STATE OF M.P. vs K.C.T. DRINKS

The Supreme Court held that the levy of full costs of supervision and establishment of excise staff on the respondent company was invalid as the High Court had correctly quashed it based on the ruling in M/s Lilasons Breweries (Pvt.) Ltd. v. State of Madhya Pradesh, which deemed Rule 22 of the M.P. Breweries Rules, 1970 ultra vires. The Court clarified that the D-2 licences were issued under the Distillery & Warehouse Rules, not the Brewery Rules, and upheld the High Court's decision. The appeal was dismissed, affirming the lower court's judgment.