‘Who Controls Alcohol?’ Why Centre & States Locked Horns In Supreme Court Over Liquor

The Supreme Court this week has constituted a special nine-judge constitutional bench to answer if ‘industrial alcohol’ is the same as ‘intoxicating liquor.’ The answer to this question is crucial to decide who gets money generated from the taxes on liquor and liquor products.

The states maintain that they have exclusive jurisdiction over all sorts of alcohol, be it fit for human consumption or not. Whereas a seven-judge Supreme Court bench in 1997 had ruled that Centre will have regulatory power over production of industrial alcohol.

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What Is The Difference Between Industrial And Intoxicating Alcohol?

Intoxicating liquor as the name suggests includes alcohol that is fit for human consumption. These included your regular spirits you encounter in liquor shops, restaurants, or bars like whisky, vodka, gin, rum and country liquor and so on.

Industrial Liquor is an impure form of ethanol that is used in industry in products like perfumes, cleaners, cosmetics, fuels, pharmaceuticals, textiles products and much more.

Industrial liquor is called denatured liquor that is not suitable for human consumption. It is called denatured because nauseous substances are added to it to make it unpalatable.

Both Industrial as well as Intoxicating liquor is made from rectified spirit. This rectified spirit is a highly concentrated and toxic spirit.

The state and Centre are arguing over the difinations of Industrial Liquor, Intoxicating Liquor, denatured liquor and rectified liquor. States maintain that there is no difference between Industrial Liquor and Intoxicating liquor. Cousel appearing for states have termed ‘Industrial Liquor’ as misnomer.

Need For Regulating Manufacturing And Sale Of Alcohol

Often, industrial alcohol is used illegally to manufacture intoxicating liquor for illegal trade. Both the Centre and States have some overlapping legislative powers over alcohol. There are three lists in the Constitution that define powers of States and Centre. 

Under the State list’s entry 8, a state can make laws on the production, manufacture, possession, transport, purchase and sale of intoxicating liquors.

Under the Union list’s entry 52 the Centre has powers to regulate industries that Parliament finds to be of “public interest.”

Accordingly, the Industries (Development and Regulation) Act, 1951, has given the power to regulate specific products related to scheduled industries to the Centre. This provision was made to ensure that the products were distributed and sold fairly.

However, the Concurrent list that consists of products listed for regulation by both Centre and States can make laws on the products of any industry, even if Parliament has given control to the Centre in public interest. 

This has raised the question, which the nine-judge bench has to decide — “Is industrial liquor same as Intoxicating liquor?”

The conflict between States and Centre arises from Industrial (Development and Regulation) Act, 1951, & 2016 amendment that gave Centre power to regulate industries producing, supplying, distributing and indulging in trade and commerce of industrial alcohol. 

Appearing for the Uttar Pradesh government, advocate Dinesh Dwivedi said that all liquids having alcohol qualify as intoxicating liquor and fall under Entry 8 of List II in Seventh Schedule. The States argue that they have exclusive control over alcohol.

A bench of Chief Justice D Y Chandrachud and Justices Hrishikesh Roy, A S Oka, B V Nagarathna, J B Pardiwala, Manoj Misra, Satish C Sharma and Augustine Masih are hearing the arguments in the case.