Centre asserts in SC its power to regulate industrial alcohol, cites steps taken to manufacture sanitisers during pandemic

New Delhi, Apr 16 (PTI) Asserting its right to regulate industrial alcohol, the Union government told the Supreme Court on Tuesday that framers of the Constitution intended to give the Centre complete control over any industry through enactment of Industrial (Development and Regulation) Act, 1951 in “public interest”.

Solicitor General Tushar Mehta, appearing for the Centre, told a bench headed by Chief Justice D Y Chandrachud that as per the Act, the development and regulation of a number of important industries, the activities of which affected the country as a whole, were required to be brought under central control.

Citing the example of Covid, the law officer said the government can utilise its regulatory power in national interest as it did during the outbreak by issuing orders to ensure availability of ethanol at a notified price for manufacturing sanitisers.

“Suppose the Union government required during Covid that entire quantity of industrial alcohol should be used for manufacturing sanitisers, then the government can utilise its regulatory power,” Mehta told the constitution bench, also comprising Justices Hrishikesh Roy, Abhay S Oka, B V Nagarathna, J B Pardiwala, Manoj Misra, Ujjal Bhuyan, Satish Chandra Sharma and Augustine George Masih.

The nine-judge constitution bench is examining the issue of overlapping powers of the Centre and states with regard to production, manufacturing, supply and regulation of industrial alcohol.

Industrial alcohol is not meant for human consumption. While Entry 8 in the State List under the 7th Schedule gives states the power to legislate on the manufacture, possession, transport, purchase and sale of “intoxicating liquors”, Entry 52 of the Union List and Entry 33 of the Concurrent List mentions industries whose control is “declared by Parliament by law to be expedient in public interest”.

While both Parliament and state legislatures can enact laws on subjects mentioned in the concurrent list, where a central law exists, it will have primacy over the state law.

A clutch of petitions came before the bench after a seven-judge constitution bench ruled against the states.

The matter was referred to the nine-judge bench in 2010 after the seven-judge bench ruled in 1997 that the Centre would have regulatory power over the production of industrial alcohol.

The seven-judge bench had in 1990 observed that through the Industries (Development and Regulation) Act, 1951, the Union had “evinced a clear intention to occupy” legislative competence on the subject and hence Entry 33 could not empower a state government.

Mehta submitted that the Government of India has been implementing Ethanol Blended with Petrol (EBP) Programme throughout the country wherein Oil Marketing Companies (OMCs) sell petrol blended with ethanol.

He said under the EBP Programme, the government has fixed the target of 20 per cent blending of ethanol with petrol by 2025.

“Under this scheme viz. National Biofuel Policy, 2018, Government is facilitating entrepreneurs to set up new distilleries (molasses-based, grain-based and dual-feed based) or expansion of existing distilleries throughout the country…. This would at some stage need regulation to ensure sufficient quantity of ethanol,” he said, making a case for the Centre to regulate industrial alcohol.

The top court had earlier sought to know from the Centre why the states, as the custodians of the health of citizens, cannot impose regulations on industrial alcohol and levy fees to ensure that its abuse does not take place.

Commencing his arguments before the nine-judge bench, Mehta had earlier said the interpretation given by the court would not impact just industrial alcohol (the only subject argued by the petitioners) but every industry included in Schedule I of Industries Regulation and Development Act, 1951.

The hearing remained inconclusive and will resume on April 16.

The Centre had earlier told the apex court that legislative power to levy excise duty on alcohol not fit for human consumption but meant for industrial use lies exclusively with Parliament.

Attorney General R Venkataramani had submitted that a “conscious decision” was taken to treat alcoholic liquors fit for human consumption and alcoholic liquors not fit for human consumption separately, with the former falling within the domain of provincial legislatures and the latter within the ambit of the federal legislature.

Prior to that, BJP-ruled Uttar Pradesh and TMC-governed West Bengal were on the same page in the top court where they asserted the legislative power vested in states to regulate industrial alcohol is untrammelled and complete and beyond the Centre’s jurisdiction.

Senior advocate Dinesh Dwivedi, appearing for the Uttar Pradesh government, had told the court that liquor has always been within the legislative sphere of states and the Centre does not have any jurisdiction with regard to industrial alcohol.

Excise, liquor and spirit have always been part of the state’s jurisdiction, including industrial alcohol, he had said.