Balancing the scale

In a milestone verdict on Wednesday, the Supreme Court affirmed that states have the right to regulate not only alcoholic beverages but also "industrial" alcohol—with an 8:1 majority ruling on this long-contested issue.

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Alcohol has long been a key source of revenue for states, particularly through excise duties on drinking liquor.

The Supreme Court's decision further opens up a new avenue, empowering states to tax industrial alcohol as well.

The roots of the decision lie deep in constitutional interpretation—marking a much-needed distinction in the realm of federalism.

The issue at hand revolves around whether the term "intoxicating liquor" could be stretched to include industrial alcohol, which is not intended for human consumption but rather used in a variety of industries such as pharmaceuticals, cosmetics, and cleaning agents.

The Centre argued that industrial alcohol, categorized under the Industries (Development and Regulation) Act of 1961 (IDRA), falls under its jurisdiction as a controlled industry.

Meanwhile, states maintained that they should be allowed to regulate it to prevent the risk of it being repurposed into illicit, dangerous liquor—a significant issue that has resulted in several public health tragedies lately.

Chief Justice of India DY Chandrachud, who authored the majority opinion, argued that the term "intoxicating liquor" should be understood broadly.

The logic was that "intoxication" doesn't solely refer to the effect of drinking but also to poisoning.