JUDGEMENT Navin Sinha, J. 1. The common challenge in this batch of writ applications is to the notification issued by the respondent State, dated 24.3.1992 amending Rule 3 of the notification dated 20.4.1919 in exercise of powers under Section 19 of the Bihar Excise Act, 1915 (hereinafter called the Bihar Excise Act) levying license fee for establishment of Distillery based on installed production capacity and annual renewal thereof on payment of fresh license fee at the same rate on each renewal, in so far as rectified spirit and denatured spirit unfit for human consumption are concerned. 2. During the pendency of the writ application by fresh notification dated 17.10.2005 the license fee was enhanced to Rs. 7,50,000/- annually from Rs. 3,25,000/-. This has been challenged by amendment in I.A. No. 4462 of 2010. Upon hearing counsel for the parties this Court considers it proper to allow the amendment satisfied that it is based on a continuity of challenge to the levy of license fee not raising any fresh issues. 3. Learned Senior Counsel Shri Y.V. Giri appearing for the petitioner in CWJC 2868/92 made the lead submissions. The facts shall therefore be primarily noticed from the same except to the extent necessary. It was submitted that the petitioners Distillery (hereinafter called "the Distillery") held license under the Industries (Regulation & Development) Act, 1951 ("hereinafter called the I.D.R. Act"), for manufacture of rectified and denatured spirit only. These were unfit for human consumption. They were ingredients as raw material for varied uses such as industrial or for manufacture of country liquor and Indian made foreign liquor by a process of dilution for the latter two purposes. Being unfit for human consumption in their original form, they did not constitute excisable articles under the Bihar Excise Act and were not within the legislative competence of the State under the Constitution of India. Under Entry 7, 52 and 84 of List-1, Schedule-7 to the Constitution of India, the Industry was amenable to legislative control by the Union of India alone under the I.D.R. Act and the Licensing of Industrial Undertaking Rules, 1952 framed thereunder. The State Legislature was competent to legislate only in respect of matters under Entry 8 and 51 of List-2 in the 7th Schedule to the Constitution of India which related to intoxicating liquor fit for human consumption. The State Legislature was competent to legislate only in respect of matters under Entry 8 and 51 of List-2 in the 7th Schedule to the Constitution of India which related to intoxicating liquor fit for human consumption. The Distillery under Section 13 of the Bihar Excise Act held a license under Form 28A for manufacture of such spirit only, issued in 1955 renewed annually since then without levy of fee, until the issuance of the present notifications. The product manufactured under the license, being unfit for human consumption, what may be the possible user by a process of conversion to potable liquor or that the State required the petitioner to supply a portion of the spirit to warehouses, who in turn, supplied it to manufacturers of country liquor shall not render the petitioner liable to legislative control and competence of the State Government, Relying upon a notification dated 5.3.1990 of the Union of India issued in pursuance of the judgment of the Supreme Court in (1990)1 S.C.C. 109 , Synthetics and Chemicals Ltd. V/s. State of U.P. & Ors., it was submitted that a clear distinction had been made between a Distillery manufacturing spirit unfit for human consumption and that manufacturing potable liquor. 4. Reliance was placed on the judgment of this Court in 1983 P.L.J.R. 105 (D.B.), (The New Swadeshi Sugar Mills Ltd. & Anr. V/s. State of Bihar & Ors.) stated to have been affirmed in (2003) 11 S.C.C. 478 (State of Bihar & Ors. V/s. New Swadeshi Sugar Mills Ltd.), 1997(1) P.LJ.R. 77 (M/s. Industrial Corporation Pvt. Ltd. V/s. State of Bihar & Ors.) affirmed in (2003)11 S.C.C. 465 (State of Bihar & Ors. V/s. Industrial Corporation Pvt. Ltd.). Reliance was further placed on (2004)1 S.C.C. 225 (State of U.P. & Ors. V/s. Vam Organic Chemicals Ltd.). The judgment of the Supreme Court in (1997)2 S.C.C. 727 [: 1997(2) PLJR (SC)92] (Bihar Distillery V/s. The Union of India was urged not to have any application. 5. It was next contended that under Rules 9 and 36A of the Bihar Excise Rules framed under the Bihar Excise Act, the Excise Department had already posted its officers in the Distillery to ensure that rectified and denatured spirit was not misutilized by diversion for conversion into potable liquor causing revenue loss. All costs, including salary, pension, uniform etc. 5. It was next contended that under Rules 9 and 36A of the Bihar Excise Rules framed under the Bihar Excise Act, the Excise Department had already posted its officers in the Distillery to ensure that rectified and denatured spirit was not misutilized by diversion for conversion into potable liquor causing revenue loss. All costs, including salary, pension, uniform etc. were to be borne by the Distillery inclusive of such fee for the purpose as may be levied for the same. The present levy was in the garb of a tax without authority of law. If the petitioner breached any condition of the license in Form-28A it was liable to prosecution apart from the possible cancellation of its license for manufacture of denatured and rectified spirit by the Union of India. Relying upon the judgments it was submitted that apart from the complete absence of legislative competence on part of the State, in absence of any element of quid pro quo the respondent State could not even impose any license fee in purported exercise of its regulatory power. 6. Shri Satyabir Bharati appearing for the petitioners in other three cases made similar submissions. He additionally relied on (2009)3 S.C.C. 157 (Mohan Meakin Ltd. V/s. State of Himachal Pradesh & Ors.) contending that the petitioners were not liable for any license fee at the behest of the State Government in respect of rectified and denatured spirit manufactured at their Distillery. They held licenses under Form 25 for manufacture of denatured spirit. They also possessed license in Form 28 for manufacture of country liquor. The manufacture of rectified spirit has no co-relation to the manufacture of country liquor as far as the legislative competence of the State with regard to spirit was concerned. Learned counsel very fairly submitted that the Distillery in C.W.J.C. 6360 of 1993 and 3690 of 1992 have since closed down permanently. The Distillery in C.W.J.C. No. 3025 of 1992 is presently closed but expects to be revived sooner or later. 7. Learned Senior Counsel Shri Ray Shivaji Nath, Additional Advocate General No. 4, appearing on behalf of the State submitted that Form No. 28A issued under the Bihar Excise Act came to be amended on 15.12.1997. It now envisages a "License to manufacture spirit in a Distillery for use in the manufacture of potable liquor". 7. Learned Senior Counsel Shri Ray Shivaji Nath, Additional Advocate General No. 4, appearing on behalf of the State submitted that Form No. 28A issued under the Bihar Excise Act came to be amended on 15.12.1997. It now envisages a "License to manufacture spirit in a Distillery for use in the manufacture of potable liquor". Since the rectified and denatured spirit manufactured by the petitioners in their Distillery was being supplied and used for manufacture of potable liquor, they are liable to pay license fee in terms of Section 38 of the Bihar Excise Act and the Rules framed by the Board of Revenue under Section 90 of the Bihar Excise Act. It was submitted that the usage of the rectified and denatured spirit for manufacture of potable liquor fit for human consumption was the determinative factor to vest legislative competence in the State in exercise of its regulatory powers. Strong reliance was placed on the judgment of the Supreme Court in the case of Bihar Distillery (supra) to urge that the petitioners clearly fell in Categories (2) and (3) of the categorization done in paragraph-23 of the judgment and the period prior to the amendment of Form- 28A i.e. 1992-1997 also fell within the reasoning of the judgment. The case of Bihar Distillery (supra) was decided on 29.1.1997 and in terms thereof Form-28A was amended by publication on 15.12.1997. Reliance was further placed on (2005) 2 S.C.C. 762 [: 2005(2) PLJR (SC)48] (State of Bihar V/s. Shri Baidyanath Ayurved Bhawan (P) Ltd. & Ors.) to submit that the authority of the State to impose a regulatory fee without quid pro quo to control and regulate manufacture of intoxicants was held to be justified. The judgments cited by the petitioners related to industrial alcohol and not to rectified or denatured spirit. It was lastly submitted relying upon (1997)2 S.C.C. 453 (State of Bihar V/s. Bihar Distillery Ltd.) that there shall be a presumption in favour of the constitutionality of the imposition of licence fee by the State and unless absolutely necessary in law, the Court may not interfere with the imposition of licence fee as no one had a fundamental right to deal in liquor, rectified and denatured spirit being the raw materials for the same. 8. 8. The issue for determination by this Court is the legislative competence of the respondent State to levy licence fee under Form-28A of the Bihar Excise Act with regard to rectified and denatured spirit produced by a Distillery wholly unfit for human consumption not constituting an excisable item under the Bihar Excise Act. If the spirit was capable of conversion to liquor fit for human consumption by a process, will its conversion into potable liquor at a subsequent stage vest jurisdiction in the State to legislate on the theory of the likely or actual nature of the usage of such spirit at an earlier stage. 9. The Constitution of India envisages a division of legislative powers between the Parliament and the State Legislature under Article 246 of the Constitution to frame laws on matters as provided for in List-1, 2 and 3 of the 7th Schedule to the Constitution of India. Entry-3 is not relevant for the present. 10. The entries in List-1 relevant for the present controversy are 7, 52 and 84 which provide as under: "7. Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. 52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. 84. Duties of excise on tobacco and other goods manufactured or produced in India except (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry." 11. The entries relevant in List-2 are- 8, 51 and 66 which provide as under: "8. Intoxicating liquors, that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors. 51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this entry. 66. Fees in respect of any of the matters in this List, but not including fees taken in any Court." 12. 66. Fees in respect of any of the matters in this List, but not including fees taken in any Court." 12. Rectified spirit did not constitute an excisable item under the Bihar Excise Act, not being liquor fit for human consumption came up for consideration by this Court in The New Swadeshi Sugar Mills. Ltd. & Anr. V/s. State of Bihar & Ors., 1983 P.L.J.R. 105 (D.B.). This Court rejected the argument of the State that because rectified spirit by subsequent dilution becomes potable and fit for human consumption liable for duty it was ample justification for levy of duty at a prior stage before the subsequent stage was reached. No bond or duty could be levied under Form-28A. The Court at paragraphs 8 and 9 of the judgment held as under: "8. The contention of the learned counsel for the State, apart from what is stated in the notice (Annexure-2), was that the petitioner-company is liable to pay duty on the spirit because rectified spirit by subsequent dilution becomes potable and thus fit for human consumption and, therefore, duty could be recovered from the petitioner- company, which is thus liable to compensate the loss caused to the Government due to non-delivery by application of R. 33 of the Rules made by the Board of Revenue under the notification dated the 29th April, 1919 (hereinafter referred to as the Rules). 9. It is, therefore, essential to examine whether rectified spirit can be subjected to levy of dyty under the Act. Excisable article has been defined in S. 2(6) of the Act and Cl. (a) thereof is relevant for the present purpose, which is as follows: "excisable article means (a) any alcoholic liquor for. human consumption. XX XX XX Liquor is defined in S. 2(14) of the Act which "includes all liquids consisting of or containing alcohol, such as spirit of wine, spirit, wine fermented, tari, pachwai and beer, and also unfermented tari, and also any other substance which the State Government may, by Notification, declare to be liquor for the purposes of this Act". Intoxicant has been defined in S. 2(12a) of the Act, which means "any liquor or intoxicating drug". Section 2(19) defines spirit as any liquor containing alcohol obtained by distillation, whether it is denatured or not". Intoxicant has been defined in S. 2(12a) of the Act, which means "any liquor or intoxicating drug". Section 2(19) defines spirit as any liquor containing alcohol obtained by distillation, whether it is denatured or not". Thus, the total effect of the definition of intoxicant, liquor and spirit, read with the definition of excisable article, means that only a spirit meant for human consumption can be subjected to excise duty." 13. This judgment came to be upheld by the Supreme Court upon challenge by the State of Bihar in (2003)11 SCC 478 (State of Bihar & Ors. V/s. New Swadeshi Sugar Mills Ltd. & Anr.) holding as follows: "1. We find that the conclusion of the High Court that no duty can be levied by the appellant State on rectified spirit having regard to the provisions of the Constitution, has been upheld by this Court in the case of Synthetic and Chemical Ltd. vs. State of U.P. It has been held there that the provisions in various State Acts which purport to levy a tax or charge upon industrial alcohol also called rectified spirit and alcohol used for industrial purposes, are unconstitutional. 2. Having regard to the fact that the provision in the State Act imposing the levy is unconstitutional, it is unnecessary to go into the appellants argument based on a rule made in exercise of the rule making power in the State Act. The rule concerned relates to duty to be paid on rectified spirit which is transported, a prescribed quantity being allowed to be deducted by way of leakage or evaporation............Duty itself not being leviable that claim must also be held to be invalid." 14. The question of the competence of the State Legislature to impose fee in respect of Industrial Alcohol came up for consideration by a Constitution Bench before the Supreme Court in Synthetics & Chemicals Ltd. (supra). On consideration of the legislative powers of the Parliament and the State Governments, the promulgation of the Industries (Development and Regulation) Act, 1951 by the Parliament, the Court interpreting the aforesaid entries in the 7th Schedule of the Constitution held that the State Legislature had no power to enact a law levying duty on spirit not meant for human consumption and that it was the Parliament alone which was competent to legislate on Industrial Alcohol holding at paragraph-86 of the judgment as follows: "86. The position with regard to the control of alcohol industry has undergone material and significant change after the amendment of 1956 to the IDR Act. After the amendment, the State is left with only the following powers to legislate in respect of alcohol: (a) it may pass any legislation in the nature of prohibition of potable liquor referable to Entry 6 of List-ll and regulating powers. (b) it may lay down regulations to ensure that non-potable alcohol is not diverted and misused as a substitute for potable alcohol. (c) the State may charge excise duty on potable alcohol and sales tax under Entry 52 of List-ll. However, sales tax cannot be charged on industrial alcohol in the present case, because under the Ethyl Alcohol (Price Control) Orders, sales tax cannot be charged by the State on industrial alcohol. (d) however, in case State is rendering any service, as distinct from its claim of so-called grant of privilege, it may charge fees based on quid pro quo." 15. This decision was followed in (1995)5 S.C.C. 753 (State of U.P. V/s. Modi Distillery). Considering the legality of a demand of excise duty inter alia on high strength spirit of 80% to 85% from distillery to warehouse and the duty levied on pipeline wastage it was held at paragraphs as follows: "9. It is convenient now to note the judgment of a Bench of seven learned Judges of this Court in Synthetics and Chemicals Ltd. V/s. State of U.P., (1990)1 SCC 109 : ( AIR 1990 SC 1927 ). This Court stated that it had no doubt that the framers of the Constitution, when they used the expression alcoholic liquors for human consumption, meant, and the expression still means, that liquor which, as it is, is consumable in the sense that it is capable of being taken by human beings as such as a beverage or drink. Alcoholic or intoxicating liquors had to be understood as they were, not what they were capable of or able to become. Entry 51 of List-II was the counterpart of Entry 84 of List-I. It authorised the State to impose duties of excise on alcoholic liquors for human consumption manufactured or produced in the State. It was clear that all duties of excise save and except the items specifically excepted in Entry 84 of List-I were generally within the taxing power of the Central Legislature. It was clear that all duties of excise save and except the items specifically excepted in Entry 84 of List-I were generally within the taxing power of the Central Legislature. The State Legislature had limited power to impose excise duties. That power was circumscribed under Entry 51 of List-ll. It had to be borne in mind that, by common standards, ethyl alcohol (which had 95 per cent strength) was an industrial alcohol and was not fit for human consumption. The ISl specifications had divided ethyl alcohol (as known in the trade) into several kinds of alcohol. Beverages and industrial alcohols were clearly and differently treated. Rectified spirit for industrial purposes was defined as spirit purified by distillation having a strength not less than 95 per cent by volume of ethyl alcohol. Dictionaries and technical books showed that rectified spirit (95 per cent) was an industrial alcohol and not potable as such. It appeared, therefore, that industrial alcohol, which was ethyl alcohol (95 per cent), by itself was not only non-potable but was highly toxic. The range of potable alcohol varied from country spirit to whisky and the ethyl alcohol content thereof varied between 19 to about 43 per cent, according to the ISl specification. In other words, ethyl alcohol (95 per cent) was not an alcoholic liquor for human consumption but could be used as a raw material or input, after processing and substantial dilution, in the production of whisky, gin, country liquor etc. In the light of experience and development, it was necessary to State that "intoxicating liquor" meant only that liquor which was consumable by human beings as it was." 16. This Court in 1997(1) P.L.J.R. 77 (D.B.), (M/s Industrial Corporation Pvt. Ltd. V/s. State of Bihar) was considering a challenge on the competence of the State to levy penalty in respect of a license granted under Form-28A for the manufacture of spirit in the Distillery for use in the manufacture of chemical and for Industrial, Scientific and other purposes. Relying on Synthetics and Chemicals Ltd. (supra) and Modi Distillery (supra) it was held that license for manufacture of non-potable alcohol vested in the Central Government alone and therefore Form-28A had no meaning and should be scrapped as it is not within the jurisdiction of the State Government to grant any such license for the manufacture of spirit in any Distillery for commercial use. 17. 17. The judgment of this Court in M/s Industrial Corporation (supra) came up for consideration by the Supreme Court on appeal by the State Government in (2003)11 S.C.C. 465 [: 2003(4) PLJR (SC) 231] (State of Bihar & Ors. V/s. Industrial Corporation (P) Ltd. & Ors.). Referring to Synthetics and Chemicals Ltd. (supra) as also Modi Distillery (supra) it was held that the State Government was not competent to levy any penalty on the manufacture of rectified spirit, the power of the State Government being confined to potable liquor only under List-2 of the 7th Schedule of the Constitution and spirit being unfit for human consumption in its raw form was the exclusive domain of the Parliament. It was noticed at paragraph 19 as under: "19. So far as the second submission of Mr. Ray is concerned, it would not detain us very long as the matter stands almost covered by a catena of decisions of this Court. In Synthetics and Chemicals Ltd. and Others V/s. State of U.P. and Others reported in (1990)1 SCC 109 , this Court, while interpreting Entry 84 of List-I, Entries 8 and 51 of List-ll and Entry 33 of List-Ill of Schedule-VII, held that the State Legislature has no power to enact law levying duty on the spirit, which is not meant for human consumption. It was also held that the State has the power to impose duty only on the spirit, which is for human consumption under Entry 51 of List-ll of Schedule-VII." 18. A different view at variance with the above however came to be taken by the Supreme Court in a writ petition under Article 32 of the Constitution of India in (1997)2 SCC 727 [: 1997(2) PLJR (SC)92] (Bihar Distillery and Anr. V/s. Union of India & Ors.) by a Bench of two Judges. The petitioner questioned the legislative competence of the State Government to deal with rectified spirit unfit for human consumption in view of the promulgation of the IDR Act contending that industrial alcohol was the exclusive prerogative of the Parliament to legislate. V/s. Union of India & Ors.) by a Bench of two Judges. The petitioner questioned the legislative competence of the State Government to deal with rectified spirit unfit for human consumption in view of the promulgation of the IDR Act contending that industrial alcohol was the exclusive prerogative of the Parliament to legislate. Summing up the consideration the Court at Paragraph 23 in the relevant extract held as follows: "23..............We proceed to elaborate: (1) So far as industries engaged in manufacturing rectified spirit meant exclusively for supply to industries [industries other than those engaged in obtaining or manufacture of potable liquors], whether after denaturing it or without denaturing it, are concerned, they shall be under the total and exclusive control of the Union and be governed by the I.D.R. Act and the rules and regulations made thereunder. In other words, where the entire rectified spirit is supplied for such industrial purposes, or to the extent it is so supplied, as the case may be, the levy of excise duties and all other control including establishment of distillery shall be that of the Union. The power of the States in the case of such an industry is only to see and ensure that rectified spirit, whether in the course of its manufacture or after its manufacture, it (is?) not diverted or misused for potable purposes. They can make necessary regulations requiring the industry to submit periodical statements of raw material and the finished product [rectified spirit] and are entitled to verify their correctness. For this purpose, the States will also be entitled to post their staff in the distilleries and levy reasonable regulatory fees to defray the cost of such staff, as held by this Court in Shri Bileshwar Khand Udyog Khedut Sahakari Mandali Ltd. V/s. State of Gujarat, (1992)1 SCR 391 : (1992 AIR SCW 554) and Gujchem Distillers India Ltd. V/s. State of Gujarat, (1992)1 SCR 675 : (1992 AIR SCW 1206). (2) So far as industries engaged in the manufacture of rectified spirit exclusively for the purpose of obtaining or manufacturing potable liquorsor supplying the same to the State Government or its nominees for the said purposeare concerned, they shall be under the total and exclusive control of the States in all respects and at all stages including the establishment of the distillery. In other words, where the entire rectified spirit produced is supplied for potable purposesor to the extent it is so supplied, as the case may bethe levy of excise duties and all other control shall be that of the States. According to the State Governments, most of the Distilleries fall under this category. (3) So far as industries engaged in the manufacture of rectified spirit, both for the purpose of (a) supplying it to industries [other than industries engaged in obtaining or manufacturing potable liquors/intoxicating liquors] and (b) for obtaining or manufacturing or supplying it to Governments/persons for obtaining or manufacturing potable liquors are concerned, the following is the position : the power to permit the establishment and regulation of the functioning of the distillery is concerned, it shall be the exclusive domain of the Union. But so far as the levy of excise duties is concerned, the duties on rectified spirit removed/cleared for supply to industries [other than industries engaged in obtaining or manufacturing potable liquors], shall be levied by the Union while the duties of excise on rectified spirit cleared/removed for the purposes of obtaining or manufacturing potable liquors shall be levied by the concerned State Government. The disposal, i.e., clearance and removal of rectified spirit in the case of such an industry shall be under the joint control of the Union and the concerned State to ensure evasion of excise duties on rectified spirit removed/cleared from the distillery. It is obvious that in respect of these industries too, the power of the States to take necessary steps to ensure against the misuse or diversion of rectified spirit meant for industrial purposes [supply to industries other than those engaged in obtaining or manufacturing potable liquors] to potable purposes, both during and after the manufacture of rectified spirit, continues unaffected. Any rectified spirit supplied, diverted or utilized for potable purposes, i.e., for obtaining or manufacturing potable liquors shall be supplied to and/or utilized, as the case may be, in accordance with the concerned State Excise enactment and the rules and regulations made thereunder. If the State is so advised, it is equally competent to prohibit the use, diversion or supply of rectified spirit for potable purposes." 19. If the State is so advised, it is equally competent to prohibit the use, diversion or supply of rectified spirit for potable purposes." 19. This judgment however came to be doubted in 1998(3) SCC 272 (Deccan Sugar and Abkari Company Limited V/s. Commissioner of Excise, A.P.) in view of the Constitution Bench judgment in Synthetics & Chemicals Ltd. (supra) and the matter referred to a larger Bench. The question for consideration was whether the appellant Distillery manufacturing rectified spirit could be asked to pay excise duty on manufacture of rectified spirit to the State Excise Authority. At Paragraph 4 thereof it was observed, "Even that apart the aforesaid observations made in Bihar Distillery case by the Division Bench of this Court prima facie run counter to the scheme of legislative competence as examined by the Constitution Bench of this Court as well as in the three Judges Bench decision of this Court in "Modi Distillery". A larger Bench of three Judges in 2004(1) SCC 243 (Deccan Sugar and Abkari Company Limited V/s. Commissioner of Excise, A.P.) then held at Paragraph 2 as follows: "2. It is settled by the decision of this Court in Synthetic and Chemical Ltd. vs. State of U.P. that the State legislature has no jurisdiction to levy any excise duty on rectified spirit. The State can levy excise duty only on potable liquor fit for human consumption and as rectified spirit does not fall under that category the State Legislature cannot impose any excise duty. The decision in Synthetic and Chemical Ltd. vs. State of U.P. has been followed in State of U.P. vs. Modi Distillery wherein certain wastage of ethyl alcohol was sought to be taxed. This Court following the decision in Synthetic and Chemical ltd. came to the conclusion that this cannot be done." 20. The appeal came to be allowed. 21. The Supreme Court in (2004)1 SCC 225 (State of U.P. & Ors. V/s. Vam Organic Chemicals Ltd. & Ors.), considering the earlier judgments of the Apex Court held that the State cannot legislate in respect of industrial alcohol despite the fact that such industrial alcohol has the potential to be used to manufacture alcoholic liquor. It was also noticed that the State Government could only charge regulatory fee for the purpose of payment of salary for the staff and to see that no non-potable alcohol was converted into potable alcohol. It was also noticed that the State Government could only charge regulatory fee for the purpose of payment of salary for the staff and to see that no non-potable alcohol was converted into potable alcohol. The burden of showing a broad co-relation between the fee charged and administrative expenses for imposing a regulatory fee was on the State Government. It was held at Paragraphs 43 and 44 that at best the State Government was competent to levy fee for the purpose of ensuring that the industrial alcohol is not surreptitiously converted into potable alcohol so that the State is not deprived of revenue on sale and public protected from illicit liquor. 22. The question again came up for consideration in (2009)3 SCC 157 (Mohan Meakin Ltd. V/s. State of H.P. & Ors.). The petitioner contended that transportation of industrial alcohol and rectified spirit being not within the legislative competence of the State it cannot levy any permit fee on transportation of the same. The element of quid pro quo being inherent in the levy of fee, no material was produced by the State to justify such demand. Noticing the constitutional scheme in the 7th Schedule and the earlier judgments of the Court referred above it set aside the judgment of the High Court upholding such fee and remanded the matter for consideration afresh. 23. Form-28A of the Bihar Excise Act originally read as "LICENCE TO MANUFACTURE SPIRIT IN A DISTILLERY FOR USE IN THE MANUFACTURE OF CHEMICAL AND FOR INDUSTRIAL SCIENTIFIC AND OTHER PURPOSE". The heading of the license itself clarifies that it does not deal with potable liquor. No further discussion is needed in view of the Constitution Bench judgment of Synthetic & Chemicals Ltd. (supra) of the complete absence of any legislative competence of the State to levy any fee. The change in the nomenclature of this form after the judgment of Bihar Distillery (supra) to read as "LICENCE TO MANUFACTURE SPIRIT IN A DISTILLERY FOR USE IN THE MANUFACTURE OF POTABLE LIQUOR" was purely cosmetic in nature not altering the factual and legal position on legislative competence of the State. In any event of the matter, Bihar Distillery (supra) having been impliedly overruled in Deccan Sugar and Abkari Company Limited (supra) as also noticed in Vam Organic Chemicals Ltd. & Ors. (supra), the entire justification of the State collapses as being contrary to law. 24. In any event of the matter, Bihar Distillery (supra) having been impliedly overruled in Deccan Sugar and Abkari Company Limited (supra) as also noticed in Vam Organic Chemicals Ltd. & Ors. (supra), the entire justification of the State collapses as being contrary to law. 24. The question of quid pro quo not being relevant for the imposition of the license fee in context of regulatory powers as contended on behalf of the State, is best answered by Rules 9 and 36A of the Excise Rules framed under Section 90 of the Bihar Excise Act which read as under: "9. The Commissioner shall appoint such officers and establishment as he thinks fit to the charge of a distillery. (in the case of a distillery licensed solely for the purpose of the manufacture of denatured spirit or any other commercial spirit the distiller shall bear the whole cost including leave and pension contributions and cost of uniform of such excise staff and establishment as may be considered necessary by the Excise Commissioner for proper supervision.) 36A. The Excise Commissioner shall decide as to whether a wholesome or a part time excise staff is necessary for the proper supervision of such operations in any such operations in any such premises. The licensee shall pay to the Provincial Government such fees as may be determined from time to time by the Excise Commissioner as the actual cost of the excise staff, employed for the purpose of this rule. The fees shall be payable by the licensee at the end of each calendar month in case of a part time excise staff and by the 7th of each calendar month in advance in case of a whole- time excise staff. These fees, shall be in addition to any other fees payable under the Bihar and Orissa Excise Act." 25. Apparently the State has already taken necessary steps by financial imposition upon the Distillery to ensure that no spirit is illegally diverted for manufacture of potable liquor causing revenue loss to the State. The question of imposing any regulatory fee thereafter without even a semblance of service rendered or additional costs incurred by the State, the fee sought to be levied in Form-28A upon manufacturers of spirit in the garb of a regulatory fee is nothing but a tax without authority of law. 26. The question of imposing any regulatory fee thereafter without even a semblance of service rendered or additional costs incurred by the State, the fee sought to be levied in Form-28A upon manufacturers of spirit in the garb of a regulatory fee is nothing but a tax without authority of law. 26. The contention of the State that the judgments aforesaid were limited in their applicability to industrial alcohol only as distinct from rectified and denatured spirit is wholly misconceived. Industrial alcohol is distilled ethyl alcohol normally of high proof, produced and sold for other than beverage purposes. It is distributed in the form of pure ethyl alcohol, completely denatured alcohol, specially denatured alcohol and proprietary solvent blends. Rectified spirit is highly concentrated ethanol which has been purified by means of repeated distillation. Denatured spirit is ethanol that has additives which make it poisonous, unpalatable and un- drinkable. in Synthetics and Chemicals Ltd. (supra) at Paragraph 74 it has been observed that by common standards ethyl alcohol is an industrial alcohol which is also known as rectified spirit. I.S.I, specifications divide ethyl alcohol into several kinds of alcohol. In Vam Organic Chemicals (supra) at Paragraph- 43 it has been noticed that even Bihar Distillery (supra) at Paragraph 23 held that industrial alcohol was denatured rectified spirit. 27. The reliance by the State upon the case of Shree Baidyanath Ayurved Bhawan (P) Ltd. to justify State Legislative competence and levy of fee without quid pro quo upon spirit which was to be supplied for use in manufacture of potable liquor is misconceived. The question therein was with regard to the legislative competence of the State Legislature redefining "intoxicant" in Section 2(12-a) of the Bihar Excise Act by including medicinal and toilet preparation containing alcohol as defined under the Medicinal and Toilet Preparation (Excise Duties) Act, 1955, in view of Entry 84 in List-1 of the 7th Schedule of the Constitution as also the Drugs and Cosmetics Act, 1940 to urge lack of authority on part of the State to license and regulate manufacture of medicinal preparations containing alcohol. License fee had been levied in regulation for vend of medicinal preparation in whole sale and retail sale containing alcohol prepared by distillation. The Supreme. Court observed that the Bihar Excise Act sought to license and regulate use including consumption of medicinal preparation containing alcohol equating it with alcoholic beverage. License fee had been levied in regulation for vend of medicinal preparation in whole sale and retail sale containing alcohol prepared by distillation. The Supreme. Court observed that the Bihar Excise Act sought to license and regulate use including consumption of medicinal preparation containing alcohol equating it with alcoholic beverage. That fundamentally distinguishes it from the present case dealing with spirit unfit for human consumption. The situation prevailing in the present case under Rules 9 and 36A.of the Bihar Excise Rules was neither applicable nor considered. In that context and the need to regulate misuse of medicines containing alcohol it was held that the State was competent to legislate with regard to medicinal preparation containing alcohol as an alcoholic beverage and therefore a regulatory fee without quid pro quo was permissible. 28. At the time of admitting the writ petitions this Court had declined stay of the impugned demands observing that any deposit made shall be subject to the result to the case and in case of success shall be refundable with 9% interest. In view of the discussion, more particularly the Bihar Distillery (supra) case, and that the writ petitions have remained pending before this Court since 1992 for no fault of the respondent State, we do not consider it appropriate to impose onerous interest upon the State which in any event shall be paid from public funds. We therefore consider it appropriate to modify the interim order by directing that the deposit made shall be refunded with 4% interest within six months of the presentation of a copy of this order before the respondents. If the payment is not made within time prescribed herein it shall carry interest at the rate of 9% from the date of expiry of six months. 29. The impugned notifications dated 24.3.1999 and 17.10.2005 imposing license fee upon the petitioner under Form-28A are therefore quashed. 30. The writ applications are allowed. No order as to costs.