On Wednesday, the Supreme Court ruled by an 8:1 majority that states enjoy the exercised power of regulating the production, manufacture, and supply of industrial alcohol. This verdict reverses a ruling given by a seven-judge bench and brings to an end a long-standing dispute over the Centre’s and states’ rights. CJI Dhananjaya Y. Chandrachud, who presided over the bench, said that its decision has left the legal profession confounded ‘for generations.’
The present proceedings emerged out of a petition of thirty appeals, mostly from various States questioning the correctness of the decision in Civil Appeal No. 947 of 1990 passed by the Supreme Court in the Synthetic and Chemicals Ltd case, which earlier delimited the filed of executive power of states over industrial alcohol. The majority verdict that CJI Chandrachud was disqualified overruled the 1990 judgment. It clearly stated that the power to legislate on industrial alcohol comes under Entry 8 of List 2 (State List) for Intoxicating liquor. The court was very clear that this power cannot be ousted by the legislative power of Parliament under Entry 52 of List 1 (Union List), which relates to ‘Industries’ in general.
While delivering the verdict, the bench had seven judges, CJI D Y Chandrachud giving the majority opinion, and five of the six other judges also agreed with him. Justice B.V. Nagarathna dissented from the majority by stating that okaying taxing rights in states could have unfavorable consequences and could interfere with the two political tiers in the Constitution. Justice Nagarathna also based her argument on the claim that the field of industrial alcohol should be with the central Legislature alone, and without reading the Letter of Patent notification, the following should not be construed to be state legislation power under Entry 8. With regard to this, she supported the maintenance of the decision made in 1990, stating that there are many issues in connection with the regulation powers concerning this subject area.
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