STATE’S
POWER TO TAX INDUSTRIAL ALCOHOL: POLITY
NEWS: SC
Upholds States’ Power to Tax Industrial Alcohol in Landmark 8:1
Ruling
WHAT’S IN
THE NEWS?
The article discusses the Supreme Court’s ruling
affirming states’ authority to tax industrial alcohol, reinforcing their
control over revenue from intoxicating liquors.
Industrial
Alcohol Definition:
- Industrial alcohol is
non-consumable (denatured) and used in pharmaceuticals, disinfectants,
chemicals, and biofuels.
Supreme
Court Ruling:
- The Supreme Court
ruled in an 8:1 majority that states can tax industrial alcohol,
not just alcoholic beverages, increasing state revenue.
Key
Constitutional Issue:
- The case involved overlapping
legislative powers in the Seventh Schedule of the Constitution.
- Entry 8 (State List): States control
intoxicating liquors.
- Entry 52 (Union List): Centre regulates
industries.
Court’s
Majority Decision:
- Chief Justice Chandrachud
interpreted "intoxicating liquor" broadly, including both
drinkable and industrial alcohol under state regulation to prevent misuse.
Dissenting
Opinion:
- Justice Nagarathna
dissented, arguing industrial alcohol should be regulated based on
its intended use, supporting central control over industries.
Previous
Cases:
- Synthetics & Chemicals
Ltd v. State of Uttar Pradesh (1989): Limited states' power over industrial
alcohol, granting central authority.
- Ch Tika Ramji v. State of UP
(1956):
Affirmed states’ power to legislate on industries despite central
laws.
Impact of
Ruling:
- Strengthened states'
ability to raise revenue from both potable and industrial alcohol,
clarifying their authority over intoxicating liquors.
Source: https://www.thehindu.com/news/national/supreme-court-verdict-on-centre-states-tussle-over-industrial-alcohol/article68785881.ece