State Of Tamil Nadu & Anr vs Tvl. South Indian Sugar Mills ...

The Supreme Court upheld the legality of the Tamil Nadu government's amendment to Rule 5-A of the Tamil Nadu Distillery Rules, which increased the administrative service fee for industrial alcohol from 50 paise to ₹1 per bulk litre. The Court clarified that while states can regulate the production of industrial alcohol under Entry 8 of List II of the Seventh Schedule of the Constitution, the fees must reflect a reasonable relationship to the services rendered, as established in Sreenivasa General Traders v. State of Andhra Pradesh (1983) 4 SCC 353. The Court concluded that the fee imposed was valid and did not violate the principle of quid pro quo.