SC opens tap for state regulation of industrial alcohol

In a big victory for states, the Supreme Court (SC) on Wednesday, in an 8:1 majority, upheld the states' right to regulate taxes on industrial alcohol, overruling a 1990 judgment.

- BHAVINI MISHRA

The verdict is likely to impact entities involved in the industrial alcohol sector, which will have to watch out for consequential regulatory changes in the future.

The court stated that 'industrial alcohol' falls within the meaning of 'intoxicating liquor' under Entry 8 of List II (State List) of the Constitution, allowing states to regulate and tax it accordingly.

A nine-judge Constitution Bench led by Chief Justice of India (CJI) D Y Chandrachud, including Justices Hrishikesh Roy, Abhay S Oka, BV Nagarathna, JB Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma, and Augustine George Masih, delivered its ruling on Wednesday. Justice Nagarathna provided a separate dissenting judgment.

The Bench indicated that the meaning of intoxicating liquor under Entry 8 of the State List extends beyond the narrow definition of alcoholic beverages or potable alcohol and includes all types of alcohol that can adversely affect public health.