Nine-judge Bench to pronounce verdict on Centre-States’ tussle over industrial alcohol

Supreme Court to decide on States' challenge to Centre's control over industrial alcohol, impacting public health and taxation.

A nine-judge Constitution Bench of the Supreme Court is scheduled on October 23 to pronounce its judgement on multiple States’ challenge to the Centre’s position that it has exclusive control over industrial alcohol.

The Constitution Bench headed by Chief Justice of India D.Y. Chandrachud heard States’ objections to the Centre’s tight grip over industrial alcohol, without even letting them have the opportunity to regulate its inflow and clandestine conversion to potable liquor for human consumption, posing a grave threat to public health.

“There is a strong possibility of denatured spirit or industrial alcohol being misused for the purpose of human consumption. The State is the guardian of public health. States are concerned about liquor tragedies happening within their jurisdictions. You (the Centre), on the other hand, are a disconnected entity. A national entity. You are not going to be concerned with what happens in a district or a collectorate… Why can’t the State make regulations to prevent the misuse of industrial alcohol and its conversion into intoxicating liquor?” Chief Justice Chandrachud had asked Solicitor General Tushar Mehta, appearing for the Centre, during a hearing in April 2024.

At the crux of the case is the tussle between the Union and the States over the power to levy tax, manufacture, and produce alcohol.

The Centre claimed that industrial alcohol was an ‘industry’ controlled by the Union government in public interest under a parliamentary law. Such an industry was covered by Entry 52 of the Union List in the Seventh Schedule of the Constitution. Though trade and commerce, supply, distribution, and production of the products of such industries were included as Entry 33(a) of the Concurrent List, this had to be read in consonance with and as an extension of the Centre’s power under Entry 52. In short, the Centre was in complete control of every aspect of such industries.

Mr. Mehta said the States’ power extended to only ‘intoxicating liquors’ fit for human consumption. This was covered under Entry 8 of the State List along with Entry 6 (public health).

However, States like Kerala, Maharashtra, Punjab, and even a petition from Uttar Pradesh, raised alarm over the use of industrial alcohol to make intoxicating liquor. In such cases, they had argued that States cannot remain mute spectators and wait for tragedy to strike.