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The Supreme Court on Tuesday questioned the Union government regarding the regulatory powers of states over industrial alcohol, emphasising the latter’s role as guardians of public health.
“We all know about hooch tragedies, and the states are widely concerned about the health of their citizens. Why should the states not have the power to regulate? If they can regulate to ensure that there is no misuse, then they can impose any fees,” remarked a nine-judge Constitution bench, headed by Chief Justice of India Dhananjaya Y Chandrachud.
The bench, also comprising justices Hrishikesh Roy, Abhay S Oka, B V Nagarathna, J B Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih, is examining the issue of overlapping jurisdiction between the Centre and states in the production, manufacturing, supply, and regulation of industrial alcohol.
“Denatured spirit can be converted into intoxicating liquor by a process…The Centre is a national entity. You are not going to control what is happening in a district or collectorate. Suppose there is a strong possibility of denatured spirit being misused for consumption. The state is rightly concerned as a custodian of health, and it can impose regulations for ensuring that abuse does not take place. Why should we deny them the power to impose fees for that purpose?” the bench asked solicitor general Tushar Mehta, representing the Centre.
Responding, the S-G said that regulation of industrial alcohol lies with the Centre under the Industries (Development and Regulation) Act (IDRA), 1951, and hence, only the Union has legislative power to levy excise duty on alcohol not fit for human consumption. He added that every industry covered by Schedule I of the 1951 Act would be impacted by the court’s interpretation, not simply industrial alcohol, which was the petitioners’ sole point of contention.
Mehta submitted that the Centre is also entitled to control the requirements of a particular industry if it ought to be governed by economic factors of an all-India import and cannot be permitted to be decided by any state according to their provincial interests.
“The Parliament, under List I Entry 52, is fully entitled to control everything as per its wisdom, requirements of a particular industry and to achieve the stated object of IDRA when Parliament is satisfied that the activities of an industry/industries which affects the country as a whole,” Mehta said.
The hearing concluded inconclusively and is set to resume on April 16.
The nine-judge bench is hearing a batch of 30 appeals referred to it by a five-judge bench in December 2010 doubting the correctness of a 1990 judgment that took away state’s power in relation to industrial alcohol under Entry 33 of the Concurrent List. This entry provides for trade and commerce in production, supply and distribution of certain industrial products. The ruling also categorised “denatured spirit” as industrial alcohol, placing its regulation outside the jurisdiction of states. Some of the states, including the state of Uttar Pradesh, have sought a reconsideration of the 1990 SC decision in Synthetics & Chemicals Limited Vs State of UP, arguing the previous judgment will have a deleterious effect on the state funds.
The Centre, on its part, has maintained that any liquid containing alcohol not fit for human consumption but meant for industrial use will fall within the regulation regime of the Centre.
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