Supreme Court on Alcohol Regulation

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The Supreme Court reinforces state powers over regulating alcohol, including both potable and industrial uses, preserving the federal balance.

The Supreme Court of India has upheld the federal balance in regulating alcohol, clarifying that “intoxicating liquors” in the State List under the Constitution includes both potable and industrial alcohol. This ruling, delivered by a nine-judge bench, extends the states' powers to regulate all alcohol products, including those used for industrial purposes like rectified spirit, extra neutral alcohol, and denatured alcohol. The ruling also asserts that the central Industries (Development and Regulation) Act (IDRA) of 1951, which lists "fermentation industries" under Union control, does not extend to the regulation of intoxicating liquors.

Chief Justice D.Y. Chandrachud emphasized that allowing the Union to regulate alcohol would upset the federal balance. This ruling follows another significant verdict that affirmed states' rights to tax mineral-bearing lands, reinforcing states' legislative authority against Parliament's interference. However, Justice B.V. Nagarathna dissented, arguing that the constitutional focus on fermentation industries gave the Union control over industrial alcohol, which is crucial for the chemical industry and fuel blending. She emphasized that Parliament only excluded potable alcohol from regulation, not industrial alcohol.