STATE OF U.P. & ORS versus M/S LALTA PRASAD VAISH AND SONS
[2024] 10 S.C.R. 1931, Supreme Court of India, 2024
Outcome: Unknown
Segment: Issues
Entries 8 and 51 of List II read with Entry 84 
of List I have exclusive privilege to legislate 
on intoxicating liquor or alcoholic liquor for 
human consumption. Hence, so long as 
any alcoholic preparation can be diverted to 
human consumption, the States shall have 
the power to legislate as also to impose taxes 
etc. In this view, denaturation of spirit is not 
only an obligation on the States but also within 
the competence of the States to enforce.”
Haryana Brewery Ltd.:
9.11	In Government of Haryana vs. Haryana Brewery Ltd. (2002) 
4 SCC 547 (“Haryana Brewery Ltd.”), the controversy related
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to levy of excise duty on beer brewed by the respondent therein. 
Rule 35 of the Punjab Brewery Rules, 1956 and Section 32 of 
the Punjab Excise Act, 1914 were considered. It was observed 
by this Court that the said Rule was only an enabling provision 
which would help the Excise Authorities in calculating what 
would be the quantity of beer manufactured and fit for human 
consumption on which excise duty could be imposed. The said 
Rule was declared valid and it did not require any reading down 
as had been done by the High Court. It was observed that the 
tax was on the end product and not on the raw material. Rule 
35 indicated that in order to determine what was the quantity 
of beer manufactured which was fit for human consumption, 
after all the processes were completed, one had to see what 
was the quantity of raw materials which were utilised for the 
manufacture of beer and then allowance for wastage of seven 
per cent had to be made and thereafter the quantity of beer 
manufactured was determined. That the figure taken for the 
purpose of calculating the excise duty was only on the end 
product, namely the beer produced, and not the quantity of 
the raw material used in manufacture of beer, during which 
loss of some quantity as wastage would have occurred and 
there could not be a deduction of any sum or proportion as 
wastage from the quantity of end product in order to arrive at 
that quantity. In such a
case, the question of determining any 
allowance of seven per cent for wastage did not arise. Therefore, 
the Excise Authorities could levy excise duty only on the beer 
after it had been manufactured and the levy was on the quantity 
manufactured. How this quantity had to be arrived was to be 
determined according to Section 32 read with Rule 35 of the 
aforementioned Act and Rules. Hence, Rule 35 was sustained 
as valid and it did not require any reading down.
Industrial Corporation (P) Ltd.:
9.12	In the State of Bihar vs. Industrial Corporation (P) Ltd. 
(2003) 11 SCC 465 (“Industrial Corporation (P) Ltd.”), the 
respondent companies were engaged in the manufacture of 
rectified spirit from molasses allotted to them by the Controller 
of Molasses in terms of the Bihar Molasses (Control) Act, 1947 
and they had been granted licences under various provisions of 
the Bihar and Orissa Excise Act, 1915. It was found that certain
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quantity of rectified spirit had to be produced but instead there 
was a shortfall and therefore, notice was issued and penalty 
was imposed on the premise that the respondents therein had 
diverted the molasses towards manufacturing either country 
liquor or liquor which was fit for human consumption. Assailing 
the same, writ petitions were filed before the High Court which 
had allowed the said writ petitions. Therefore, the State had 
appealed before this Court.
9.13	This Court noted that molasses is a by-product of sugar 
and mainly used as raw material for manufacture of spirit, 
including alcohol for human consumption. The respondents 
in the said case were engaged in the manufacture of rectified 
spirit from molasses and penalty was imposed owing to a loss 
of revenue by reason of loss of wastage of molasses while 
carrying on manufacture of such rectified spirit. One of the 
contentions raised was that the State has power to impose 
duty only on the spirit which is for human consumption and 
the respondents therein had not carried out any activities in 
relation to manufacture of potable liquor from the molasses. It 
was observed that the judgment in Modi Distillery applied to 
the said case and therefore, no penal duty could be imposed 
on rectified spirit. Reliance placed on Bihar Distillery was not 
gone into inasmuch as it was observed that it was unnecessary 
to go into the
question of the correctness of the observations 
made in Bihar Distillery. However, the observations of the High 
Court therein were that in view of the judgment of this Court in 
Synthetics and Chemicals (7J), the State had no legislative 
competence even in relation to potable liquor, (which is fit for 
human consumption), was not correct.
Vam Organic II:
9.14	In Vam Organic II, a notification dated 13.01.1990 whereby 
licence fee of 15 paise per litre was sought to be imposed on 
the quantity of specially denatured spirit (STS) obtained from 
distilleries in the State of Uttar Pradesh under Rule 3(a) of 
the UP Licences for the Possession of Denatured Spirit and 
Specially Denatured Spirit Rules, 1976 was assailed before the 
Allahabad High Court. The writ petitions were allowed, and the 
State had filed appeals before this Court. Section 3 (13) of the 
UP Excise Act, 1910 (for short, “1910 Act”) had defined the word
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“intoxicant” as meaning “any liquor or intoxicating drug”. The 
word “liquor” in turn was defined in Section 3(11) as meaning 
“intoxicating liquors and includes spirits of wine, spirit, wine, 
tari, pachwai, beer and all liquid consisting of or containing 
alcohol, also any substance which the State Government may 
by notification declare to be liquor for the purposes of the Act.” 
In paragraph 6 of the judgment, it was observed that “industrial 
alcohol” is not liquor nor is it potable as such. However, it 
may be utilized to produce a kind of liquor if it is denatured. 
“Denatured” in Section 3(9) of the Act was defined to mean 
“rendered unfit for human consumption in such manner as 
may be prescribed by the State Government by notification in 
this behalf”. Thus, the State Act equated “industrial alcohol” 
to non-potable alcohol and not fit for human consumption. To 
ensure the denaturation of “industrial alcohol” under Section 
41 of the 1910 Act, Rules were made in the year 1976. It was 
contended by the appellant State that the word “industry” has 
been construed by the Constitution Bench of this Court in ITC 
Ltd. vs. Agricultural Produce Market Committee (2002) 
9 SCC 232 (“ITC Ltd.”) to mean only manufacture and 
production. Therefore, the State was competent under Entry 33 - 
List III to regulate the products of an industry which was declared 
to be a controlled industry under Entry 52 - List I. Since there
was no Central legislation occupying the field, the State law 
must be held to be valid. 
9.14.1	 Referring to Synthetics and Chemicals (7J), it was 
observed that since the coming into force of the IDRA on 
08.05.1952, the State Legislatures are constitutionally 
incompetent to levy tax on “industrial alcohol”. This 
principle was reiterated in Modi Distillery wherein it 
was held that the State’s power to levy excise duty 
was limited to alcoholic liquors for human consumption 
which means, that liquor which, as it is, is consumable 
in the sense that it is capable of being taken by human 
beings as such as a beverage or drink. Therefore, 
even if ethyl alcohol (95 per cent) could be used as a 
raw material or input, after processing and substantial 
dilution, in the production of whisky, gin, country liquor 
etc. nevertheless, it was not “intoxicating liquors” 
which expression meant only that liquor which was
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consumable by human beings as it was. Therefore, 
the State could not legislate on “industrial alcohol” 
despite the fact that such “industrial alcohol” has the 
potential to be used to manufacture alcoholic liquors 
for human consumption. 
9.14.2	 Ultimately, in paragraph 43 of the judgment, it was 
pithily observed as under:
“43. Considering the various authorities 
cited, we are of the view that the State 
Government is competent to levy fee for the 
purpose of ensuring that industrial alcohol 
is not surreptitiously converted into potable 
alcohol so that the State is deprived of 
revenue on the sale of such potable alcohol 
and the public is protected from consuming 
such illicit liquor. But this power stops with 
the denaturation of the industrial alcohol. 
Denatured spirit has been held in Vam 
Organics I to be outside the seisin of the 
State Legislature. Assuming that denatured 
spirit may by whatever process be renatured 
(a proposition which is seriously disputed by 
the respondents) and then converted into 
potable liquor, this would not give the State 
the power to regulate it. Even according to 
the demarcation of the fields of legislative 
competence as envisaged in Bihar Distillery 
industrial alcohol for industrial purposes falls 
within the exclusive control of the Union and 
according to Bihar Distillery “denatured 
rectified spirit, of course, is wholly and 
exclusively
industrial alcohol” (SCC p. 742, 
para 23).”
Analysis of Judicial Dicta:
10.	 I shall now analyse the judgments of this Court on the points in 
controversy.
10.1	 In Indian Mica, the question which came up was whether the 
fee levied under Rule 111 of the Bihar and Orissa Excise Rules
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framed under Section 90 of the Bihar and Orissa Excise Act, 
1915 on denatured spirit used and possessed by the appellants 
therein had sufficient quid pro quo for the levy. This Court struck 
down the levy as being unjustified and excessive as there was 
no co-relationship between the levy and the services rendered.
10.2	 In Southern Pharmaceuticals and Chemicals vs. State of 
Kerala, AIR 1981 SC 1863 (“Southern Pharmaceuticals”), 
being aggrieved by the dismissal of their writ petitions and 
upholding the constitutional validity of Section 12-A and other 
sections of the Kerala Abkari Act, and Rules 13 and 16 of 
the Kerala Rectified Spirit Rules, 1972, the manufacturers 
of medicinal and toilet preparations containing alcohol had 
filed the appeal before this Court questioning the legislative 
competence of State to enact a law relating to medicinal and 
toilet preparations containing alcohol under Entry 8 - List II. 
Repelling the said contention in light of the scheme of legislation 
and its history, it was observed that impugned Act was relatable 
to Entry 8 - List II. Reference was also made to the judgment 
of this Court in FN Balsara and it was held that the main 
purpose of the impugned Act was to consolidate the law relating 
to manufacture, sale and possession of “intoxicating liquors” 
which squarely fell under Entry 8 - List II, while the main object 
of the Central Act was to provide for the levy and
collection of 
duties of excise on medicinal and toilet preparations containing 
alcohol falling under Entry 84 - List I. According to this Court 
when the framework of the two enactments was examined, 
it was apparent that the Central and the State legislations 
operated in two different and distinct fields. It was held that in 
the matter of making rules or detailed provisions to achieve 
the object and purpose of a legislation, there may be some 
provisions seemingly overlapping or encroaching upon the 
forbidden field, but that does not warrant the striking down of 
the impugned Act as ultra vires the State Legislature.
10.3	 In Synthetics and Chemicals (7J), the question for 
consideration was whether different legislations and rules 
in respect of “industrial alcohol” enacted by the States were 
valid. In my view, this Court was clear about the concept of 
“industrial alcohol” and “intoxicating liquors” and therefore, the 
State Legislatures’ competence to levy excise duty on “industrial 
alcohol” was considered as the seminal issue. In that context,
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the scope and ambit of Entry 8 - List II was also considered. 
It is in the context of the taxing power of the States, i.e., to 
levy excise duty on “industrial alcohol” and/or impost(s) such 
as vend fees which was the point of controversy. 
In the above backdrop, the question was crystallised to whether 
the expression “intoxicating liquors” in Entry 8 - List II is confined 
to potable liquor or includes all liquors. It was observed that 
the expression “alcoholic liquors for human consumption” 
used by the framers of the Constitution in Entry 51 – List II 
and Entry 84 – List I meant that liquor which is consumed by 
human beings directly as a beverage or as a drink. It was 
observed that alcoholic liquor or “intoxicating liquors” must be 
understood as common people would understand it and not what 
certain alcoholic products are capable of being transformed or 
converted into. That when excise duty was being levied under 
Entry 84 - List I, it did not include alcoholic liquors for human 
consumption but included denatured spirit which is “industrial 
alcohol”. It was observed that merely because the denatured 
spirit could be treated with water and transformed into alcoholic 
liquors into human consumption which did not involve a process 
of manufacture, the States would not have the legislative 
competence to levy excise duty under Entry 51 - List II. 
10.4	 Subsequently, in Synthetics and
Chemicals (2J), it was 
clarified that the question which arose for consideration before 
the seven-Judge Bench was with regard to the validity of “vend 
fee and other fees” charged by the States. The two-Judge 
Bench clarified that the seven-Judge Bench had answered 
the question whether, “intoxicating liquors” in Entry 8 - List II 
was confined to only potable liquor or other liquors also and it 
was held that it included only potable liquor and not “industrial 
alcohol”. However, it was clarified that the State has the power 
to levy taxes on sale or purchase of goods under Entry 54 - 
List II and therefore paragraph 86 of the seven-Judge Bench 
in Synthetics and Chemicals (7J) was clarified in those 
terms. It was observed that in paragraph 86 by an accident 
(due to an inadvertence) the prohibition of sales tax being 
levied by the States on the “industrial alcohol” was adverted to 
without there being a discussion on that aspect of the matter 
and, therefore, to that extent the dictum of the seven-Judge 
Bench in Synthetics and Chemicals (7J) was per incuriam.
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It was further clarified that the seven-Judge Bench was only 
concerned with the question whether the State Legislature 
could levy vend fee or excise duty on “industrial alcohol” and 
that the said question was answered in the negative by holding 
that “industrial alcohol” being unfit for human consumption, the 
State Legislature was incompetent to levy any duty of excise 
under Entry 51 - List II. 
10.5	 In the above context, it was also observed that alcohol can 
be divided into two categories, namely, potable and non-
potable alcohol. That alcohol which is potable is “intoxicating 
liquors” for human consumption directly as a beverage and 
comes within the scope and ambit of Entry 8 - List II and the 
State Legislature has the power to regulate such “intoxicating 
liquors” by making relevant laws. However, non-potable liquor 
or “industrial alcohol” as it is popularly called, can be diluted 
and consumed as a beverage, and the State has an obligation 
and powers to regulate and ensure that there is no such abuse 
having regard to Article 47 of the Constitution being a Directive 
Principle of State Policy. Hence, under Entry 8 - List II, the 
State can make laws for prevention of production, possession, 
sale etc. of non-potable alcohol as “intoxicating liquors”. Such 
regulation would be intra vires Entry 8 - List II and would not 
be in conflict with any other Entry in List I, II or List III. This 
would also be in
line with Article 47 of the Constitution.
10.6	 The aforesaid view was affirmed in Bileshwar Khand Udyog 
by holding that clarity was brought about in respect of “industrial 
alcohol” in Synthetics and Chemicals (7J) and the competency 
of the State to frame any legislation to levy any tax or duty 
on “industrial alcohol” was excluded. However, under Entry 
33 - List III, there was power vested in the State insofar as 
“industrial alcohol” was concerned as the said product was a 
product of a scheduled industry, namely, Item 26 of the First 
Schedule of the IDRA which was enacted pursuant to Entry 
52 - List I. This is subject to the intention of the Parliament to 
occupy the field as per the provisions of the IDRA, in particular, 
under Section 18G of the said Act. Gujchem Distillers also 
followed the aforesaid judgment. Khoday Distilleries also 
emphasised the fact that the State has the power to completely 
prohibit the manufacture, sale, possession, distribution and 
consumption of potable liquor as a beverage but the State
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cannot prohibit trade and business in medicinal and toilet 
preparations containing liquor or alcohol. In the same way, the 
State cannot prohibit trade or business in “industrial alcohol” 
which is not used as a beverage but used legitimately for 
industrial purposes. It was held that restrictions imposed by 
the States on trade or business in “industrial alcohol” or in 
medicinal and toilet preparations containing liquor or alcohol 
could be for the purpose of preventing their abuse or diversion 
for use as or in beverages. 
10.7	 In Shree Krishna Gyanoday Sugar Ltd. it was categorically 
observed that the excise authorities under the concerned 
State Act could supervise the working of the distilleries which 
had composite licences to manufacture not only denatured 
spirit and other spirits for industrial use but also potable spirit 
or country liquor in order to prevent alteration of denatured 
spirit and make it fit for human consumption. Therefore, at the 
distilleries of the licencees, supervision had to be provided 
as it was a regulatory measure. In this context also, it was 
clarified that the denatured spirit is a spirit which is not fit for 
human consumption and non-potable, and was also called as 
“other commercial spirits” under the rules in question, as they 
are used for industrial purposes or any other purpose other 
than human consumption as a beverage. This was opposed to
potable liquor which is fit for human consumption. It was finally 
observed that in respect of such distilleries having composite 
licencees, the State will have to provide the cost of supervisors 
and the same could not be foisted on such distilleries. 
10.8	 Jeevan Reddy, J., in Bihar Distillery, also held that insofar 
as “intoxicating liquors or potable liquors” are concerned, 
they fall in the exclusive province of the State. However, 
alcohol can be used for the industrial purposes even without 
denaturing it. Significantly, it was held that Entry 8 - List II uses 
the expression “intoxicating liquors” which signifies “liquor for 
human consumption”. The absence of the words “for human 
consumption” in Entry 8 – List II is irrelevant as the word 
“intoxicating” signifies human consumption, i.e., as a beverage 
and all aspects of its production, manufacture, possession, 
transport, sale and purchase of “intoxicating liquors” are covered 
under the said Entry. Also the accidental error in para 85 of the 
Synthetics and Chemicals (7J) was explained to say that all
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potable liquor shall be governed by Entry 8 - List II which is 
within the exclusive domain of the State. Further, Entry 8 - List II 
is outside the purview of Entry 24 - List II and the Union cannot 
take control of “intoxicating liquors” by making a declaration in 
terms of Entry 52 - List I. It was further observed that Synthetics 
and Chemicals (7J) mainly dealt with “industrial alcohol”, i.e., 
denatured rectified spirit. 
10.9	
In Bihar Distillery, this Court further observed that the States 
have the power to legislate under Entry 33(a) – List III provided 
the field is not occupied by the Union. That there was a clear 
line of demarcation at the stage of removal or clearance of 
the product, i.e., if the clearance is for “industrial” purpose, 
the duties of excise and all other control is with the Union but 
if the removal or clearance is for obtaining or manufacturing 
“potable liquor”, the levy of duty and other control is with the 
State. It was observed that there was a need for joint control 
and supervision of the process of manufacture of rectified 
liquor and its use and disposal for ensuring that “industrial 
alcohol” was not misused by diverting it for potable purpose 
and consequently certain concrete observations were made 
in the said judgment which is of a binding nature. 
10.10	 The challenge to the notification issued by the excise 
commissioner, Uttar Pradesh dated 18.05.1990 was a subject 
matter
of controversy in Vam Organic I, in the context of 
legislative competence of the State of Uttar Pradesh to 
impose tax or levy on “industrial alcohol”, ethyl alcohol and 
rectified spirit. It was observed that the expression “industrial 
alcohol” is not used in any of the three Lists of the Seventh 
Schedule of the Constitution. Referring to Synthetics and 
Chemicals (7J), this Court observed that the judgment 
in the aforesaid case proceeded to consider that rectified 
spirit was the ingredient for “intoxicating liquors” or alcoholic 
liquors for human consumption. The same was referred to 
as “industrial alcohol” in respect of which the State has no 
power whatsoever under Entries 8 and 51 – List II, while 
the States have the exclusive competence to legislate 
on “intoxicating liquors” or “alcoholic liquors for human 
consumption” but if any alcoholic preparation is diverted for 
human consumption, the States would have the power to 
legislate under Entry 8 - List II.
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10.11	 Again, Jeevan Reddy, J. speaking for the Court in Bihar 
Distillery noted that in Synthetics and Chemicals (7J) 
a distinction was drawn between rectified spirit meant 
exclusively for industries (“industrial alcohol”) and rectified 
spirit exclusively used for obtaining potable alcohol. The 
said judgment did not deal with rectified spirit which could 
be converted to potable alcohol as such. That insofar as 
the first category was concerned, it was under the exclusive 
control of the Union and the second category was under the 
control of the State at all stages including the establishment 
of the distillery. 
10.12	 In Vam Organic II, the history of the legislations on “intoxicating 
liquors” as well the earlier judgments of this Court were 
considered and it was observed that the State Legislatures 
are constitutionally not competent to levy tax on “industrial 
alcohol” since the coming into force of the IDRA on 08.05.1952. 
It was opined that Synthetics and Chemicals (7J) continued 
to hold the field and therefore, the States’ power was limited 
to regulation of non-potable alcohol for the limited purpose 
of preventing its use as alcoholic liquors.
Further Analysis:
11.	 The survey of the aforesaid decisions of this Court and their analysis 
clearly indicate the golden thread of continuity in all of them, i.e., this 
Court has been clear on what is meant by the expression
“industrial 
alcohol” as simplified to refer to all alcohol which is “not fit for human 
consumption as a beverage or non-potable alcohol”. By contrast, 
the use of the expression “potable alcohol” refers to “intoxicating 
liquors” used for human consumption as a beverage or as a drink. 
However, in paragraph 85 of Synthetics and Chemicals (7J) the 
expression “both potable and” is an inadvertent insertion inasmuch 
as there was no reason to state that licences to manufacture potable 
alcohol was vested in the Central Government. Therefore, to that 
extent the judgment in Synthetics and Chemicals (7J) calls for a 
clarification. Apart from that the following points would emerge from 
paragraph 85:
(i)	
That, on insertion of Item 26 of the First Schedule to IDRA, 
the control of “Fermentation Industries” has vested exclusively 
in the Union.
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(ii)	
Therefore, even the States cannot themselves manufacture 
“industrial alcohol” without the permission of the Central 
Government.
(iii)	
“Industrial alcohol” cannot be amenable to States’ claim to 
possession of exclusive privilege and the States can neither 
rely on Entry 8 – List II nor Entry 33 – List III as a basis for 
such claim.
(iv)	
The States cannot claim that under Entry 33 – List III, it can 
regulate “industrial alcohol” as a product of the scheduled 
industry as the Union under Section 18G of the IDRA has 
evinced a clear intention to occupy the whole field. The doctrine 
of occupied field under Article 254 has been applied in the said 
case which shall be adverted to later. 
(v)	
Any exercise of power by the States under Entry 8 – List II is 
not an exercise of power under Entry 33 – List III. 
11.1	 The aforesaid judgments state that insofar as “intoxicating 
liquors” or potable liquors are concerned, Entry 8 - List II is 
the regulatory Entry while Entry 51 - List II is the taxation Entry 
which provides for imposition of excise duty on potable liquor 
also called alcoholic liquors for human consumption. Conversely, 
insofar as “industrial alcohol” is concerned, the control of the 
said industry is vested with the Union owing to Section 2 of 
the IDRA read with the other provisions of the said Act, which 
enactment has been made by virtue of Entry 52 - List I. That 
the Union has taken under its
control “Fermentation Industries” 
as per Item 26 of the First Schedule to the IDRA which has 
been enacted by the Parliament in relation to Entry 52 - List I 
excluding “intoxicating liquors”. “Fermentation Industries” relates 
to various products manufactured, processed, etc. as a result 
of fermentation process. Such products of fermentation are 
broadly classified as “industrial alcohol” (non-potable alcohol) 
and “intoxicating liquors” (potable alcohol). This classification 
is for the purpose of identifying the nature of the product, its 
use in the industry and consequently, dividing the subject of the 
legislation between the Parliament and the State Legislature. 
11.2	 The aforesaid decisions also indicate that merely because 
“industrial alcohol” or non-potable alcohol such as rectified 
spirit can be converted into “intoxicating liquors” or alcohol fit
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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”. 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. 
11.3	 The judgment of this Court in Synthetics and Chemicals 
(7J), was also clear about the controversy before it, namely, 
the competence of the Uttar Pradesh State Legislature to 
impose vend-fee on “industrial alcohol” when the same is a 
product of “Fermentation Industries” and, therefore, under the 
control of the Union.
11.4	 However, the sum and substance of the controversy has to 
be answered by this Court on the premise that, despite there 
being clarity in the minds of the authorities under the States 
as well as the Centre, repeated imposition of imposts in the 
form of tax or excise
duties etc., have brought several cases 
before this Court for adjudication. Ultimately, those who are 
in the business of “industrial alcohol” or “intoxicating liquors”, 
namely, non-potable and potable liquor respectively are clear 
about the nature of their business and the products that they 
are dealing with. Hence, I feel that it is incumbent for this 
Court to enhance the clarity and not create a further legal 
regime which would cause confusion and legal uncertainty 
in the economy. 
Meaning of “intoxicating liquors”:
12.	 Before embarking on an enquiry in this Reference to understand 
the scope of the expression “intoxicating liquors” as it appears in 
Entry 8 – List II, it would be useful to highlight that this Court has 
relied on pre-constitutional legislations and the Constitution of India 
while interpreting the scope of the expression “intoxicating liquors”.
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12.1	 At the outset, I may refer to Cooley’s “Constitutional Limitations” 
[2nd ed. Boston : Little, Brown & Company, p.58], wherein it 
is explained as follows:
“In interpreting clauses we must presume that words 
have been employed in their natural and ordinary 
meaning. Says Marshall, Ch. J.: “The framers of the 
Constitution, and the people who adopted it, must 
be understood to have employed words in their 
natural sense, and to have understood what they 
meant.” This is but saying that no forced or unnatural 
construction is to be put upon their language; and 
it seems so obvious a truism that one expects to 
see it universally accepted without question; but the 
attempt is so often made by interested subtlety and 
ingenious refinement to induce the courts to force 
from these instruments a meaning which their framers 
never held, that it frequently becomes necessary to 
re-declare this fundamental maxim.”
(underlining by me)
Therefore, one task before this Court is to ascertain to what extent 
“intoxicating liquors” had acquired a natural and ordinary meaning 
at the time of the Constitution coming into force. 
12.2	 I may note another cardinal rule of interpretation explained by 
Sir Maurice Gwyer C.J., of the Federal Court of India in In Re: 
the Central Provinces and Berar Act No. XIV of 1938, 1939 
1 FCR 80, while discussing the principles of interpretation of 
a constitutional provision as under:
“I conceive
that a broad and liberal spirit should 
inspire those whose duty it is to interpret it; but I 
do not imply by this that they are free to stretch 
or pervert the language of the enactment in the 
interests of any legal or constitutional theory, or 
even for the purpose of supplying omissions or of 
correcting supposed errors. A Federal Court will not 
strengthen, but only derogate from, its position, if it 
seeks to do anything but declare the law; but it may 
rightly reflect that a Constitution of a Government is 
a living and organic thing, which of all instruments
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has the greatest claim to be construed ut res magis 
valeat quam pereat.”
12.3	 The learned Chief Justice Dr. Chandrachud, in his opinion has 
conducted an extensive inquiry into identification of legislative 
meaning of the phrase and its legislative history, but found 
that no conclusive answer can be reached on the legal import 
of “intoxicating liquors”. With due respect, I view that such 
an enquiry needs to give due primacy to the ordinary and 
natural meaning of words and also test their connotations in 
colloquial use by the Constitution makers so as to give it a 
constitutional flavour. 
A Historical Perspective:
12.4	 A historical enquiry would show that “intoxicating liquors” 
was first used in Entry 31 – List II in the Government of India 
Act, 1935. This was a departure from the legislative head in 
Devolution Rules framed under the Government of India Act, 
1919 insofar as the Entry therein was “alcoholic liquor”. The 
revisions in List II of Government of India Act, 1935 were 
partly the product of a Joint Select Committee chaired by Lord 
Linlithgow. Later, the word “liquors” was also qualified by the 
word “intoxicating”.
12.5	 I may briefly refer to the following remarks of Brewer, J. in 
South Carolina vs. United States (1905) 199 US 437 (“South 
Carolina”):
“To determine the extent of the grants of power, we 
must, therefore, place ourselves in the position of 
the men who
framed and adopted the Constitution, 
and inquire what they must have understood to be 
the meaning and scope of those grants.”
12.6	 In this backdrop, it is useful to draw sustenance from certain 
contemporaneous legislations and Hansard records that go 
to show that the phrase “intoxicating liquors” was used in the 
context of consumption. On 30.04.1889, the House of Commons 
on a motion moved by Mr. S. Smith to discuss how the fiscal 
system of the Government of India led to the establishment 
of spirit distilleries, liquor and opium shops in a large number 
of places where till recently (from the date of question) they
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never existed had several references to “intoxicating liquors” 
exclusively in the context of consumption. On 29.06.1904, Mr. 
Herbert Roberts, a person interested in temperance asked the 
Secretary of State for India whether he was aware that the 
number of ‘shops open for the sale of “intoxicating liquors” 
and drugs in India rose from 97,910 in 1901–02 to 99,497 
in 1902–03’ and whether he was in a position to explain the 
reasons for this increase in the number of shops opened and 
the consequent increase in consumption. Most interestingly, 
on 13.07.1937, in a sitting of the House of Lords, Lord Clwyd 
(formerly Mr. Herbert Roberts) asked the Secretary of State 
for India the following question:
“To ask His Majesty’s Government what was the 
amount in pounds sterling of the net Excise revenue 
of India for the years 1933–1934, 1934–1935 and 
1935–1936 respectively; what was the recorded 
consumption of country spirits in 1935–1936 in 
Bengal, Madras, Bombay, Sind, Bihar and Orissa, the 
United Provinces, the Punjab, the North-West Frontier 
Province, the Central Provinces and Berar, Assam and 
Burma respectively; what was the number of shops 
licensed for the sale of intoxicating liquor, the net 
amount of Excise revenue, and the cost of Excise 
administration in each Province in 1930–1931 and 
1935–1936; and what was the percentage of Excise 
revenue compared with the total revenue accruing 
to the Provincial
Governments in each case for the 
year 1935–1936.”
12.7	 This enquiry reflects that “intoxicating liquors” has not only been 
a term of common parlance but was also used in administration 
for assessment and regulation of consumption of spirits in 
provinces in pre-independence India from the point of view of 
collection of revenue.
Constituent Assembly Debates: 
12.8	 I might also take persuasive strength from the use of the 
expression “intoxicating liquors” in Constituent Assembly 
Debates in the context of Article 47. Sri B.G. Kher speaking 
on the ruin caused by the consumption of alcohol noted the 
use of “intoxicating liquors” and drugs as a vice.
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12.9	 The aforesaid discussion points to the fact that there was 
a consumption-oriented meaning attached to “intoxicating 
liquors” that was used for legal and administrative purposes. 
To ascertain the breadth of the phrase “intoxicating liquors” 
as it was used by the draftsmen of the Constitution and the 
Government of India Act, 1935 one cannot be bound by 
only the definitions provided in legislative enactments, or 
lack thereof. 
12.10	 The Constitution of India clearly employs three distinct 
expressions relevant to the present controversy:
(a)	 Entry 51 - List II refers to duties on ‘alcoholic liquors 
for human consumption’;
(b)	 Article 47 uses the words “consumption of ‘intoxicating 
drinks’”; and
(c)	
Entry 8 – List II uses the words in question – “intoxicating 
liquors”
12.11	 I may observe that the expression “alcoholic liquors for 
human consumption” as it appears in Entry 51 – List II and 
intoxicating drinks as it appears in Article 47 have been 
categorically used in the context of human consumption as a 
beverage, as rightly observed by the learned Chief Justice in 
his opinion. Herein, I might note that appellants have sought to 
contend that the expression “intoxicating liquors” as it appears 
in Entry 8 – List II has no explicit neighboring context which 
would indicate that it is restricted to mean only potable liquor. 
12.12	 The first interpretive question therefore is,
whether the absence 
of the context of consumption expands “intoxicating liquors” 
to also include “industrial alcohol”. In my opinion, the words 
“intoxicating liquors” itself explains that Entry 8 – List II does 
not seek to travel beyond “intoxicating liquors” meant for 
human consumption i.e., potable alcohol. This was also the 
view of Jeevan Reddy, J. in Bihar Distillery.
12.13	 Another distinguishing consideration is the use of “intoxicating” 
as an adjective to liquor i.e., as a qualifier whereas elsewhere 
in the Constitution the word “alcoholic” accompanies the word 
liquor. Learned Chief Justice has carefully found following 
three inferences which are summarized as under:
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a)	
Ingredient vs. Effect: “Alcoholic liquor” defines the scope 
of the provision based on the ingredient, that is, alcohol 
whereas “intoxicating liquors” defines the scope based 
on effect i.e. intoxication. Therefore, liquor which is not 
colloquially considered alcoholic liquor may be covered 
by the phrase “intoxicating liquors”.
b)	
Broader intent: ‘Intoxicate’ means either the ability of 
someone to lose control of their behavior or poison. Thus, 
the purpose of substituting the adjective which indicates 
the impact with the ingredient seems to have enhanced 
the scope of the Entry to cover all liquor which has an 
impact on health; and
c)	
Public interest purpose: There is a discernible public 
interest in covering the entire stage from production to 
sale of “intoxicating liquors”. Additionally, Entry 31 – List II 
in the Government of India Act, 1935 also regulated 
narcotic drugs and opium along with “intoxicating 
liquors”. However, references to them were deleted to 
prevent overlapping with entries in the Concurrent List. 
In substance, the inference that is drawn is that all – 
alcohol, narcotic drugs and opium – are products which 
can be noxiously used because they are also used as 
raw materials in the production of other products.
12.14	 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, 
in my view, 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
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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.
12.15	 One must also be cognizant of the fact that Entry 8 – List II 
concerns itself with “intoxicating liquors” even from a historical 
perspective. Constitutional framers were not engaged in a 
theoretical task of demarcating legislative fields but in their 
utmost wisdom and pragmatism distributed legislate fields 
between Parliament and State Legislatures that would continue 
to determine the governance of the nation. One must note 
that a construction of Entry 8 – List II should not potentially 
give the States the legislative competence to legislate on 
“industrial alcohol” which is a scheduled industry under IDRA. 
That Entry 8 – List II which deals with
“intoxicating liquors” 
cannot also subsume industries for manufacture of “industrial 
alcohol”, etc. 
12.16	 Therefore, 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. 
12.17	 Halsbury’s Laws of England (Fourth Edition), Volume 26 
defines the meaning of “intoxicating liquors” as discussed in 
the context of the distinction between wholesale and retail 
trade. It is stated that “Dealing wholesale” means “the sale at
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any one time to any one person of not less than two gallons 
or one case of spirits, wine or made-wine, or not less than 
four and a half gallons or two cases of beer”. “Selling by 
retail” means “the sale at any one time to any one person 
of not more than two gallons or one case of spirits, wine or 
made-wine or not more than four and a half gallons or two 
cases of beer or cider”. The following definitions are apposite:
(i)	
“Spirits” is defined to mean spirits of any description and 
includes all liquors mixed with spirits and all mixtures, 
compounds and preparations made with spirits, but does 
not include methylated spirits : Customs and Excise 
Act, 1952. 
(ii)	
“Wine” means liquor obtained from the alcoholic 
fermentation of fresh grapes or the must of fresh grapes, 
whether or not it is fortified with spirits or flavoured with 
aromatic extracts. 
(iii)	 “Made-wine” means any liquor obtained from the alcoholic 
fermentation of any substance or by mixing a liquor so 
obtained or derived from a liquor so obtained with any 
other liquor or substance, but does not include wine, 
beer, black beer, spirits or cider. This definition replaced 
an earlier one in different terms of “British wine”.
(iv)	 The definition of “beer” includes ale, porter, stout and any 
other description of beer and any other liquor which is 
made or sold as a description of beer or as a substitute 
for beer which on analysis of a sample at any
time is 
found to be of a strength exceeding two degrees of 
proof, but does not include liquor made elsewhere than 
upon the licenced premises of a brewer for sale which 
on analysis of a sample at any time is found to be of 
an original gravity not exceeding 1,016 degrees and to 
be of a strength not exceeding two degrees of proof : 
Customs and Excise Act, 1952.
(v)	
“Intoxicating liquors” means spirits, wine, beer, cider and 
any fermented, distilled or spiritous liquor but (apart from 
cider) does not include any liquor for the sale of which 
by wholesale no excise licence is required : Licensing 
Act, 1964.
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(vi)	 “Cider” means cider or perry of a strength less than 8.7 
per cent of alcohol by volume at 20 degrees Centigrade 
obtained from the fermentation of apple or pear juice 
without the addition at any time of any alcoholic liquor or 
liquor or substance which communicates colour or flavour 
other than such as the Commissioner of Customs and 
Excise may allow as appearing to them to be necessary 
to make cider or perry : Customs and Excise Act, 1952.
(vii)	 “Intoxicating liquors other than spirits” includes beer, 
wine, made-wine and cider.
12.18	 It may also be useful to outline some undisputed elements of 
“industrial alcohol”. It is an undisputed position that “industrial 
alcohol” is not meant to be consumed as a human beverage. In 
other words, it is not produced or manufactured to be meant for 
direct human consumption as a beverage. However, only when 
misused, as an intoxicating substance after some treatment, 
howsoever limited, “industrial alcohol” certainly could cause 
the “intoxicating” effect on direct human consumption. 
12.19	 Two distinguished interpretations have been contended before 
us. In effect, the respondents contend that “intoxicating liquors” 
must be so constructed that it includes only “liquors which are 
meant to intoxicate” as is. Per contra, the appellants contend 
that it is a cardinal rule of interpretation that legislative Entries 
be given the widest possible
construction and therefore 
Entry 8 – List II should be read as “liquors which can intoxicate 
even when mischievously used”. The effect of the appellants’ 
construction is that Entry 8 – List II will give States the 
legislative field on “industrial alcohol”, which by design is not 
sought to be intoxicating but rather could intoxicate because 
of its misuse. 
12.20	 Before proceeding further, I may first note a notable feature 
of the phraseology of Entry 8 – List II of the Constitution 
of India and Entry 40 – List II, as Entry 8 appeared in the 
Draft Constitution. Neither in the Constitution nor in the Draft 
Constitution was there any other Entry in List II that used an 
adjective as a qualifier. Whether use of the word “intoxicating” 
enlarges or limits the scope of “liquors” is something that 
needs to be answered. Herein, “intoxicating” is an adjective 
that is adjoined to “liquors” and explains an effect that is
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caused. In this regard, learned Solicitor General contended 
that “intoxicating” has been used to expand beyond the limits of 
“alcoholic liquors” because States have an interest in regulating 
other “intoxicating liquors” such as bhang. It needs no labour 
that an “intoxicating” effect can be said to be caused only 
upon actual consumption by human beings. Unlike potable 
alcohol, “industrial alcohol” by its design, intent and purpose 
is neither sought to be consumed and cause an intoxicating 
effect nor is it produced keeping in mind its intoxicating effect 
on human beings. If we were to read “industrial alcohol” as 
“intoxicating liquors” which even though by design is neither 
supposed to be consumed nor have an effect on health but 
has the constituents that could be “intoxicating” when misused, 
it would enable a cumbersome interpretational plane.
12.21	 It is useful to allude to the sine qua non of Entry 8 – List II 
i.e. the intoxicating effect. In my view, the sine qua non of 
Entry 8 – List II i.e. the “intoxicating” effect of liquor has to be 
read as (i) an effect, and (ii) an intended effect of the industry 
and its products. One might argue that even “industrial alcohol” 
due to its very constituents could cause an intoxicating effect, 
when mischievously consumed, albeit with dire consequences. 
However, such an argument ignores that the fundamental 
nature of “industrial alcohol” is that it is non-potable
i.e. when 
put to its actual use, neither is it intended to be consumed by 
human beings as a beverage nor, as a corollary, is sought 
to cause an “intoxicating” effect on human beings. “Industrial 
alcohol” can be said to cause an “intoxicating” effect only 
when it is mischievously directed away from its actual purpose 
and use and towards human consumption. To accept such 
a rationale for interpreting Entry  8 – List II would lead to 
an anomalous situation wherein the marginal mischievous 
use of “industrial alcohol” would bring in the whole industry 
of “industrial alcohol” to Entry 8 – List II and take it out of 
Entry 24 – List II viz. “industrial alcohol” which is not always 
meant to intoxicate a human being but could only sometimes 
when used mischievously or abused would wholly become 
a legislative field for States to legislate. It is to avoid such 
an abuse that States have the powers to prevent by suitable 
legislative and administrative measures, as has been held in 
the aforesaid decisions of this Court.
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12.22	 Viewed from another perspective, the exception (mischievous 
use) cannot lead to governing of the norm (original intended 
use) through such construction of Entry 8 – List II. Put into 
practice, this would translate into legislative regulation of 
production, manufacture, possession, transport, purchase 
and sale of the entire industry and product of “industrial 
alcohol” only because of its possible misuse or mischievous 
use. This reading would be tantamount to attaching to the 
constitutional intent an absurdity i.e. the part governing the 
whole or in other words, bringing within the ambit of Entry 
8 – List II something which is an exception as a main aspect 
of the Entry. A careful revisit pertinent at this point would be to 
paragraph 86 of Synthetics and Chemicals (7J), wherein it 
was held that States continue to have legislative competence 
to ensure that non-potable alcohol is not misdirected to potable 
alcohol. That is different from saying that States have the right 
to regulate “industrial alcohol” or non-potable alcohol. A power 
to legislate as to the principal matter specifically mentioned in 
the Entry also includes within its expanse, legislation touching 
incidental and ancillary matters. However, ancillary matters 
by a backdoor cannot be included within the Entry, beyond 
what is covered as the principal. Herein, the ancillary matter 
being prevention of
mischievous use of “industrial alcohol” 
would be within Entry 8 – List II but “industrial alcohol” as 
such would not be included.
Hence, the analysis of the relevant Entries in the three Lists 
must be in the backdrop of the aforesaid discussion.
Analysis of relevant Entries in the three Lists:
13.	 While analysing Entry 52 – List I which deals with industries, the 
control of which by the Union is declared by Parliament by law to 
be expedient in public interest, it would be useful to refer to Entries 
7 and 54 – List I. What is common in all these three Entries is that 
there is a declaration made by the Parliament. Entries 7, 52 and 
54 – List I read as under:
“7. Industries declared by Parliament by law to be necessary 
for the purpose of defence or for the prosecution of war.
xxx
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52. Industries, the control of which by the Union is declared 
by Parliament by law to be expedient in the public interest.
xxx
54. Regulation of mines and mineral development to the 
extent to which such regulation and development under 
the control of the Union is declared by Parliament by law 
to be expedient in the public interest.”
13.1	 What is common between Entry 52 – List I and Entry 54 – 
List I is the fact that control of industries or regulation and 
development of mines and mineral development respectively 
is to the degree or extent under the control of the Union 
which is expressed by a declaration made by Parliament by 
law to be expedient in the public interest. Thus, under Entry 
52 – List I, the intent to control an industry: (i) by the Union; 
(ii) by a declaration by Parliament by law; and (iii) which law 
is expedient in the public interest are the key phrases to be 
taken note of. Thus, if there is a declaration by Parliament 
by law (such as IDRA) to control any of the industries by the 
Union, such as “Fermentation Industries” which is expedient 
in the public interest then, to the extent of such control, the 
industries would be covered under Entry 52 – List I. This is 
also evident on a reading of Entry 24 – List II which also deals 
with the field of legislation being “industries” subject to the 
provision of Entries 7 and 52 – List I. As already noted above, 
Entry 7 – List I pertains to
industries declared by Parliament 
by law to be necessary for the purpose of defence or for the 
prosecution of war. Entry 52 – List I deals with “industries”, 
the control of which by the Union is declared by Parliament 
by law to be expedient in the public interest.
13.2	 In Ishwari Khetan, the facts were that the Governor of Uttar 
Pradesh promulgated an Ordinance on 03.07.1972, styled 
as U.P. Sugar Undertaking (Acquisition) Ordinance, 1971, 
with a view to transferring and vesting sugar undertakings 
set out in the Schedule to the Ordinance in the U.P. State 
Sugar Corporation Limited, a Government Company within 
the meaning of Section 617 of the Companies Act, 1956. 
Subsequently, the Ordinance was repealed and replaced by 
an Act. The Schedule to the Act enumerated twelve sugar 
undertakings which stood transferred to and vested in the
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Corporation w.e.f. 03.07.1971, the date on which the Ordinance 
was issued. Writ Petitions were filed before the Allahabad High 
Court challenging the constitutional validity of the Ordinance as 
well as the Act on various grounds. The Division Bench of the 
High Court had repelled the contentions advanced on behalf 
of the petitioners therein and upheld the constitutional validity 
of the Act. Before this Court, the main thrust of the attack was 
that the U.P. Legislature lacked legislative competence to enact 
the impugned Act. This was because under Entry 52 – List I 
the Parliament had made the requisite declaration in Section 
2 of the IDRA and in view of Item 25 of the First Schedule 
to the Act i.e. sugar, being a declared industry therein, that 
industry was excluded from Entry 24 - List II. Hence U.P. State 
Legislature was denuded of all legislative power to legislate 
in respect of sugar industry and the impugned legislation was 
void on account of legislative incompetence. 
13.2.1	 D.A. Desai, J. for himself and on behalf of V.R. 
Krishna Iyer and S. Murtaza Fazal Ali, JJ. wrote 
for the majority. This Court analysed the relevant 
Entries keeping in view the legislative perspective 
and historical background through which Entries 7 
and 52 – List I, Entry 24 - List II and Entry 33 - List 
III, inter alia, had passed through. Considering Entry 
52 – List I and Entry 24 - List II, it
was observed that 
“industry” as a head of legislation is to be found in 
Entry 24 - List II with the limitation that it is subject to 
Entries 7 and 52 - List I. The difference in the language 
in which Entries 7 and 52 - List I is couched has a 
bearing on the interpretation of Entry 52 - List I. The 
subject “industry” being enumerated in List II, the 
State Legislature has power to legislate in respect to it 
and keeping aside the words “subject to the provision 
of Entries 7 and 52 of List I”, the State Legislature 
alone can legislate in respect of the legislative head 
“industry”. Ipso facto Parliament would have no power 
to legislate in respect of industry as a legislative head. 
Under Entry 52 - List I, unless and until a declaration 
is made by Parliament by law to assume control over 
specified industries, the embargo on the power of 
Parliament to legislate in respect of industry would
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not be lifted. The declaration has to be made by 
Parliament by law to assume control over specified 
industry in public interest. Thus, the extent of control 
would be known by the declaration so made by law. 
This would necessarily depend upon the legislation 
enacted spelling out the degree of control assumed 
which is a pre-requisite for assuming control over 
a specified industry. As a result to that extent, the 
State Legislature would be denuded of its powers to 
legislate under Entry 24 - List II. It was contended that 
the industry in respect of which control is assumed for 
the purpose of their development and regulation have 
been set out in the First Schedule and in the manner 
provided in the statute i.e. IDRA which also provides 
the limit of control to the extent mentioned in the said 
Act. It was contended that Section 2 has to be read 
along with the Act and not read de hors the Act. This 
would mean the provision of the Act would make the 
control concrete and specific and the manner in which 
exercise has to be laid down and not some abstract 
control. Thus, the control has to be concrete and the 
mode and method of its exercise must be regulated 
by law. That under the IDRA, Sections 3 to 30 set 
out various modes and methodology, power and 
procedure to effectuate the control which the Union 
acquired by virtue of the declaration contained in 
Section 2 of the IDRA. On these contentions, it was
observed that absence of the words “to the extent 
herein provided” in Section 2 of the IDRA would not 
lead to the conclusion that the control assumed was 
to be something in abstract, total and unfettered and 
not as per the provisions of the IDRA. It was thus held 
that to the extent Union acquired control by virtue of 
declaration in Section 2 of the IDRA as amended from 
time to time, the power of the State Legislature under 
Entry 24 - List II to enact any legislation in respect 
of declared industry so as to encroach upon the field 
of control occupied by IDRA would be taken away.
13.2.2	 In this regard, reliance was placed on Baijnath Kedia 
vs. State of Bihar, AIR 1970 SC 1436 (“Baijnath
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Kedia”). Thus to the extent the provision of the 
IDRA occupies the field, the State Legislature stands 
denuded of its power to legislate in respect of such 
declared industry. Examining the provision of the 
IDRA, it was held that in pith and substance, the 
impugned Act was one for acquisition of scheduled 
undertakings to the corporation, which would in no 
way come in conflict with any of the provision of the 
IDRA or would not trench upon any control exercise 
by the Union under the various provisions of the IDRA. 
That the IDRA is not concerned with the ownership of 
industrial undertaking in declared industry except the 
control over the management of the undertaking by the 
owner. Thus the legislative power of the State under 
Entry 24 - List II is eroded only to the extent control is 
assumed by the Union pursuant to a declaration made 
by the Parliament in respect of a declared industry as 
spelt out by the legislative enactment and the field 
occupied by such enactment is the measure of erosion. 
Subject to such erosion, on the remainder the State 
Legislature will have power to legislate in respect of a 
declared industry without in any way trenching upon 
the occupied field. It was held that State Legislature 
which is otherwise competent to deal with industry 
under Entry 24 – List II can deal with that industry 
in exercise of other powers enabling it to legislate 
under
different heads set out in Lists II and III and 
this power cannot be denied to a State. The second 
limb of the submission therein is not related to the 
present controversy and need not be adverted to. It 
was finally observed that the impugned Act was not 
intended to take over management or control of any 
industrial undertaking by the State Government as 
in pith and substance, it was enacted to acquire the 
scheduled undertakings in terms of Entry 42 – List III. 
13.2.3	 In Ishwari Khetan, Pathak, J. (as he then was) for 
himself and for Koshal, J. (minority view) observed that 
while they broadly agreed with the final conclusion, on 
several points, reached by Desai, J. in his judgment, 
they preferred to refrain from expressing any opinion
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on the question whether the declaration made by 
Parliament in Section 2 of the IDRA in respect of the 
industries specified in the First Schedule to that Act can 
be regarded as limited to removing from the scope of 
Entry 24 - List II only so much of the legislative field as 
is covered by the subject matter and content of that Act 
or it can be regarded as effecting the removal from that 
Entry of the entire legislative field embracing all matters 
pertaining to the industries specified in the declaration. 
It was further opined that the observations made by 
this Court in Hingir-Rampur Coal Co., Ltd. vs. The 
State of Orissa, AIR 1961 SC 459 (“Hingir-Rampur”); 
State of Orissa vs. M.A. Tulloch and Co., AIR 1964 
SC 1284 (“M.A. Tulloch”); Baijnath Kedia vs. State 
of Bihar, AIR 1970 SC 1436 (“Baijnath Kedia”); and 
State of Haryana. vs. Chanan Mal, AIR 1976 SC 
1654 (“Chanan Mal”), would not be of assistance in 
this behalf. In each of those cases, the declaration 
made by Parliament in the concerned enactment 
limited the control of the regulation of the mines and the 
development of minerals to the extent provided in the 
enactment. Whether the terms in which the declaration 
has been made in Section 2 of the IDRA, a declaration 
not expressly limiting control of the specific industries 
to the extent provided by the Act, can be construed as 
being so limited was a matter which, they thought, should 
be dealt with in
some more appropriate case. That the 
range of considerations encompassed within the field 
of enquiry to which the point was amenable had not 
been sufficiently covered before the Court. “This was 
for the good reason and, hence, the provocation was 
limited.” Therefore, the controversy could be adequately 
answered on the ground that the legislation impugned 
therein fell within Entry 42 - List III and would not be 
related to Entry 52 - List I or Entry 24 - List II. 
13.2.4	 Therefore, there was a reluctance to enter upon an 
examination of the mutually competing claims of Entry 
52 - List I and Entry 24 - List II — Entries which deal 
with “industries”. Consequently, the appeals were 
dismissed.
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13.3	 When the expression “subject to” is used in an Entry in List II it 
would imply that the said Entry is subordinate to the respective 
Entries in List I and has to be read along with the relevant 
Entry in List I. Thus, on a conjoint reading of Entry 24 – List 
II with Entry 52 – List I, it is apparent that Entry 24 – List II is 
subject to Entry 52 – List I. The expression “subject to” in the 
Entries in List II has been a subject matter of interpretation in 
several decisions and is of legal import.
13.3.1	 As per Black’s Law Dictionary, 5th Edition, Pg.1278, 
“subject to” means “liable, subordinate, subservient, 
inferior, obedient to, governed or affected by.” 
13.3.2	 The relevant judgments of this Court on the point are 
discussed as under:
a)	
In Hingir Rampur Coal Company vs. State of 
Orissa (1961) 2 SCR 537 (“Hingir Rampur”), 
while interpreting the import of the expression 
“subject to” in Entry 23 – List II and the interplay 
of that Entry with Entry 54 – List I, this Court 
observed as undisputed the position in law that, 
once a Central Act containing a declaration by 
Parliament covering the field is passed as required 
by Entry 54 – List I, the State Legislature had no 
legislative competence to enact a legislation on 
the subject that has already been occupied by a 
Central legislation – not for reason of repugnancy 
but rather competence at the very inception. 
b)	
In
Gujarat University vs. Shri Krishna 
Ranganath Mudholkar, AIR 1963 SC 703 
(“Shri Krishna”), this Court was tasked with 
interpreting Entry 11 - List II, which, although 
stands omitted now, earlier read as ‘Education 
including universities, subject to the provisions 
of Entries 63, 64, 65 and 66 of List I and Entry 
25 of List III’. Therein, it was held that use of the 
expression “subject to” in Entry 11 - List II clearly 
indicated that legislation in respect of excluded 
matters cannot be made by the State Legislature. 
By the Constitution (Forty-Second Amendment), 
1976, Entry 11 – List II was omitted, as noted
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above, and Entry 25 – List III was substituted 
as, ‘Education, including technical education, 
medical education and universities, subject to 
the provisions of Entries 63, 64, 65 and 66 of 
List I; vocational and technical training of labour.’ 
In this context, this Court in Baharul Islam vs. 
The Indian Medical Association, 2023 SCC 
OnLine SC 79 (“Baharul Islam”), while referring 
to Modern Dental College & Research Centre 
vs. State of Madhya Pradesh (2016) 7 SCC 
353 (“Modern Dental College”), explained that 
where one Entry is made ‘subject to’ another 
Entry, it means that out of the scope of the former 
Entry a field of legislation covered by the latter 
Entry has been reserved to be specially dealt 
with by the appropriate Legislature. 
c)	
Similarly, while interpreting the significance of a 
constitutional provision being subject to another 
in The South India Corporation (P) Ltd. vs. The 
Secretary, Board of Revenue Trivandrum, AIR 
1964 SC 207 (“South India Corporation”), this 
Court observed that the expression “subject to” 
conveys the idea of a provision yielding place to 
another provision or other provisions to which it 
is made subject. 
d)	
Helpful reference may also be made to the import 
of “subject to” in legislative uses. In Ashok 
Leyland Ltd. vs. State of Tamil Nadu (2004) 
3 SCC 1 (“Ashok Leyland Ltd.”) this Court 
held that “subject to” is an expression whereby 
a limitation is expressed.
13.4
Having noted as above, it is also crucial to examine the 
interplay between Entry 52 – List I, Entry 24 – List II and 
Entry 8 – List II. Entry 24 – List I is a regulatory Entry which 
provides State Legislatures with the competence to legislate on 
“industries” subject to Entry 7 – List I and Entry 52 – List I. In 
effect, Entry 52 – List I enables the Union to take an industry 
out of the legislative competence of States and bring it within 
Entry 52 – List I. In the instant cases, the primary question is 
whether there is any overlap between Entry 52 – List I and
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Entry 8 – List II. In other words, is there any conflict between 
the exclusive competence of State Legislatures under Entry 8 – 
List II and the regulation of industries the control of which by 
the Union is declared by Parliament by law to be expedient 
in the public interest under Entry 52 – List I?
13.4.1	 It is a settled law that the meaning of “industries” in 
Entry 52 – List I and Entry 24 – List II is coextensive. 
Therefore, what is out of Entry 24 – List II will also 
not be within Entry 52 – List I. In that context, it has 
been contended before us that Entry 8 – List II is a 
unique Entry as it is not limited to only the product of 
“intoxicating liquors” but also takes within its sweep the 
“industry” of “intoxicating liquors”. It was also submitted 
that Entry 8 – List II unlike Entry 24 – List II is not 
subject to Entries in List – I and therefore the industry 
of “intoxicating liquors” is the exclusive domain of State 
Legislatures. The import of such a position is that if 
Entry 8 – List II is held to be both an industry-based and 
product-based Entry, the Entry would empower States 
to legislate on both the product of “intoxicating liquors” 
and production of the product as well. Furthermore, 
as Entry 8 – List II is not subject to Entry 52 – List I, 
the industry of “intoxicating liquors” will be out of Entry 
24 – List II, and therefore, coextensively under Entry 
52 – List
I the Union would not have the legislative 
competence to legislate on what lies exclusively within 
Entry 8 – List II.
13.4.2	 Learned Chief Justice Dr. Chandrachud in his proposed 
judgment has observed that the Seventh Schedule 
differentiates between the industry and product of 
industry and, even further, Entry 8 – List II is special 
because such a distinction made in the general Entries 
is not adopted in Entry 8 – List II. As rightly pointed 
out, it is the potential overlap between Entry 52 – List I 
and Entry 8 – List II which must be resolved herein. 
13.4.3	 In this regard, reference to the dictum of this Court 
in Calcutta Gas Company is apposite, wherein the 
interpretation between Entries 24 and 25 – List II in 
relation to Entry 52 – List I was considered. It was 
observed that Entry 24 – List II in its widest amplitude
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takes in all industries, including that of “gas and gas-
works”. So does Entry 25 – List II which comprehends 
gas industry. There is, therefore, an apparent conflict 
between the two Entries and they overlap with each 
other. It was observed that in such a contingency the 
doctrine of harmonious construction must be invoked. 
While Entry 24 – List II covers a very wide field, that is, 
the field of entire industry being within the legislative 
competence of the State, Entry 25 – List II dealing with 
“gas and gas-works”, can be confined to a specific 
industry, that is, the “gas industry”. This was possibly 
because only one or two States are concerned with 
“gas industry” and it was not considered to be of an 
all-India importance and therefore, was carved out of 
Entry 24 – List II and given a separate Entry as Entry 
25 – List II, as otherwise if a declaration by law was 
made by Parliament within the meaning of Entry 7 or 
Entry 52 - List I, gas and “gas industries” would be 
taken out of the legislative power of States. Therefore, 
by the doctrine of harmonious construction, “gas and 
gas works” were found to be within the exclusive field 
allotted to the States and outside the legislative field of 
Parliament. It was further observed that the expression 
“industry” in Entry 52 - List I bears the same meaning 
as that in Entry 24 - List II, with the result that the said 
expression in Entry 52 - List I also does not
take in 
the industry of “gas and gas works”. If so, it followed 
that the IDRA, in so far as it purported to deal with the 
“gas industry” is beyond the legislative competence 
of Parliament. 
13.4.4	 Keeping the aforesaid dictum in mind, it must be 
observed that Entry 8 – List II being a special Entry 
prevails over the general Entry 24 – List II. Therefore, 
while Entry 52 – List and Entry 8 – List II overlap on 
the aspect of “industry” of “intoxicating liquors”, Entry 
52 – List I cannot takeover the “industry” of “intoxicating 
liquors”. 
13.5	 Therefore, the next question is whether Entry 8 – List II which 
deals with “intoxicating liquors”, that is to say, the production, 
manufacture, possession, transport, purchase and sale of
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“intoxicating liquors” is restricted to only alcoholic liquors 
for human consumption i.e., potable alcohol or it would also 
extend to non-potable alcohol or “industrial alcohol”. In other 
words, if “industrial alcohol” is read within the meaning of 
Entry 24 – List II then, whether, on account of the declaration 
made by the Parliament in Section 2 of the IDRA in terms of 
Entry 52 – List I it would be excluded from Entry 24 – List II 
and included under Entry 52 – List I as per the provisions of 
the IDRA. In other words, the question is whether Entry 8 – 
List II which deals with “intoxicating liquors” would take within 
its scope and ambit “industrial alcohol”?
One of the ways of answering these questions would be to 
compare Entry 84 – List I as it stood prior to 16.09.2016 with 
Entry 51 – List II although both are taxation Entries. Entry 
84 – List I dealt with duties of excise on tobacco and other 
goods manufactured or produced in India except – (a) alcoholic 
liquors for human consumption; (b) opium, Indian hemp and 
other narcotic drugs and narcotics, but including medicinal and 
toilet preparations containing alcohol or any substance included 
in sub-paragraph (b) of this Entry. Entry 51 – List II talks of 
duties of excise on the goods manufactured or produced in the 
State and countervailing duties at the same or lower rates on 
similar goods manufactured or produced elsewhere in
India, 
namely, - (a) alcoholic liquors for human consumption; (b) 
opium, Indian hemp and other narcotic drugs and narcotics, 
but not including medicinal and toilet preparations containing 
alcohol or any substance included in sub-paragraph (b) of this 
Entry. Both are taxation entries.
13.6	 On a comparative reading of the said two Entries, what is 
evident is that excise duty on goods manufactured as per 
Entry 84 – List I excludes duty of excise on alcoholic liquors 
for human consumption. This is subject to the further exception 
that, if, any medicinal and toilet preparations containing alcohol 
or any substance included in sub-paragraph (b) of the said 
Entry, namely, opium, Indian hemp and other narcotic drugs 
and narcotics, then, the excise duty is leviable as per Entry 
84 – List I by the Union or Central Government. Conversely, 
under Entry 51 – List II, goods manufactured or produced in 
the State would be subject to excise duty such as on – a) 
alcoholic liquors for human consumption; b) opium, Indian hemp
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and other narcotic drugs and narcotics, but does not include 
medicinal and toilet preparations containing alcohol or any 
substance included in sub-paragraph (b) of the said Entry. In 
other words, alcoholic liquors not meant for human consumption 
and medicinal and toilet preparations containing alcohol or any 
substance such as opium, Indian hemp and other narcotic 
drugs and narcotics would be subject to excise duty leviable 
under Entry 84 – List I by the Central Government. Insofar as 
alcoholic liquors for human consumption is concerned, the 
States have the power to levy excise duty. 
13.7	 Therefore, in my view, the framers of the Constitution 
bifurcated alcoholic liquors for human consumption as distinct 
from alcohol used for medicinal and toilet preparations or 
any other liquor including “industrial liquor” on which excise 
duty is leviable under Entry 84 – List I. What is the purpose 
of excluding levy of excise duty under Entry 84 – List I on 
alcoholic liquors for human consumption and including the 
same under Entry 51 – List II and thereby giving the powers 
to the State Legislature to levy excise duty on such alcoholic 
liquors? The intent of the framers of the Constitution was to 
categorize alcoholic liquors into following two categories and 
accordingly divide the legislative powers between Parliament 
and State Legislature:
(a)	 alcoholic liquors for human consumption (potable alcoholic 
liquors);
and 
(b)	 alcoholic liquors not for human consumption such as 
“industrial alcohol” (non-potable alcoholic liquors).
At this stage itself, it is made clear that if alcoholic liquor, which 
is manufactured for the purpose of using the same as a raw 
material in the manufacture or production of any other “industrial 
product” and is subject to a process, would not come within the 
scope and ambit of “alcoholic liquors for human consumption”. 
As noted, the said product is also known as “industrial alcohol”. 
Such “alcoholic liquors” or “industrial alcohol” are not used 
directly for human consumption as a beverage. On the other 
hand, it would be an abuse of such “industrial alcohol”, if 
consumed as a beverage. Merely because it can be subjected 
to a process and mischievous human consumption is possible, 
does that make “industrial alcohol” “alcoholic liquors for human
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consumption” within the meaning of Entry 84 – List I and Entry 
51 – List II and also “intoxicating liquors” within the scope and 
ambit of Entry 8 – List II? 
13.8	  A person or an entity which is not engaged in the manufacture 
of alcoholic liquors for human consumption as a beverage is 
not authorised to manufacture “industrial alcohol” and subject 
it to a process and sell it as alcoholic liquors for human 
consumption. The same is prohibited and has to be dealt with 
having regard to the scope and ambit of Entry 8 – List II. On 
the other hand, it is only “intoxicating liquors” which is directly 
for human consumption as a beverage and the production, 
manufacture, possession, transport, purchase and sale of such 
“intoxicating liquors”, as per Entry 8 – List II, which is within 
the competence of State Legislature i.e. for the purpose of 
regulation of such “intoxicating liquors” which would also entail 
levy of an excise duty on such “intoxicating liquors” as per 
Entry 51 – List II as alcoholic liquor for human consumption. 
Therefore, on “intoxicating liquors” which is alcoholic liquors 
directly for human consumption as a beverage, excise duty is 
levied by the State Legislature and regulated under Entry 8 – 
List II. Also, under Entry 84 – List I, the Parliament has no 
power to levy any such excise duty on such “intoxicating 
liquors” meant for human consumption as a beverage as 
it
is an expressly excluded item. In other words, alcoholic 
liquors for human consumption is thus directly relatable to 
“intoxicating liquors” and the expression “intoxicating liquors” 
in Entry 8 – List II means alcoholic liquors directly for human 
consumption as a beverage. Thus, no other alcoholic liquors 
can be regulated as per Entry 8 – List II except to ensure that 
there is no abuse/misuse of “industrial alcohol” being treated 
for human consumption by subjecting it to a particular process; 
nor can any excise duty be levied on such liquor by the State 
Legislature. 
Hence, any “intoxicating liquors” would mean alcoholic liquors 
for human consumption which is produced, manufactured, 
possessed, transported, purchased or sold and can be 
regulated under Entry 8 – List II by the State Legislature but 
alcoholic liquors which are not for human consumption as a 
beverage would not come within the scope of the expression 
“intoxicating liquors”, such as “industrial alcohol” which
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would in turn be regulated by Entry 24 – List II which Entry 
is subject to Entry 52 – List I and can be controlled by the 
Union exclusively. Thus, “industrial alcohol” and medicinal 
and toilet preparations which contain alcohol can be taxed 
as per Entry 84 – List I by the Central Government in the 
form of central excise duty. 
13.9	
Merely because “industrial alcohol” by a process can be 
converted to alcohol for human consumption as a beverage 
does not entitle the State Legislature to tax or regulate 
“industrial alcohol”. On the other hand, the States as per 
Entry 8 – List II have the power to regulate “intoxicating 
liquors” which is for human consumption as a beverage and 
in that regard have the power to prohibit “industrial alcohol” 
being converted to alcohol for human consumption as a 
beverage. This is in order to protect the health of citizens 
which is a Directive Principle of State Policy under Article 
47 of the Constitution and in order to prohibit unauthorised 
use/misuse of “industrial alcohol” produced in the State from 
being converted and sold as “intoxicating liquors” meant for 
human consumption as a beverage. 
13.10	 This interpretation would become clearer on a reading of 
Entry 33(a) – List III which deals with, inter alia, trade and 
commerce in, and the production, supply and distribution 
of the products of any industry where the control of such 
industry by the Union is declared by
Parliament by law to be 
expedient in the public interest, and also includes imported 
goods of the same kind as such products. Therefore, if 
products of any industry where the control of such industry 
by the Union has been declared by Parliament by law to 
be expedient in public interest are manufactured in India or 
imported into India, then as per Entry 33(a) – List III, on the 
production, supply and distribution of and trade and commerce 
of such industrial products, the State Legislature would not 
have any exclusive power to pass a law under Entries 26 
and 27 – List II as they are subject to Entry 33(a) – List III. 
In other words, in view of the passing of the IDRA, under 
Entry 52 – List I and the inclusion of, inter alia, products of 
“Fermentation Industries” such as “industrial alcohol” in Item 
26 of the First Schedule of the IDRA, the State Legislatures 
would be subject to the powers of the Parliament to pass
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a law in the matter of production, supply, distribution, trade 
and commerce of such industrial product. 
13.11	 Therefore, if the control of any industry has been declared 
by Parliament by law to be expedient in the public interest, 
then in such a case, in the matter of production, supply and 
distribution of products of such industry, Entry 27 – List II 
would be subject to Entry 33(a) – List III. Thus, the subject 
production, supply and distribution of goods found in Entry 
27 – List II as well as in Entry 33(a) – List III regarding any 
product of an industry has a nexus with Entry 52 – List I. 
13.12	 Further, Entry 24 – List II which deals with industries, is 
itself subject to Entry 52 – List I. Therefore, if any industry 
is mentioned in the First Schedule of the IDRA which is a 
legislation passed by the Parliament by virtue of Entry 52 – 
List I, a reading of the same conjointly with Entry 33(a) – 
List III would mean that particular industry which has been 
mentioned in the First Schedule of IDRA would be under the 
control of the Union. However, as far as the products of such 
industry are concerned, Entry 33(a) – List III deals with the 
aspect of production and supply and distribution as well as 
trade and commerce. Thus, if any particular industry is not 
mentioned or is deleted from the First Schedule of IDRA, 
then automatically Entry 33(a) – List III would not apply to 
such
industrial products and the subject would squarely fall 
within the scope and ambit of Entry 24 – List II and Entry 
27 – List II. 
14.	 There is another way of looking at the Entries under consideration. 
As already noted, Entry 24 - List II which deals with the subject 
“industries”, enables legislative competence to the State Legislature 
to enact laws on the said subject. Therefore, at a first glance the 
subject “industries” is a State subject. However, Entry 24 - List II 
is subject to Entries 7 and 52 - List I which have been discussed 
above. In particular, Entry 52 - List I deals with “industries”, the control 
of which is taken over by the Union by a declaration made by the 
Parliament by law as it is expedient in public interest. In respect of 
“such industries”, as covered within the scope and ambit of Entry 
52 - List I, it would imply that under Entry 33(a) - List III, insofar as 
the products of any such industry are concerned where the control 
of such industry by the Union is declared by the Parliament by law to
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be expedient in public interest and import of goods of the same kind 
as such products have to be read in consonance with the scheme of 
the Entries. It would mean that if any legislation has been made by 
the Parliament, such as the IDRA and an industry is named in the 
First Schedule thereof such as “Fermentation Industries” in the instant 
cases, the State Legislation would be subject to the Parliamentary 
legislation. The said Entry is in the Concurrent List and the Parliament 
as well as the State Legislature have the competence to pass such 
laws. Then, the question that would arise, is whether, there would be 
repugnancy between the laws made by Parliament and laws made 
by a State Legislature and if so, how could it be resolved.
14.1	 In this regard, Section 18G which is a part of Chapter IIIB of 
the IDRA could be considered. The said Section states that the 
Central Government, so far as it appears to be necessary or 
expedient for securing the equitable distribution and availability 
at fair prices of any article or class of articles relatable to 
any scheduled industry, i.e. any of the industries specified 
in the First Schedule of IDRA may, notwithstanding anything 
contained in any other provision of the IDRA by notified order, 
provide for regulating the supply and distribution thereof and 
trade and commerce therein. This provision deals particularly 
with regard to regulation of supply and distribution,
trade and 
commerce of any article relatable to scheduled industry. Sub-
section (2) of Section 18G states that without prejudice to 
the generality of the powers conferred by sub-section (1) of 
Section 18G, a notified order made may provide for various 
aspects. Sub-section (4) of Section 18G states that no order 
made in exercise of any power conferred by this section shall 
be called in question in any court. 
14.2	 One of the contentions raised in this batch of cases is with 
regard to whether the Central Government has to, in fact, 
issue a notified order with regard to regulating the supply and 
distribution and trade and commerce of any article or class of 
articles relatable to any scheduled industry so as to indicate 
that the State Legislature cannot pass any legislation under 
Entry 33(a) - List III. In my considered view, the fact that an 
industry is a scheduled industry under the IDRA would imply that 
at any time the Central Government is empowered to issue a 
notified order providing for regulating the supply and distribution 
and trade and commerce of the products of such a scheduled
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industry. But in the absence of there being an issuance of a 
notified order as such can the State Legislature be denuded 
of their powers to pass any law under Entry 33(a) - List III? 
14.3	 Having regard to the emerging situation in the economy in the 
matter of supply and distribution and trade and commerce of any 
article or class of articles relatable to any scheduled industry, 
the Central Government may issue a notified order for the 
purpose of regulating the same so as to secure its equitable 
distribution and availability at fair prices of the products of 
such industry. 
14.4	 A situation may suddenly arise making it necessary or expedient 
to issue a notified order under Section 18G of the IDRA. One 
cannot envisage the emerging circumstances in an economy 
such as the Indian economy where the need for issuance of 
such a notified order would arise. It could be for instance to 
curb hoarding and black marketeering of a particular article 
of a scheduled industry in order to stifle price rise. It could 
be for ensuring a minimum or maximum price for any article 
related to a scheduled industry which is a raw material or 
ancillary input for a product/article of another scheduled or 
non-scheduled industry. Sudden rise in prices of commodities/
articles relatable to any scheduled industry due to natural 
disasters, floods, famines, financial emergency or other such 
reasons could
necessitate issuance of a notified order under 
Section 18G of the IDRA. Of recent occurrence is the Covid-19 
pandemic which would have necessitated issuance of notified 
orders on certain articles related to scheduled industries. The 
field of legislation must therefore be left open for the Central 
Government to act by issuance of a notified order as and 
when thought necessary or expedient to secure and achieve 
the objects stated in the said provision. 
14.5	 But, can it be held that in the absence of any such notified 
order issued by the Central Government, the States could 
pass laws under Entry 33(a) - List III? Would it lead to a 
legal confusion and an overlapping and contradiction? This 
is because if it is held that in the absence of there being 
a notified order actually issued by the Central Government 
under Section 18G of the IDRA, the States are empowered 
to pass laws under Entry 33(a) - List III and such laws are in
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fact made under the aforesaid Entries by the States and the 
Central Government subsequently decides to issue a notified 
order under Section 18G of the IDRA, the question would be, 
what would be the fate of the laws made by the States if they 
overlap with the notified order issued under Section 18G of 
the IDRA? Obviously, the control of any industry being taken 
over by the Union under the provisions of the IDRA would 
imply that the Central Government is empowered to issue a 
notified order in terms of Section 18G of the said Act as and 
when it is necessary or expedient to secure the equitable 
distribution and availability at a fair price of any article related 
to any scheduled industry. In such a case, the notified order 
being issued under Section 18G of the IDRA, would have an 
overriding effect on the States’ laws if any made under Entry 
33(a) – List III in regard to trade and commerce, supply and 
distribution of such articles or products of the scheduled industry 
which are covered under the notified order and the same would 
no longer be applicable wherever there is a conflict in the laws. 
14.6	 A law made by the State Legislature under any Entry of List 
III or Concurrent List is no doubt subject to Article 254 of the 
Constitution. However, Entry 33(a) - List III is in a way unique 
inasmuch as the said Entry would have to be read in the 
context of Entry 52 - List I which relates to the IDRA which 
is
enacted by Parliament under the said Entry and therefore, 
inter alia, to Section 18G of the IDRA. When Entry 52 - List I 
and any law such as IDRA empowers the Union or Central 
Government to take certain steps under the provisions of the 
said Act, it would imply that the State Legislature is, per se, 
denuded of its powers to make any law under Entry 33(a) - List 
III. Applying the above interpretation, when once the Central 
Government has the powers under Section 18G of the IDRA in 
the matter of regulating supply and distribution and trade and 
commerce of any article of a scheduled industry so as to secure 
the equitable distribution and availability at fair price, the field/
contours as covered under Section 18 of IDRA is occupied by 
the Parliament and, consequently by the Central Government 
to issue a notified order as and when the necessity arises. 
14.7	 The reason for holding so is because List III which is the 
Concurrent List is governed by Article 254 of the Constitution 
which deals with inconsistency between laws made by
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Parliament and laws made by the Legislatures of the States. 
The same is expressed as the doctrine of repugnancy. Clause 
(1) of Article 254 states that –
(i)	
if any provision of a law made by the Legislature of a 
State is repugnant to any provision of a law made by 
Parliament which Parliament is competent to enact, or 
(ii)	
to any provision of an existing law with respect to one of 
the matters enumerated in the Concurrent List, 
then, subject to clause (2) thereof, the law made by Parliament, 
whether passed before or after the law made by the Legislature 
of such State, or, as the case may be, the existing law, shall 
prevail and the law made by the Legislature of the State shall, 
to the extent of the repugnancy, be void. 
Under Article 13(3)(a), law includes any ordinance, order, bye-
law, rule, regulation, notification, custom or usage having in 
the territory of India the force of law. 
14.8	 Clause (2) of Article 254 is an exception to clause (1). It states 
that where a law made by the Legislature of a State with respect 
to one of the matters enumerated in the Concurrent List contains 
any provision repugnant to the provisions of an earlier law made 
by Parliament or an existing law with respect to that matter, 
then, the law so made by the Legislature of such State shall, 
if it has been reserved for the consideration of the President 
and has received his assent, prevail in that
State. The proviso 
states that nothing in clause (2) of Article 254 would prevent 
Parliament from enacting at any time any law with respect to 
the same matter including a law adding to, amending, varying 
or repealing the law so made by the Legislature of the State. 
14.9	 What is of significance under the second portion of Article 
254(1) is that the law has to be passed by the Parliament 
either before or after the law made by the Legislature of such 
a State, secondly, such a law must be with respect to one of 
the matters enumerated in the Concurrent List. The above is a 
case of actual repugnancy. There can also be a case of what 
can be called potential repugnancy, which is also expressed as 
the doctrine of occupied field which shall be discussed at this 
stage in the context of the observations made in Synthetics 
and Chemicals (7J).
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Entry 33(a) – List III vs. Entry 52 - List I: Observations in 
Synthetics and Chemicals (7J): 
15.	 Article 246 of the Constitution deals with the division of legislatives 
subjects between the Parliament and the Legislatures of the States. 
Both sub-clauses (1) and (2) begin with a non-obstante clause while 
sub-clause (3) begins with a “subject to” clause. On a holistic reading 
of Article 246, it emerges that the Parliament has exclusive power to 
make laws with respect to any of the matters enumerated in List I 
and it also has the power to make laws with respect to any of the 
matters enumerated in List III or the Concurrent List (vide clause 
(2) of Article 246). The non-obstante clauses in clauses (1) and (2) 
of Article 246 in my view, are significant inasmuch as they envisage 
parliamentary supremacy over laws made by the State Legislature 
even in respect of a subject enumerated in List II as clause (3) of 
Article 246 is subject to clauses (1) and (2) of Article 246. This is 
despite the State Legislatures having exclusive competence over 
the subjects mentioned in List II. However, the said position would 
apply only when there is a conflict between a State Law and a Union 
Law which is irreconcilable or cannot be interpreted harmoniously. 
15.1	 The Parliament as well as the Legislature of any State have 
also concurrent powers to make laws in respect of any of the 
matters enumerated in List III. This is
notwithstanding anything 
in clause (3) of Article 246 but is subject to clause (1) thereof. 
This would imply that any law made by the Legislature of a 
State in List III or the Concurrent List is subject to a law made 
by Parliament in List I. This also has a bearing on first part of 
the clause (1) of Article 254. Therefore, in my view, the doctrine 
of parliamentary supremacy is writ large in Articles 246 and 
254 both in the manner of arrangement of the subjects in the 
three Lists as well as the extent to which the State Legislatures 
have competence with regard to the subjects assigned to them 
particularly in List III or the Concurrent List. 
15.2	 In this case, we have to consider Entry 33(a) – List III in light 
of Entry 52 - List I and the observations made by this Court 
in Synthetics and Chemicals (7J). Entry 33(a) – List III is 
in the Concurrent List and it speaks of trade and commerce 
in, and production, supply and distribution of the products 
of any industry where the control of such industry by the 
Union is declared by Parliament by law to be expedient in the
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public interest, and imported goods of the same kind as such 
products. A dissection of this Entry would indicate that insofar 
as products of any industry which is a scheduled industry in 
terms of a law made by Parliament by virtue of Entry 52 – 
List I viz. where the control of such scheduled industry has 
been assumed by the Union (insofar as trade and commerce 
in, and production, supply and distribution of the products of 
such industry), both the Union as well as the States have 
concurrent powers to enact laws. It must be remembered that 
Entry 33(a) – List III is a field of legislation and therefore, 
deals with the concurrent legislative competence of both the 
Union as well as the State Legislature. An enactment under 
such an Entry by the State is subject to the application of 
the principle of repugnancy as envisaged in Article 254 of 
the Constitution discussed above. 
15.3	 One cannot lose sight of the fact that the IDRA has been 
enacted by Parliament taking control of certain industries 
such as the “Fermentation Industries”, which is the subject 
matter of controversy in the present cases, on the strength 
of Entry 52 – List I. The degree of control envisaged under 
the various provisions of the IDRA have been detailed in the 
various provisions of the said Act. Section 18G was inserted to 
IDRA w.e.f. 01.10.1953. The said Section in the IDRA is also 
a provision which has been
inserted pursuant to Entry 52 - 
List I. The said Section empowers the Central Government 
to issue a notified order for securing the equitable distribution 
and availability at fair prices of any article or class of articles 
relatable to any scheduled industry. The expression “notified 
order” is defined in Section 3(e) of the IDRA to mean the 
issuance of a notification in the official gazette. 
15.4	 It is necessary to note that Entry 33(a) – List III will apply 
only when a law such as IDRA has been enacted pursuant 
to Entry 52 – List I, which has enabled the Union to take 
control of certain industries such as “Fermentation Industries”. 
While Entry 33(a) – List III is a field of legislation which deals 
with trade and commerce in, and the production, supply and 
distribution of, inter alia, the products of the scheduled industry 
under IDRA, Section 18G thereof deals with securing equitable 
distribution and availability at fair prices of any article or class 
of articles relatable to any scheduled industry. The Explanation
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to Section 18G states that the expression “article or class 
of articles” relatable to any scheduled industry 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. An 
article manufactured or produced in the scheduled industry is 
nothing but a product of a scheduled industry. Therefore, the 
expression “the products of any scheduled industry” comes 
within the scope and ambit of the expression “article or class 
of articles” relatable to any scheduled industry. Thus, Section 
18G which pertains to a scheduled industry is also relatable 
to Entry 33(a) – List III though it is a part of IDRA which is a 
Parliamentary law enacted on the basis of Entry 52 – List I. 
15.5	 The question that would then arise is, whether, by the mere 
insertion of Section 18G to the IDRA with effect from 01.10.1953, 
the State Legislatures have been denuded of their legislative 
competence in the matter of regulation of supply and distribution 
and trade and commerce of products of any scheduled industry. 
The conundrum which has arisen in this case is on account of 
the observation in paragraph 85 of Synthetics and Chemicals 
(7J), which, inter alia, reads as under:
“85. … The State cannot claim that under Entry 33 of 
List III, it can regulate industrial alcohol as a product 
of the scheduled industry,
because the Union, under 
Section 18-G of the IDR Act, has evinced clear 
intention to occupy the whole field.…”
The aforesaid observations mean that by the very insertion 
of Section 18G to the IDRA, there is a denudation of the 
State’s legislative competence vis-à-vis Entry 33(a) – List III 
with respect to a product of a scheduled industry which in the 
instant cases is the “Fermentation Industries”. 
15.6	 The aforesaid observation which has led to a reference to 
this nine-Judge Bench has to be considered in light of Entry 
52 – List I, Entry 33(a) – List III and Section 18G of the IDRA. 
As already stated, it is pursuant to Entry 52 – List I that the 
IDRA has been enacted by the Parliament declaring the taking 
of control of industries mentioned in the First Schedule to 
the said Act called a scheduled industry. Entry 33(a) – List III 
deals with trade and commerce in, and production, supply and
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distribution of the products of any industry where the control of 
such industry by the Union is declared by Parliament by law to 
be expedient in the public interest and imported goods of the 
same kind as such products i.e. with reference to a scheduled 
industry. The nexus between Entry 33(a) – List III and Entry 
52 – List I is with regard to the Union taking control of certain 
industries such as “Fermentation Industries” in the instant 
cases by a declaration made by Parliament by law. Section 
2 of the IDRA has made such a declaration and hence, it is 
in respect of the products of any industry whose control has 
been taken by the law i.e. IDRA, pursuant to Entry 52 – List I 
that Entry 33(a) – List III gives the legislative competence to 
both the Parliament as well as the State Legislatures. 
15.7	 As already noted, 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 extracted 
as under: 
“26. The fermentation industries (other than 
potable alcohol):
(i) Alcohol
(ii) other products of fermentation industries.”
The said Item 26 was added w.e.f. 08.05.1952 even prior 
to the insertion of Section 18G to the IDRA which is w.e.f. 
01.10.1953. However, w.e.f. 14.05.2016, Item 26 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
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potable alcohol and rest of the industry of the “Fermentation 
Industries” other than potable alcohol is a scheduled industry. 
15.8	 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 
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. A notified order may also 
provide -
(a)	
for the purpose of controlling the prices at which any 
such article or class of articles may be bought or sold for; 
(b)	
for regulating the licences, permits or otherwise the 
distribution, transport, disposal, acquisition, possession, 
use or consumption of any such article or class thereof; 
(c)	
for prohibiting the withholding from sale of any such article 
or class thereof ordinarily kept for sale; 
(d)	
for requiring any person manufacturing, producing or 
holding in stock any such article or class thereof to sell the 
whole or part of the articles so manufactured or produced 
during a specified period or to sell the whole or a part of the 
articles so held in stock to such person or class of persons 
in such circumstances as may be specified in the order;
(e)	
for regulating or prohibiting any class of commercial or 
financial transactions relating to such article or class 
thereof which in the opinion
of the authority making the 
order are, or if unregulated are likely to be, detrimental 
to public interest;
(f)	
for requiring persons engaged in the distribution and 
trade and commerce in any such article or class thereof 
to mark the articles exposed or intended for sale with the 
sale price or to exhibit at some easily accessible place on 
the premises the price-lists of articles held for sale and 
also to similarly exhibit on the first day of every month, 
or at such other time as may be prescribed, a statement 
of the total quantities of any such articles in stock;
(g)	
for collecting any information or statistics with a view to 
regulating or prohibiting any of the aforesaid matters; and
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(h)	
for any incidental or supplementary matters, including, in 
particular, the grant or issue of licences, permits or other 
documents and the charging of fees therefor.
15.9	 Sub-section (4) of Section 18G provides that no order made 
in exercise of any power conferred under Section 18G shall 
be called in question in any court. Thus, a notified order may 
be issued by the Central Government bearing in mind the 
situations and conditions which may arise in the Indian economy 
pertaining to a particular scheduled industry.
Article 254, Repugnancy and Doctrine of Occupied Field:
16.	 There is also a further angle to the matter in the context of 
concurrent powers of Parliament and State Legislatures vis-à-vis 
Entry 33(a) – List III and Article 254 of the Constitution. Nicholas 
in his Australian Constitution, 2nd Edition, page 303, refers to three 
tests of inconsistency or repugnancy: 
(i)	
There may inconsistency in the actual terms of the competing 
statutes;
(ii)	
Though there may be no direct conflict, a State law may be 
inoperative because the commonwealth law; or commonwealth 
court is intended to be a complete exhaustive Code; and
(iii)	 Even in the absence of intention, a conflict may arise when 
both State and commonwealth seek to exercise their powers 
over the same subject matter.”
16.1	 In Tika Ramji, this Court accepted the above three rules evolved 
by Nicholas, among others,
as a useful guide to test the question 
of repugnancy. The same was also quoted by this Court in 
M/s. Hoechst Pharmaceuticals Ltd. vs. State of Bihar, AIR 
1983 SC 1019 (“Hoechst Pharmaceuticals Ltd.”). In the said 
case, it was observed that the question of repugnancy between a 
law made by Parliament and a law made by the State Legislature 
arises only in case both the legislations occupy the same field 
with respect to one of the matters enumerated in the Concurrent 
List and there is direct conflict between the two laws. It is only 
when both these requirements are fulfilled that the State law 
will, to the extent of repugnancy, become void. Article 254(1) 
has no application to cases of repugnancy due to overlapping 
found between List II on the one hand and Lists I and III on
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the other. If such overlapping exists in any particular case, the 
State law would be ultra vires because of non-obstante clause 
in Article 246(1) read with the opening words “subject” in Article 
246(3). In such a case, the State law will fail not because of 
repugnance to the Union law but due to want of legislative 
competence. Thus, the question of repugnancy arises only when 
both the Legislatures are competent to legislate in the same 
field, that is, with respect to one of the matters mentioned in 
the Concurrent List. Hence, Article 254(1) cannot apply unless 
both the Union and the State laws relate to a subject specified 
in the Concurrent List and they occupy the same field. 
16.2	 Thus, 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
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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. 
16.3	  The next question that would arise is, whether, the principle of 
repugnancy in Article 254 of the Constitution could have a wider 
ramification inasmuch as even in the absence of there being 
two sets of laws which have been made by the Parliament and 
by the State Legislature but owing to the nature of the law that 
the Parliament has made, the State Legislature is incompetent 
in making a law on the same subject. In other words, whether 
a law enacted by the Parliament can prevent a law being made 
by the State Legislature on the same subject on the premise 
that the field has been occupied by the Parliamentary law. This 
is expressed in what is known as the doctrine of occupied field. 
By this, it would mean that the law enacted by the Parliament 
has occupied the field in its entirety and consequently, the 
States have no legislative competence to make a law on the 
very same aspect. In other words, if a law is made by the 
Parliament, does it occupy the entire field so as to reduce or 
negate the legislative competence of the State Legislature to 
make a similar law? How does one determine whether the 
legislative field has been occupied? Firstly, there must be a 
Parliamentary law in place with an intention to occupy
the 
field. Secondly, the contours of the field must be determined. 
Consequently, the State Legislature would be prevented from 
making the law in terms of what has been determined by the 
Parliament to occupy the field. Thus, the intention to occupy 
the field must be explicit and clear and discernible with the 
result that the State Legislature would have a reduced field or 
the legislative competence would be one of total prohibition to 
make a similar law. For instance, whether the Parliamentary law 
intends to put in place a complete and exhaustive regulatory 
scheme, as a result of which the State Legislature is denuded 
of its powers to make any State regulation in the field as a 
whole. This intention would have to be discerned on a reading 
of the statute as a whole and the particular provisions which 
should emanate such an intention. Thus, there must be a clear 
intention to occupy the field by a Parliamentary legislation. 
Further, the extent of the field sought to be occupied must be 
clearly demarcated. In other words, whether the Parliament
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has evinced to exclude the State Legislature from making a 
law on a similar subject by virtue of an Entry in List III? 
16.4	 In order to answer this question, the provisions of the Act made 
by the Parliament have to be examined threadbare in order 
to ascertain a clear intention of the Parliament to occupy the 
field so as to negate the Legislature of the States to have the 
competence to make a similar law. Thus, while a direct conflict 
of a Parliamentary law and a State law could be resolved on 
the touchstone of a harmonious interpretation of the two laws 
(vide second part of article 254(1)), a potential conflict between 
a Parliamentary law which has been enacted and a potential or 
future law by a State Legislature is avoided on the touchstone 
of the doctrine of occupied field. 
16.5	 While applying the occupied field doctrine, Courts must 
delicately balance the legislative competence of the Parliament 
and the State Legislatures in making laws on a particular subject 
under the Concurrent List and apply the doctrine of occupied 
field only having regard to the intention of the Parliament to 
occupy the field and the Parliament defining the contours of 
the field sought to be occupied by a comparative and coherent 
reading of the other Entries in List I and List II, having bearing 
on the concerned Entry in List III of the Constitution. Such 
balancing need to be done by Courts in order to ascertain 
whether
despite legislative competence being provided to the 
State Legislatures under a particular Entry in the Concurrent 
List but owing to what has been stated in any law made under 
Entry in List I (Union List) having a bearing on an Entry in the 
Concurrent List being made subject to any Entry in the Union 
List, would result in the State Legislatures being denuded 
of legislative competence to make laws on a similar subject 
under an Entry in List III such as Entry 33(a) – List III which 
is under consideration. 
16.6	 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.
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16.7	 Applying the aforesaid principles to the cases at hand, the 
question is whether by virtue of insertion of Section 18G to 
the IDRA, the legislative competence of the State Legislatures 
under Entry 33(a) – List III vis-à-vis products of the scheduled 
industry namely, “Fermentation Industries” would be governed 
within the scope and ambit of Section 18G of the IDRA 
and consequently, the State Legislatures would have no 
competence to make a law in regard to the products of a 
scheduled industry in respect of which Section 18G applies. 
This is by bearing in mind the twin tests referred to above 
namely, the intention of the Parliament to occupy the field 
and the demarcation of the areas in which the field is sought 
to be occupied. In other words, in the instant case, 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 the aspects referred to above. 
16.8	 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
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is issued, the Central Government’s notified order would apply if 
there is a direct conflict between the State laws or 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. Such a legal confusion and conundrum would 
not be conducive to a scheduled industry such as “Fermentation 
Industries” dealing with “industrial alcohol” which is a commodity 
of critical and significant importance in the Indian economy. 
16.9	 Sub-section (4) of Section 18G also states that no order in 
exercise of power conferred by the Section shall be called 
in question in any court. Thus, the question of repugnancy 
between an existing State law and the notified order of the 
Central Government cannot be raised before a court of law. 
Then, whether both the State law as well as the notified order 
can be simultaneously obeyed. If not, what would be the 
remedy. Sub-section (4) of Section 18G also indicates that the 
Parliament has intended to occupy the field as demarcated 
under Section 18G. Such an interpretation has to be
given in 
order to avoid a legal uncertainty and quandary in the economy 
in the context of Section 18G of the IDRA.
16.10	 Thus, the question, 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 above 
mentioned and the States would not have the competence to 
pass any law relating to Entry 33(a) – List III, in my view, has 
to be answered in the 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 52 – 
List 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
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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 above 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. 
16.11	 In this context, by way of analogy, it would be of relevance to 
refer to my dissenting opinion dated 25.07.2024 in Mineral 
Area Development Authority Etc. vs. M/s. Steel Authority 
of India & Others (Civil Appeal Nos.4056-4064 of 1999) 
(“Mineral Area Development Authority”) wherein the 
interpretation of Entry 50 – List II vis-à-vis Entry 54 – List I 
came up for consideration and it was observed by me that 
even a taxation Entry i.e. Entry 50 – List II was subject to the 
limitation imposed by Parliament by law relating to mineral 
development in terms of the Entry 54 – List I. Thus, the 
doctrine of parliamentary supremacy in the context of an Entry 
in List II (State List) with an Entry in List I (Union List) was 
considered. For immediate
reference the following passage 
from said opinion could be extracted: 
“8.6 However, what is pertinent to be considered 
in this case is, Entry 50 - List II in juxtaposition 
with Entry 54 - List I. As already noted, Entry 
50 - List II is a taxation Entry which empowers a 
State Legislature to impose tax on mineral rights. 
However, this power of the State Government is not 
an absolute power inasmuch as Entry 50 - List II 
itself states that the power of the State Legislature 
to impose tax on mineral right is “subject to any 
limitations imposed by Parliament by law relating 
to mineral development”. In other words, if there 
is any limitation imposed by the Parliament by law 
relating to mineral development then that would 
have an impact on the legislative competence of 
the State Legislature to impose a tax on mineral
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rights. The key expressions of Entry 50 - List II 
are “taxes on mineral rights” and “subject to any 
limitations imposed by the Parliament by any law 
on mineral development”. Thus, the Parliament 
can impose any limitation on the State’s right to 
impose a tax on mineral rights by way of a law 
relating to mineral development. Thus, while Entry 
50 - List II speaks of taxes on mineral rights and 
is a taxation Entry empowering States to impose 
taxes on mineral rights, the same is not unbridled 
or absolute but is subject to any limitation to be 
imposed by Parliament by law relating to mineral 
development. In other words, if Parliament intends 
to regulate mineral development in the country, it 
can do so by a law made as per Entry 54 - List I 
and to that extent the taxation Entry in Entry 50 - 
List II could be limited and the State’s right to 
impose a tax on mineral rights by a law would be 
affected. Thus, a taxation Entry in Entry 50 - List II 
can be affected by Entry 54 - List I in the interest 
of mineral development by Parliament imposing a 
limitation on the State’s right to tax mineral rights. 
In other words, if the Union has by a law taken 
control of, inter alia, mineral development with the 
Parliament passing a law, then the State’s power 
to impose any tax on mineral rights would, to that 
extent, be denuded, if the Parliamentary or Central 
law creates a limitation to impose such a tax, if it
relates to mineral development. It is in the above 
backdrop that the controversy must be considered.
8.7 Exercise of mineral rights have to be consistent 
with mineral development in the country, which 
would embrace, inter alia, uniformity in mineral 
development throughout the country having regard 
to several factors which would otherwise come in the 
way of such development. Hence, the framers of the 
Constitution introduced Entry 50 - List I enabling a 
limitation being imposed on Entry 50 - List II although 
that is a taxation Entry giving powers to the States 
to impose taxes on mineral rights. It is subject to
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any limitation imposed by Parliament under Entry 
54 - List I.
8.8 The golden thread which runs through Entry 54 - 
List I and Entry 23 - List II is that the Entries deal 
with regulation of mines and mineral development. 
Thus, any aspect of regulation of mines and mineral 
development taken under the control of the Union by a 
declaration made by the Parliament by a law, denudes 
the State Legislature of its legislative competence 
to pass any law to that extent. If a Parliamentary 
law such as MMDR Act, 1957 is enacted and deals 
with certain aspects of mineral development, to that 
extent the State Legislature would be denuded of 
its competence to pass any law on the said aspect. 
The legislative competence vested with the State 
Legislature is, therefore, not an absolute one but is 
subject to a Parliamentary law enacted as per Entry 
54 - List I dealing with mineral development. 
In the circumstance, the aforesaid observations made in Synthetics 
and Chemicals (7J) are in consonance with the constitutional 
framework of Article 246 read with the Entries in Lists I and III and 
the doctrine of occupied field applies in the context of Section 18G 
of IDRA enacted under Entry 52 – List I and Entry 33(a) – List III. 
17.	 One of the contentions raised was that so long as the notified order 
has not been issued by the Central Government which triggers 
the exercise of powers under Section 18G
of the IDRA, the States 
would have the legislative competence to pass laws under Entry 
33(a) – List III. In my view, the issuance of a notified order under 
Section 18G is only a ministerial act to be performed and to be 
complied with by the Central Government by a publication in the 
official gazette. The object of publication of a notified order in the 
official gazette is to inform the world at large about the contents 
of the said order. This could happen at any point of time having 
regard to the situations and conditions which emerge in the Indian 
economy with regard to a product of a scheduled industry which 
is also described as an article or class of articles relatable to any 
scheduled industry under Section 18G of IDRA. Thus, when the 
field is occupied by Section 18G of the IDRA which is an enactment 
made pursuant to Entry 52 – List I and the State Legislatures are
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denuded of legislative competence for passing any law under Entry 
33(a) – List III in respect of a product of a scheduled industry which 
is read within the definition of article or class of articles relatable to 
any scheduled industry as per the Explanation to Section 18G, the 
issuance of a notified order pales into insignificance in the context 
of repugnancy. The issuance of a notified order has relevance only 
for the purpose of intimation of action being taken on any particular 
article or class of article of a scheduled industry by the Central 
Government in an occupied field.
17.1	 As far as the controversy whether “Fermentation Industries” 
being under the control of the Union could enable the State 
Legislature to pass a law by virtue of Entry 33 (a) - List III of 
the Constitution, in the context of a product of “Fermentation 
Industries” and in the context of Section 18G of the IDRA, there 
has been a cleavage of opinion of this Court in the aforesaid 
judgments. While in Synthetics and Chemicals (7J), it was held 
that mere insertion of Section 18G into the statute of the IDRA, 
would imply that the field has been occupied by the Union and, 
therefore, the State has no jurisdiction to exercise its powers 
under the said Entry and therefore, has been denuded of all 
its powers, the subsequent decisions in Bihar Distillery etc., 
have opined that the said position may not be correct. In other 
words, unless
action is taken under Section 18G of the IDRA 
by the actual issuance of a notified order and if such a notified 
order is repugnant to an existing State legislation or action being 
initiated thereto, the question of repugnancy would arise. The 
judgment of this Court in Tika Ramji has been referred to and 
how far the said judgment would have an application in the 
present controversy is a matter to be analysed.
17.2	 In Tika Ramji, the vires of the Uttar Pradesh Sugarcane 
(Regulation of Supply and Purchase) Act, 1953 (hereinafter 
referred to as “UP Act”) was assailed by the petitioners therein. 
It was contented that the State of Uttar Pradesh had no power to 
enact the said Act as the same was with respect to the subject 
of industries, the control of which by the Union was declared by 
Parliament by law to be expedient in the public interest within 
the meaning of Entry 52 – List I and was, therefore, within the 
exclusive province of Parliament. It was further contended that 
the Act was ultra vires the powers of the State Legislature and
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was a colorable exercise of legislative power by the State. It 
was further contended that it was repugnant to the IDRA and 
the Essential Commodities Act, 1955 (Act 10 of 1955) also a 
Central Act. That in the event of this Court were to hold that 
the impugned Act was within the legislative competence of the 
State Legislature, it was void by reason of such repugnancy. It 
was also contended that the impugned Act stood repealed to 
the extent that it had been repealed by Section 16 of Act 10 
of 1955 and by clause (7) of the Sugarcane (Control) Order, 
1955, made in exercise of the powers conferred by Section 3 
of Act 10 of 1955 (a Central Act). 
17.3	 It was observed that even if it was assumed that sugarcane 
was an article or class of articles relatable to the sugar 
industry within the meaning of Section 18G of the IDRA, since 
no order was issued by the Central Government in exercise 
of the powers vested in it under that section, no question of 
repugnancy could ever arise because repugnancy must exist 
in fact and not depend merely on a possibility. The possibility 
of an order under Section 18G being issued by the Central 
Government would not be enough. The existence of such an 
order would be an essential prerequisite before any repugnancy 
could ever arise.
17.4	 Without going into the other aspects of the case, in my view, 
this Court was not right in holding that since no order
was 
issued by the Central Government under Section 18G of the 
IDRA, the legislative field was open to both the Central as well 
as the State Governments to take action. That portion of the 
judgment in Tika Ramji in my view is not correct.
17.5	 The judgments of this Court including that of the Constitution 
Bench in Tika Ramji; Indian Aluminium company Limited 
vs. Karnataka Electricity Board (1992) 3 SCC 580 (“Indian 
Aluminium company”); Shree Krishna Gyanoday Sugar 
Ltd.; Belsund Sugar Co. Ltd. vs. State of Bihar (1999) 9 
SCC 620 (“Belsund Sugar Co. Ltd.”) and SIEL Ltd. vs. 
Union of India (1998) 7 SCC 26 (“SIEL Ltd.”) have lost sight 
of the fact that when a notified order is issued under Section 
18G of the IDRA it is pursuant to a Central enactment made 
by virtue of Entry 52 – List I and it is not an exercise of power 
under Entry 33(a) – List III. When once Section 18G has been
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inserted to the IDRA in respect of a scheduled industry, the 
control being taken over by the Union in respect of the very 
same scheduled industry, legislative competence cannot remain 
with the State Legislature also under Entry 33(a) – List III in 
respect of the aspects or field covered under Section 18G of 
IDRA which is a Parliamentary enactment. 
18.	 There is another angle to the matter. Article 254 in the normal course 
would apply when there is a direct conflict between the laws made 
by the Parliament and the State Legislature under an Entry in the 
Concurrent List. But in the instant case, it can also be held that the 
conflict is not between a law or an action taken by the Parliament or 
the Central Government under Entry 33(a) – List III versus a State 
law that could be made or action taken under the very same Entry. 
Here, the conflict arises between action that could be taken by the 
Central Government under Section 18G of IDRA made by virtue of 
Entry 52 – List I as opposed to a State law or action which could 
be made under Entry 33(a) – List III. In such case, the doctrine of 
repugnancy would arise as per the first part of Article 254(1) between 
Entry 52 – List I and Entry 33(a) – List III and not in respect of the 
second part of Article 254(1). Thus, when the Central Government 
seeks to exercise power in respect of a scheduled industry under 
Section 18G of the IDRA it is pursuant to the said Act
being made 
under Entry 52 – List I. Hence, any action to be taken by the Central 
Government under Section 18G is not really an action that would 
be taken under Entry 33(a) – List III.
18.1	 On this aspect, reference must be made to judgment of this 
Court in State of Kerala vs. Mar Appraem Kuri Company 
Limited (2012) 7 SCC 106 (“Mar Appraem Kuri Company”). 
The Constitution Bench of this Court speaking through Kapadia, 
C.J., considered the question - when does repugnancy arise in 
the context of whether Kerala Chitties Act 23 of 1975 becoming 
repugnant to the (Central) Chit Funds Act 40 of 1982 under 
Article 254(1) upon making of the Central Act (i.e. 19.08.1982 
when the President gave his assent) or whether the Kerala 
Chitties Act 23 of 1975 would become repugnant to the Central 
Act as and when the notification under Section 1(3) of the 
Central Act bringing the Central Act into force in the State 
of Kerala is issued. In other words, the question raised was 
whether making of the law or its commencement brings about 
repugnancy or inconsistency as envisaged in Article 254(1) of
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the Constitution. In this context, reference was made to Deep 
Chand vs. State of UP, AIR 1959 SC 648 (“Deep Chand”) 
and it was observed as under:
“30. That, in Deep Chand v. State of U.P., three 
principles were laid down as indicative of repugnancy 
between a State law and a Central law, which have to 
be borne in mind by the State Legislature whenever it 
seeks to enact a law under any entry in the Concurrent 
List. Thus, where there is a Central law which intends 
to override a State law or where there is a Central law 
intending to occupy the field hitherto occupied by the 
State law or where the Central law collides with the 
State law in actual terms, then the State Legislature 
would have to take into account the possibility of 
repugnancy within the meaning of Article 254 of the 
Constitution. In this connection, it was submitted that 
Tests 1 and 2 enumerated in Deep Chand do not 
require the Central law to be actually brought into force 
for repugnancy between two competing legislations to 
arise in the context of Article 254 of the Constitution.”
18.2	 In paragraph 40, it was observed that the expression “subject 
to” in clauses (2) and (3) of Article 246 denotes supremacy of 
Parliament and the same is extracted as under:
“40. However, the principle of federal supremacy in 
Article 246(1) cannot be resorted to unless there is 
an “irreconcilable” conflict between the entries in the
Union and State Lists. The said conflict has to be 
a “real” conflict. The non obstante clause in Article 
246(1) operates only if reconciliation is impossible. As 
stated, the parliamentary legislation has supremacy 
as provided in Articles 246(1) and (2). This is of 
relevance when the field of legislation is in the 
Concurrent List. The Union and the State Legislatures 
have concurrent power with respect to the subjects 
enumerated in List III. [See Article 246(2).] Hence, the 
State Legislature has full power to legislate regarding 
subjects in the Concurrent List, subject to Article 
254(2) i.e. provided the provisions of the State Act 
do not come in conflict with those of the Central Act 
on the subject. [See Amalgamated Electricity Co.
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(Belgaum) Ltd. v. Municipal Committee, Ajmer 
[AIR 1969 SC 227 : (1969) 1 SCR 430]. Thus, the 
expression “subject to” in clauses (2) and (3) of Article 
246 denotes supremacy of Parliament.”
18.3	 In paragraph 43, it was observed as under:
“43. Our Constitution gives supremacy to Parliament 
in the matter of making of the laws or legislating with 
respect to matters delineated in the three Lists. The 
principle of supremacy of Parliament, the distribution 
of legislative powers, the principle of exhaustive 
enumeration of matters in the three Lists are all to 
be seen in the context of making of laws and not in 
the context of commencement of the laws.”
18.4	 Dealing with the question of repugnancy and the ways in which 
it would arise between Parliamentary legislation and States’ 
legislation, it was observed in paragraph 47 as under:
“47. The question of repugnancy between parliamentary 
legislation and State legislation arises in two ways. 
First, where the legislations, though enacted with 
respect to matters in their allotted spheres, overlap 
and conflict. Second, where the two legislations 
are with respect to matters in the Concurrent List 
and there is a conflict. In both the situations, the 
parliamentary legislation will predominate, in the first, 
by virtue of non obstante clause in Article 246(1); in 
the second, by reason of Article 254(1).”
18.5	 Ultimately, in paragraph 61, it was stated as under:
“61. The
entire above discussion on Articles 245, 246, 
250, 251 is only to indicate that the word “made” has 
to be read in the context of the law-making process 
and, if so read, it is clear that to test repugnancy 
one has to go by the making of law and not by its 
commencement.”
18.6	 On the facts of the said case, this Court held that on the 
enactment of the (Central) Chit Funds Act, 1982 on 19.08.1982, 
intending to occupy the entire field of chits under Entry 7 - List 
III, the State Legislature was denuded of its power to enact 
the Kerala Finance Act 7 of 2002.
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18.7	 Thus, when the State of Kerala intended to amend the State 
Act in 2002, it was bound to keep in mind the fact that there is 
already a Central law on the same subject made by Parliament 
in 1982, though not in force in Kerala, whereunder there is a pro 
tanto repeal of the State Act. Therefore, the State Legislature 
ought to have followed the procedure in Article 254(2) and 
ought to have obtained the assent of the President.
18.8	 Ultimately, in paragraph 78, issue was summed up as under:
“78. To sum up, Articles 246(1), (2) and 254(1) 
provide that to the extent to which a State law is in 
conflict with or repugnant to the Central law, which 
Parliament is competent to make, the Central law shall 
prevail and the State law shall be void to the extent 
of its repugnancy. This general rule of repugnancy 
is subject to Article 254(2) which inter alia provides 
that if a law made by a State Legislature in respect 
of matters in the Concurrent List is reserved for 
consideration by the President and receives his/her 
assent, then the State law shall prevail in that State 
over an existing law or a law made by Parliament, 
notwithstanding its repugnancy.”
19.	 Further, reference could also be made to the Food Safety and 
Standards Act, 2006 (“FSSA, 2006”) which has been enacted pursuant 
to Entry 52 – List I where the Parliament by a declaration made 
under Section 2 of the said Act has
declared that it is expedient in 
the public interest that the Union should take under its control the 
food industry. Consequently, clause (b) of Entry 33 – List III which 
speaks of food stuffs, including edible oils seeds, and oils would be 
impacted on account of the FSSA, 2006 and the declaration made 
therein pursuant to Entry 52 – List I to the extent of the control under 
the said Act. 
20.	 The reason for the aforesaid view would have to be also considered 
from the point of view of the fact that when an “industry” is taken 
control of by the Union by specifying it in the First Schedule of the 
IDRA, it becomes a scheduled industry and to the extent of control 
envisaged as per the Schedule and as per the provisions of IDRA. It 
is only those industries which are critical and of vital significance to 
the Indian economy which are taken control of by the Union and one 
such industry is “Fermentation Industries”, which inter alia comprises
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of “industrial alcohol” both as a product and as a raw material for 
other industries.
21.	 Conversely, if any industry is not a scheduled industry and does not 
come within the scope and ambit of First Schedule of the IDRA, in 
such an event, not only Entry 24 - List II but also Entries 26 and 
27 - List II would fully operate. Then, Entries 26 and 27 - List II would 
not be subject to the restriction under Entry 33(a) - List III nor to 
Entry 52 - List I. The States would have the liberty to pass laws with 
regard to trade and commerce, production supply and distribution 
of goods of any industry under Entries 26 and/or 27 - List II without 
there being any restriction in terms of Entry 33(a) - List III. In other 
words, insofar as a non-scheduled industry is concerned, Entry 
33(a) - List III would not at all apply and Entries 26 and/or 27 - List 
II would apply in the matter of production, supply and distribution 
of goods or trade and commerce of the products of any industry or 
any other specific Entry in List II, as the case may be. 
22.	 In the above context, the intention of the Constitution makers in the 
matter of division of legislative subjects between the Parliament 
and the States have to be clearly understood. In order to achieve 
consistency of dividing the subjects of legislation not only within the 
particular Lists, namely, the Union List, State List and Concurrent List 
but also, inter se, between the
three Lists so as to have a clarity in the 
matter of the Parliament or the State Legislature having competence 
to make laws, the prescription under Article 246 and the mandate 
thereof would give a clue regarding interpretation of the Entries in the 
three Lists. To reiterate, Articles 246 (1) and (2) of the Constitution 
begins with a non-obstante clause and Article 24(3) begins with a 
“subject to” clause. On a conspectus reading of aforesaid clauses 
of Article 246, it is evident that the Legislature of a State has the 
power to make laws with respect to any matter enumerated in List III, 
i.e., Concurrent List, subject to List I which deals with Parliament’s 
exclusive powers to make laws in respect of any matter enumerated 
in List I. Therefore, a subject placed in List III, i.e., the Concurrent 
List can also be subject to the exclusive power of Parliament to 
make laws with respect to any matter enumerated in List I (vide first 
part of Article 254(1)). Thus, the intention of the Constitution makers 
was to preserve parliamentary supremacy while at the same time 
maintaining a federal balance in the matter of distribution of the 
fields of legislation vis-à-vis various Entries in the three Lists. This 
is also evident on a reading of Article 246(3) which deals with the
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exclusive powers to make laws by State Legislatures in respect of 
matters enumerated in List II being subject to clauses (1) and (2) 
of Article 246, i.e., subject to the Union List and the Concurrent List 
is in a case of conflict of laws which is irreconcilable. 
23.	 Any other view would result in a situation wherein the State 
Legislatures on the strength of Entry 33(a) – List III would have their 
own legislations on the premise that there is no notified order issued 
by the Central Government in respect of the scheduled industry 
under Section 18G of the IDRA, and if subsequently in respect of 
a product of a scheduled industry, the Central Government is to 
issue a notification under Section 18G of the IDRA, the laws that 
are in operation in the various States would become repugnant if 
there is a direct conflict between the said State laws with the notified 
order issued by the Central Government under Section 18G of the 
IDRA. This would result in a legal quagmire and uncertainty leading 
to confusion. Therefore, for this reason also States cannot have 
legislative competence to pass laws or take any action in respect of 
any product of a scheduled industry from the moment Section 18G 
has been inserted to the IDRA which has been enacted pursuant 
to Entry 52 – List I. As a result, time of insertion of Section 18G to 
the IDRA, the intention of the Union is to occupy the field insofar
as 
an article or articles of scheduled industry is concerned which will 
also include a product of a scheduled industry. Consequently, the 
States are denuded of their powers to pass any law insofar as the 
said subject-matter is concerned.
24.	 In State of W.B. vs. Union of India, AIR 1963 SC 1241 (“State 
of W.B.”), this Court on a comparative analysis of List I in Seventh 
Schedule to the Constitution with the Seventh Schedule to the 
1935 Act noted that the powers of the Union have been enlarged 
particularly in the field of economic unity and that this was done as 
it was felt that there should be centralised control and administration 
in certain fields of common interest if rapid economic and industrial 
progress had to be achieved by the nation. Reference in this regard 
was also made, inter alia, to the transfer of new Entry 33 – List III 
in the Constitution from List II of the 1935 Act. It was observed that 
the result of ensuring such economic unity was a departure from 
any traditional pattern of federation and a conscious decision for the 
common good. Furthermore, in identifying deviations from traditional 
features of federations, this Court noted a notable feature that is true 
of the Indian constitutional framework:
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“26. … (c) Distribution of powers between the Union 
and the regional units each in its sphere coordinate and 
independent of the other. The basis of such distribution of 
power is that in matters of national importance in which 
a uniform policy is desirable in the interest of the units, 
authority is entrusted to the Union, and matters of local 
concern remain with the States. …”
Importance of “Industrial Alcohol” to the Indian Economy:
25.	 It is necessary to note the importance of “industrial alcohol” in 
the Indian economy. “Industrial alcohol” is important to the Indian 
economy for it is used in at least two sectors: i) as a key feedstock 
for production of various chemicals in the chemicals industry; and 
ii) as liquid fuel to be blended with petrol. 
25.1	 As regards the chemical industry, the XIIth five-year plan (2012-
2017) of the Planning Commission (“PC Report”) notes that 
“alcohol-based chemical industry occupies an important place 
in the Indian chemical industry and is a key contributor to the 
growth of the sector”. It also notes that several alcohol-based 
chemicals are made using “industrial alcohol” and are used 
as building blocks for various downstream industries such as 
“synthetic fibres and synthetic yarn, drugs and pharmaceuticals, 
agrochemicals, personal care products, dyestuffs, pigments, 
flavours & fragrances etc.” Further, the PC Report notes that 
alcohol based chemical industry
“contributes to green chemistry” 
as chemicals are manufactured using ethanol instead of being 
manufactured through the petro-chemical route. It also notes 
that they contribute to foreign exchange reserves.
25.2	 As regards blending of ethanol with petrol, the contribution 
of Ethanol Blended with Petrol (EBP) programme of the 
Government of India appears significant. In this programme, 
fuel-grade ethanol is blended with petrol and is sold by Oil 
Marketing Companies (OMCs) for use as a fuel in automobiles. 
In response to an Unstarred Question No.2764 answered on 20th 
December, 2023, the Minister of State for Ministry of Consumer 
Affairs, Food & Public Distribution had answered that: 
i)	
The Government of India has been implementing EBP 
programme and has fixed the target of 20% blending of 
ethanol with petrol by 2025;
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ii)	
The supply of ethanol to OMCs has increased by more 
than 13 times from 38 crore litres in ESY 2013-13 to 502 
crore litres in ESY 2022-23;
iii)	
To achieve the target of 20% blending by 2025, about 1016 
crore litres of ethanol would be required and for this, about 
1700 crore litres of ethanol producing capacity is required.
25.3	 Further, a report of the Ministry of Petroleum and Natural Gas, 
Government of India titled “Ethanol Growth Story” suggests 
that the EBP programme has at least three benefits: first, it 
raises income of farmers which is evident from the observation 
that OMCs have paid sugar mills nearly Rs.81,796 crore for 
ethanol supplies up to 2022. Second, it reduces import bills 
and improves India’s energy security. The report suggests that 
the cumulative foreign exchange impact is estimated to be over 
Rs.53,894 crore between 2014 and 2022. Third, it lowers CO2 
emissions and promotes a cleaner environment. The report 
estimates that Greenhouse gas emissions were reduced by 
318.2 lac tonnes due to the EBP programme between 2014 
and 2022.
26.	 Thus, insofar as “Fermentation Industries” (other than potable alcohol) 
is concerned, both alcohol and other products of “Fermentation 
Industries” being a scheduled industry under the IDRA passed 
under Entry 52 – List I it would clearly be within the scope of Union 
legislation. It is clarified that as far as the concept of
“intoxicating 
liquors” versus “industrial alcohol” is concerned, it is clear that Entry 
33(a) – List III does not deal with “intoxicating liquors” which is a 
State subject under Entry 8 – List II. “Fermentation Industries” is a 
controlled industry and is a scheduled industry under the IDRA. It 
has been clarified by the 2016 Amendment that Item 26 dealing with 
“Fermentation Industries” does not include potable alcohol. Therefore, 
insofar as “intoxicating liquors” which is “potable liquors” is concerned, 
only the State Legislatures have the legal competence to enact laws 
concerning the said subject. Therefore, other types of liquor (i.e. 
excluding “intoxicating liquors”) comes within the nomenclature of 
“Fermentation Industries” which is a scheduled industry under IDRA. 
27.	 Since qua State Legislatures, Article 246(2) is also subject to Article 
246(1), the legislation which could have been made under List III 
(Concurrent List) can also be subject to legislation made under Entry 
52 – List I. This is expressly so having regard to Entry 33(a) – List
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III as any law regarding trade and commerce in, and the production, 
supply and distribution of the products of any industry where the 
control of such industry by the Union is declared by Parliament by 
law to be expedient in the public interest, and imported goods of 
the same kind as such products, would be subject to a law made 
as per Entry 52 – List I i.e., IDRA. This is because a Parliamentary 
law which is made by virtue of an Entry under List I has supremacy 
over any other law in List II or List III when they are irreconcilable 
or when the doctrine of occupied field applies respectively. 
28.	 In Mineral Area Development Authority, I have voiced similar 
concerns as in the present case in the following words:
“36.3 The Government of India Act, 1935 was the first 
comprehensive blueprint for legislative division of power in 
India between federal, provincial and concurrent spheres 
which resolved residuary powers to rest with the Federal 
Government. Though there are apparent similarities 
between the Government of India Act, 1935 and the Indian 
Constitution, yet factors, such as, regulation of economic 
competition and the development of twentieth century 
welfare States guided the constitutional blueprint for a 
model of federalism in which provincial initiative should not 
preclude national coordination, particularly, in the fields of 
socio-economic spheres.
36.4 According to Tillin, “in the case of India,
political 
economy considerations intersect with the accommodation 
of diversity in shaping the resulting forms of federalism”. 
The question of a desirable balance between Central and 
the State Governments has to be viewed in the context 
of the country continuing to confront the need to promote 
economic growth while upholding and expanding social 
rights. 
Sarkaria Commission Report on Centre-State Relations:
37. Resolved to study and reform the existing arrangements 
between the Union and the States in an evolving socio-
economic scenario, the Ministry of Home Affairs vide 
Order dated 09.06.1983 constituted a Commission under 
the Chairmanship of Justice R.S. Sarkaria with Shri B. 
Sivaraman and Dr. S.R. Sen having due regard to the
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framework of the Constitution. At this stage, reference to 
Section 5, Chapter II – Legislative Relations of the Report of 
the Sarkaria Commission (“Sarkaria Commission Report”) 
may be of assistance:
“2.5.21 In every Constitutional system having 
two levels of government with demarcated 
jurisdiction, contents respecting power are 
inevitable. A law passed by a State legislature 
on a matter assigned to it under the Constitution 
though otherwise valid, may impinge upon 
the competence of the Union or vice versa. 
Simultaneous operation side-by-side of two 
inconsistent laws, each of equal validity, will be 
an absurdity. The rule of Federal Supremacy 
is a technique to avoid such absurdity, resolve 
conflicts and ensure harmony between the 
Union and State laws. This principle, therefore, 
is indispensable for the successful functioning 
of any federal or quasi-federal Constitution. It 
is indeed the kingpin of the federal; system. 
“Draw it out, the entire system falls to pieces”
2.5.22 If the principles of Union Supremacy are 
excluded from Articles 246 and 254, it is not 
difficult to imagine its deleterious results. There 
will be every possibility of our two-tier political 
system being stultified by internecine strife, 
legal chaos and confusion caused by a host 
of conflicting laws, much to the bewilderment 
of the common citizen. Integrated legislative 
policy and uniformity on basic
issues of 
common Union-State concern will be stymied. 
The federal principle of unity in diversity will be 
very much a casualty. The extreme proposal 
that the power of Parliament to legislate on a 
Concurrent topic should be subject to the prior 
concurrence of the States, would, in effect, 
invert the principle of Union Supremacy and 
convert it into one of State Supremacy in the 
Concurrent sphere. The very object of putting
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certain matters in the Concurrent List is to enable 
the Union Legislature to ensure uniformity in 
laws on their main aspects throughout the 
country. The proposal in question will, in effect, 
frustrate that object. The State Legislatures 
because of their territorially limited jurisdictions, 
are inherently incapable of ensuring such 
uniformity. It is only the Union, whose legislative 
jurisdiction extends throughout the territory 
of India, which can perform this pre-eminent 
role. The argument that the States should 
have legislative paramountcy over the Union 
is basically unsound. It involves a negation of 
the elementary truth that the ‘whole’ is greater 
than the ‘part’.”
(emphasis supplied)
As the paragraphs extracted above elucidate, the 
Commission was of the firm view that the principles of 
Union Supremacy cannot be undermined from Articles 246 
and 254. While the immediate paragraph is concerned with 
legislative actions taken under the List III - Concurrent List, 
they provide us a beneficial lens to both the importance 
of Union supremacy in matters that demand national 
uniformity and the Commission’s following discussion on 
“Mines and Minerals” in Chapter XIII.”
29.	 Constitutional law is mainly concerned with the basic features or the 
framework of distribution of powers between the different organs of 
the State; between the Union and its units and between the State and 
the citizens. But there is
something in a Constitution that is even more 
primordial than the structure and the features. These are the ideals 
on which the founding parents, in their wisdom and sagacity, built 
the entire edifice of the Constitution itself. It is all important that this 
edifice is not dislodged while attempting to dynamically interpret the 
Constitution. These Constitutional ideals are irreducible and underpin 
the survival and success of constitutional order and a concordial 
society. Federalism is one such ideal where the Constitution defines 
a federal structure with a unitary spirit in Article 246 read with the 
three Lists of the Seventh Schedule of the Constitution.
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State of U.P. & Ors. v. 
M/s Lalta Prasad Vaish and sons
Conclusions on interplay of legislative Entries: 
30.	 In view of the aforesaid discussion, my conclusions on the interplay 
of the legislative Entries under consideration are as under:
I.	
The field of legislation comprised in Entry 8 – List II is carved 
out of Entry 24 – List II. 
Thus, the subject relating to “intoxicating liquors”, that is to say, 
the production, manufacture, possession, transport, purchase 
and sale of “intoxicating liquors” being a specific subject is taken 
out of the general subject of “industries” under Entry 24 – List II. 
II.	
As a result, Entry 52 – List I or any law made under that Entry 
by the Parliament cannot intrude or trench upon any law made 
by the State Legislatures under Entry 8 – List II. 
Thus, the Parliament cannot take under its control the subject 
pertaining to “intoxicating liquors” under any law, such as, 
IDRA made under Entry 52 – List I. Therefore, the subject 
“intoxicating liquors” falls exclusively within the domain of the 
State Legislatures which also have the obligation to prevent 
“industrial alcohol” being converted into “intoxicating liquors” as 
an abuse and, therefore, pass legislations or take State action 
in that regard having regard to Article 47 of the Constitution 
of India. 
III.	
Entry 33(a) – List III (Concurrent List) and any law made or 
to be made by the State Legislatures under the said Entry is 
subject to
Parliamentary law made either under Entry 52 – 
List I or under Entry 33(a) – List III in terms of the first part and 
second part of Article 254(1) respectively. 
Thus, if any law has been made by the Parliament by virtue of 
Entry 52 – List I, such as, the IDRA and there is an intention to 
occupy the field, the State law would be subject to the doctrine 
of occupied field. Thus, Section 18G of the IDRA which has 
been made by virtue of Entry 52 – List I thereof would prevail 
on the basis of the aforesaid doctrine. Consequently, it is held 
that issuance of a notified order under Section 18G of the IDRA 
is neither a sine qua non nor is it a condition precedent for the 
State Legislatures to restrain exercise of powers under Entry 
33(a) – List III. In other words, the mere insertion of Section 
18G to the IDRA implies that the Parliament has intended to
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occupy the field demarcated under the aforesaid provision. 
Also, a notified order when issued by the Central Government 
under Section 18G of the IDRA cannot be questioned in any 
Court of law. This also indicates that the doctrine of occupied 
field applies to the said Section vis-à-vis a scheduled industry 
under the IDRA. 
IV.	
If the Parliament has made a law under Entry 52 – List I and 
intends to occupy the whole field then the State Legislatures are 
denuded of their powers and therefore, they would lack legislative 
competence to enact a law under Entry 33(a) – List III.
In the context of “industrial alcohol” and in terms of Item 26 of 
the First Schedule of the IDRA i.e. “Fermentation Industries”, 
it is only the Central Government which has the powers to act 
under Section 18G of the said Act. So long as an industry is 
a scheduled industry under the IDRA and Section 18G of the 
said Act remains on the statute book, the State Legislatures 
are denuded of their powers to pass a legislation or to take 
any action in respect of the products of a scheduled industry 
under Entry 33(a) – List III.
Effect of overruling Synthetics and Chemicals (7J):
31.	 The judgment of this Court in Synthetics and Chemicals (7J) 
has held the field since 1989 for three and a half decades. The 
doubts which have arisen regarding the said judgment subsequently 
have led to the reference to a larger Bench. On re-considering 
the judgment
in Synthetics and Chemicals (7J) in light of the 
arguments advanced before this nine-Judge bench and in the 
backdrop of the constitutional Entries in the three Lists, I find that 
except for a clarification and deletion of the words “both potable 
and” in paragraph 84 of AIR version of the Report, the said judgment 
would not call for any intervention. The reasons for saying so can 
be stated as under: 
Firstly, the judgment has held the field for three and a half 
decades on certain concrete ideas pertaining to liquors 
as part of “Fermentation Industries”, which is a scheduled 
industry, and that part which is excluded from the aforesaid 
scheduled industry. This is based on the interplay of Entries 
in Lists I and II.
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State of U.P. & Ors. v. 
M/s Lalta Prasad Vaish and sons
The judgment in Synthetics and Chemicals (7J) has 
crystallised the concepts of “intoxicating liquors” and 
“industrial alcohol” which are clearly distinguished in 
legislations of the State and in administration or governance 
for several decades on the basis of constitutional 
demarcation of legislative entries. Consequently, it held 
that “Fermentation Industries” is a controlled industry and 
I have now clarified that it does not take within its ambit 
“intoxicating liquors” or potable alcohol. 
The judgment in Synthetics and Chemicals (7J) correctly 
held on a conspectus reading of Entry 8 – List II, Entry 
6 - List II and Article 47 that State Legislatures have the 
competence to ensure that “industrial alcohol” or non-
potable alcohol is not diverted and misused as a substitute 
for potable alcohol. 
Secondly, the judgment has correctly considered the 
significance of insertion of Section 18G to the IDRA which 
is a Parliamentary Law made under Entry 52 – List I and 
the consequences that follow in light of the doctrine of 
occupied field in the context of “Fermentation Industries”, 
a scheduled industry, by bearing in mind the first part of 
Article 254(1) of the Constitution. 
Thirdly, the reasons assigned in Synthetics and 
Chemicals (7J) for invoking the doctrine of occupied 
field in the context of “Fermentation Industries” and in the 
context of Section 18G of the IDRA would equally
apply 
to all other scheduled industries under the said Act. Any 
interference with the said legal position would have a 
cascading effect on other scheduled industries thereby 
giving legislative competence in respect of all scheduled 
industries to the States under Entry 33(a) – List III. This 
would result in multiple States as well as the Union having 
powers to make laws which would lead to the scheduled 
industries under IDRA pale into insignificance. This would 
defeat the purpose of Entry 52 – List I and the laws made 
thereunder; such as IDRA. 
Fourthly, the critical importance of scheduled industries in 
the Indian economy must not be lost sight of. The object 
and purpose of Entry 52 – List I and passing of laws on
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the strength of the said Entry by the Parliament taking over 
control of certain industries by a declaration made by law 
as expedient in the public interest, is a factor which cannot 
be lost sight of while answering the reference made to this 
Bench in the form of various questions raised. This aspect 
has been borne in mind in Synthetics and Chemicals 
(7J) while deciding the issues raised therein. 
Fifthly, if the judgment in Synthetics and Chemicals 
(7J) is overruled then all State legislatures can also make 
laws under Entry 33(a) – List III in respect of scheduled 
industries. This would result in IDRA made under Entry 
52 – List I and Entry 52 – List I itself losing significance 
as the object and purpose of taking control of certain 
industries by insertion of the said industries as scheduled 
industries under the said Act would be defeated. 
Sixthly, if industries of critical importance to the Indian 
economy which are scheduled industries under the IDRA 
which are under the control of the Union by a declaration 
made by Parliament by law are allowed to be legislated 
upon by the State legislatures, the whole object of taking 
control of such industries by the Union for ensuring 
uniformity in their development and for ensuring the object 
and purpose of the IDRA would be defeated. This would 
result in a haphazard development of such scheduled 
industries in the country. For instance, if “industrial alcohol”
is read as coming within the scope and ambit of Entry 
8 – List II then it would be excluded from the scheduled 
industry. Such a state of affairs would not be conducive 
to the economy as the scheduled industries such as 
“Fermentation Industries”, minus potable alcohol play a 
significant role in the Indian economy. 
Seventhly, the interpretation of the constitutional Entries and 
the provisions of the Constitution must be so made bearing 
in mind the intentions of the framers of the Constitution 
and the nature and structure of the Indian economy and 
the need for a uniform development throughout the country 
of certain industries which have been taken control of by 
the Union. This approach has been adopted in Synthetics 
and Chemicals (7J).
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Eighthly, the principle of federal balance must yield to 
the doctrine of Parliamentary supremacy in certain areas 
such as when laws are made under Entry 52 or Entry 
54 or Entry 7 – List I such as in the present cases. This 
is because of the unique manner in which Article 246 of 
the Constitution is worded and the division of legislative 
subjects between the Parliament and the State legislatures, 
having regard to the unique federal structure in India with 
the balance tipping in favour of the Union in certain niche 
areas of legislation and governance. 
Ninthly, the Amendment Act, 2016 has brought much 
needed clarity on the issue and is the correct position of 
law compatible with the scheme of legislative competence 
as under our Constitution. I have already held that merely 
because “industrial alcohol” can be easily manufactured 
into or misused to become “intoxicating liquors” would 
not grant States the competence to wholly regulate 
“industrial alcohol”. State legislatures only have legislative 
competence over what is “intoxicating liquors” as a 
beverage. Therefore, the judgment in Synthetics and 
Chemicals (7J) is good law and was most correct in 
postulating that State legislatures will only have the 
competence to prevent misuse in interest of public health. 
For the aforesaid reasons, I am of the view that although the judgment 
in Synthetics and Chemicals (7J) calls for only a
clarification, it 
does not require any overruling.
My answers to the questions formulated:
32.	 Consequently, the questions formulated are accordingly answered 
as under:
Ques.	1. Does Section 2 of the Industries (Development and 
Regulation) Act, 1951, have any impact on the field covered 
by Section 18G of the said Act or Entry 33(a) of List III of the 
Seventh Schedule of the Constitution?
Ans.: 	Entry 33(a) – List III has to be read in the context of Entry 
52 – List I. IDRA is relatable to Entry 52 – List I. Section 2 of 
the IDRA has a nexus and is connected with Section 18G of 
the said Act. Therefore, Entry 33(a) – List III is impacted by 
Section 2 read with Section 18G of the IDRA.
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Ques.	2. Does Section 18G of the aforesaid Act fall under Entry 52 
of List I of the Seventh Schedule of the Constitution, or is it 
covered by Entry 33(a) of List III thereof?
Ans.: 	Section 18G of the IDRA is directly relatable to Entry 52 – List 
I which has to be read in the context of Section 2 of IDRA. 
The doctrine of occupied field applies and the legislative field 
under Entry 33(a) – List III is covered by the said provision 
on the basis of doctrine of occupied field under first part of 
Article 254 of the Constitution.
Ques.	3. In the absence of any notified order by the Central 
Government under Section 18G of the above Act, is the power 
of the State to legislate in respect of matters enumerated in 
Entry 33 of List III ousted?
Ans.: 	Yes, even in the absence of any notified order by the Central 
Government under Section 18G of the IDRA, the power of 
the States to legislate in respect of matters enumerated in 
Entry 33(a) – List III is ousted on the basis of the doctrine of 
occupied field as aforestated.
On this aspect, the judgment of this Court in Synthetics and 
Chemicals (7J) is correct. 
Ques.	Does the mere enactment of Section 18G of the above Act, 
give rise to a presumption that it was the intention of the 
Central Government to cover the entire field in respect of 
Entry 33(a) - List III so as to oust the States’ competence to 
legislate in respect of matters relating thereto?
Ans.: 	Yes, the mere
enactment of section 18G of the IDRA gives 
rise to a presumption that it was the intention of the Parliament 
and Central Government to cover the entire field in respect 
of Entry 33(a) - List III so as to oust the States’ competence 
to legislate in respect of matters relating thereto.
Answer given to question (3) above is reiterated here.
Ques.	5. Does the mere presence of Section 18G of the above Act, 
oust the State’s power to legislate in regard to matters falling 
under Entry 33(a) of List III?
Ans.: 	Yes, the mere presence of Section 18G of the IDRA would oust 
the State’s power to legislate in regard to matters falling under 
Entry 33(a) - List III. The doctrine of occupied field applies.
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State of U.P. & Ors. v. 
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Ques.	6. Does the interpretation given in Synthetics and Chemicals 
case (1990) 1 SCC 109 in respect of Section 18G of the 
Industries (Development and Regulation) Act, 1951, correctly 
state the law regarding the States’ power to regulate “industrial 
alcohol” as a product of the scheduled industry under Entry 
33(a) of List III of the Seventh Schedule of the Constitution 
in view of Clause (a) thereof?
Ans.: 	Yes, the interpretation given in Synthetics and Chemicals 
case (1990) 1 SCC 109 in respect of Section 18G of the IDRA 
correctly states the law. Even with regard to “industrial alcohol” 
as a product which falls within “Fermentation Industries” 
in respect of which the Union has assumed control, in the 
absence of a notified order, the competence of the State to 
act under Entry 33 - List III is denuded.
My answers to the conclusions of learned Chief Justice:
33.	 His Lordship, the Chief Justice of India has overruled the judgment 
in Synthetics and Chemicals (7J) and has come to the following 
conclusions and my answers to the same are in a tabular form as under:
Point(s)
Conclusions arrived at 
by Hon’ble the CJI
My Conclusions
a.
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 Entry are not exhaustive 
of its contents. It includes 
the
regulation of everything 
from the raw materials to the 
consumption of ‘intoxicating 
liquor’;
In my view, 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 IDRA 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”.
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b.
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;
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 24 
– List 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. 
c.
Parliament does not 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;
I agree.
d.
The judgments of the 
Bombay High Court in 
FN Balsara v. State of 
Bombay (supra), this 
Court in FN Balsara 
(supra) and Southern 
Pharmaceuticals (supra) 
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;
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.
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State of U.P. & Ors. v. 
M/s Lalta Prasad Vaish and sons
e.
The expression ‘intoxicating 
liquor’ in Entry 8 has not 
acquired a legislative 
meaning on an application 
of the test laid down in 
Ganon Dunkerley (supra);
The expression “intoxicating 
liquor” in Entry 8 has acquired 
a legislative and judicial 
meaning over the decades as 
per the discussion above.
f.
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;
T h e  m e m b e r s  o f  t h e 
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 
“ i n t o x i c a t i n g  l i q u o r s ” 
non-potable or “industrial 
alcohol”. Further, in order to 
have a consistency between 
what was envisaged under 
Entry 84 – List 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)
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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.
g.
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 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;
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 non-potable / “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.
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h.
The judgment in Synthetics 
(7J) (supra) is overruled in 
terms of this judgment;
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.
i.
Item 26 of the First 
Schedule to the IDRA 
must be read as excluding 
the industry “intoxicating 
liquor”, as interpreted in this 
judgement;
Item 26 of 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.
j.
The correctness of the 
judgment in Tika Ramji 
(supra) on the interpretation 
of word ‘industry’ as it 
occurs in the Legislative 
entries does not fall for 
determination in this 
reference; and
In my opinion, 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.
k.
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.”
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”.

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34.	 Reference is answered in the above terms. 
35.	 The Registry to place the matters before Hon’ble the Chief Justice of 
India for seeking orders for being listed before the appropriate Bench.
36.	 I must place on record my sincere appreciation to the learned Attorney 
General, learned Solicitor General and their teams, learned senior 
counsel appearing for the respective parties, learned instructing 
counsel and learned counsel for the respective parties for their 
valuable assistance to this Bench.
Result of the Case: Reference answered in above terms.
†Headnotes prepared by: Ankit Gyan