SC overturns ’90 verdict on industrial alcohol

New Delhi: The Supreme Court in an 8:1 majority verdict on Wednesday overturned a seven-judge bench judgment and held that the states have regulatory power over production, manufacture and supply of industrial alcohol.

Industrial alcohol refers to denatured alcohol which is unfit for human consumption. Chemical compound ethyl alcohol (95 per cent concentration) is an industrial form of alcohol.

The apex court held that 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.

The majority bench comprised Chief Justice of India D.Y. Chandrachud and Justices Hrishikesh Roy, Abhay S. Oka, J.B. Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih.

Justice B.V. Nagarathna, however, dissented and held that states did not have the legislative competence to regulate industrial alcohol or denatured spirit.

The majority verdict overturned a 1990 seven-judge bench verdict in Synthetics & Chemicals Ltd. Vs. State of Uttar Pradesh holding that the centre had the regulatory power over the production of industrial alcohol.

The CJI, who penned the majority verdict, also writing on behalf of the seven judges, said Entry 8 sought to regulate everything from “raw materials to production of intoxicating liquor”.

In its 364-page judgment, the top court said: “Parliament cannot occupy the field of the entire industry merely by issuing a declaration under Entry 52 of List I. The state legislature’s competence under Entry 24 of List II is denuded only to the extent of the field covered by the law of Parliament under Entry 52 of List I.”

Parliament does not have the legislative competence to enact a law taking control of the industry of intoxicating liquor, reads the verdict.

The judgment said the phrase “intoxicating liquor” in Entry 8 included all alcoholic liquids which could harm public health. 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”.

Both Parliament and state legislatures can enact laws on the subjects mentioned in the Concurrent List. However, a Central law will have primacy over the state law.

Several state governments including Uttar Pradesh had challenged the seven-judge bench judgment and countered Centre’s position that it had exclusive control over industrial alcohol.

The Union government referred to its power in Entry 52 of the Union List, which said “industries, the control of which by the Union is declared by Parliament by law to be expedient in public interest”.

Asserting its regulatory right over industrial alcohol, the Centre had contended that framers of the Constitution intended to give it complete control over any industry through enactment of Industrial (Development and Regulation) Act, 1951 in “public interest”.