### State excise policy's 70% district-wide renewal threshold and cluster-based settlement do not violate Article 14.

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

Under this new policy, the State introduced a "cluster" system where shops (1 to 5) are grouped together.

Renewal of an individual license for 2025–26 was made contingent upon: (a) at least 70% of eligible licensees in the district applying for renewal, and (b) all shops within a specific cluster opting for renewal.

If these conditions were not met, the shops were subject to e-auction.

The petitioners’ renewal applications were cancelled because certain shops within their assigned clusters remained unrenewed, leading the Department to propose settling the entire cluster via auction.

1. Whether Clauses 2.2.6, 2.2.7, and 2.2.8 of the Excise and Temperance Policy 2025–2029 are arbitrary and violative of Article 14 of the Constitution by making an individual's renewal dependent on the actions of third parties.

2. Whether a citizen has a fundamental or vested right to the renewal of a liquor license under the Rajasthan Excise Act, 1950.

3. Whether the State’s “cluster” mechanism and the 70% district-wide threshold constitute a valid exercise of executive policy power.

The Court applied the doctrine of res extra commercium, establishing that there is no fundamental right to trade in liquor under Article 19(1)(g).

It relied on Khoday Distilleries Ltd. v. State of Karnataka (1995), which affirms the State's exclusive privilege to regulate intoxicants and create monopolies.

The Court invoked Section 37 of the Rajasthan Excise Act, 1950, which explicitly states that no licensee has a claim to renewal as a matter of right.

It further applied the principle of "Limited Judicial Review" in policy matters, holding that executive wisdom in fiscal and regulatory affairs is not subject to interference unless it is manifestly arbitrary or violates Article 14.

The Court reasoned that since liquor trade is a privilege and not a right, the State possesses wide discretion to determine the method of settlement to optimize revenue and prevent illegal trade in "fallow" areas.

The 70% district threshold and cluster requirements were found to be rational policy tools intended to ensure administrative stability and collective responsibility among vendors.

The Court rejected the argument of "economic coercion," noting that renewal is voluntary and petitioners had signed undertakings accepting these policy terms when applying.

Furthermore, the court observed that 6,420 out of 7,665 licensees had successfully opted into the cluster system, indicating broad acceptance and undermining the claim of inherent arbitrariness.

The clustering of shops was deemed a technical administrative exercise that did not infringe upon any constitutional guarantee.

It ruled that the petitioners have no vested right to renewal and that the State’s cluster-based policy falls squarely within its regulatory privilege.

The Court dismissed the batch of writ petitions, refusing to substitute its own wisdom for that of the executive in matters of excise revenue.

The cancellation of the petitioners' renewal applications and the consequential auction proceedings were upheld.