# State of U.P. & Ors v. M/s Lalta Prasad Vaish and sons

- **Citation:** 2024 INSC 812
- **Court:** Supreme Court of India
- **Decided:** 2024-10-23
- **Case number:** Civil Appeal No. 151 of 2007
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-u-p-ors-v-m-s-lalta-prasad-vaish-and-sons-37303
- **Pages:** 252

## Headnote

The issues which arise for adjudication in this reference pertain
to the scope of the power of the State Legislatures under Entry 8
and the meaning of the phrase "intoxicating liquor". The question
is whether "intoxicating liquor" in Entry 8 only includes potable
alcohol, such as alcoholic beverages or also includes alcohol which
is used in the production of other products; whether Entry 52 of
List I of the Seventh Schedule to the Constitution overrides Entry 8
of List II; whether the expression 'intoxicating liquors' in Entry 8 of
List II of the Seventh Schedule to the Constitution includes alcohol
other than potable alcohol; and whether a notified order under
Section 18G of the Industries (Development and Regulation) Act
is necessary for Parliament to occupy the field under Entry 33 of
List III of the Seventh Schedule to the Constitution.
Headnotes†
Constitution of India - Entry 8 of List II of the Seventh
Schedule - Whether Entry 8 of List II of the Seventh
Schedule to the Constitution is an industry-based entry or a
product-based entry:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] Entry 8 of List II of the Seventh Schedule to the
Constitution is both an industry-based entry and a product-based
entry - The words that follow the expression "that is to say" in the
* Author
1932
[2024] 10 S.C.R.
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Entry are not exhaustive of its contents - It includes the regulation of
everything from the raw materials to the consumption of 'intoxicating
liquor". [Para 140(a)] - [Per B.V. Nagarathna, J. (dissenting)]
Entry 8-List II deals with "intoxicating liquors" - The misuse,
diversion or abuse of "industrial alcohol" as "intoxicating liquors" can
also be controlled and prevented under Entry 8-List II by the State
Legislatures having regard to Article 47 of the Constitution - It is
also made clear that the Industries (Development and Regulation)
Act 1951 which has been enacted by the Parliament by virtue of
Entry 52-List I has taken control of "Fermentation Industries" as a
scheduled industry - Such "Fermentation Industries" would exclude
"intoxicating liquors". [Para 33(a)]
Constitution of India - Entry 52 of List I, Entry 24 of List II -
Whether Parliament can occupy the field of the entire industry
merely by issuing a declaration under Entry 52 of List I:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] Parliament cannot occupy the field of the
entire industry merely by issuing a declaration under Entry 52
of List I - The State Legislature's competence under Entry 24 of
List II is denuded only to the extent of the field covered by the law
of Parliament under Entry 52 of List I. [Para 140(b)] - [Per B.V.
Nagarathna, J. (dissenting)] Parliament can occupy the field of
the entire industry by merely issuing a declaration under Entry
52-List I and the State Legislature's competence under Entry 24List II is denuded to the field of the entire industry and specifically
to the extent of the field covered by the law of Parliament under
Entry 52-List I. [Para 33(b)]
Constitution of India - Whether Parliament have the legislative
competence to enact a law taking control of the industry of
intoxicating liquor covered by Entry 8 of List II in exercise of
the power under Article 246 read with Entry 52 of List I:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] Parliament does not have the legislative competence
[2024] 10 S.C.R.
1933
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
to enact a law taking control of the industry of intoxicating liquor
covered by Entry 8 of List II in exercise of the powe

## Text

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[2024] 10 S.C.R. 1931 : 2024 INSC 812
State of U.P. & Ors.
v.
M/s Lalta Prasad Vaish and sons
(Civil Appeal No. 151 of 2007)
23 October 2024
[Dr Dhananjaya Y Chandrachud,* CJI, Hrishikesh Roy,
Abhay S Oka, B.V. Nagarathna,* J B Pardiwala,
Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma,
Augustine George Masih, JJ.]
Issue for Consideration
The issues which arise for adjudication in this reference pertain
to the scope of the power of the State Legislatures under Entry 8
and the meaning of the phrase "intoxicating liquor". The question
is whether "intoxicating liquor" in Entry 8 only includes potable
alcohol, such as alcoholic beverages or also includes alcohol which
is used in the production of other products; whether Entry 52 of
List I of the Seventh Schedule to the Constitution overrides Entry 8
of List II; whether the expression 'intoxicating liquors' in Entry 8 of
List II of the Seventh Schedule to the Constitution includes alcohol
other than potable alcohol; and whether a notified order under
Section 18G of the Industries (Development and Regulation) Act
is necessary for Parliament to occupy the field under Entry 33 of
List III of the Seventh Schedule to the Constitution.
Headnotes†
Constitution of India - Entry 8 of List II of the Seventh
Schedule - Whether Entry 8 of List II of the Seventh
Schedule to the Constitution is an industry-based entry or a
product-based entry:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] Entry 8 of List II of the Seventh Schedule to the
Constitution is both an industry-based entry and a product-based
entry - The words that follow the expression "that is to say" in the
* Author
1932
[2024] 10 S.C.R.
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Entry are not exhaustive of its contents - It includes the regulation of
everything from the raw materials to the consumption of 'intoxicating
liquor". [Para 140(a)] - [Per B.V. Nagarathna, J. (dissenting)]
Entry 8-List II deals with "intoxicating liquors" - The misuse,
diversion or abuse of "industrial alcohol" as "intoxicating liquors" can
also be controlled and prevented under Entry 8-List II by the State
Legislatures having regard to Article 47 of the Constitution - It is
also made clear that the Industries (Development and Regulation)
Act 1951 which has been enacted by the Parliament by virtue of
Entry 52-List I has taken control of "Fermentation Industries" as a
scheduled industry - Such "Fermentation Industries" would exclude
"intoxicating liquors". [Para 33(a)]
Constitution of India - Entry 52 of List I, Entry 24 of List II -
Whether Parliament can occupy the field of the entire industry
merely by issuing a declaration under Entry 52 of List I:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] Parliament cannot occupy the field of the
entire industry merely by issuing a declaration under Entry 52
of List I - The State Legislature's competence under Entry 24 of
List II is denuded only to the extent of the field covered by the law
of Parliament under Entry 52 of List I. [Para 140(b)] - [Per B.V.
Nagarathna, J. (dissenting)] Parliament can occupy the field of
the entire industry by merely issuing a declaration under Entry
52-List I and the State Legislature's competence under Entry 24List II is denuded to the field of the entire industry and specifically
to the extent of the field covered by the law of Parliament under
Entry 52-List I. [Para 33(b)]
Constitution of India - Whether Parliament have the legislative
competence to enact a law taking control of the industry of
intoxicating liquor covered by Entry 8 of List II in exercise of
the power under Article 246 read with Entry 52 of List I:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] Parliament does not have the legislative competence
[2024] 10 S.C.R.
1933
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
to enact a law taking control of the industry of intoxicating liquor
covered by Entry 8 of List II in exercise of the power under
Article 246 read with Entry 52 of List I. [Para 140(c)] - [Per B.V.
Nagarathna, J. (concurring)]. [Para 33(c)]
Constitution of India - Meaning of the expression 'intoxicating
liquor' by judgments of the Bombay High Court in FN Balsara v.
State of Bombay, this Court in FN Balsara and Southern
Pharmaceuticals:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself and
for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj Misra,
Ujjal Bhuyan, Satish Chandra Sharma, Augustine George Masih,
JJ.] The judgments of the Bombay High Court in FN Balsara v. State
of Bombay, this Court in FN Balsara and Southern Pharmaceuticals
did not limit the meaning of the expression 'intoxicating liquor' to
its popular meaning, that is, alcoholic beverages that produce
intoxication - All the three judgments interpreted the expression
to cover alcohol that could be noxiously used to the detriment of
health. [Para 140(d)] - [Per B.V. Nagarathna, J. (dissenting)]
The context of the controversy must be borne in mind in the said
cases - The aforesaid decisions in substance limited the meaning
of the expression "intoxicating liquors" to its popular meaning i.e.
"alcoholic beverages" that produce intoxication - Therefore, in the
context of prohibition of "intoxicating liquor" as a beverage, there
could not have been prohibition of production of alcohol used for
medicinal and toilet preparation as well as "industrial alcohol" or
non-potable alcohol. [Para 33(d)]
Constitution of India - Expression 'intoxicating liquor' in
Entry 8 - Legislative meaning and judicial meaning:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] The expression 'intoxicating liquor' in Entry 8 has not
acquired a legislative meaning on an application of the test laid
down in Ganon Dunkerley. [Para 140(e)] - [Per B.V. Nagarathna, J.
(dissenting)] The expression "intoxicating liquor" in Entry 8 has
acquired a legislative and judicial meaning over the decades as
discussed. [Para 33(e)]
1934
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Constitution of India - Evolution of Legislative Entries on
Alcohol - Use of expression "intoxicating liquor":
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] The study of the evolution of the legislative entries
on alcohol indicates that the use of the expressions "intoxicating
liquor" and "alcoholic liquor for human consumption" in the Seventh
Schedule was a matter well-thought of - It also indicates that the
members of the Constituent Assembly were aware of use of the
variants of alcohol as a raw material in the production of multiple
products. [Para 140(f)] - [Per B.V. Nagarathna, J. (dissenting)]
The members of the Constituent Assembly were clear in what
they envisaged within the scope and ambit of the expression
"intoxicating liquors" in Entry 8-List II - This is also evident from
Item 26 of the First Schedule of the IDRA - "Intoxicating liquors" is
only a segment of the "Fermentation Industries", namely, potable
alcohol - There was no intention on the part of the members of the
Constituent Assembly to read within the expression "intoxicating
liquors" non-potable or "industrial alcohol" - Further, in order to
have a consistency between what was envisaged under Entry 84List I and Entry 51-List II in the context of alcoholic liquors for
human consumption, the taxing Entry in List II which is within the
legislative competence of the States follows the regulatory Entry
in Entry 8-List II - Therefore, the use of the expression "industrial
alcohol" or non-potable alcohol in Synthetics and Chemicals (7J)
was only to crystallise all variants of alcohol which were non-potable
and to distinguish the same from potable alcohol meant only for
human consumption as a beverage. [Para 33(f)]
Constitution of India - Entry 8 of List II - Scope and ambit:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] Entry 8 of List II is based on public interest - It
seeks to enhance the scope of the entry beyond potable alcohol -
This is inferable from the use of the phrase 'intoxicating' and
other accompanying words in the Entry - Alcohol is inherently a
noxious substance that is prone to misuse affecting public health
at large - Entry 8 covers alcohol that could be used noxiously
[2024] 10 S.C.R.
1935
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
to the detriment of public health - This includes alcohol such as
rectified spirit, ENA and denatured spirit which are used as raw
materials in the production of potable alcohol and other products -
However, it does not include the final product (such as a hand
sanitiser) that contains alcohol since such an interpretation will
substantially diminish the scope of multiple other legislative
entries. [Para 140(g)] - [Per B.V. Nagarathna, J. (dissenting)]
The entire controversy cannot be viewed from the point of view
of alcohol being used as a raw material and final product such
as hand sanitizer containing alcohol - The potential misuse of
alcohol cannot be the basis for interpreting an Entry such as
Entry 8-List II - Ultimately, the "Fermentation Industries" have
to be borne in mind which takes within its canvas only nonpotable /"industrial alcohol" - The aspect of public health having
a corelation to Entry 8-List II dealing with "intoxicating liquor" and
the misuse of alcohol cannot be a guide while interpreting the
content of the said Entry and therefore, its scope and ambit being
amplified beyond what it really envisages as a field of legislation
for the States to legislate upon. [Para 33(g)]
Constitution of India - The judgment in Synthetics (7J) -
Overruled:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] The judgment in Synthetics (7J) is overruled
in terms of this judgment. [Para 140(h)] - [Per B.V. Nagarathna, J.
(dissenting)] The judgment in Synthetics and Chemicals (7J)
need not be overruled in relation to Section 18G of the IDRA and
it continues to be good law in the context of what is comprised in
the expression "industrial alcohol" and "intoxicating liquors" except
what has been clarified above in Entry 8-List II.[Para 33(h)]
Constitution of India - Entry 8 of List II - Industries (Development
and Regulation) Act 1951 - Item 26:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] Item 26 of the First Schedule to the IDRA
must be read as excluding the industry "intoxicating liquor".
[Para 140(i)] - [Per B.V. Nagarathna, J. (dissenting)] Item 26 of
1936
[2024] 10 S.C.R.
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the First Schedule of the IDRA must be read excluding only what
is contained in the expression "intoxicating liquors" as interpreted
above in Entry 8-List II. [Para 33(i)]
Constitution of India - Correctness of the judgment in Tika
Ramji on the interpretation of word 'industry':
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] The correctness of the judgment in Tika
Ramji on the interpretation of word 'industry' as it occurs in the
Legislative entries does not fall for determination in this reference.
[Para 140(j)] - [Per B.V. Nagarathna, J.] Tika Ramji is held to be
not good law insofar as the requirement of issuance of a notified
order as a condition precedent for the field to be occupied, has
been mandated therein.[Para 33(j)]
Constitution of India - Entry 8 of List II and Entry 33(a) of List III -
Industries (Development and Regulation) Act 1951 - s.18G:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] The issue of whether Section 18G of the IDRA covers
the field under Entry 33(a) of List III does not arise for adjudication
in view of the finding that denatured alcohol is covered by Entry 8
of List II". [Para 140(k)] - [Per B.V. Nagarathna, J. (dissenting)]
Denatured alcohol belongs to the family of "industrial alcohol"
and therefore, Section 18G of the IDRA has a bearing on the
said product - Section 18G occupies the field under Entry 33(a)-
List III and, thereby, only Parliament is competent to legislate on
all articles or class of articles related to a scheduled industry i.e.
"Fermentation Industries". [Para 33(k)]
Constitution of India - Article 246 - Federal balance of the
distribution of legislative powers between the Union and the
States:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] The federal balance of the distribution of
[2024] 10 S.C.R.
1937
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
legislative powers between the Union and the States rests on
the interpretation of the phrase "notwithstanding" in Clause (1) of
Article 246 and "subject to" in Clause (3) of Article 246 - It is more
than clear that the phrases provide predominance to Parliament
over State Legislatures - The federal balance lies not on the
recognition that the Constitution grants Parliament predominant
legislative power but on the identification of the scope of such
predominance - The scope of the non-obstante clause in Article
246(1) and the subjugation clause in Article 246(3) must not be
interpreted in isolation but along with the substantive provisions
of the clauses - Clause (1) of Article 246 grants Parliament the
"exclusive power" to enact laws with respect to matters in List I -
Similarly, Clause (3) of Article 246 grants the Legislature of States,
the "exclusive power" to enact laws with respect to matters in
List II - On a holistic interpretation of the provisions, it is clear
that the non-obstante clause in Article 246(1) and the subjugation
clause in Article 246(3) do not permit Parliament to enact laws with
respect to the entries in List II - Each of the legislative bodies are
sovereign and supreme within the sphere that is allocated to them
in the Seventh Schedule - It is crucial to note that Clause (1) of
Article 246 stipulates that the power of Parliament to make laws with
respect to entries in List I is 'notwithstanding' not just the power to
make laws with respect to matters in the Concurrent list but also
the power to make laws with respect to matters in the State List - A
combined reading of the non-obstante clause and the subjugation
clause along with the use of the phrase "exclusive power" means
only one thing, that when there is a conflict between the entries
in List I and List II, the power of Parliament supersedes. [Para 44]
Constitution of India - Legislative entries - Interpretation -
Overlap between two entries:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
George Masih, JJ.] The legislative entries must be given a wide
meaning - All incidental and ancillary matters which can be fairly
and reasonably comprehended must be brought within them -
However, if there is an overlap between two entries the Court
must endeavour to interpret the entries harmoniously - While
interpreting the entries harmoniously, it must be ensured that no
entry is rendered redundant - This principle of construction applies
1938
[2024] 10 S.C.R.
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equally to entries within the same List and entries within different
lists - The principle of parliamentary supremacy must be applied
only when the attempted reconciliation by the above methods of
interpretation fails. [Para 51]
Constitution of India - Entry 8 of List II - Usage of phrase
"that is to say":
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] The expression 'that is to say' in Entry 8 of List II
cannot be interpreted to circumscribe the scope of the entry - The
words that follow 'that is to say' are illustrative and explanatory
of the scope of the provision - The expression does not limit the
scope of the entry - Thus, the scope of Entry 8 of List II cannot
be limited to the 'production, manufacture, possession, transport,
purchase and sale' of Intoxicating Liquor. [Para 55]
Constitution of India - Entry 52 of List I - Whether an implied
limitation can be read into Entry 52 of List I in the absence of
the expression "to the extent to which":
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] If an implied limitation is not read into the Entry,
Parliament by a simple declaration may take over the complete
industry and subject the power of the State Legislature to make any
provision with respect to that industry to the power of Parliament -
This interpretation diminishes the scope of competence of the
State Legislature under Entry 24 of List II - Such an interpretation
completely tilts the federal balance that entries 52 of List I and 24
of List II seek to maintain - The power of Parliament in Entry 52 of
List I is defined by the phrase 'control' - The Entry does not read
as "industries, declared by Parliament by law to be expedient in the
public interest" - The Entry states "Industries, the control of which
by the Union is declared by Parliament by law to be expedient in
the public interest" - The law enacted by Parliament must not be
an abstract declaration but must specify the extent of control that
is necessary to be taken in public interest - The State Legislature
will have the competence to legislate with respect to the field which
is not the subject matter of control - The legislative competence of
[2024] 10 S.C.R.
1939
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
the State Legislature is only denuded to the extent of the 'control'
by the Union declared by the law of Parliament to be expedient
in the public interest. [Para 65]
Constitution of India - Whether Parliament under Entry 52 of
List I takes over the industry of intoxicating liquor covered
by Entry 8 of List II:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] No - Entry 52 of List I is a general entry dealing with
industry - Entry 8 of List II is a special entry dealing with one
particular industry - The consequence of interpreting Entry 52
to cover the industry of 'intoxicating liquor' is two-fold: first, it
would amount to deleting the words 'production, manufacture' in
Entry 8; and second, the State Legislature also loses its exclusive
competence to legislate upon the product of the industry, rendering
Entry 8 fully redundant - This is because the legislative competence
on products of industries covered by Entry 52 of List I is placed
in Entry 33 of List III - As a consequence, Parliament does not
have the legislative competence to enact a law taking control
of the industry of intoxicating liquor under Entry 52 of List I.
[Paras 71(e), 72]
Constitution of India - Entry 8 of List II - Intoxicating Liquor:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] It is clear from the analysis of various judgments that
the meaning of the phrase 'intoxicating liquor' in Entry 8 of List II
has been expanded beyond the narrow definition of alcoholic
beverages that produce an 'intoxicating effect' upon consumption -
Liquids which contain alcohol and which can possibly be used
(or misused) as intoxicating liquor have been included within the
meaning of the phrase. [Para 82]
Words and Phrases - Intoxicating Liquor - Interpretation:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine
1940
[2024] 10 S.C.R.
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George Masih, JJ.] The expression 'intoxicating liquor' can
possibly be interpreted to mean the following: (a) Alcohol which
is used as a beverage for human consumption such as beer or
gin, that is, potable liquor; (b) If liquor means liquid, then Entry 8
of List II includes all liquids which contain alcohol; and (c) Alcohol
which is used as a raw material to prepare other products such as
pharmaceutical products and cosmetic drugs - This could include
denatured alcohol but also other types of alcohol that are used in
the production of products without denaturing it. [Para 107]
Words and Phrases - Alcoholic Liquor - Meaning:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] 'Alcoholic liquor' defines the scope of the provision
based on the ingredient, that is, 'alcohol' - In contrast, 'intoxicating
liquor' defines the scope of the provision based on the effect, that
is, intoxication - Thus, even liquor which colloquially or traditionally
is not considered as alcoholic liquor may be covered by the
phrase 'intoxicating liquor' if it produces the effect of intoxication.
[Para 112(a)]
Words and Phrases - Intoxicate - Meaning:
Held: [Per Dr Dhananjaya Y Chandrachud, CJI, for himself
and for Hrishikesh Roy, Abhay S Oka, J B Pardiwala, Manoj
Misra, Ujjal Bhuyan, Satish Chandra Sharma, Augustine George
Masih, JJ.] "Intoxicate" means the ability of someone to lose
control of their behaviour - It could also mean poison - Thus, the
purpose of substituting the adjective which indicates the ingredient
(alcohol) with the impact (intoxication) seems to be enhance the
scope of the Entry to cover liquor which has an impact on health.
[Para 112(b)]
Constitution of India - Entry 8-List II and Art.47 - Industrial
alcohol - Intoxicating liquor:
Held: [Per B.V. Nagarathna, J.] Merely because "industrial alcohol"
or non-potable alcohol such as rectified spirit can be converted
into "intoxicating liquors" or alcohol fit for human consumption as
a beverage (potable alcohol), that would not empower the State
Legislature to tax or impose any levy on such "industrial alcohol" -
[2024] 10 S.C.R.
1941
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
However, since the expression "intoxicating liquors" in Entry 8-List II
deals specifically with alcohol used as a beverage and meant for
human consumption, it would be within the scope and ambit of
the said Entry for the State Legislature to regulate any abuse or
conversion of "industrial alcohol" as a beverage, which is, in fact,
harmful when consumed - Therefore, having regard to Article 47 of
the Constitution, a State Legislature can even prohibit manufacture
of "intoxicating liquors" in a State as one of the objects of which
would be to negate the conversion or abuse of "industrial alcohol"
as alcohol fit for human consumption. [Para 11.2]
Constitution of India - Entry 8-List II - Intoxicating liquor -
Intoxicating effect - Direct and indirect human consumption:
Held: [Per B.V. Nagarathna, J.] What prima facie appears is
that the "intoxication" effect is a sine qua non for the legislative
competence of States on any liquors potentially coming within
the scope of Entry 8-List II - In the absence of an "intoxicating"
effect from liquors, a State Legislature cannot legislate on the
subject - However, what is required to be seen is the nature of
the product which leads to such an intoxicating effect upon human
consumption of the same - Here, the expression consumption
must be explained - It is not all kinds of human consumption,
direct or indirect, which is the determining factor - It is only direct
consumption i.e. as an ingestion by the act of drinking as a beverage
or a drink - An indirect consumption by use of alcoholic liquors as
a raw material for any other product, industrial, medicinal or a toilet
item cannot be included as part of Entry 8-List II - Secondly, merely
because there can be a potential misuse of "industrial alcohol",
for example, by converting rectified spirit ("industrial alcohol") as
a beverage which has an intoxicating effect, Entry 8-List II cannot
be stretched to include such "industrial alcohol" - The prevention
of abuse of "industrial alcohol" as a beverage is also covered
under Entry 8-List II - Thus, what is carved out of "Fermentation
Industries" in Entry 24-List II is only "intoxicating liquors" used
as beverage and thus, for direct human consumption the said
subject is placed in Entry 8-List II - This would imply that the
rest of "Fermentation Industries" would be within the scope and
ambit of Entry 24-List II which is subject to Entry 52-List I and is
a scheduled industry as per Section 2 read with Item 26 of First
Schedule of IDRA. [Para 12.14]
1942
[2024] 10 S.C.R.
Digital Supreme Court Reports
Constitution of India - Entry 8-List II - Intoxicating liquor -
Contours of interpretation:
Held: [Per B.V. Nagarathna, J.] In deciding on "intoxicating liquors",
the contours of interpretation must be concerned only with the very
nature of the product of "intoxicating liquors" rather than the entire
industry concerning alcohol - Entry 8-List II provides the legislative
competence to States to regulate production, manufacture,
possession, transport, purchase and sale of only "intoxicating
liquors" - It must follow from this that what is being produced or
manufactured or possessed or transported or purchased or sold
must actually be "intoxicating liquors" and not any other alcoholic
product. [Para 12.16]
Constitution of India - Entry 52-List I - Industries (Development
and Regulation) Act - Item 26 of the First Schedule - s.18G:
Held: [Per B.V. Nagarathna, J.] The IDRA is enacted by
Parliament under Entry 52-List I taking control of, inter alia,
"Fermentation Industries" as noted in Item 26 of the First Schedule
to the said Act - Section 18G deals with any article or class of
articles relatable to any scheduled industry i.e. "Fermentation
Industries" in the instant cases - The Explanation to Section 18G
states that the expression "article or class of articles" relatable
to any scheduled industry i.e. "Fermentation Industries" herein
includes any article or class of articles imported into India which
is of the same nature or description as the article or class of
articles, manufactured or produced in the scheduled industry -
The explanation is inclusive and not an exhaustive one - For
immediate reference Item 26 of the First Schedule of the IDRA
pursuant to the 2016 amendment is "The fermentation industries
(other than potable alcohol): (i) Alcohol; (ii) other products of
fermentation industries" - The Item 26 w.e.f. 14.05.2016, has
been amended to clarify that "Fermentation Industries" refers to
industries others than potable alcohol - This is for the reason
that "intoxicating liquors" in Entry 8-List II is equated to only
potable alcohol and rest of the industry of the "Fermentation
Industries" other than potable alcohol is a scheduled industry -
Once an industry is a scheduled industry under the provisions
of IDRA, in the context of Section 18G the Central Government
may notwithstanding anything contained in any other provision
[2024] 10 S.C.R.
1943
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
of IDRA by a notified order provide for regulating the supply and
distribution thereof and trade and commerce therein of a product
of scheduled industry. [Paras 15.7, 15.8]
Constitution of India - Art.254 - Doctrine of repugnancy in
the context of the legislative subjects which are enumerated
in List III or the Concurrent List:
Held: [Per B.V. Nagarathna, J.] Article 254 of the Constitution
applies the doctrine of repugnancy in the context of the legislative
subjects which are enumerated in List III or the Concurrent List -
While applying the principles of repugnancy under Article 254, a
sine qua non is to identify the conflict between the laws made by
the Parliament and the laws made by the State Legislature - The
conflict between the said laws is the basis for the application of
Article 254 - The conflict could be direct when both the laws
cannot operate together or it could be indirect when the State
law entrenches upon a Parliamentary or Central law - But when
laws made by the Parliament or the State Legislature can be
implemented without there being any conflict, the principle of
repugnancy would not apply inasmuch as there would be no
contrary results owing to the applicability of both sets of laws - In
other words, there cannot be a situation where obeying the State
laws would result in disobeying the Parliamentary laws - Thus,
when laws are made under an Entry in List III or the Concurrent
List by both the Parliament as well as by the State Legislature,
the Court must first ascertain whether the two sets of laws can
operate harmoniously, if not, whether harmonious interpretation
could be given to the said laws so as to avoid a conflict between
the two - It is only when there is a conflict between the two
sets of laws inasmuch as the State laws would be abridging the
Parliamentary law, in such a case, the doctrine of Parliamentary
supremacy would apply i.e. when a harmonious interpretation is not
possible - Even if the two laws overlap, if they are complimentary
to each other, in such a case, there would be no application of
the principle of Parliamentary supremacy - Thus, when there is
absolute inconsistency between the two sets of laws, and they are
not reconcilable then, the principle of Parliamentary supremacy
would apply in the context of repugnancy. [Para 16.2]
1944
[2024] 10 S.C.R.
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Principles/Doctrines - Doctrine of occupied field:
Held: [Per B.V. Nagarathna, J.] The application of the doctrine of
occupied field is a technique adopted by the constitutional courts
in order to ensure that there is no potential conflict that could arise
between the State laws and the existing Parliamentary law having
regard to the nature of the legislative powers, their importance in
the socio-economic sphere of governance in the country and such
other considerations. [Para 16.6]
Constitution of India - Entry 8-List II and Art.254 - Industries
(Development and Regulation) Act - s.18G, Item 26 of First
Schedule - Whether Item 26 which speaks of "Fermentation
Industries" to include "industrial alcohol" or non-potable
alcohol as a product of such industry which has been taken
control of by the Union under the provisions of IDRA (and
which is excluded from the scope and ambit of Entry 8-List II),
falls within the scope and ambit of a scheduled industry, and
thereby Section 18G would apply on the said aspects:
Held: [Per B.V. Nagarathna, J.] The answer is in the affirmative for
the following reasons: firstly, insofar as the potable or "intoxicating
liquors" is concerned, the legislative field is exclusively with the
State Legislature - However, in respect of the scheduled industry
which is "Fermentation Industries" (which does not take within
its scope and ambit potable alcohol) vide Item 26 of the First
Schedule, all other types of alcohol including "industrial alcohol"
can be regulated only by the Parliamentary law and the Central
Government - Any other interpretation would imply that even in the
face of Section 18G being incorporated into the IDRA and in the
absence of any notified order being issued, the States Legislatures
and the State Governments would have the legislative competence
to make laws on what is the subject matter of Section 18G of IDRA
under Entry 33(a)-List III - Then, each State could make its own
law on the said subject matter covered under Section 18G of IDRA
pertaining to a scheduled industry - If in respect of the products
of a scheduled industry, the States make laws and there are a
variety of laws made by the individual States which are in force
in respect of the subject under Section 18G of IDRA then when a
notified order is issued, the Central Government's notified order
would apply if there is a direct conflict between the State laws or
[2024] 10 S.C.R.
1945
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
legal regime in place and the notified order that is issued - This
would result in a legal quagmire vis-à-vis a scheduled industry -
It cannot then be said that it is necessary to ascertain whether
there is a direct conflict between the State law and the notified
order made by the Central Government at every instance such
an order is issued and if there is such a direct conflict then, the
Parliamentary law would apply on the strength of Article 254 of
the Constitution. [Paras 16.7 and 16.8]
Constitution of India - Entry 33(a)-List III - Industries
(Development and Regulation) Act - s.18G, Item 26 of First
Schedule - Whether, under Entry 33(a)-List III, the States
have been denuded of their powers by virtue of insertion of
Section 18G to the IDRA, i.e., Section 18G having occupied
the field to the extent of control as mentioned and the States
would not have the competence to pass any law relating to
Entry 33(a)-List III:
Held: [Per B.V. Nagarathna, J.] Answer is in affirmative - This is
because Section 18G has been inserted by Parliament to the IDRA
which is an enactment made pursuant to Entry 52-List I - Entry 52List I speaks of the Union by declaration made by Parliament
by law taking control of such scheduled industry (Section 2 of
the IDRA) such as the "Fermentation Industries" herein - The
industries which are controlled of by the Union are specified in
the First Schedule to the IDRA - "Fermentation Industries" is
a scheduled industry - Therefore, the Union has taken control
of "Fermentation Industries" - For the sake of clarification, in
the year 2016 an amendment was made to expressly exclude
potable alcohol from "Fermentation Industries" and it includes
only non-potable alcohol such as "industrial alcohol" - The
detailed discussion made is in regard to only "industrial alcohol"
being non-potable alcohol - "Intoxicating liquors" being potable
alcohol is not within the scheduled industry - Therefore, the said
products of "Fermentation Industries" which have been taken
control of by the Union by virtue of insertion of the Section 18G
of the IDRA would come within the scope and ambit of the said
Section. [Para 16.10]
Constitution of India - Importance of "Industrial Alcohol" to
the Indian Economy - Discussed. [B.V. Nagarathna, J.]
1946
[2024] 10 S.C.R.
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Case Law Cited
In the Judgment of Dr Dhananjaya Y Chandrachud, CJI.
Synthetics and Chemicals Ltd. v. State of UP [1989] Supp. 1 SCR
623 : (1990) 1 SCC 109 - overruled.
State of Madras v. Gannon Dunkerley [1959] 1 SCR 379 : 1959
SCR 379 - followed.
Tika Ramji v. State of UP [1956] 1 SCR 393 : AIR 1956 SC 676 -
held inapplicable.
Nashirwar v. State of MP [1975] 2 SCR 861 : 1975 AIR 360; Har
Shanker v. Dy. Excise and Taxation Commissioner, AIR 1957 SC
414; Synthetics & Chemicals v. State of UP [1980] 2 SCR 531 :
(1980) 2 SCC 441; State of Bombay v. FN Balsara [1951] 1 SCR
682 : (1951) SCC 860; Indian Mica and Micancite Industries v.
State of Bihar [1971] Supp. 1 SCR 319 : (1971) 2 SCC 236; Shri
Bileshwar Khand Udyog Khedut Sahakari Mandali v. State of Gujarat
[1992] 1 SCR 391 : (1992) 2 SCC 42; Gujchem Distillers India v.
State of Gujarat [1992] 1 SCR 675 : (1992) 2 SCC 399; State of
AP v. McDowell [1996] 3 SCR 721 : (1996) 3 SCC 709; Vam Organic
Chemicals v. State of UP [1997] 1 SCR 403 : (1997) 2 SCC 715;
Bihar Distillery v. Union of India [1997] 1 SCR 680 : (1997) 2 SCC
727; Government of Haryana v. Haryana Brewery (1997) 5 SCC
758; State of UP v. Modi Distillery [1995] Supp. 3 SCR 119 : (1995)
5 SCC 753; Deccan Sugar & Abkari v. Commissioner of Excise,
AP (2004) 1 SCC 243; State of UP v. Vam Organic [2003] Supp.
4 SCR 957 : (2004) 1 SCC 225; RP Sharma v. State of UP 2004
SCC OnLine All 159; State of UP v. Lalta Prasad [2007] 11 SCR
670 : (2007) 13 SCC 463; SIEL Ltd v. Union of India [1998] Supp.
1 SCR 560 : (1998) 7 SCC 26; ITC Ltd v. Agricultural Produce
Market Committee [2002] 1 SCR 441 : (2002) 9 SCC 232; Jindal
Stainless Steel v. State of Haryana [2016] 10 SCR 1 : (2017) 12
SCC 1 [617]; Hoechst Pharmaceuticals v. State of Bihar [1983]
3 SCR 130 : (1983) 4 SCC 45; State of WB v. Committee for
Protection of Democratic Rights [2010] 2 SCR 979 : (2010) 3 SCC
571; Calcutta Gas Co. (Proprietary) Ltd. v. State of W.B. [1962]
Supp. 3 SCR 1 : 1962 SCC OnLine SC 60 : AIR 1962 SC 1044;
Union of India v. HS Dhillon [1972] 2 SCR 33 : (1971) 2 SCC 779;
TMA Pai Foundation v. State of Karnataka [1993] Supp. 3 SCR
[2024] 10 S.C.R.
1947
State of U.P. & Ors. v.
M/s Lalta Prasad Vaish and sons
117 : (2002) 8 SCC 481; State of Karnataka v. State of Meghalaya
[2022] 18 SCR 516 : (2023) 4 SCC 416; MPV Sundararamier
& Co. v. State of Andhra Pradesh [1958] 1 SCR 1422 : (1958)
9 STC 298; R Abdul Quader & Co. v. STO [1964] 6 SCR 867;
United Province v. Atiqa Begum (1940) FCR 110; Godfrey Phillips
India Ltd. v. State of UP [2005] 1 SCR 732 : (2005) 2 SCC 515;
Harakchand Ratanchand Banthia v. Union of India [1970] 1 SCR
479 : (1969) 2 SCC 166; Bhola Prasad v. The King Emperor (1942)
4 FCR 17; Bansal Wire Industries v. State of UP [2011] 7 SCR
416 : (2011) 6 SCC 545; Sait Rikaji Furtarnal v. State of AP (1991)
Supp (1) SCC 202; CST v. Popular Trading Company [2000] 2
SCR 983 : (2000) 5 SCC 511; State of Punjab v. Devans Modern
Brewaries [2003] Supp. 5 SCR 930 : (2004) 11 SCC 26; State of
Bombay v. Bombay Education Society [1955] 1 SCR 568 : (1954)
2 SCC 152; Indian Aluminium Co. Ltd. v. Assistant Commissioner
of Commercial Taxes (Appeals) [2001] 1 SCR 407 : (2001) 2 SCC
201; State of Bombay v. Bombay Education Society [1955] 1 SCR
568 : (1954) 2 SCC 152; Mineral Area Development Authority v.
M/s Steel Authority of India [2024] 8 SCR 540 : 2024 INSC 554;
Ishwari Khetan Sugar Mills v. State of UP [1980] 3 SCR 331 : (1980)
4 SCC 136; Baijnath Kedia v. State of Bihar [1970] 2 SCR 100;
State of Haryana v. Chanan Mal [1976] 3 SCR 688; Hingir-Rampur
Coal Co. Ltd. v. State of Orissa [1961] 2 SCR 537 : AIR 1961 SC
459; State of Orissa v. M.A. Tulloch and Co. [1964] 4 SCR 461 :
AIR 1964 SC 1284; Baijnath Kadio v. State of Bihar [1970] 2 SCR
100 : (1969) 3 SCC 838, 847-848 : AIR 1970 SC 1436; State of
Haryana v. Chanan Mal [1976] 3 SCR 688 : (1977) 1 SCC 340,
351 : AIR 1976 SC 1654; Wavery Jute Mills Co. Ltd. v. Raymon &
Co (2018) 4 SCC 743; FN Balsara v. State of Bombay 1950 SCC
OnLine Bom 57; Southern Pharmaceuticals and Chemical v. State
of Kerala [1982] 1 SCR 519 : (1981) 4 SCC 391; Kone Elevator
India (P) Ltd. v. State of T.N. [2014] 5 SCR 912 : (2014) 7 SCC 1;
Ahmedabad Municipal Corporation v. GTL Infrastructure Limited
[2016] 11 SCR 172 : (2017) 3 SCC 545; Rainbow Steels v.