'State's power to make laws on industrial alcohol can't be taken away': SC in 8:1 majority verdict

NEW DELHI: The Supreme Court, with an 8:1 majority, overturned a previous seven-judge bench verdict and said that states have the regulatory authority over the production, manufacture, and supply of industrial alcohol.
Court's 9-Judge bench led by CJI D Y Chandrachud gave a huge revenue fillip to states by ruling that they have legislative taxing control over all kinds of alcohol including industrial alcohol and its raw material, limited only by Parliament law specified industries.
The apex court ruled that "industrial alcohol" falls within the definition of "intoxicating liquor" under Entry 8 of List II of the Constitution, thereby granting states the authority to regulate and tax its production.
"The state's power to make laws on industrial alcohol cannot be taken away," SC said while delivering the verdict.
Justice B V Nagarathna dissented and said Parliament had the power to regulate industrial alcohol in its entirety while the states have control over potable alcohol or intoxicating liquor.
Contour of the judgment followed fiscal federalism rationale laid down in the case relating to state's power to tax extracted mineral and mineral bearing land by the bench, with Justice Nagarathna's dissent who in both cases upheld Parliament supremacy in legislative domain.
In final lighter vein comment, Justice Hrishikesh Roy, said "for the winning side (states) the happy hours begin now." SG Tushar Mehta said "even the losing side needs it." Justice Roy said, "But don't lose control (after the happy hours)."
This recent decision was given after a series of petitions challenged a ruling from a seven-judge Constitution bench, which had previously favored central regulatory authority over industrial alcohol production.
This ruling follows hearings that took place on April 18, involving arguments presented by Attorney General R Venkataramani, Solicitor General Tushar Mehta, and senior advocates Dinesh Dwivedi and Arvind P Datar, who represented the Uttar Pradesh government, alongside other state representatives.
The court clarified that industrial alcohol is not intended for human consumption, distinguishing it from intoxicating liquors covered under the Constitution.
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 legislate on topics within the Concurrent List, the Supreme Court reaffirmed that central laws take precedence over state legislation.
In a 1997 ruling, the seven-judge bench had declared that the Centre possessed regulatory power in this area, leading to the referral of the case to the nine-judge bench in 2010. In 1990, the seven-judge bench had interpreted the Industries (Development and Regulation) Act of 1951 as an indication of the Centre's intention to assert legislative control over the matter, thus limiting state governments' powers under Entry 33.