New Delhi, Oct 23 (PTI) Dissenting from a majority verdict, Supreme Court’s Justice B V Nagarathna on Wednesday held that states lacked the legislative competence to regulate production, manufacture and supply of industrial alcohol.
In a 8:1 majority ruling, the Chief Justice of India D Y Chandrachud along with seven other judges, held states will have regulatory power over industrial alcohol and said the phrase “intoxicating liquor” in Entry 8 of the State List in the Seventh Schedule of the Constitution would include industrial alcohol within its ambit.
In a dissenting minority judgement running into 238-pages, Justice Nagarathna, who was also part of the nine-judge bench, said only because industrial alcohol, by a process, can be converted to alcohol for human consumption as a beverage, it did not entitle the State Legislature to tax or regulate it.
“Denatured alcohol belongs to the family of industrial alcohol and, therefore, Section 18G of the Industries (Development and Regulation) Act (IDRA) has a bearing on the said product,” she said.
The judge further noted Section 18G occupied the field under Entry 33(a) – List III and, thereby, only Parliament was competent to legislate on all articles or a class of articles related to a scheduled industry, namely, fermentation industries.
The judge said IDRA, which has been enacted by Parliament by virtue of Entry 52 – List I has taken control of fermentation industries as a scheduled industry.
Such fermentation industries would exclude intoxicating liquors, she added.
“The states as per Entry 8 – List II have the power to regulate “intoxicating liquors” which is for human consumption as a beverage and in that regard have the power to prohibit “industrial alcohol” being converted to alcohol for human consumption as a beverage,” the judge noted.
Justice Nagarathna, therefore, underlined, “This is in order to protect the health of citizens which is a Directive Principle of State Policy under Article 47 of the Constitution and in order to prohibit unauthorised use/misuse of ‘industrial alcohol’ produced in the state from being converted and sold as ‘intoxicating liquors’ meant for human consumption as a beverage.” While Entry 8 in the State List under the 7th Schedule of the Constitution gives the states the power to legislate on the manufacture, possession, transport, purchase and sale of “intoxicating liquors”, Entry 52 of the Union List and Entry 33 of the Concurrent List mention industries whose control was “declared by Parliament by law to be expedient in public interest”.
While both parliament and state legislatures can enact laws on the subjects mentioned in the Concurrent List, a central law holds primacy over the state law.
Several state governments including Uttar Pradesh had challenged the seven-judge bench judgement and challenged that Centre’s position that it had an exclusive control over industrial alcohol.
The seven-judge bench had, in 1990, observed that through the Industries (Development and Regulation) Act, 1951, the Union had “evinced a clear intention to occupy” legislative competence on the subject and hence, Entry 33 could not empower a state government.
The matter was referred to the nine-judge bench in 2010 after the seven-judge bench ruled that the Centre would have regulatory power over the production of industrial alcohol. PTI PKS AMK PKS AMK AMK AMK
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