Mere Potential Misuse Of 'Industrial Alcohol' Cannot Justify Its Inclusion Under Entry 8 List II: Justice BV Nagarathna In Her Dissenting Opinion

While dissenting from the Supreme Court Judgment that held that Entry 8 State List II of seventh schedule of Constitution of India includes both industrial and products of intoxicating liquor, Justice BV Nagarathna held that merely because there can be a potential misuse of “industrial alcohol”, it cannot be included in Entry 8 List II.

The majority Judges of the Bench comprising of Chief Justice DY Chandrachud, Justice Hrishikesh Roy, Justice Abhay S. Oka, Justice JB Pardiwala, Justice Manoj Misra, Justice Ujjal Bhuyan, Justice Satish Chandra Sharma, and Justice Augustine George Masiah, overruled its 1990 Judgment.

"Merely because there can be a potential misuse of “industrial alcohol”, for example, by converting rectified spirit (“industrial alcohol”) as a beverage which has an intoxicating effect, Entry 8 – List II cannot be stretched to include such “industrial alcohol”, the judge observed.

Justice Nagarathna emphasized that the production and regulation of "industrial alcohol," which falls under "Fermentation Industries," are governed by the Centre under Entry 52 of List I through the Industries (Development and Regulation) Act, 1951 (IDRA). She pointed out that the IDRA includes Fermentation Industries, excluding intoxicating liquors, as a scheduled industry under its purview, thus reserving the Centre's authority over non-potable alcohol.

"The prevention of abuse of “industrial alcohol” as a beverage is also covered under Entry 8 – List II. Thus, what is carved out of “Fermentation Industries” in Entry 24 – List II is only “intoxicating liquors” used as beverage and thus, for direct human consumption the said subject is placed in Entry 8 – List II. This would imply that the rest of “Fermentation Industries” would be within the scope and ambit of Entry 24 – List II which is subject to Entry 52 – List I and is a scheduled industry as per Section 2 read with Item 26 of First Schedule of IDRA," Justice Nagarathna said. 

She reaffirmed that while state legislatures have the power to regulate intoxicating liquors, the control over industrial alcohol remains with the Centre under Section 18G of the IDRA and Entry 33(a) of List III. The Court also held that the earlier ruling in Synthetics and Chemicals (1990) need not be overruled and continues to distinguish between industrial and potable alcohol, with the Centre retaining authority over the former.

"One must also be cognizant of the fact that Entry 8 – List II concerns itself with “intoxicating liquors” even from a historical perspective. Constitutional framers were not engaged in a theoretical task of demarcating legislative fields but in their utmost wisdom and pragmatism distributed legislate fields between Parliament and State Legislatures that would continue to determine the governance of the nation. One must note that a construction of Entry 8 – List II should not potentially give the States the legislative competence to legislate on “industrial alcohol” which is a scheduled industry under IDRA. That Entry 8 – List II which deals with “intoxicating liquors” cannot also subsume industries for manufacture of “industrial alcohol”, etc," she said. 

Justice Nagarathna held, "Therefore, in deciding on “intoxicating liquors”, the contours of interpretation must be concerned only with the very nature of the product of “intoxicating liquors” rather than the entire industry concerning alcohol. Entry 8 – List II provides the legislative competence to States to regulate production, manufacture, possession, transport, purchase and sale of only “intoxicating liquors”. It must follow from this that what is being produced or manufactured or possessed or transported or purchased or sold must actually be “intoxicating liquors” and not any other alcoholic product."

Cause Title: State of UP & Ors. v. v. M/S Lalita Prasad Vaish [Neutral Citation No. 2024 INSC 812]  

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