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April 8 @ 7:00 am - 11:30 pm


The Supreme Court, led by the Chief Justice of India (CJI), is examining a pivotal case involving a 9-judge Constitution Bench. The focus is on determining whether states possess the authority to regulate and levy excise duty on industrial alcohol. 

Constitutional Framework: 

State List (Entry 8): 

  • Grants state governments the power to legislate on intoxicating liquors, encompassing production, manufacturing, possession, transportation, purchase, and sale. 

Union List (Entry 52): 

  • Empowers the Parliament to legislate on industries deemed beneficial for public interest. 

Concurrent List (Entry 33): 

  • Permits both states and the Centre to legislate on industries, but state laws must align with central laws to avoid contradictions. 

Industrial Alcohol Regulation: 

Industries (Development and Regulation) Act, 1951 (IDRA): Lists industrial alcohol as a regulated subject, granting regulatory powers to the central government. 

Central Question: 

Autonomy Over Regulation: 

  • The core issue revolves around whether states possess the authority to regulate industrial alcohol or if this power exclusively rests with the Centre. 

Legal Interpretation: 

  • While Concurrent List subjects can be regulated by both entities, the IDRA, 1951, implies central dominance over industrial alcohol. 

Arguments by the States: 

Interpretation of Entry 8: 

  • The term “intoxicating liquors” in Entry 8 is seen as encompassing all alcohol-containing liquids. 
  • Historical references from pre-constitutional excise laws support this interpretation. 

Scope of Union’s Power: 

  • Entry 52 doesn’t extend to regulating post-denatured “finished products” like industrial alcohol. 
  • Control over industrial alcohol falls under Entry 33 of the Concurrent List. 
  • Exclusive central authority requires an order under Section 18-G of the IDRA; otherwise, states maintain jurisdiction. 

Preservation of States’ Powers: 

  • Caution against reducing states’ authority is emphasized, referencing the ITC Ltd v Agricultural Produce Market Committee Case, 2002. 
  • Upholding states’ constitutional powers is crucial to avoid weakening their autonomy. 

Other Relevant Cases: 

Synthetics & Chemicals Ltd v. State of Uttar Pradesh Case, 1989: 

  • Held that states’ authority, as per Entry 8, is confined to “intoxicating liquors,” distinguishing them from industrial alcohol. 
  • Centre retains the exclusive right to impose levies or taxes on industrial alcohol. 

Ch Tika Ramji versus State of Uttar Pradesh Case, 1956: 

  • Upheld Uttar Pradesh’s legislation regulating the sugarcane industry against challenges. 
  • Affirmed states’ legislative authority even in the presence of central laws, setting a vital precedent. 

About Excise Duty: 

What is Excise Duty? 

  • An indirect tax on goods for their production, licensing, and sale. 
  • Producers remit this tax to the Government of India. 

Changes post-GST: 

  • With the introduction of GST in July 2017, various excise duties were combined. 
  • Currently, excise duty applies primarily to petroleum and liquor. 

Role in State Revenue: 

  • Excise duty on alcohol significantly contributes to state revenue. 
  • States often adjust excise duty rates to boost income; for instance, Karnataka increased the Additional Excise Duty (AED) on Indian Made Liquor (IML) by 20% in 2023. 

This case before the Supreme Court carries immense significance for federal governance and the balance of power between the Centre and states concerning industrial alcohol regulation and excise duty imposition. 


April 8
7:00 am - 11:30 pm
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