it affects those who are immediately connected with and dependant upon him. The injury, it is true, first falls upon him in his health, which the habit undermines; in his morals, which it weakens; and in the self-abasement which it creates. But, as it leads to neglect of business and waste of property and general demoralisation, it affects those who are immediately connected with and dependant upon him. By the general concurrence of opinion of every civilised and Christian community, there are few sources of crime and misery to society equal to the dram shop, where intoxicating liquors, in small quantities, to be drunk at the time, are sold indiscriminately to all parties applying." 32. The above passage has been quoted with approval in Cooverjee v. Excise Commissioner, Ajmer (AIR. 1954 SC. 220). Entry 8 in List II to the Seventh Schedule of the Constitution reads: "Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors." The above Entry furnishes the legislative competency for S.18A of the Abkari Act,1 of 1077. The object behind S.18A is only to select the persons to whom licences, the number of which is determined under S.29 (2) (b) of the Abkari Act, 1 of 1077, have to be issued. This is therefore only a part of the measure to control the evils attendant on excessive consumption of liquor. The reasonableness of S.18A is attacked on the ground that it authorises collection of rental in consideration for the grant of the privilege. S.3, Sub-section (23) defines "rental" thus: "'rental' means the rental payable under S.18A in consideration of the grant of an exclusive or other privilege of manufacturing, supplying or selling any liquor or intoxicating drugs." The term "Abkari Revenue" defined in S.3 (1) of the Abkari Act, 1 of 1077 does not include 'rental' payable under S.18 A of the Act. 33. The submission of counsel for the petitioners is that S.18A' is a fiscal measure for the purpose of raising revenue and it imposes unreasonable restriction upon the fundamental right guaranteed under Art.19 (1) (g) and is therefore void. The learned counsel said that; it is not open to raise revenue except by way of taxes or fees allowed by the legislative Entries 45 to 66 in List II of Schedule VII of the Constitution. 34. Legislative competence of a particular enactment must depend on its primary objects. The learned counsel said that; it is not open to raise revenue except by way of taxes or fees allowed by the legislative Entries 45 to 66 in List II of Schedule VII of the Constitution. 34. Legislative competence of a particular enactment must depend on its primary objects. If in essence it relates to a subject within the legislative competence, the incidental encroachment on some other matter will not affect its legality. Quoting from American Jurisprudence, the Supreme Court has pointed out in Nagar Mahapalika, Varanasi v. Durga Das.(A1R.1968 SC. 1119 at 1125) that "if the primary purpose of such an enactment is the regulation of some particular occupation, calling, or activity, it is an exercise of the police power even if it incidentally produces revenue." 35. "An exaction which is invalid as an exercise of the taxing power may not be upheld as an exercise of the police power where it is clear that the legislative body imposing it did not intend it as such, but on the other hand, an exaction which would be invalid as an exercise of the taxing power may be upheld as a regulatory measure where the primary purpose of the legislature in imposing it was the regulation of some calling or activity which is potentially inimical". (American Jurisprudence, 2nd Edition, Volume 16, page 520, Para.265). When the primary purpose of the Act is therefore regulatory in character to control, regulate and restrict a particular activity, if in exercise of the regulatory power revenue is collected and paid into the treasury, it will not by itself show that the collection is as a tax or fee. To us it appears, as we have already said, the primary purpose of S.18A is to restrict the sale and consumption of foreign liquor by restricting the number of sellers thereof in an area and also by making it as costly as possible consistent with local conditions of the area; and the rental that may be fixed at the auction in open competition is only an incidental product thereof. 36. It may be that abkari auctions invariably culminate in bids that fetch large collections to the State. 36. It may be that abkari auctions invariably culminate in bids that fetch large collections to the State. That is obviously because alcohol, despite its evils when consumed in excessive quantities, has a universal attraction for humanity, and therefore restrictions on its sale produce keen competition among traders to secure the privilege of its sale which must naturally yield large profits. The more stringent such restrictions are, the more dear (in all senses of the term) becomes the commodity and higher becomes the bid for the privilege of its sale which is made exclusive for the successful bidder at the auction. If restrictions have to be and are imposed for sake of health and safety of the society, the fact that anxious traders make voluntary bids however high such bids may be for a profitable exemption from such restrictions does not affect the nature of the restrictions and the incidentally of the bids. 37. As pointed out in Shinde Brothers v. Dy. Commr, Raichur (AIR. 196,7 SC. 1512 at 1521) the bidder at a public auction who invariably will be aware of local conditions regulates his bid in the light of the sales he expects in the licensing year and that appears to be a relevant and cogent factor in the control of sale of such deleterious commodity. The giving up of the formerly adopted mode of levying a fixed fee for the licence and resorting to public auction in open competition at the locality to select the licensee for sale of liquor in that area cannot therefore be decried as unreasonable or arbitrary. We therefore hold that the provision for auction embodied in S.18A is not primarily a fiscal measure but one calculated to restrict and control trade in liquor though it incidentally raises revenue for the State. It is thus well warranted by Entry 8 of List II in the VIIth Schedule of the Constitution. 38. It is not and cannot be disputed that R.13 (1) is consistent with S.18A and it only particularises the several modes of action contemplated in the Section. There is no constitutional infirmity in the rule. 39. In the view that we have taken Art.276 of the Constitution is also not attracted to the rental under S.18A. Tax, as observed in Commr. FIRE. v. L.T. Swamiar (AIR. 1954 SC. There is no constitutional infirmity in the rule. 39. In the view that we have taken Art.276 of the Constitution is also not attracted to the rental under S.18A. Tax, as observed in Commr. FIRE. v. L.T. Swamiar (AIR. 1954 SC. 282 at p. 295) "is a compulsory exaction of money by public purposes enforceable by law and is not payment ‘for services rendered"'. The rental under S.18A is fixed by voluntary bids at the auction in open competition by competitors among themselves for the privilege of vending liquor. We are also of the opinion that the observations in Shinde Brohters v. Dy. Commr. Raichur (AIR. 1967 SC. 1512) as to the character of such rental is only in relation to the contentions that the rental was excise duty which the court negatived. As pointed out by the Supreme Court every ruling has to be read in the background of the facts and circumstances of the case at hand. 40. In the result, the challenge to S.18A and R.13 (1) fails and with that these petitions fail. They are accordingly dismissed. But in the circumstances we make no order as to costs.