State Of U.P. And Ors vs Vam Organic Chemicals Ltd. And Ors

The Supreme Court upheld the validity of the notification imposing a licence fee on specially denatured spirit (SDS) under Rule 3(a) of the U.P. Licences for the Possession of Denatured Spirit and Specially Denatured Spirit Rules, 1976, stating that the levy is traceable to the UP Excise Act, 1910. The Court clarified that industrial alcohol, although denatured, falls under the definition of 'liquor' as per Section 3(11) of the Act, thus justifying the imposition of the fee. The appeals by the State were allowed, reversing the High Court's decision that had previously struck down the levy.