Let me first say that I don't know quite how the prohibitions work in Varanasi. It's a holy city, and it was my understanding that within certain city limits, there's no alcohol or meat products. It's supposed to be vegetarian only. We were eating vegetarian on this trip, so that was fine by us, and we don't really drink, so again no matter. However, if you want a drink and some chicken, the Dolphin (at the top of the Rashmi Guest House just a hop north of the main ghat) has it, and people seemed to be enjoying it.
We went for the view which is truly spectacular, and the waitstaff were very patient with us, allowing us to sit for quite awhile having only ordered a chai and some water (and we did leave an ample tip as a thank you). We came back a second time and had a very simple meal (dal and rice which was good, but not outrageously good) so that we could partake of the view again on New Year's Eve.
I don't think they have to try too hard with the food because the location is just so perfect (you look far up and down the river); neverthless the staff were very nice, the menu large and varied, and the food just fine. It seemed other travelers were very happy to have a few bottles of beer---I didn't notice what brands were available---and the non-veg dishes smelled pretty good. (The menus themselves could use a bit of a wipe-down and I did have to wipe out my teacup both times before pouring my chai, so just be aware that it's a little bit grubby.)
This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC.