Arguing for UP govt, advocate Dinesh Dwivedi said Tuesday all liquids having alcohol qualify as intoxicating liquor and fall under Entry 8 of List II in Seventh Schedule, which confers exclusive jurisdiction to states to control and regulate all kinds of spirits produced from molasses.
The seriousness of the issue, involving a major revenue-generating source, wasn’t lost on SC, with a judge saying, “The argument of states is that whether intoxicating drinks bring joy to human beings or not, it should bring joy to state revenue.”
Recently, SC reserved verdict on another Centre-state dispute over taxation of mineral-bearing land.
SC: Overlap of jurisdiction of Centre, states on alcohol row
The subject was such that even members of the bench, which comprised 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, indulged in light banter to keep the proceedings cheerful.
One confessed ignorance about liquor to claim that he and his ilk on the bench will decide the issue impartially. Another judge told Dwivedi, a whisky lover, that he had explained how “some alcohol requires ageing to improve taste, while others don’t; some are fair in colour while others are dark”, and asked, “Would material exhibit help?” The question drew peals of laughter.
In the present case, states are empowered by Entry 8 of List II to control and regulate “intoxicating liquors, that is to say, production, manufacture, possession, transport, purchase and sale of intoxicating liquor”. The matter was referred to a nine-judge bench in 2010 as a seven-judge bench in 1997 had ruled that Centre will have regulatory power over production of industrial alcohol. Hence the question: Can industrial alcohol be termed as intoxicating liquor?
The conflict arises from Industrial (Development and Regulation) Act, 1951, & 2016 amendment empowering Centre to regulate industries producing, supplying, distributing and indulging in trade and commerce of industrial alcohol. Under Entry 52 of List I, Parliament in public interest can enact a law to regulate any industry.
CJI said the bench is “facing a conundrum as the two entries, Entry 52 of List I and Entry 8 of List II, are identical in nature and there is a complete overlap of jurisdiction of Centre and states. One way of deciding it is to rely on federal structure of governance and the other is to take guidance from Article 246(1)”, which explains distribution of law-making power of Parliament and assemblies. Arguments will continue on Wednesday.