States will have the regulatory power over the production, manufacture and supply of industrial alcohol, the Supreme Court held on Wednesday as it also rejected the Centre’s stand that regulating the same was under its exclusive domain.The top court further observed Parliament did not have the legislative competence to enact a law taking control of the industry of intoxicating liquor.
The judgement assumes significance as it effectively opens up another window of a major revenue source for the state governments.
In a 8:1 majority ruling, the top 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 (CJI) 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 states did not have the legislative competence to regulate industrial alcohol or denatured spirit.
The apex court’s majority verdict overturned its 1990 seven-judge bench judgment holding that Centre had the regulatory power over the production of industrial alcohol.
“Irrespective of whether the term ‘industry’ is interpreted in a narrow or a wide manner (a point that is vehemently contested by both sides), the industry of intoxicating liquor cannot be taken over by Parliament under Entry 52 of List I,” the CJI said.