State excise policy governing liquor license renewal via cluster mechanisms is not subject to Article 14 challenge absent manifest arbitrariness.

The petitioners, existing liquor licensees in Rajasthan, challenged the "Rajasthan Excise & Temperance Policy 2025–2029".

The policy introduced a "cluster" system where shops (1 to 5) are grouped together for settlement.

Under Clauses 2.2.6, 2.2.7, and 2.2.8, renewal of an individual license was made contingent upon: (a) 70% of eligible licensees in a district opting for renewal, and (b) all shops within a specific cluster applying for renewal.

The Petitioner's renewal application was cancelled because one shop in her cluster remained unrenewed, leading the department to propose a cluster-wide auction.

The petitioners alleged these clauses were arbitrary, discriminatory under Article 14, and amounted to economic coercion.

1. Whether Clauses 2.2.6, 2.2.7, and 2.2.8 of the Excise Policy 2025-2029 are constitutionally valid under Article 14 of the Constitution of India.

2. Whether an existing licensee has a vested or fundamental right to the renewal of a liquor license.

The Court applied the principle that there is no fundamental right to trade in liquor under Article 19(1)(g), as liquor is res extra commercium; it is a privilege regulated by the State under Entry 8 and 51, List II of the Seventh Schedule.

The Court relied on Khoday Distilleries Ltd. v. State of Karnataka, establishing that while the State has exclusive privilege, its methods must not be "manifestly arbitrary" under Article 14.

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

The Court reasoned that the formulation of excise policy is a matter of executive wisdom involving revenue optimization and administrative convenience.

It found that the 70% district-wide threshold and the cluster-based renewal system were rational mechanisms intended to prevent "fallow areas" and ensure revenue stability.

The Court rejected the argument of arbitrariness, noting that the policy operates uniformly across the State and that the petitioners had accepted these conditions when submitting their renewal applications.

The Court emphasized that it cannot substitute its own view for the State’s policy wisdom unless there is a patent constitutional violation, which was not demonstrated here.

Linking individual renewal to cluster-wide participation was deemed a valid regulatory tool to prevent vendors from selectively picking only high-profit shops while leaving non-viable shops to fuel illegal trade.

It held that the impugned clauses of the Excise Policy 2025-2029 are constitutionally valid, as they are neither andifestly arbitrary nor discriminatory.

The Court dismissed the batch of writ petitions, affirming the State's right to cancel renewals if cluster or district-level conditions are not met.

All pending applications were disposed of accordingly.