'Intoxicating Liquor' Doesn't Include 'Denatured Spirit', But Includes 'Extra Neutral Alcohol' : State Of Kerala To Supreme Court

The Supreme Court on Thursday concluded its 9-judge Constitution Bench hearing on the issue whether States have the power to regulate 'industrial alcohol' using their powers over 'intoxicating liquor' or whether it is exclusively reserved for the Union. “Denatured spirit is an end product and therefore it can be synonymous to industrial alcohol, it would not come within the purview of Entry 8 List II, because Entry 8 is about intoxicating liquor and we have no material to assume even upon the hypothetical basis that denatured spirit would be a raw material for potable alcohol/ rectified spirit.” Other States like Uttar Pradesh, West Bengal and Maharashtra have taken the stance that 'intoxicating liquor' is wide enough to cover 'industrial alcohol' as well. “Every aspect of the manufacture of intoxicating liquor is covered by Entry 8 List II, therefore my lords, production of ENA, which would be considered as a stage prior to the making of the Indian Made Foreign Liquor / potable alcohol or a beverage as the Centre may call it, is also covered by Entry 8 List II. There are industries which procure molasses or malt, come to the stage of rectified spirit and then sell it to another unit which manufactures ENA….but every aspect of it would be covered by Entry 8 List II….Every aspect of the process by which ultimately we get into the stage of IMFL would be covered by Entry 8 List II.” The CJI then observed that the said argument of Mr Giri to include a raw material like ENA under the meaning of the production process of 'intoxicating liquor' would run contrary to the definition of 'industry' as laid down in the case of Tika Ramji. The said Entry 31 List II is presently in the form of Entry 8 List II of the Constitution; secondly, the judicial precedents of the Top court have held that when there is a conflict between the entries in List I and List II, the same should be reconciled harmoniously- “ It is only when no reconciliation is possible it is then that Parliamentary supremacy takes place” ; Thirdly, none of the local Acts during the British Raj from which the basic understanding of liquor has been derived presently, make a clear distinction between industrial alcohol/ denatured spirit and potable alcohol and lastly, the required of a 'notified order' by the centre under S. 18 G of the IDR Act is a positive direction and cannot be defended by Union's earlier reliance on Doctrine of Forbearance.