‘State can’t regulate molasses used as non-intoxicant under Excise Act’

Raipur: The Chhattisgarh high court has declared the ‘Chhattisgarh Molasses Control and Regulation Rules, 2022' as ultra vires and unconstitutional. The ruling came in response to a batch of 30 writ petitions. The petitioners challenged the 2022 Rules, which mandated excise licences and duties for the possession and transport of molasses. They argued that molasses in its raw form is not an ‘intoxicant' or ‘liquor' as defined under the Excise Act.The petitioners included various traders and manufacturers of cattle feed and gudakhu (tobacco paste).The state govt defended the rules, contending that molasses is a key raw material for producing potable liquor. Additional advocate general Shashank Thakur argued that the state must regulate its supply and possession to prevent illegal conversion into alcohol and subsequent revenue loss.A division bench comprising Chief Justice Ramesh Sinha and Justice Ravindra Kumar Agrawal ruled that the state govt cannot regulate molasses used for non-intoxicant purposes under the Chhattisgarh Excise Act, 1915. The court observed that rules framed under a statute cannot enlarge its scope or travel beyond the object defined in its preamble. Molasses is a thick, dark brown liquid obtained from raw sugar during the refining process.Senior counsel Manoj Paranjpe, appearing for the petitioners, submitted that molasses is a by-product of sugar and is primarily used for non-intoxicant purposes like cattle feed and industrial applications. He argued that while the state has the power to regulate molasses used for distilling spirit, it lacks the legislative competence to interfere with ordinary trade involving non-intoxicant uses. The petitioners also highlighted that molasses is subject to a 28% Goods and Services Tax (GST) by the central govt, further proving it is not treated as an intoxicant, which is outside the GST's purview. The court noted that Section 2 of the Chhattisgarh Excise Act does not list molasses as an ‘excisable article,' ‘intoxicant', or ‘intoxicating drug'. It held that the expression ‘any other base' in Section 8 of the Act cannot be stretched to include raw molasses.The bench clarified that while the state can control molasses intended for distilleries, extending this control to agricultural or industrial uses violates settled principles of statutory interpretation. "The Rules of 2022 extend control to non-intoxicant uses, impose licensing and duty, and regulate ordinary trade activity. This clearly travels beyond the scope of the Excise Act," the court stated. Following the declaration of the rules as unconstitutional, the court allowed all writ petitions. The petitioners are now entitled to consequential reliefs, including the withdrawal of any past or proposed coercive measures initiated by the excise authorities.