Supreme Court: In a significant decision rendered on 23-10-2024 qua the States’ power to tax industrial alcohol, the 9-Judge Constitution Bench of the Supreme Court, with a ratio of 8:1, held that ‘industrial alcohol’ comes within the purview of ‘intoxicating liquor’ under Entry 8 of List II of the Constitution and hence, States can regulate and impose tax on industrial alcohol.
The majority comprising of Dr DY Chandrachud, CJI and Hrishikesh Roy, Abhay S. Oka, JB Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih, JJ., held that the meaning of intoxicating liquor under the State List is beyond the narrow definition of alcoholic beverages or potable alcohol and includes all kinds of alcohol which can adversely affect public health.
This majority decision further overruled its 7-Judge Bench ruling in Synthetics and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109, wherein it was held that States cannot tax industrial alcohol.
B.V Nagarathna, J., was the sole dissenter in the matter. She stated that that ‘industrial alcohol’ means alcohol which is not fit for human consumption and that an artificial interpretation cannot be adopted to give a different meaning to the term ‘intoxicating liquor’ which is contrary to the intention of the constitution makers.
Source: Press
