On the fourth day of the proceedings regarding the regulation of industrial alcohol, the Supreme Court questioned the Centre’s stance on why states shouldn’t have the authority to impose regulations aimed at preventing the abuse of industrial alcohol.
NEW DELHI: On Tuesday (9th April): The Supreme Court of India sought clarification from the Centre regarding the powers of states to impose regulations on industrial alcohol and levy fees to prevent its misuse. A nine-judge constitution bench is currently examining the issue, which involves determining the extent of overlapping powers between the Center and states in the production, manufacturing, supply, and regulation of industrial alcohol.
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The bench also comprised Justices Hrishikesh Roy, Abhay S. Oka, B. V. Nagarathna, J. B. Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma, and Augustine George Masih.
During the proceedings, the bench, headed by Chief Justice D.Y. Chandrachud, questioned the Center on why the states should not have the authority to regulate industrial alcohol to prevent its misuse. The Chief Justice highlighted the states’ concerns about the health of their citizens and suggested that if the states can regulate industrial alcohol to prevent abuse, they should also be able to impose fees for that purpose.
Background
The matter was referred to the nine-judge bench in 2010 following a ruling by a seven-judge constitution bench in 1997, which granted regulatory powers over the production of industrial alcohol to the Center. The previous bench had based its decision on the observation that the Industries (Development and Regulation) Act, 1951, demonstrated the Centre’s intention to occupy legislative competence on the subject. It concluded that the states could not exercise regulatory powers in this domain.
The seven-judge bench had in 1990 observed that through the Industries (Development and Regulation) Act, 1951, the Union had “evinced a clear intention to occupy” legislative competence on the subject, and hence Entry 33 could not empower a State Government.
“Why shouldn’t states have the authority to regulate, given the widespread concern over Hooch tragedies and the health of their citizens? If regulation can prevent misuse, then surely they can impose any necessary fees,” questioned the bench led by Chief Justice D.Y. Chandrachud, addressing Solicitor General Tushar Mehta, who represented the Centre.
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A bunch of petitions came before the bench after a seven-judge constitution bench ruled against the states.
The nine-judge constitution bench asked Mehta why the states cannot have a regulatory mechanism for industrial alcohol.
“Given that denatured spirits can be transformed into intoxicating liquor through a certain process, there’s a risk of misuse. Shouldn’t the state have the authority to regulate and prevent such abuse?”
“The Center, being a national body separate from the state, won’t manage occurrences at the district or collectorate level. Imagine if there’s a significant risk of denatured spirits being repurposed for consumption.”
“The state, acting as a guardian of public health, has every right to enact regulations to prevent abuse. Why then should we withhold the authority to levy fees for such purposes?” observed the bench.
Referring to Hooch tragedies in the country, it said, “Can the state not say that this is happening within my territory and is likely to cause law and order problems?
Mehta replied that regulation of industrial alcohol lies with the Centre under the Industries (Development and Regulation) Act, 1951, and only the Union has legislative power to levy excise duty on alcohol not fit for human consumption.
Commencing his arguments before the nine-judge bench, the law officer said the interpretation given by the court would not impact just industrial alcohol (the only subject argued by the petitioners) but every industry included in Schedule I of the Industries Regulation and Development Act, 1951.
“Some of the industries have always been considered to be necessary to remain under central control if they are found to be in the national interest. Since the beginning of the evolution of Entry 52 List I, the power of the central government to take such industries under its control has existed.
“From the outset of Entry 52 List I’s development, it has been acknowledged that certain industries must stay under central government oversight if deemed in the national interest. The central government has always had the authority to bring such industries under its control.”
Mehta submitted that the Union 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.
“Initially, it should be noted that this reference does not concern the tax-related provisions for alcohol, whether for drinking or not. The questions posed in the reference do not address this issue, nor have the petitioners presented arguments on the taxing authority of Parliament compared to that of the state legislature,” stated Mehta.
The Center previously affirmed its authority to regulate industrial alcohol, stating to the apex court that the power to impose excise duty on alcohol unfit for human consumption but intended for industrial purposes rests solely with Parliament.
Attorney General R. Venkataramani emphasized that a deliberate decision was made to differentiate between alcoholic beverages fit for human consumption and those not fit for human consumption. The former falls under provincial legislatures’ purview, while the latter falls within the federal legislature’s scope.
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During earlier proceedings, both BJP-led Uttar Pradesh and TMC-administered West Bengal concurred in the Supreme Court, asserting that states possess complete and unrestricted legislative authority to regulate industrial alcohol, beyond the Centre’s control.
Senior advocate Dinesh Dwivedi, representing the Uttar Pradesh Government, argued that historically, the jurisdiction over alcohol, including industrial alcohol, has always resided with the states, and the Centre lacks jurisdiction in this domain.
The hearing remained inconclusive and will resume on April 16.
