In a landmark judgment, the Supreme Court of India has clarified the division of powers between the Centre and states regarding the regulation of industrial alcohol. The Court’s decision, delivered by an eight-judge bench, overruled a previous 1990 judgment and affirmed the states’ authority over the production, manufacture, supply, and regulation of industrial alcohol.
The Bench comprised of Chief Justice DY Chandrachud, Justice Hrishikesh Roy, Justice Abhay S. Oka, Justice JB Pardiwala, Justice Manoj Misra, Justice Ujjal Bhuyan, Justice Satish Chandra Sharma, and Justice Augustine George Masiah. Justice BV Nagarathna dissented.
Key Issues Considered
The Court held that state governments have the primary authority to legislate on intoxicating liquor, including industrial alcohol, under Entry 8 of the State List.
Entry 8 of List II deals with ‘intoxicating liquors’. These words are followed by the expression “that is to say, the production, manufacture, possession, transport, purchase and sale of intoxicating liquors”.
“….Parliament under Entry 52 of List I does not have the legislative competence to enact a law taking control of the industry of intoxicating liquor. The State Legislatures will have control over the industry of ‘intoxicating liquor’. Parliament could not have taken control of the field covered by Entry 8 since we have interpreted intoxicating liquor to include alcohol other than potable alcohol as well. Therefore, Item 26 of the First Schedule to the IDRA must be read as excluding the industry of “intoxicating liquor”, as interpreted in this judgment.“
In her dissenting judgment, Justice BV Nagarathna agreed that the Parliament under Entry 52 of List I does not have the legislative competence to enact a law taking control of the industry of intoxicating liquor. However, she concluded that states cannot have competence to wholly regulate industrial alcohol.
“…Merely because “industrial alcohol” can be easily manufactured into or misused to become “intoxicating liquors” would not grant States the competence to wholly regulate “industrial alcohol”. State legislatures only have legislative competence over what is “intoxicating liquors” as a beverage.”
Through its majority judgment, the Court overturned the 1990 judgment that had granted the Centre greater regulatory power over industrial alcohol.
Implications of the Judgment
This decision has significant implications for the Indian alcohol industry. It empowers state governments to enact their own regulations governing the production, distribution, and sale of industrial alcohol within their respective jurisdictions. This could lead to variations in policies and regulations across different states.
The judgment also raises questions about the Centre’s role in regulating industrial alcohol. While the Centre may still have some regulatory powers under the Concurrent List, the state governments now have greater autonomy in this area.
