State vs. Central Authority: Alcohol Regulation Conflict

State vs. Central Authority: Alcohol Regulation Conflict

The ongoing Supreme Court proceedings involve a pivotal debate on the authority of state governments to regulate various aspects of industrial alcohol, including its sale, distribution, and pricing. The case, presided over by a 9-judge Bench led by Chief Justice of India D Y Chandrachud, stems from a notification issued by the Uttar Pradesh government in 1999. This notification introduced a 15% fee on alcohol sales to license holders under the UP Excise Act, 1910, for industrial purposes.

Constitutional Context:

At the heart of the matter lies the interpretation of constitutional provisions, specifically:

1. State List (Entry 8): This empowers states to legislate on matters related to "intoxicating liquors," encompassing production, manufacture, possession, transport, purchase, and sale.
2. Union List (Entry 52) and Concurrent List (Entry 33): These entries pertain to industries subject to regulation by Parliament in the public interest. Notably, while the Concurrent List allows for state and central legislation, any state law must not contradict existing central legislation.

Industrial alcohol falls under the purview of the Industries (Development and Regulation) Act, 1951 (IDRA), a central legislation.

Legal Precedents:

Previous Supreme Court judgments provide crucial context:

1. In the landmark 1989 case of "Synthetics & Chemicals Ltd v. State of Uttar Pradesh," a 7-judge Constitution Bench affirmed that states' authority under Entry 8 of the State List extends only to intoxicating liquors distinct from industrial alcohol.
2. However, the court's stance in "Ch Tika Ramji v State of UP" (1956) is notable, where a five-judge bench upheld Uttar Pradesh's legislation regulating sugarcane supply despite Section 18-G of the IDRA conferring exclusive jurisdiction on the Centre over the sugar industry.

Present Arguments:

Senior Advocate Dinesh Dwivedi, representing the State of UP, contends that "intoxicating liquors" within Entry 8 encompass all alcoholic liquids. Additionally, he argues that without a directive under Section 18-G of the IDRA, states retain regulatory control over industrial alcohol.