State's cluster-based excise policy and renewal thresholds are valid exercises of regulatory privilege under Article 14.

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 Policy introduced a "cluster" system where shops are grouped (1–5 shops) for settlement.

Under the impugned clauses, renewal of an individual license 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/clusters were subjected to e-auction.

The petitioners, despite fulfilling individual eligibility and paying fees, had their renewal applications cancelled because other shops in their respective clusters remained unrenewed or district thresholds were unmet.

1. Whether Clauses 2.2.6, 2.2.7, and 2.2.8 of the Excise Policy 2025–2029 are arbitrary, discriminatory, and violative of Article 14 of the Constitution by making an individual’s renewal dependent on third-party conduct.

2. Whether the State’s executive privilege in regulating liquor trade exempts its policy decisions from judicial review on the touchstone of reasonableness.

3. 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*; instead, the State holds "exclusive privilege" over its manufacture and sale, relying on *Khoday Distilleries Ltd. v. State of Karnataka (1995)*.

State action must still satisfy the test of non-arbitrariness under Article 14.

The Court 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 doctrine of estoppel was also invoked against petitioners who participated in the renewal process after accepting the policy terms.

The Court reasoned that while liquor trade is a regulated privilege, the State's policy must be evaluated for "manifest arbitrariness".

It held that the 70% district threshold and the cluster mechanism were rational policy tools aimed at revenue optimization, administrative efficiency, and preventing "fallow areas" where illegal trade might proliferate if certain shops remained unsettled.

The Court rejected the argument that these clauses were coercive, noting that the State is entitled to adopt collective settlement mechanisms to ensure all shops (even low-potential ones) are accounted for.

Since the policy applied uniformly across all districts, it did not create a hostile classification.

Furthermore, the Court emphasized that judicial review does not allow the substitution of "policy wisdom" with judicial opinion, especially in fiscal matters involving State revenue.

The Court held that petitioners have no fundamental or vested right to renewal.

Having participated in the process with full knowledge of the conditions, the petitioners could not challenge them upon failing to secure renewal.

Consequently, the High Court dismissed the entire batch of writ petitions, upholding the validity of the Rajasthan Excise & Temperance Policy 2025–2029.