Excise renewal rights are not absolute and remain subject to uniform, non-arbitrary state policy thresholds.

The petitioners, existing liquor licensees in Rajasthan, challenged the constitutional validity of Clauses 2.2.6, 2.2.7, and 2.2.8 of the Rajasthan Excise & Temperance Policy 2025–2029.

The new policy introduced a "cluster" system (grouping 1–5 shops) and mandated that renewal of individual licenses in a district was contingent upon at least 70% of eligible licensees in that district applying for renewal.

If the 70% threshold was not met, or if any shop within a cluster remained unrenewed after a "limited tender" period, the entire cluster/district was subject to fresh e-auction.

The petitioners, despite applying for renewal and paying fees, had their applications cancelled because their respective clusters or districts failed to meet these collective criteria.

The Court applied the principle that while there is no fundamental right to trade in liquor (res extra commercium), State action must still satisfy the test of non-arbitrariness under Article 14.

The Court relied on Khoday Distilleries Ltd. v. State of Karnataka, establishing that the State holds "exclusive privilege" over intoxicants and can create a monopoly or impose restrictive conditions.

It further applied Section 37 of the Rajasthan Excise Act, 1950, which stipulates that no person has a claim to the renewal of a license.

The "Doctrine of Estoppel" was also noted, as petitioners participated in the renewal process after signing undertakings to abide by the policy terms.

The Court reasoned that since the liquor trade is a regulated privilege rather than a fundamental right, the State possesses wide latitude in framing excise policies to optimize revenue and prevent illegal trade in "fallow" areas.

The Court found that the 70% district-wide threshold and the cluster mechanism were rational policy choices aimed at administrative stability and ensuring that non-viable shops are not left unregulated while only profitable ones are renewed.

It rejected the argument of "economic coercion," stating that renewal is voluntary and subject to prescribed conditions that apply uniformly to all licensees.

The Court emphasized that it cannot substitute its wisdom for that of the executive in fiscal and regulatory matters.

Additionally, the Court held that petitioners were estopped from challenging the policy after participating in the process and failing to secure a favorable outcome.

The Court answered that there is no fundamental or vested right to the renewal of a liquor license.

The State’s implementation of the cluster system and percentage-based renewal thresholds was found to be a valid exercise of regulatory power with a rational nexus to revenue protection.

All pending applications were disposed of accordingly.