A three-judge bench headed by Chief Justice J S Khehar relaxed the cap while noting that almost half the state revenue of Arunachal Pradesh came from the sale of liquor and 916 out of a total of 1011 shops have been affected by the 500-metre cap.
"The counsel appearing for Arunachal Pradesh states that the terrain in the state is similar to that of states of Sikkim and Meghalaya and, accordingly, Arunachal Pradesh deserves parity given to Sikkim and Meghalaya in the order passed by this court on March 31. The prayer is allowed," the bench, also comprising Justices D Y Chandrachud and L N Rao, said.
The bench also similarly allowed the prayer of the Andaman and Nicobar Islands and relaxed the 500-metre cap according to its March 31 order.
The apex court had on March 31 said that liquor vends within 500 metres of national and state highways will have to shut down from April 1, but had exempted the hill states of Sikkim, Meghalaya and Himachal Pradesh and areas having a population of up to 20,000.
The apex court also dealt with a similar plea of Uttarakhand which also sought a relaxation of the cap.
However, the counsel for Uttarakhand could not furnish the data on the revenue loss and was asked to furnish details.
"You provide us [with] the data. We will give you time. We are not agreeable at this stage. You provide the data first," the bench said and posted the matter for hearing next week.
A similar petition filed by Kerala also came up for hearing before the bench but the counsel appearing for the state said he would amend the application.
In a significant order on March 31 on the pleas of various states seeking modification of the court's December 15, 2016, verdict, the apex court had said that the ban on liquor vends along the highways would also be applicable to bars, pubs and restaurants as drunken driving led to fatal road accidents, particularly on highways which have high-speed traffic.
It had modified the 500-metre cap rule for Meghalaya, Sikkim, Himachal Pradesh and areas alongside highways with a population of up to 20,000, saying they may have liquor vends at a distance of 220 metres from highways.
On the issue of non-extension of liquor vends' licences beyond March 31, the apex court had said the licences, which were given before December 15, 2016, will be valid until September 30 in case of Telangana and would be operational till June 30 in Andhra Pradesh.
The court had ordered a ban on all liquor shops along the national and the state highways and made it clear that licences of existing shops will not be renewed after March 31.
The verdict had come on a PIL alleging that nearly 1.42 lakh people died per year in road mishaps and drunken driving was a major contributor.
It had also directed that all signages indicating the presence of liquor vends will be prohibited along the national and state highways.