Summarize the following court judgment. enunciated in various decisions of foreign courts is not applicable in the Indian context. In India	 as the Constitution was enacted or was framed	 after having the experience of various countries in the world	 the concept of fundamental rights and rights like life	 liberty	 procedure established by law and various legislative functions which were divided between the States and the 640 Union	 left no scope for any power except which could be derived from any provision in the Constitution coupled with an Entry in one of the three Lists which would indicate that the power vested in either the State or the Centre. Apart from it	 the scheme of our Constitution is that there are no residuary powers which vest in the State and scheme of our Constitution also reveals that in case of any conflicts it is the Centre which prevails and not the State and	 there fore	 applying the doctrine of police powers will only mean to do violence to the scheme of the Constitution. In fact	 under our Constitution no powers could be conceived for which there is no provision in any one of the entries in the three Lists or which could not be justified under any spe cific Article of the Constitution. Thus	 even under the concept of the doctrine of police powers	 the levies imposed by the State on alcohol or alcoholic liquors cannot be justified. [689E	 G H	 690A C] & ORIGINAL JURISDICTION: Writ Petition No. 182 of 1980 Etc. (Under Article 32 of the Constitution of India). F.S. Nariman	 M.H. Baig	 A.B. Divan	 Rajinder Sacher	 L.M. Singhvi	 R.N. Banerjee	 K.J. John	 Harish N. Salve	 S.C. Sharma	 S.S. Shroff	 Mrs. P. Shroff	 Ms. section Sharma	 J.B. Dadachanji	 A.P. Hathi	 section Ganesh	 section Sukumaran	 D.N. Misra	 Mrs. A.K. Verma	 Sandip I. Thakore	 R.F. Nariman	 P.H. Parekh	 Shishir Sharma	 Poppat	 Ms. Shalini Soni	 Sunita Sharma	 M.L. Lahoty	 Shiv Prasad Sharma	 Himanshu Shekhar	 D.D. Gupta	 Ms. M. Gupta	 A.T.M. Sampath	 Mrs. Swaran Mahajan	 Ms. Anuradha Mahajan	 K.K. Mohan	 Laxmi Kant Pandey	 R.B. Mehrotra	 K.C. Dua	 K.R. Nagaraja	 P.D. Sharma	 V. Balachandran	 O.P. Sharma	 A.K. Sangal	 Anil Kumar	 D. Goburdhan	 K.D. Prasad and Mrs. Naresh Bakshi for the Peti tioners. K. Parasaran	 Attorney General	 C. Shivalha	 G. Rath	 V.M. Tamaskar	 Altar Ahmed	 N.N. Gooptu	 Dinesh Chandra Swami	 A.S. Bobde	 K. Alagiri Swamy	 V.Venkataramaniah	 Inder Singh	 Advocate Generals	 R.N. Trivedi	 Additional Adv. Genl.	 Yogeshwar Prasad	 S.K. Dholakia	 P.S. Poti	 A.K. Ganguli	 Satish Chandra	 R.B. Datar	 G.L. Sanghi	 P.R. Ramasesh	 R.K. Mehta	 S.K. Bhattacharya	 H.K. Purl. Probir Chowdhary	 N.K. Sharma	 M.N. Shroff	 Ashok K. Srivastava	 R.S. Rana	 A.S. Bhasme	 A.M. Khanwilkar	 Sunil Gupta	 T.T. Kunhikanan	 V. Krishnamurthy	 P. Venugopal	 T.V.S.N. Chari	 D.R.K. Reddy	 Jagan M. Rao	 Ms. A. Subhashini	 641 A. Subba Rao	 K.C. Dua	 Satish K. Agnihotri	 Ashok Singh	 Indra Makwana	 Ms. Amrita Sanghi and N.K. Sharma for the Respondents The following Judgments of the Court were delivered: SABYASACHI MUKHARJI	 J. These writ petitions	 civil appeals and review petitions relate to the right of the States to levy vend fee or duties in respect of industrial alcohol under different legislations in different States. We will first deal with writ petition No. 182/80. In Writ Petition No. 182/80 (Synthetics & Chemicals Ltd. vs State of U.P. & Ors.)	 we are concerned with the notification dated 31st May	 1979	 substituting new rule 17(2) for old rule 17(2) and providing for a vend fee of Rs. 1.10 per bulk liter for all issues from distillery but in case of FL 39 Licence (like the petitioner in this case)	 the vend fee would be so charged that the amount of this fee and purchase tax together does not exceed 25 paise per bulk litre; Then there are three review petitions	 namely	 Review Petition Nos. 202 04/80 (Synthetics & Chemicals Ltd. vs State of U.P. ) and Review Petition No. 17 of 1980 (Kesar Sugar Works Ltd. vs State of U.P.). These are directed against the judgment and order of this Court dated 19th December	 1979 in State of U.P.	 etc. vs Synthetics & Chemicals Ltd. & Ors. ; 	 re agitating the challenge to sections 24A & 24B of the U.P. Excise Act	 1910 as amended in 1972 and 1976 declaring exclusive privilege of the Government for manufacture and sale of foreign liquor as defined (which includes denatured spirit and industrial alcohol). Then there is Writ Petitions Nos. 3163 64 of 1982 (All India Alcohol Based Industries Development Association vs State of Maharashtra	 ) which challenges the amendment to section 49 of the Bombay Prohibition Act	 1949 treating exclusive privilege for State in liquor trade and imposing a transport fee of Rs. 1.15 per bulk litre. There is Writ Petition No. 4501/78 (Chemicals & Plastics India Ltd. vs State of Tamil Nadu)	 Writ Petition No. 2580/82 (Kolhapur Sugar Mills and Anr. vs S.R. Hegde & Anr. )	 which challenge the Bombay Prohibition Act	 1949 as amended from time to time along with Ordinance No. 15 of 1981 which amended the Bombay Prohibition Act	 1945 and section 49 added by reason of which the State was granted exclusive privilege of import ing	 exporting	 transporting	 manufacturing	 bottling	 selling	 buying	 processing	 or using any intoxicant. There after	 the Bombay Rectified Spirit (Transport in Bond) Rules	 1951 were amended and transport fee was increased from the rate of 17 paise to the rate of Rs. 1.25 paise. Thereafter	 the Bombay Rectified Spirit (Transport in Bond) Amendment Rules	 1982 were amended and the transport fee was reduced from Rs. 1.25 per litre to 0.40 paise per litre. Then there is Writ Peri 642 tion No. 1892/73 (Hindustan Polymers Ltd. vs State of A.P.) which seeks a declaration that alcohol plant of the peti tioner company is not covered by the A.P. Excise Act	 1968	 A.P. Distillery Rules	 1970 and A.P. Rectified Spirit Rules	 1971 and further to declare that the alcohol plant of the company is not a 'distillery ' within the meaning of the said expression under the A.P. Distillery Rules and therefore	 the Distillery Rules have no application thereto. It seeks also an order to restrain from interfering with and/or regulating and controlling the production	 distribution	 movement and supply of alcohol from the alcohol plant of the company and also a writ of prohibition with the appropriate directions. Civil Appeal No. 4384/84 also challenges the A.P. Excise Act	 1968 and A.P. Distillery Rules. Similar is the position in C.As. 466 67 of 1980 which challenge the Tamil Nadu Prohibition Act. The main question that falls for consideration in these matters is whether the vend fee in respect of the industrial alcohol under different legislations and rules in different States is valid. The question is. is the vend fee and impost leviable or extractable by the States under different Acts. The question mainly involved in all these matters is a common question of law but we will have to deal with diverse factual situations as well as the particular provisions of the various Acts. The questions with which we are mainly concerned are the following: (i) whether the power to levy excise duty in case of industrial alcohol was with the State legislature or the Central legisla ture? (ii) what is the scope and ambit of entry 8 of list II of the Seventh Schedule of the Constitution? (iii) whether	 the State government has exclusive right or privilege of manufacturing	 selling	 distributing	 etc. of alcohols in cluding industrial alcohol. In this connec tion	 the extent	 scope and ambit of such right or privilege has also to be examined. It is necessary to bear in mind that in the last four to five decades there has been a tremendous change in the industrial horizon of this country. During the initial stages of the Constitution	 the only well known industrial sectors in India were iron and steel	 textiles	 jute and cement. The rest of the production was raw materials geared to feed and supply the industrial base of the foreign power. After independence	 an Industrial Policy Resolution was adopted to achieve 643 rapid industrialisation in a big way. In the last few dec ades	 there has been a great transformation and tremendous upsurge not only in industry and commerce	 but also in sophisticated technology and industries. The chemical	 fertilizer	 plastic and engineering industries are only some of the fields in industrial development. In this background	 the views expressed previously relating to 'intoxicating liquor ' and 'alcoholic liquor for human consumption ' have to be borne in mind. It is	 in this connection	 also necessary to refer to Article 47 of the Constitution. The said Article which deals with the duty of the State to raise the level of nutrition and the standard of living and to improve public health	 enjoins that the State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and	 in particular	 the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. We were invited on behalf of the petitioners by Mr. Nariman	 Mr. Divan	 Mr. Banerjee	 Mr. Baig and others that though this direction and this commit ment to improvement of the standard of living must be kept in view but it must be borne in mind that this improvement can be achieved primarily by industrialisation involving increased production and employment and giving priority to the core sectors. Entry 52 of list I of the Seventh Schedule to the Constitution deals with "industries"	 the control of which by the Union is declared by Parliament by law to be expedient in the public interest. It is the contention of the petitioners and appellants that the Industries (Develop ment & Regulation) Act	 1951 (hereinafter called the 'IDR Act ') was enacted with a view to developing and controlling various important industries. Section 2 of the IDR Act declares that it is expedient in the public interest that Union should take under its control the industries specified in the First Schedule. The cases in this bunch are in re spect of industries which are not concerned with potable alcohol for the purpose of human consumption. These are predominantly and primarily concerned with using ethyl alcohol (rectified spirit) as an industrial raw material. This industrial alcohol is required as an input for further manufacture of downstream products. For this purpose	 some of the industries have their captive plants. Reference in this connection may be made and our attention was drawn to the report of the Alcohol Committee	 1956. This Report indicates that (a) that industrial alcohol is an input and should be available at reasonable price. (b) there should be uniform railway freight. 644 (c) larger capacities of molasses etc. 	should be available	 and (d) uniform taxation policies are essential for the development of these indus tries. In order to appreciate the controversy in these matters	 it is	 therefore	 necessary to keep these objectives in mind. In these matters	 this Court is concerned with the taxing power of the States to impose and levy excise duty on industrial alcohol and/or imposts as vend fees. This has been	 and as has been noticed hereinbefore	 claimed as a part of the exclusive privilege of the States to impose a levy as a consideration or price for manufacturing of and/or dealing with industrial alcohol. It is essential that there should be uniformity in the industry so that these are free from the vagaries and arbitrary and differential treatment meted out from State to State and even in the same State from time to time. Arbitrary and excessive imposts under the so called privilege are a great disincentive for development of industries in the public interest and for industrial development in general and can render units unviable and sick. In the above background	 it is necessary to refer to certain facts and as such it would be appropriate to refer to the facts and contentions in writ petition No. 182/80	 i.e. Synthetics & Chemicals Ltd. vs State of U.P.	 which is under article 32 of the Constitution	 filed by M/s. Synthetics & Chemicals Ltd. a registered Company in Bombay	 and one Mr. A.K. Roy	 Director and shareholder of the said company. The respondent therein is the State of Uttar Pradesh and the Excise Commissioner	 Uttar Pradesh. In the said writ petition	 a notification of the State of Uttar Pradesh	 being No. 4840E/XIII 330/79	 dated Lucknow May 31	 1979 was made in exercise of the power under sub section (1) of section 40 of the U.P. Excise Act	 1910 (hereinaf ter referred to as 'the U.P. Act ') read with clause (d) of sub section (2) of the said section. However	 in order to appreciate the position	 we should bear in mind the history of the legislative powers and different lists in the 7th Schedule	 regarding impost in respect of industrial alcohol. It appears that local legis latures of Uttar Pradesh had enacted the United Provinces Act	 1910 being Act IV of 1910	 and it received the assent of the Governor on 18th December	 1909 and of the Governor General on 14th February	 1910. Before 1920 there was as such no distinct dis 645 tribution of legislative subjects between the Central Legis lature and the State Legislatures. It appears that the local legislatures enacted with the assent of the Governor Gener al	 Excise Acts imposing duties and regulating production	 supply and distribution of alcoholic liquors including denatured spirits and methylated spirits. These were done under the Indian Councils Act	 1861 and the Indian Councils Act	 1909. The provisions of the Indian Council Act	 1861 were initially applicable only to the Presidencies of Fort St. George and Bombay	 but were later made applicable to other provinces by virtue of the Indian Councils Act	 1892 and 1909. Section 43 of the Indian Councils Act	 1861 enjoined that it shall not be lawful for the Governor in Council of either of the Presidencies	 except with the sanction of the Governor General	 previously communicated to him	 to make regulations or take into consideration any law or regulation for any of the purposes mentioned therein and one of the purposes	 inter alia	 mentioned was	 anything affecting the public debt of India or the Customs Duties	 or any other tax or duty then in force and imposed by the authority of the Govt. of India for the general purposes of such Government. The Government of India Act	 1915 was amended from time to time with a view to consolidate and amend the enactment relating to the Govt. of India. The Governor General in Council with the sanction of the Secretary of State in Council made Devolution Rules. Rule 3(1) thereof provided for distinguishing the functions of the local governments and local legislatures of governors ' provinces and of the province of Burma from the functions of the Governor General in Council. It was provided that any matter which is includ ed in the list of provincial subjects set out in Part II of Schedule I of the said Act shall	 to the extent of such inclusion	 be excluded from any central subject of which	 but for such inclusion	 it would form part. Part II of the Government of India Act	 1915 provided that any matter which is included in the provincial subjects set out in Part II of Schedule I shall	 to the extent of such inclusion be exclud ed from any central subject of which	 but for such inclu sion	 it would form part. Part II dealt with provincial subjects. Item 16 of Part II provided as under: "Excise	 that is to say	 the control of pro duction	 manufacture	 possession	 transport	 purchase	 and sale of alcoholic liquor and intoxicating drugs	 and the levying of excise duties and licence fees on or in relation to such articles	 but excluding	 in the case of opium	 control of cultivation	 manufacture and sale for export. " 646 It appears that the Govt. of U.P. levied a vend fee on denatured spirit for the first time @ 8 annas per bulk gallon	 vide notification dated January 18	 1937 under section 40(2) of the U.P. Excise Act	 1910. It was levied as a duty. By this notification Rule 17(2) was added which enjoined that in case of issues from a distillery a vend fee of annas 8 per bulk gallon shall be payable in advance before the spirit is issued. The fee was not made chargeable in case of issues to hospitals	 dispensaries and other charitable and educational institutions upto a quantity allowed to be issued by the Excise authorities	 and also on the issues for export out of the provinces. Thereafter	 on 1st April	 1937 the Govt. of India Act	 1935 came into effect. The federal legislative list in the 7th Schedule to the said Act contained entry 45 which in cluded duties of excise on tobacco and other goods manufac tured or produced in India except alcoholic liquors for human consumption. The provincial legislative List being List II of the 7th Schedule. contained entry 31 on intoxi cating liquors and narcotic drugs	 that is to say	 the production	 manufacture	 possession	 transport	 purchase and sale of intoxicating liquors	 opium and other narcotic drugs	 but subject	 as respects opium	 to certain provi sions. It also included entry 40 which was on duties of excise including	 inter alia	 all these items and alcoholic liquors	 opium	 Indian hemp and medicinal and toilet prepa rations containing alcohol. It was contended on behalf of M/s Synthetic Chemicals Ltd. that the duties previously levied by the local legisla tures continued in force by virtue of section 143(2) of the Govt. of India Act	 1935 only if these were levied before 31st January	 1935	 and that only these duties were to be so continued until provisions to the contrary were made by the Federal Legislature. The Constituent Assembly which derived from the people all power and authority	 was convened. On 15th August	 1947 the British Parliament passed the Indian Independence Act	 1947 making provisions for the setting up in India of two independent dominions. Under section 6(1) of the said Act	 the legislature of each of the new dominions was to have full powers to make laws for that dominion including laws having extra territorial operations. Under section 8(2) read with section 9(1) of the Indian Independence Act	 1947 the Governor General adopted the provisions of the Govt. of India Act	 1935. It appears that on 3rd April	 1948 the Constituent Assembly acting as the Dominion Legislature passed the which received the assent of Governor General on the same day. By this Act	 the Central 647 Government took under its control the Power Alcohol Indus try. This was in pursuance of the declaration made by the Dominion Legislature under entry 34 of List I of the 7th Schedule to the Government of India Act	 1935. The entry was: "Development of Industries where development under Dominion control is declared by Dominion Law to be expedient in public interest". "Power Alcohol" was defined as meaning Ethyle Alcohol containing not less than 95.5% by volume of Ethanol measured at 60 degree F	 corresponding to 74.4 over proof strength. It may be mentioned that Rectified Spirit is Ethyl Alcohol or Ethanol with 96% alcohol v/v. ON dehydration	 Ethyl Alcohol with 99.5% volume of Ethanol is produced. It was suggested that take over by the Dominion of the potable liquor industry was precluded by virtue of entries 29 & 31 of list II read with entry 34 of list I of the Govt. of India Act	 1935. It may be mentioned that the word 'indus tries ' is the analogous provision in the State list under the Constitution of India	 1950	 hence	 the meaning given to it in that list	 must be applied. According to the petition ers/appellants	 the expression 'industries ' has been given a restricted meaning so as not to entrench on the State 's power with respect to other industries specifically assigned to the State under other entries in the State list. See Calcutta Gas Co.	 [1962] Suppl 3 SCR 1. By virtue of the Constitution of India which came into effect from 26th January	 1950 the powers of legislation in respect of alcohol were distributed between list I and list II of the 7th Schedule to the Constitution. Duties of excise on tobacco and other goods manufactured or produced in India except	 inter alia	 alcoholic liquors for human consumption	 and opium	 Indian hemp and other narcotic drugs and narcot ics	 but including medicinal and toilet preparations con taining alcohol or any such substance were given to Parlia ment under entry 84	 list 1. But duties of excise on goods manufactured or produced in the State and countervailing duties at the similar rates	 inter alia	 alcoholic liquors	 the State was given power by entry 51 of list II to legis late. By entry 8 of list II	 States were given power to legislate on liquors	 that is to say production	 manufac ture	 processing	 transport	 purchase and sale thereof. On or about 8th May	 1952 the Parliament enacted the Industries (Development & Regulation) Act	 1951. Chapter IIIB of the said Act contains section 18G whereby the Central Govt. was empowered for securing equitable distribution and availability at fair prices of any article or 648 class of articles relatable to any scheduled industry to provide for regulating the supply and distribution thereof	 and trade and commerce therein by a notified order. The notified order was also to provide for controlling the prices at which such article or class of articles could be bought or sold. The said Act was amended in 1956. Item 26 was inserted in the First Schedule to the said Act and empowered the Central Govt. to control the Fermentation Industries including alcohol industries. Item 26 was as follows: "26. Fermentation Industries. (1) Alcohol (2) Other products of Fermentation Industries." The Govt. of India issued licences for the manufacture of alcohol based industries. It is asserted by M/s Synthetics & Chemicals Ltd. that one Tulsidas Kilachand	 who had promoted the said Company	 was invited by the U.P. Govt. to set up a synthetic rubber factory in the State of Uttar Pradesh. It is stated that the Govt. of Uttar Pradesh assured the said Tulsidas Kilachand of the supplies of alcohol necessary for the factory upto 20 million gallons	 on payment only of Rs.7.50 kilo litre as administrative charges. It is the case of M/s Synthetics & Chemicals that there was no assertion or claim or privilege on behalf of the State Govt. in respect or ' denatured spirit nor was the said company or its promoters informed that there might be a charge of rental or consideration for parting with any such privilege. On 30th December	 1960 the Govt. of U.P. issued a noti fication under section 4(2) of the U.P. Excise Act	 1910 by which all "rectified	 perfumed	 medicated and denatured spirits wherever made" was included under the definition of 'foreign liqour '. Thereafter	 the said notification was embodied in Rule 12 of the U.P. Excise Rules. On or about 28th November	 1952 the Power Alcohol Au thority and Excise Commissioner of U.P. issued an order for allotment of alcohol to M/s Synthetics & Chemicals Ltd. and also provided a condition that "the denatured alcohol meant for supply to M/s Synthetics & Chemicals Ltd. is exempted from payment of vend fee". Paragraph 2 of the said order provided that M/s Synthetics & Chemicals Ltd. shall pay an administrative charge at the rate of Rs.7.50 per kilo litre of 649 denatued alcohol. The denatured alcohol meant for supply to M/s Synthetics & Chemicals Ltd. was exempted from payment of vend fee. It was stipulated that alcohol shall be denatured with 5% Ethyl Ether or 0.2% crotonaldehyde at distilleries. It appears that in May	 1963 M/s Synthetics & Chemicals Ltd. established a factory in Bareilly. Industrial alcohol is said to be one of the basic raw materials for the manu facture of synthetic rubber. Accordingly	 the Govt. of U .P. on or about 30th July	 1963 issued a notification excluding from the levy of vend fee the alcohol issued to industries engaged in the manufacture of synthetic rubber on terms and conditions the State Government might determine. Rule 17(2) was accordingly modified. On or about 3rd November	 1972 the Govt. of U.P. issued a notification (being U.P. Excise Third Amendment Rules	 1972) substituting a new rule 17(2) which is now embodied in para 680(2) of the U.P. Excise Manual at p. 20 1. In the new rule	 vend fee @ Rs. 1.10 per bulk litre was imposed on denatured spirit without examining industries engaged in the manufacture of synthetic rubber. Supplies to the hospitals of certain quantity	 and exports out of the State were exempted. In December	 1972 when a demand was raised for payment of the vend fee	 it was asserted on behalf of M/s Synthetic & Chemicals that they had to close down their factory	 and filed a writ petition	 No. 8069 of 1972 in the Allahabad High Court challenging the validity of the notification dated 30th November	 1972 whereby vend fee on denatured spirit was introduced for the first time. The Division Bench of the Allahabad High Court vide judgment dated 24th March	 1973 struck down the said notification holding that the vend fee could not be justified either as a tax or fee or as excise duty. Relying on the decision of this Court in the case of Nashirwar etc. vs The State of M.P.; 	 and stating the same in the Preamble to the Act	 the U.P. Legislature passed Act No. 5 of 1976 being U.P. Excise Amendment (Re enactment and Validation) Act	 1976 inter alia	 introducing sections 24A and 24B in the U.P. Excise Act	 1910 and making other amendments with retrospective effect. Sections 24A and 24B are as follows: "24 A. (1) Subject to the provisions of Sec tion 31	 the Excise Commissioner may grant to any person a licence or licence for the exclu sive or other privilege: 650 (a) of manufacturing or of supply by whole sale	 or of both; or (b) of manufacturing or of supplying by whole sale	 or both and selling by retail; or (c) of selling by wholesale (to wholesale or retail vendors); or (d) of selling by retail at shops (for con sumption 'off ' the premises only); any foreign liquor in any locality. (2) The grant of licence or licences under clause (d) of sub section (1) in relation to any locality shall be without prejudice to the grant of licences for the retail sale of foreign liquor in the same locality in hotels and restaurants for consumption in their premises. (3) Where more licences than one are proposed to be granted under clause (d) of sub section (1) in relation to any locality for the same period advance intimation of the proposal shall be given to the prospective applicants for every such licence. (4) The provisions of section 25	 and proviso to section 39 shall apply in relation to grant of a licence for an exclusive or other privi lege under this section as they apply in respect of the grant of a licence for an exclusive privilege under section 24. 24 B. For the removal of doubts	 it is hereby declared: (a) that the State Govt. has an exclusive right or privilege of manufacture and sale of country liquor and foreign liquor; (b) that the amount described as licence fee in clause (c) of section 41 is in its essence the rental or consideration for the grant of such right or privilege by the State Govern ment; 651 (c) that the Excise Commissioner as the head of the Excise Department of the State shall be deemed while determining or realising such fee	 to act for and on behalf of the State Government. " It is stated that in May	 1976 the State of U.P. filed an appeal against the decision of the Allahabad High Court in writ petition No. 8069/72; and that between 1976 and 1978	 relying on the judgment of the Allahabad High Court certain wholesale dealers in denatured spirit filed writ petitions in the High Court of Allahabad claiming refund of vend fee already paid by them. These writ petitions were heard and allowed by the learned Single Judge of the Allaha bad High Court. Against the judgment of the Single Judge	 special appeals to a Division Bench were preferred by the State of U.P. and all were allowed on 6th October	 1978	 relying upon sections 24A and 24B of the said Act. In 1976	 the State Government issued the U.P. Licence for the possession of Denatured Spirit and Special Denatured Spirit Rules	 1976 requiring a licence for possession of denatured spirit and specially denatured spirit for indus trial purposes. "Special Denatured Spirit" was defined as "Spirit rendered unfit for human consumption". Licences for possession of denatured spirit including Specially Denatured Spirit for industrial purposes were to be of 3 kinds	 ac cording to the parties. (1) Form F.L. 39 for use in industries in which alcohol is destroyed or converted chemically in the process into other product and the product does not contain alcohol	 such as Ether	 Styrene	 Butadiene	 Acetone	 Polythene etc. (2) Form F.L. 40 for use in industries in which alcohol is used only as a solvent or processing agent and the product does not contain alcohol	 which is generally recovered for re use	 such as Cellulose and its derivatives	 Pectin etc. (3) Form F.L. 41 for use in industries in which alcohol is used directly or alcohol is used as solvent or vehicle and ap pears in the final produce to some extent such as Lacquers	 Varnishes	 Polishes	 Adhesives and antifreezers etc. The Allahabad High Court in W.P. No. 8096 of 1972	 referred to hereinbefore	 held that the State did not have the legislative competence to impose a tax under entry 8 of list II of the Seventh Schedule to the Constitution follow ing the decision of Sheopat Rai & Ors. vs State of U.P. [1972] All L.J. 1000. The High Court held that the power of 652 regulation does not carry with it the power of taxation and thus vend fee could not be justified. The High Court also held that the levy could not be justified as a fee as there was no quid pro quo. It appears that in view of the judgment of the High Court	 a telegram was issued to the distilleries by the Excise Commissioner that vend fee should not be charged from the petitioner. Instead the State Government resorted to imposition of sales tax. It may be mentioned herein that this decision of the Allahabd High Court was set aside by this Court by a Bench of two judges in State of U.P vs Synthetics & Chemicals	 (supra). In view of the fact that review petition in respect of the same is pending	 it may be necessary to refer to the said decision. This Court held that the levy of vend fee is for parting with the exclusive right of the State with regard to intoxicating liquors and for conferring a right on the licensees to sell such liquors. A conspectus of the decisions of this Court	 according to the said decision	 establishes: (i) that there is no fundamental right of a citizen to carry on trade or to do business in liquor be cause under its police power	 the State can enforce public morality	 prohibit trade in noxious or dangerous goods; (ii) the State has power to enforce an absolute prohibition on manufacture or sale of intoxicating liquors pursuant to Article 47 of the Constitution; and (iii) the history of excise jaws in the country shows that the State has the exclusive right or privilege to manufacture or sell liquors. Reference was made to the decision of this Court in the State of Bombay & Anr. vs F.N. Balsara	 1195 1] SCR 682. This Court further held that the term "intoxicating liquor" is not confined to potable liquor alone but would include all liquors which contain alcohol. The term "liquor"	 ac cording to the said decision	 used in Abkari Acts not only covers alcoholic liquor which is generally used for beverage purposes and which produces intoxication but would also include liquids containing alcohols. It was further held that the power to regulate the notified industries is not exclusively within the jurisdiction of Parliament as entry 33 in the Concurrent List enables a law to be made regarding production	 supply and distribution of products of notified industries. The exclusive power of the State to provide for manufacture	 distribution	 sale and possession of intoxicat ing liquors is vested in the State. The power of the State Government to levy a fee for parting with its exclusive right regarding intoxicating liquors has been recognised as could be seen from the various State Acts regulating the manufacture	 sale	 etc. of intoxicating liquors. It was further held that the term "foreign liquor" cannot be given a restricted meaning because the word consumption cannot be confined to consumption of beverages only. When liquor is 653 put to any use such as manufacture of other articles. the liquor is all the same consumed. The State is empowered to declare what shall be deemed to be country liquor or foreign liquor. "Foreign liquor" is defined as meaning all recti fied	 perfumed	 medicated and denatured spirit wherever made. Therefore	 this Court in that case held that the plea that the Excise Commissioner had no right to accept payment in consideration for the grant of licence for the exclusive privilege for selling in wholesale or retail	 foreign liquor which includes denatured spirit cannot be accepted. It was further held that the definition of "alcohol" includes both ordinary as well as specially denatured spirit. The special ly denatured spirit for industrial purposes is different from denatured spirit only because of the difference in the quantity and quality of the denaturants. Specially denatured spirit and ordinary denatured spirit are classified accord ing to their use and denaturants used. Therefore	 the con tention that specially denatured spirit for industrial purposes is different from the ordinary denatured spirit has no force	 according to the said decision. Reference was made to the decisions of this Court in Har Shankar & Ors. etc. vs The Dy. Excise & Taxation Commissioner & Ors.	 ; In this connection	 it may be necessary to refer to the observations of this Court in Hat Shankar & Ors. 's case (supra)	 where Chandrachud	 J. (as the learned Chief Justice then was) stated: "In our opinion	 the true position governing dealings in intoxicants is as stated and reflected in the Constitution Bench decision of this Court in the State of Bombay & Anr. vs F.N. Balsara; 	 	 Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner	 Ajmer and Ors.	 	 State of Assam vs A.M. Kidwai	 Commis sioner of Hills Division and Appeals	 Shil long	 [1957] SCR 295	 Nagendra Nath Bora and Anr. vs The Commissioner of Hills Division and Appeals	 Assam and Ors. 	 ; 	 Amar Chandra Chakraborty vs Collector of Excise	 Govt. of Tripura & Ors.	 and State of Bombay vs R.M.D. Chamarbaugwala	 ; as interpreted in State of Orissa & Ors. vs Harinarayan Jaiswal and Ors.	 ; and Nashirwar etc. vs State of Madhya Pradesh and Ors. Civil Appeals Nos. 1711 1721 and 1723 of 1974 decided on November 27	 1974. There is no fundamental right to do trade or business in intoxicants. The State under its regulatory powers	 has the right to prohibit absolutely every form 654 of activity in relation to intoxicants its manufacture	 storage	 export	 import	 sale and possession." Though most of the cases dealt with the right of the State Government as regards auction of country liquor	 in Balsara 's case	 Nashirwar 's case and Har Shankar 's case	 this Court was concerned with the right of the State Govern ment over foreign liquor. After considering all the deci sions of five Constitutional Benches	 Chandrachud	 J. summed up the position at page 274 of the Report in Har Shankar 's case (supra) as follows: "These unanimous decisions of five Constitu tional Benches uniformly emphasised after a careful consideration of the problem involved that the State has the power to prohibit trades which are injurious to the health and welfare of the public is inherent in the nature of liquor business	 that no person has an absolute right to deal in liquor and that all forms of dealings in liquor have	 from their inherent nature	 been treated as a class by themselves by all civilised communities. " Review Petition has been moved by Synthetics & Chemicals Ltd. which was purchaser or user and not manufacturer or dealer. It is contended that the Synthetics & Chemicals Ltd. were never manufacturers of denatured spirit and they were and have been purchasers of denatured spirit. It is contend ed that this Court in Synthetics & Chemicals Ltd. 's case (supra) had proceeded on the basis that State 's privilege is with respect to manufacture or sale of foreign liquor or denatured spirit. It is contended that they were not liable to pay the vend fee. The judgment aforesaid had not dealt with that submission and	 therefore	 it was claimed that there was an error and that this judgment should be reviewed. It was contended that the fee charged is not a vend fee but fee in respect of licence for possession of denatured spirit. It was contended that the judgment had not held that the pur chasers are liable to pay vend fee. The State 's appeal should have been dismissed and the petitioner 's appeal should have been allowed	 it was pleaded in the review petition. There was an error	 it was contended. It may be at the outset made clear that in these mat ters	 we will dispose of the contention whether vend fee is leviable in respect of industrial alcohol. If it is so leviable	 who should actually pay or from 655 whom the same should be realised	 would not be the subject matter of this adjudication. Whether the manufacturer or the purchaser or the user should pay them	 must be decided in separate appropriate proceedings	 if necessary. In order to complete the narration of events	 however	 it may be mentioned that Ordinance No. 6 of 1973 was promul gated by the Government of U.P. purporting to amend the U.P. General Sales Tax Act	 1948 so as to authorise the State Govt. to impose sales tax on alcohol at the rate upto Rs.2 per litre. By the said notification	 the first schedule to the Act was amended and the new entry read as follows: "Spirits and spirituous liquors of all kinds including the rectified spirit	 methyl alcohol and absolute alcohol but excluding denatured spirit and country liquor. " Ordinance 9 of 1974 being the Uttar Pradesh Sales of Motor Spirit & Diesel Oil Taxation (Amendment) Ordinance 1974 was promulgated by the Government of U.P. By virtue of the amendment	 the definition of alcohol in section 2 was amended as follows: "(aaa) Alcohol means ethyl alcohol not being alcoholic liquor for human consumption and includes rectified spirit	 absolute alcohol. " Notification was issued thereafter by the Government of U.P. in exercise of power under section 3(1) of the U.P. Sales of Motor Spirit and Diesel Oil Taxation Act 1939. Several other notifications were issued. This Ordinance was struck down by the division bench and the Government was made liable to refund. Writ Petition was filed by Synthetics & Chemicals Ltd. Thereafter	 no appeal was filed by the State Government. The other facts are not relevant for the present controversy. There was an application challenging the purchase tax. The State of U.P. filed an appeal against the judgment and order dated 24th March	 1973 of the divi sion bench of the Allahabad High Court in Writ Petition No. 8069/72 striking down the vend fee notification. The appeal was numbered as Civil Appeal No. 1130(NCL)/76. After the sales tax levy was struck down the government proposed a purchase tax. Aggrieved by the aforesaid Act	 writ petition was filed	 and the hearing of the petition had been stayed by the order of this Court. Meanwhile	 certain wholesale dealers in denatured spirit filed writ petitions in the High Court of Judicature at Allahabad	 claiming refund of the vend fee paid by them. Against the judgment of the High 656 Court of Allahabad dated 6th October	 1978	 appeals were admitted being Civil Appeal Nos. 2191 98/78. All these have been disposed of by the bench of two learned Judges of this Court	 as mentioned hereinbefore. It appears that Kesar Sugar Works Ltd. filed writ petition challenging the validi ty both of licence fee and vend fee on the ground that the fees charged have all the characteristics of a duty of excise which is beyond the legislative competence of the State and that the alcohol industry is covered by the IDR Act. Writ Petition Nos. 4663 4664 of 1978 were also disposed of by the judgment of this Court in Synthetics & Chemicals Ltd. (supra). Notification was issued thereafter by the Government of U.P. in 1979 in exercise of powers under section 40	 sub section (1) of the U.P. Excise Act of 1910	 read with clause (d) of sub section (2) of the said section	 amending the U.P. Excise (Amendment) Rules 1979. By virtue of this amendment	 rule 17 was substituted and in the case of FL 39 licence	 vend fee	 was to be so charged that the amount of vend fee and purchase together did not exceed 25 paise per bulk litre. It is not necessary to set out in detail the exact provisions. Another notification was is sued. It was challenged in the High Court. It was kept pending. The other matter herein is writ petition No. 3 163 64/82 (All India Alcohol Based Industries Development Association vs State of Maharashtra) which challenges the amendment to section 49 of the Bombay Prohibition Act	 1949. It may be rele vant to refer to the said section as amended in 1981. The section is titled "Exclusive privilege of Government to import etc.	 intoxicants and fees levied include rent or consideration for grant of such privileges to persons con cerned. " In this connection	 it is significant to refer to the Statement of Objects for the amendment. The section is as follows: "49. Notwithstanding anything contained in this Act	 the State Government shall have the exclusive right or privilege of importing	 exporting	 transporting	 manufacturing	 bot tling	 selling	 buying	 possessing or using any intoxicant	 hemp or toddy	 and whenever under this Act or any licence	 permit	 pass	 thereunder any fees are levied and collected for any licence	 permit	 pass	 authorisation or other permission given to any person for any such purpose	 such fees shall be deemed to include the rent or consideration for the grant of such right or privilege to that person by or on behalf of the State Govern ment. " The power was contained in the Prohibition Act	 1949 which was 657 an Act to amend and consolidate the law relating to the promotion and enforcement of and carrying into effect the policy of prohibition and also the Abkari law in the State of Bombay. It may be mentioned that the Bombay PrOhibition Act	 1940 was brought into force on 25th May	 1949. Then there was the ' Bombay Rectified Spirit (Transport inBond) Rules	 1951 brought into force. On 23rd October	 1981 the amendment was made introducing section 49. The provision of the Andhra Pradesh Act was challenged by impugning the allotment of alcohol under the Andhra Pradesh Excise Act No. XVII of 1968. The Andhra Pradesh Act receive	 the assent of the President on 26th August	 1968. This was an Act to consolidate and amend the law relating to production	 manufacture	 possession	 transport	 purchase and sale of intoxicating liquors and drugs	 the levy of duties of excise and countervailing duties of alcoholic liquor for human consumption and opium	 Indian hemp and other narcotic drugs and narcotics and to provide for matters connected therewith in the State of Andhra Pradesh. Writ Petition No. 1892/73 Hindustan Polymers Ltd. vs State of Andhra Pradesh challenges the Andhra Pradesh Dis tillery Rules	 1970 and Andhra Pradesh Rectified Spirit Rules	 1971. The Tamil Nadu Prohibition Act is also chal lenged in C.A. Nos. 466 67/80 as well as writ petition No. 4501/78. In all these the point is similar and we have heard learned counsel and respective Advocate Generals. Appearing for the petitioners S/Shri Nariman	 Diwan	 Baig and Banerjee and others have made their submissions. We have also heard Mr. Trivedi	 learned Additional Advocate General of U.P.	 Mr. Yogeshwar Prasad	 Dr. Singhvi	 Mr. Sanghi	 learned Advocate Generals of Andhra Pradesh and other States. We had also the advantage of the submissions made by learned Attor ney General on behalf of Union of India. It was submitted in the statement on behalf of Union of India that the legislative competence of the State enactment in the various States will have to be determined by refer ence to following entries in list I of the 7th Schedule entries 7	 52	 59	 84	 96	 97 & entries in list II	 being 8	 24	 26	 27	 51 52	 54	 56	 62 and entries in list III 19 & 33. It was urged that there is a dichotomy between entry 84 list I and entry 51 of list II but this would not control the interpretation of other entries. There is no such dichotomy in entry 8. It has also been stated on behalf of the Union of India that while opium was in entry 19 of list III and entry 59 of list I of the 7th Schedule	 it means that Parliament will have power with regard to opium. But the power to levy excise duty on 658 opium is given to the State	 similarly medicinal and toilet preparations which contained alcohol and are fit for human consumption	 the power to levy excise duty is given to Parliament and not to the State legislature. Entry 8 of list Il similarly is not subject to entry 52 of list I for the reason that the aspect with regard to .subject matters of these two entries are different	 it was submitted. The aspect in list I entry 52 is industry while that in entry 8 of list II is intoxicating liquor. Entry 8 is	 therefore	 to be read on its own terms. The power to levy taxes is to be read from the entry relating to taxes and not from the general entry. Exception in entry 50 of list II where tax on mineral rights is subject to any limitation imposed by Parliament relating to mineral development	 and this power of Parliament is in general entry i.e. entry 54 of list I. According to Union of India	 none of the taxing entries in list II is controlled by entry 52 of list I. Union of India stated that 'industry ' is a topic of legislation. Certain entries are left to Parliament and certain others are left to State Legislatures. Identifying of entries is by refer ence to a declaration under entry 7 of list I and entry 52 of list I. The aspect of legislation with regard to subject matter of entries will be topic 'industry '. On the other hand	 the subject matter of legislation under entry 8 of list II will be topic 'intoxicating liquors '. Therefore	 there is no conflict according to the Union of India. The only question which has to be determined is whether intoxicating liquor in entry 8 in list II is confined to potable liquor or includes all liquors. According to the Union of India	 in view of the difference of language in entry 8 and entry 51 of list II	 it is reasonably possible to take the view that intoxicating liquors include both liquors. It was submitted by the Union of India that there are no grounds for overruling Balsara 's case (supra) decided in 1951 after 38 years particularly when it has been fol lowed and applied in later decisions. In that case it upheld the power of the States to completely prohibit	 manufacture	 sell etc. of potable liquor	 it struck down the provisions of the Bombay Act in so far as it imposed restrictions on medicinal and toilet preparations as violative of article 19(1)(f) of the Constitution. It is stated that this deci sion had proceeded on the basis that there could not be a complete prohibition in regard to medicinal preparations containing alcohol. Hence	 it was submitted that so far as alcohol not fit for human consumption is concerned	 it cannot be held that trade in such an article cannot be considered to be a noxious trade. It will be a noxious trade only where it is produced or manufactured for purposes of human consumption. It was submitted that in Indian Mica & Micanite Industries Ltd. vs State of Bihar & Ors.	 this Court was dealing with denatured spirit and had held that the Bihar 659 Orissa Excise Act	 insofar as it related to denatured spir it	 was regulating trade and business in public interest; and that entry 8 of list II comprehends all liquors contain ing alcohol. The State 's privilege to completely prohibit or farm out liquor containing alcohol for human consumption does not comprehend	 according to the Union of India	 a similar right of a State with regard to other intoxicating liquids containing alcohol. According to the Union of India	 to so prohibit or collect fee for farming out	 would be unconstitutional under article 19(1)(g) of the Constitution on the same principle on which the provisions of the Bombay Act were struck down in Balsara 's case. It was further stated on behalf of Union of India that Parliament has legislative competence with regard to power alcohol providing for levy of central excise duty. See the Central Excises & Salt Act	 1944	 Schedule I	 item 6; Motor Spirit. Similarly	 Parlia ment has legislated the Central Excise Tariff Act	 1985 tariff item No. 22.04. The said item reads: "Ethyl alcohol	 of any grade (including such alcohol when denatured or otherwise treated)	 which either by itself or in admixture with any other substance	 is suitable for being used as fuel for spark ignition engines. " It was stated that under article 277 of the Constitution	 any taxes	 duties	 cesses or fees which immediately before the commencement of the Constitution	 were being lawfully levied by the Govt. of any State or municipality or other local authority or body for the purpose of the State	 munic ipality	 district or other local area may	 notwithstanding that these taxes	 duties	 casses or fees are mentioned in the Union list	 continue to be levied and to be applied for the same purpose until provisions to the contrary are made by Parliament by law. According to the Union of India	 there was a similar provision in the Govt. of India Act	 1935 (See section 143(2)). Reference was made to the decision in Town Municipal Committee	 Amraoti vs Ramachandra Vasudeo Chimote & Anr.	 ; Learned Attorney General drew our attention to the fact that Parliament has exclusive power to levy duties of excise on goods manufactured or produced in India including medici nal and toilet preparations containing alcohol for opium or Indian hemp or other narcotic drugs. But Parliament has no legislative competence to levy excise duty on (a) alcoholic liquor for human consumption; (b) opium	 Indian hemp and other narcotic drugs and narcotics (entry 84 of list II). The State Legislature has legislative competence to levy excise duty on the following goods manufactured or produced in the State 660 and countervailing duties on similar goods manufactured in India (a) alcoholic liquor for human consumption; (b) opium	 Indian hemp and narcotics. But learned Attorney General emphasised that State Legislature has no power to levy excise duty on medicinal and toilet preparations which contain alcohol or opium or Indian hemp and other narcotic drugs in such medicinal and toilet preparations. Under entry 51 of list II State Legislature	 it was submitted by him	 had no power to levy excise duty on industrial alcohol as the latter is not fit for human consumption. State Legisla ture has power to levy taxes on entry of goods in local areas for consumption	 use or sale therein. This will in clude taxes on entry of all alcohol. See entry 52 of list II. The State Legislature has further power to levy taxes on goods carried by road or by inland water. The goods therein will include both alcohol fit for human consumption as well as alcohol not fit for human consumption. See entry 56 of list II of the 7th Schedule. State legislature will have to levy taxes on possession of alcoholic liquors fit for human consumption because these are luxuries. But alcohol not fit for human consumption are not luxuries and as such the State Legislatures	 according to learned Attorney General	 will have no power to levy taxes on such alcohol. Parliament will have power to levy on all alcohol taxes not covered by any other entries in lists I and II. See list I entry 97. The State Legislature will have power to levy fee in respect of all alcohol. See entry 66 read with entry 6 of list II. State Legislature has power to legislate on the topic 'intoxicating liquors ' under entry 8 of list 1I. It being a general entry	 will not comprehend a power of taxa tion but will comprehend a power to levy fee read with entry 66. According to the learned Attorney General	 with regard to industries	 the control of which by the Union is declared by Parliament by law to be expedient in public interest	 Parliament will have exclusive legislative competence. See entry 52 of list I. This power includes the power to declare by Parliament that control by the Union of industries relat ing to all types of alcohol is expedient in public interest. Once Parliament makes such a declaration	 the State Legisla ture will be denuded of its power under list II	 entry 24 on the aspect 'industry ' with respect to all subject matters. The power to collect the lump sum amount by way of auction by any right or otherwise conferring the right to sell alcohol is neither a power to levy tax nor a power to levy fee but it will fail within the legislative competence of the State Legislature under entry 8. But this power will extend only	 according to learned Attorney General	 to alcohol for human consumption. He said that there can be complete prohibition with regard to manufacture and sale of alcohol fit for human consumption because there is no funda mental 661 right to carry on business in alcohol even for human con sumption. And that this power to completely prohibit exists in the State as recognised by article 47 of the Constitution. The State can	 therefore	 collect an amount called vend fee	 shop rent etc. for conferring on a citizen the right to manufacture and sell alcoholic liquors if it is for human consumption. This power cannot extend to industrial alcohol or alcohol contained in the medicinal or toilet prepara tions. According to the learned Attorney General	 there is no power to levy such rent or fee with regard to industrial alcohol because (a) industrial alcohol and alcoholic liquor for medicinal and toilet preparations cannot be completely prohibited; (b) as there is a right to carry on business in industrial alcohol any prohibition on manufacture of indus trial alcohol would be violative of article 19(1)(g) of the Constitution. Accordingly	 in. absence of a power to com pletely prohibit there will be no power to collect sums for conferring rights to manufacture or sell except the levy of taxes and fee. On behalf of the State of U.P. both the learned Addi tional 'Advocate General Mr. Trivedi as well as Mr. Yogesh war Prasad made exhaustive submissions and submitted that in order to appreciate the controversy it is necessary to realise that the real problem arises from the fact that the denaturants can be converted into renaturants in the illicit process. According to the counsel appearing in support of the levy	 one bottle of spirit of Rs. 1.50 on renaturing yields a profit of Rs.25 to 30 at least. In this connection	 reference was made to the report of Baweja Committee. It was further emphasised that the victims are the weaker section and the sufferers are the "wailing workers	 weeping wives and crying children '?	 not only when the earning member dies	 but in their lifetime too	 the alcohol consumes	 snatches their two morsels	 their health	 nutrition and standard of living. Reference was made to the observations of this Court in P.N. Kaushal etc. vs Union of India; 	 where Mr. Justice Krishna 1yet referred to the utterances of George Bernard Shaw that drinking is the chloroform that enables the poor to endure the painful operation of living. It was submitted on behalf of the State that the vend fee on denatured alcohol or Denatured Spirit or what is known as industrial alcohol has been challenged on mainly two grounds	 namely	 (a) States lack legislative competence and (b) after the enactment of the IDR Act	 1961 the States power is completely lost. The contention of the State was that there is no dichotomy between Ethyl Alcohol to be used for beverages and to be used for industrial purposes. In any case	 the levy is on manufacture	 according to Mr. Yogeshwar Prasad and Mr. 662 Trivedi	 learned Additional Advocate General of U.P.	 of the ethyl alcohol; use is different	 and the collection at a later stage. The levy was stipulated jointly or severally both under entries 8 of list II	 entry 51 of list II	 entry 33 of list III and what is described as police powers regu latory and other incidental charges	 according to them. It was submitted that levy was justified being a regulatory power under Article 19(6)	 19(6)(ii). It was further urged that State has a monopoly in alcohol trade; and that article 31C grants immunity to the challenge under Articles 13	 14 & 19 of the Constitution. It was submitted that quid pro quo was not necessary and even if it was necessary	 the require ments were met. Under article 298 trading powers of the Stare must be recognised	 it was submitted	 coupled with century old monopoly of the State in alcohol. It was submitted that vend fee is a pre Constitution levy. The U.P. Excise Act	 1910 and the vend fee levied thereunder were pre Constitution Act/levy by a competent authority and will not cease to continue after the enforce ment of the Constitution	 merely because the authority lost its legislative competence over the subject matter. It was submitted that the levy was a pre Constitution levy	 so saved under article 277 of the Constitution. According to the State of U.P.	 the law continued under article 277 and is not a law either under article 246 nor under article 254 of the Consti tution	 so outside the purview of the Central Act. At the outset	 it may be noted that in view of the subsequent amendment and the additions to the levies it cannot	 in our opinion	 be with legitimate force contended that the levies which are sought to be impugned in the present litigation are pre Constitutional levies. So	 these submissions on behalf of the State do not require any seri ous consideration. It was further submitted that the Union of India has no power to effect the levy as levy was pre Constitutional law and further as the expression 'alcoholic liquor for human consumption ' in list I and the residuary entry 97 of list I of the 7th Schedule	 will not operate as against its own legislative intent. It was further urged that the IDR Act	 1951 does not preclude or eclipse the legislative powers of the State. This Act on its own terms	 does not apply to the levy; these operate on different tracks	 according to the counsel for the State. It was further urged that review was not maintainable. Reference was made to the distillation process and detailed submissions were made before us ex plaining the same. 663 It was submitted that sugarcane is raw material of sugar and manufacture of sugar molasses is the waste product. Molasses when mixed with yeast fermentation starts and alcohol is produced. 10 12% strength of alcohol is toxic to yeast	 hence	 fermentation stops. According to the State of U.P.	 so fermented alcohol has maximum 12% strength of alcohol	 the products being beer	 cider	 champangine	 and liquor etc. For higher strength (above 12%) distillation of fermented alcohol is necessary. By distillation process firstly 96% strength of alcohol is produced. It is known as ethyl alcohol or rectified alcohol. Counsel for the State of U.P. submitted that this ethyl alcohol is potable and used both for beverage and industrial purposes; and that it is at this stage of manufacture that the charge of levy is made. It has to be stated in view of the language used in the specific provisions the levy is not on the manufacture of alcohol as such	 therefore	 in our opinion	 these levies cannot in essence be sustained as duty of excise. It was contended on behalf of the State that rectified alcohol is diverted to different warehouses for being used as beverages (country liquor	 foreign liquor) and industrial liquor. it was submitted that this potable alcohol can be used for industrial purposes	 but for public welfare	 a lower levy is charged and to prevent its misuse denaturants are added and for denaturing in public interest	 the State has to incur expenses	 cost of denaturants	 process and regulation etc. However	 this submission	 by itself	 does not help the controversy herein in essence. No attempt had been made on behalf of the State to indicate that the levy has any element of quid pro quo or certain element which can possibly have some correlation with the expenses incurred in that connection. It was submitted that ethyl alcohol is diluted to the requisite concentration for the concerned beverage and subjected to other processes like reduction	 blending and flavouring etc. and ethyl alcohol is further distilled for higher concentration 99.4% power alcohol and 100% absolute alcohol. It was submitted that no alcohol as such is fit for human consumption. It was contended that the effect is ultimate consumption	 whether delayed or instanta neous. The effect of alcohol is fatal	 it was stated	 may be spread out on long span or instant depending upon the concentration	 dose and the person drinking it. Sleeping pills are illustrative	 overdose puts the man to eternal sleep. It is in this background that we were reminded that the State being a welfare State	 would be guilty in levying a lower levy on the alcohol. It is the duty of the State for being a welfare State to denature by incurring extra cost and effort. The industry does not need the denaturing. 664 Our attention was drawn to various observations of Krishna Iyer	 J. in P.N. Kaushal 's case (supra). There is indeed great deal of attempt made by some for wrong utilisa tion of alcohol and thereby endangering the community and people at large but the need to protect the community from the evil effects of drinking does not by itself empower the State to levy duty or impost of fee not warranted by the Constitution nor sanctioned by the specific provisions of the Constitution and the laws. It was submitted that indus trial alcohol and denatured spirit are intoxicating liquor and or alcoholic liquor for human consumption. These submis sions were supported by reference to the Dictionary meaning	 Organic Chemistry	 the definition in U.P. Excise Act	 1910 and various case laws. It is used as being consumed by humanity. The industry needs potable alcohol and the dena turants are not required by it rather some of them are avoided	 according to the State of U.P. In particular indus try they hamper the manufacture of the final product. Dena tured spirit or industrial alcohol is basically potable alcohol; it is denatured in public interest to prevent its use as potable alcohol	 according to the State of U.P. This alcohol cannot be treated differently from other alcohols only because some denaturants are added in public interest and welfare. It was submitted that the State has legislative competence to impose the levy since the impugned levy is both on its language and in pith and substance legislation failing under	 according to the State of U.P.	 entry 8 list II intoxicating liquor	 entry 51	 list II alcoholic liquor for human consumption. Counsel for the State emphasised the significant omission of the expression "fit for". What is required is intoxicating liquor and/or alcoholic liquor for human consumption	 according to counsel for the State of U.P. Entry 33 list Ill 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 public interest	 and imported goods of the same kind as such products. Under its police powers the State has to regulate health	 morality	 welfare of society and incidental pauper ism and crime it was submitted. It was further submitted by the State that the State has exclusive right to deal in liquor. This power according to the counsel for the State	 is reserved by and/or derived under articles 19(6) and 19(6)(ii) of the Constitution. For parting with that right a charge is levied. It was empha sised that in a series of decisions some of which have been referred to hereinbefore	 it has been ruled that the charge is neither a fee nor a tax and termed it as privilege. The levy is on the manufacture	 possession of alcohol. The rate of levy differs on its use	 accord 665 ing to the State of U.P. The impost is also stipulated under the trading powers of the State under article 298 and it was contended that the petitioners and/or appellants were bound by the terms of their licence. It was submitted that the Parliament has no power to legislate on industrial alcohol	 since industrial alcohol was also alcoholic liquor for human consumption. Entry 84 in list I expressly excludes alcoholic liquor for human consumption; and due to express exclusion of alcoholic liquor for human consumption from list I	 the residuary entry 97 in list I will not operate as against its own legislative interest. These submissions have been made on the assumption that industrial liquor or ethyl alcohol is for human consumption. It is important to emphasise that the expression of a Constitution must be understood in its common and normal sense. Industrial alcohol as it is	 is incapable of being consumed by a normal human being. The expression 'consumption ' must also be understood in the sense of direct physical intake by human beings in this context. It is true that utilisation in some form or the other is consumption for the benefit of human beings if industrial alcohol is utilised for production of rubber	 tyres used. The utilisation of those tyres in the vehicle of man cannot in the context in which the expression has been used in the Constitution	 be understood to mean that the alcohol has been for human consumption. We have no doubt that the framers of the Constitution when they used the expression 'alcoholic liquor for human consumption ' they meant at that time and still the expres sion means that liquor which as it is consumable in the sense capable of being taken by human beings as such as beverage of drinks. Hence	 the expression under entry 84	 list I must be understood in that light. We were taken through various dictionary and other meanings and also invited to the process of manufacture of alcohol in order to induce us to accept the position that Denatured Spirit can also be by appropriate cultivation or application or admix ture with water or with others	 be transformed into 'alco holic liquor for human consumption ' and as such transforma tion would not entail any process of manufacture as such. There will not be any organic or fundamental change in this transformation	 we were told. We are	 however	 unable to enter into this examination. Constitutional provisions specially dealing with the delimitation of powers in a federal polity must be understood in a broad commonsense point of view as understood by common people for whom the Constitution is made. In terminology	 as understood by the framers of the Constitution	 and also as viewed at the relevant time of its interpretation	 it is not possible to proceed otherwise	 Alcoholic or intoxicating liquors must be understood as these are	 not what these are capable of or able 666 to become. It is also not possible to accept the submission that vend fee in U.P. is a pre Constitution imposition and would not be subject to article 245 of the Constitution. The present extent of imposition of vend fee is not a pre Con stitution imposition	 as we noticed from the change of rate from time to time. On behalf of the State of Maharashtra Mr. Dholakia submitted that the first issue is whether entry 8 in list II of the 7th Schedule of the Constitution	 covers alcohol unfit for human consumption. The second issue	 according to him	 is	 whether assuming that the entry does not include alcohol unfit for human consumption	 its scope in that respect is curtailed because of item 26 of the Schedule to the IDR Act	 1951. The third issue	 according to him	 is	 whether having regard to entry 51 in list II	 the State can (a) impose regulations by creating economic disincentives for consumption of drinkable alcohol and (b) prevention of misuse of non drinkable alcohol for consumption. On behalf of the State both Mr. Trivedi and Mr. Yogesh war Prasad contended that regulatory power of the State was there and in order to regulate it was possible to impose certain disincentives in the form of fees or levies. Imposi tion of these imposts as part of regulatory process is permissible	 it was submitted. Our attention was drawn to the various decisions where by virtue of "Police Power" in respect of alcohol the State has imposed such impositions. Though one would not be justified in adverting to any police power	 it is possible to conceive sovereign power and on that sovereign power to have the power of regulation to impose such conditions so as to ensure that the regulations are obeyed and complied with. We would not like	 however	 to embark upon any theory of police power because the Indian Constitution does not recognise police power as such. But we must recognise the exercise of sovereign power which gives the State sufficient authority to enact any law subject to the limitations of the Constitution to discharge its func tions. Hence	 the Indian Constitution as a sovereign State has power to legislate on all branches except to the limita tion as to the division of powers between the Centre and the States and also subject to the fundamental rights guaranteed under the Constitution. The Indian State	 between the Centre and the States	 has sovereign power. The sovereign power is plenary and inherent in every sovereign State to do all things which promote the health	 peace	 morals	 education and good order of the people. Sovereignty is difficult to define. This power of sovereignty is	 however	 subject to Constitutional limitations. This power	 according to some constitutional authorities	 is to the public what necessity is to the individual. Right to tax or levy 667 imposts must be in accordance with the provisions of the Constitution. It was contended that the question	 necessarily arises as to whether these regulations under the Bombay Prohibition Act	 1949 are intended as measures of revenue or as measures to advance the cause of prohibition. Mr Dholakia invited us to the phrase "intoxicating liquor" which has been the subject matter of interpretation by the Federal Court	 this Court and the United States Supreme Court. It has been held that the expression is of widest import and must be given liberal interpretation. According to him	 this Court in Balsara 's case (supra) held that even toilet articles con taining alcohol as such would be intoxicating liquors. Mr. Dholakia suggests that United States Supreme Court has expressly held that "Denatured Spirit" is intoxicating liquor because of necessity to prevent its misuse. It was further contended that the I.D.R. Act	 was made by the Parliament and it is traceable to entry 52	 list I. This entry enables the Union Legislature to legislate in respect or ' an industry the control of which is declared by Parlia ment to be expedient in public interest. Entry 52	 according to him	 speaks of control of an industry in its establish ment. Ordinarily	 States have the authority to allow or not to allow any industry to be established under entry 24 of list I1. This power is not taken away by the I.D.R. Act. According to Mr. Dholakia	 if industry is allowed to be established by law within the policy of the State then its control thereafter would vest with the State. Ordinarily	 a citizen has fundamental right to establish an industry and only reasonable restrictions can be placed on these. Howev er	 the case of intoxicating liquor is different. By virtue of article 47 of the Constitution the State may impose absolute prohibition in respect of intoxicating liquor. In such a case	 the State is authorised to deny a citizen the right to establish an industry in intoxicating liquor. No person can claim that he is entitled to establish an industry for manufacturing whisky in any particular State. The true test	 according to Mr. Dholakia	 is to ascertain if there was no I.D.R. Act to which entry of the State List	 various regula tions in respect of "alcohol industry" would be traced. It was submitted that the regulations would have to be traced to entry 24 of list 11 and not to entry 8. It was submitted that in case of alcohol ordinarily used for human consump tion	 the extent of regulation may go to the extent of complete prohibition. It may go to a lesser extent of par tial prohibition. It may assume a variety of forms including one of imposing economic disincentives. If the price of drinkable alcohol becomes higher and higher	 the person given to drinking might think it better to give it up	 according to Mr. Dholakia. The price fixation is a valid method in regulation of consumption	 and if the above analy sis is fully 668 valid for drinkable alcohol	 it is equally valid for the non drinkable alcohol for the following reasons	 according to Mr. Dholakia: the major difference in non drinkable alcohol and drinkable one is that the former is often the legitimate activity while in the latter no such claim can be made. The distinction is important for the purpose of deter mining the extent of regulations but it is of no assistance for deciding the nature of the regulation. It is true	 he says	 that a State may not be entitled to prohibit the business of non drinkable alcohol but the State can impose regulation by which it can make nondrinkable alcohol more expensive to ensure that it is not available cheaply to a would be bootlegger. Mr. Dholakia invites us to hold that Denatured Spirit is made by addition of malodorous or nox ious substance to alcohol in order to make it unfit for human consumption. Denaturing is not done for making such alcohol fit for machine; it is done for the purpose of ensuring that such alcohol is avoided by would be drinkers. Even so	 lacking the easy availability of drinkable alcohol	 those given to drinking would make an attempt to drink denatured spirit after distillation. Such process of distil lation is what the bootleggers undertake. The process is a simple one	 according to Mr. Dholakia. We need not detain ourselves in examining the process as suggested by him. He insisted that the dividing line between relative importance of prohibition and industry should be left to each individual State because the conditions in all States are not identical. He suggested that Gujarat attaches great importance to the cause of prohibition. There are historical and social factors responsible for this policy. According to Mr. Dholakia	 the Govt. of that State is prepared to sacri fice revenue running into hundreds of crores of rupees but the same may not be true of a State like Punjab. According to him	 the historical and social conditions there are quite different. The power of the State Govt. with regard to potable liquor was sustained in the dissenting judgment of Justice Hidayatullah in the case of M/s Guruswamy & Co. etc. vs State of Mysore & Ors.	 1t was	 howev er	 suggested that levies in the instant case are not duties of excise as understood in the said decision. For these reasons	 Mr. Dholakia submitted that the Bombay Prohibition Act cannot be challenged. According to him	 the relevant section of the said Act and the Denatured Spirit Rules	 1959 have to impose and advance the cause of prohibition while at the same time assuring a reasonable availability of Dena tured Spirit and Rectified Spirit at reasonable prices. Learned Advocate General of the State of Andhra Pradesh has 669 also submitted in support of the imposition made under the A.P. Excise Act. He has referred us to the relevant defini tions and sections contending that the Act falls within the legislative competence of the Andhra Pradesh State Legisla ture by virtue of entries 8 and 51 of list II and entry 33 of list III of the 7th Schedule. He contended that the levy of excise duty falls within entry 51 of list II of the 7th Schedule to the Constitution inasmuch as the Andhra Pradesh Act received the assent of the President and is a later enactment than the I.D.R. Act. The provisions of the Andhra Pradesh Act	 according to him	 will prevail over any earlier Central Law under article 254 of the Constitution. The said Central legislation is enacted under entry 52 of list I. Learned Advocate General also insisted that there is no fundamental right in the business of liquor; and that Recti fied Spirit is nothing but alcohol which can be diluted and rendered fit for human consumption by additions of certain substances. It can also be utilised for industrial purposes as raw material for manufacturing other products. This multifarious user does not bring about any change in the essential character of alcohol after distillation. In re spect of these legislations	 learned Advocate General sub mitted that even if such an assumption were to be regarded as conceivable	 State legislation has the predominant effect prevailing over the Central Legislature in respect of the State of A.P. in view of the assent by the President and the enactment being later in point of time in accordance with article 254 of the Constitution of India. It was submitted that the dichotomy attempted to be drawn in entry 84 of list I of the 7th Schedule to the Constitution	 on the basis of the development of the concept of industrial alcohol and the inapplicability of the concept of potable liquor to the industry of alcohol is not valid. There is no question of fundamental right to trade in dan gerous or hazardous alcohol. It was submitted that it is consistent with wider interpretation of alcoholic liquor based on pre existing legislative history. It was further submitted that the test of potability of liquor is in no way rendered invalid in relation to industrial alcohol as it still permits of conversion to potability by addition of flavours and dilution. When two interpretations are possi ble	 it was submitted that the choice must fall on that interpretation which validates existing State legislations designed to raise revenues and rejection of the other inter pretation which is destructive of the scheme of distribution of powers. According to him	 the words 'alcoholic liquor ' in lists I & II of the 7th Schedule to the Constitution must be interpreted so as to mean and take within its sweep alcohol as first obtained in the process of or as a product of fermentation industry. At this stage	 it is capable of 670 being rendered potable. The fact that it may be rendered unfit for human consumption	 does not render the substance any less liable for taxation. Learned Advocates General for the States of Gujarat and Kerala have also made their submissions	 and referred to several decisions and the concept of police power	 and contended that imposition of a fee would be the most effec tive method of regulating intoxicating liquor other than alcohol. According to the Advocate General of Kerala	 that would be justified as the reasonable measure in regard to intoxicating liquor. According to him	 it has been accepted by courts all along that the 'police power ' of the State enables regulations to be made regarding manufacture	 trans port	 possession and sale of intoxicating liquor. Such police power could be exercised as to impose reasonable restrictions as to effectuate the power. He referred to the observations of this Court in Cooverjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner	 Ajmer & Ors.	 ; which quoted the passage from Crowley vs Christensen	 [1890] 34 Lawyers ' Edn. 620. Reference was also made to Hari Shankar 's case (supra) where this Court quoted Vol. 38 of the American Jurisprudence where it was stated that the higher the fee is imposed for a licence	 better is the regulation. Reliance was also placed on P.N. Kaushal 's case (supra). It was contended that it has been accepted by this Court that the police power is exercisable for regulation of an activity of a legislature within the permissible field or impost as regulatory measure. It may be valid though it may neither be fee nor a tax in the limited sense of the term. See the observations of this Court in Southern Pharmaceuticals & Chemicals	 Trichur & Ors. etc. vs State of Kerala & Ors. etc. ; 	 at 537. Re garding regulatory measures in connection with medicinal preparations containing alcohol it was observed by this Court that the impugned provisions had to be enacted to ensure that the Rectified Spirit is not misused under the pretext of being used for toilet and medicinal preparations containing alcohol. Such a regulation is a necessary concom itant of the police power of the State to regulate such trade or business which is inherently dangerous to public health. The American doctrine of police power is not perhaps applicable as such in India	 but powers of the sovereignty to regulate as part of the power of the competent legisla ture to effectuate its aim are there. It is true that in the State of West Bengal vs Subodh Gopal Bose & Ors.	 [1954] V SCR 587 at 601 604 and Kameshwar Prasad & Ors. v The State of Bihar & Anr. 	 ; the concept of 671 poliCe power was accepted as such	 but this doctrine was not accepted in India as an independent power but was recognised as part of the power of the State to legislate with respect to the matters enumerated in the State and Concurrent Lists	 subject to Constitutional limitations. It was stated that the American jurisprudence of police power as distinguished from specific legislative power is not recognised in our Constitution and is	 therefore	 contrary to the scheme of the Constitution. In interpreting the provisions of our Constitution	 we should go by the plain words used by the Constitution makers and the importing of expression like 'police power '	 which is a term of variable and indefinite connotation	 can only make the task of interpretation more difficult. It was contended that in enacting a law with respect to intoxicating liquor as part of the legislative power measures of social control and regulation of private rights are permissible and as such may even amount to prohi bition. We are of the opinion that we need not detain ourselves on the question whether the States have police power or not. We must accept the position that the States have the power to regulate the use of alcohol and that power must include power to make provisions to prevent and/or check industrial alcohol being used as intoxicating or drinkable alcohol. The question is whether in the garb of regulations a legislation which is in pith and substance	 as we look upon the instant legislation	 fee or levy which has no connection with the cost or expenses administering the regulation	 can be im posed purely as regulatory measure. Judged by the pith and substance of the impugned legislation	 we are definitely of the opinion that these levies cannot be treated as part of regulatory measures. In this view of the matter we do not detain ourselves with examining the numerous American deci sions to which our attention was drawn by learned counsel very elaborately and thoroughly. We recognise power of the State to regulate though perhaps not as emanation of police power	 but as an expres sion of the sovereign power of the State. But that power has its limitations. We have noted the submissions made to this effect by the learned Advocates General of different States	 including the State of Gujarat. Some of the interveners have also made the submissions. We have considered the submis sions made by M/s. Kantilal & Co. as interveners in respect of the Constitutional validity of the Bombay Prohibition Act as amended by the Bombay Prohibition (Gujarat Amendment) Act	 1978. We have also the advantage of the submissions made on behalf of Advocate General of Madhya Pradesh by Mr. R.B. Datar. He submit 672 ted that the substance of the case put forward by the peti tioners and/or appellants	 is that the vend fee in respect of industrial alcohol is not a fee for any services ren dered	 it is a compulsory exaction of money. The answer to the question posed lies not in the labels used	 according to Mr. Datar for describing the commodity in question. It lies in the examination of the chemical reality of the substance. He says that no process of interpretation can alter the law of chemistry or the chemical structure of the substance described in common parlance as industrial alcohol or pota ble alcohol	 or alcohol for human consumption. He referred us to Organic Chemistry and other books but	 as mentioned before	 the meanings must be found but in the conditions as these are. On behalf of State of U.P. Mr. Trivedi	 learned Addi tional Advocate General further submitted that entry 52 of list I is an exceptional entry. It not only prescribes the field of legislation but also enables and empowers the Parliament to make laws to the exclusion of the State. According to him	 being exclusionary in nature unlike en tries merely delineating fields of legislation	 entry 52 has to be strictly and	 therefore	 narrowly construed. The other question that has to be judged	 according to him	 is that whenever the Constitution intended the Parliament to assume legislative competence in respect of the entire field	 a declaration of an unqualified nature is provided for	 unlike a qualified provision like entry 52 of list I. The words 'control ' and 'regulation ' are at times	 held to be inter changeable or used synonymously	 their use in the various entries either singly or jointly	 indicates that they are sought to convey a different sense. The word 'control ' has in the context	 a narrower meaning	 excluding details of regulatory nature by the State. According to him	 comparing entries 7	 23	 24	 27	 62	 64 & 67 of list I with entry 52	 would demonstrate that under entry 52 it is not the entire field which is sought to be covered but only the control of industries; and that the absence of inclusion of qualifying	 words like 'the control of which ' cannot be brushed aside. By referring to the several decisions	 he contended that in view of the declaration made in section 2 of the I.D.R. Act and the provisions made therein the entire field was not occu pied and the vend fee or other impost by the State Legisla tures were not infringing in the field treaded by the Cen tral Legislature. Before we deal with the contentions of the petitioners/appellants	 it is necessary to reiterate the principles by which these questions will have to be judged. It is well to remember that the meaning of the expressions used 673 in the Constitution must be found from the language used. We should interpret the words of the Constitution on the same principle of interpretation as one applies to an ordinary law but these very principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation. A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be. It is also well settled that a Constitution must not be construed in any narrow or pedan tic sense and that construction which is most beneficial to the widest possible amplitude of its power	 must be adopted. An exclusionary clause in any of the entries should be strictly and	 therefore	 narrowly construed. No entry should	 however	 be so read as not to rob it of entire content. A broad and liberal spirit should	 therefore	 inspire those whose duty it is to interpret the Constitu tion	 and the courts are not free to stretch or to pervert the language of an enactment in the interest of any legal or constitutional theory. Constitutional adjudication is not strengthened by such an attempt but it must seek to declare the law but it must not try to give meaning on the theory of what the law should be	 but it must so look upon a Constitu tion that it is a living and organic thing and must adapt itself to the changing situations and pattern in which it has to be interpreted. It has also to be borne in mind that where division of powers and jurisdiction in a federal Constitution is the scheme	 it is desirable to read the Constitution in harmonious way. It is also necessary that in deciding whether any particular enactment is within the purview of one Legislature or the other	 it is the pith and substance of the legislation in question that has to be looked into. It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation. The power to legislate is given by article 246 and other Articles of the Constitution. The three lists of the 7th Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over which the appropriate legislatures can oper ate. It is well settled that widest amplitude should be given to the language of the entries in three lists but some of these entries in different fists or in the same list may override and sometimes may appear to be in direct conflict with each other	 then and then only comes the duty of the court to find the true intent and purpose and to examine the particular Legislation in question. Each general word would be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. It has to be interpreted as the Constitution must be interpreted as an organic document in the light of the experience 674 gathered. In the Constitutional scheme of division of powers under the legislative lists	 there are separate entries pertaining to taxation and other laws. The aforesaid princi ples are fairly well settled by various decisions of this Court and other courts. Some of these decisions have been referred to in the decision of this Court in civil appeal No. 62(N)/ 70 The India Cement Ltd. etc. vs The State of Tamil Nadu etc. 	 The Balsara 's case (supra) was in the context of the business of potable alcohol. Problems arose with regard to auctions	 vends	 licences and the business of manufacturing	 selling	 etc. of potable alcohol. Until the case of Synthet ics & Chemicals (supra)	 which is under challange here	 all other cases since then have dealt with potable alcohol. The only case which has dealt with alcohol used for industrial purposes was the case of Indian Mica and Micanite Industries Ltd. vs State of Bihar & Ors.	 (supra). The Constitution of India	 it has to be borne in mind	 like most other Constitu tions	 is an organic document. It should be interpreted in the light of the experience. It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the coun try. This Court should	 therefore	 endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of indisputed national goals	 as permitted by the Constitution. As mentioned here inbefore	 the relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are close ly linked and supplement one another. In this connection	 reference may be made to entry 84 of fist I which deals with the duties of excise on tobacco and other goods manufactured or produced in India except	 inter alia	 alcoholic liquors for human consumption. Similarly	 entry 51	 fist II is the counterpart of entry 84 of fist I so far as the State List is concerned. It authorises the State to impose duties of excise on alcoholic liquors for human consumption and opium	 etc. manufactured or produced in the State and the counter vailing duties at the same or lower rates on similar goods produced or manufactured elsewhere in India. It is clear that all duties of excise save and except the items specifi cally excepted in entry 84 of list 1 are generally within the taxing power of the Central Legislature. The State Legislature has power	 though limited it is	 in imposing duties of excise. That power is circumscribed under entry 51 of list II of the Seventh Schedule to the Constitution. As we have noted hereinbefore	 the correct principles of harmo nious interpretation of legislative entries have been laid down in several cases. We have mentioned hereinbefore some of the decisions as noted in the decision of this Court in India Cement (supra). In M.P.V. Sundarara 675 mier & Co. vs State of A.P.	 ; at pages 1480 82	 this Court has laid down that (i) legislative entries are to be fiber ally construed. But when a topic is governed by two entries	 then they have to be recon ciled. It cannot be that one entry is to be fiberally construed and the other entry is not to be liberally construed. (ii) under the Constitutional scheme of division of powers under legislative lists	 there are separate entries pertaining to taxation and other laws. A tax cannot be levied under a general entry. (iii) a Constitution is an organic document and has to be so treated and con strued. (iv) if there is a conflict between the entries	 the first principle is to reconcile them. But the Union power will prevail by virtue of Article 246(1) & (3). The words "notwithstanding" and "subject to" are impor tant and give primacy to the central legisla tive power. In the Central Provinces and Berar Sales of Motor Spirit and LubriCants Taxation Act	 1938	 at 37 38	 the Federal Court had emphasised that Constitution of a Government is a living and organic thing which of all in struments has the greatest claim to be so construed as to make it live. In Indian Mica & Micanite India vs State of Bihar	 (supra)	 a bench of five Hon 'ble Judges stated as under: "Under the 1935 Act as under our present Constitution	 the power to levy duties on alcoholic liquor fit for human consumption was allocated to the provincial legislature where as the power to levy duty on alcoholic liquor not fit for human consumption was allocated to the central legislature. " In the aforesaid case	 an impost was sought to be placed on denatured spirit which was used in the manufacture of micanite. It was held that the impost could not be justified as a tax	 under the taxing power and therefore	 an enquiry was ordered to find out whether it was justified as a fee. In Adhyaksha Mathur Babu 's Sakti Oushadhalaya Dacca (P) 676 Ltd. and Ors. vs Union of India	 	 at pages 966	 969	 975	 976 of the report	 it was observed by this Court that only the Central Government has the power to tax liquids containing liquor which was an ayurvedic medicine even though such medicines were capable of being used as intoxicating things. In M/s Guruswamy & Co. etc. vs State of Mysore & Ors.	 at pages 549	 556	 557	 564	 571	572 of the report	 it was held that it is clear that imposts which were not in the nature of excise duty were held to be ultra vires entry 51 of list II of the Seventh Schedule to the Constitution. In State of Mysore vs S.D. Cawasji & Co. & Ors.	 ; at pp. 804	 805 and 806 of the report	 this Court rejected the contention that under entry 8 of list II of the Seventh Scheduly to the Constitution the State was competent to legislate for levy of cess in respect of "intoxicating liquor" that is to say	 the production	 manufacture	 transport	 purchase and sale of intoxicating liquors. Legislative power normally includes all incidental and subsidiary powers	 but the power to tax is neither incidental nor subsidiary to the power to legis late on a matter or topic. Reference was made to M.P.V. Sundararamier 's case (supra). Entries in lists I and II	 dealing with certain specific topics	 it was held	 do not grant power to levy tax on transactions relating to those topics. Power to tax must be derived from a specific taxing entry. Tax could not	 therefore	 be levied	 it was held on intoxicating liquors relying upon entry 8 of list II of the 7th Schedule. It was further held that the taxing power in respect of alcoholic liquors for human consumption is	 therefore	 circumscribed and it might only be levied as excise duty	 that is a duty levied on the production and manufacture of alcoholic liquors. Reliance was placed on R.C. I all vs Union of India	 [1962] Supp. 3 SCR 436. In Om Prakash vs Giriraj Kishore	 ; at pages 158 and 163 of the report	 Venkataramiah J.	 as the learned Chief Justice then was	 held that no tax can be levied in the guise of a fee. It was held at p. 158 of the report as follows: "As observed in M.P.V. Sundararamier & Co. vs The State of Andhra Pradesh & Anr.	 ; 	 in list II of the Seventh Schedule to the Constitution Entries 1 to 44 form one group mentioning the subjects on which the States can legislate and entries 45 to 63 in that list form another group dealing with taxes that may be levied by States. Entry 64 refers to offences against laws with respect to any of the matters in List II and Entry 65 refers to jurisdiction of Courts. Entry 66 empowers the State to levy 677 fees in respect of any of the matters in List I1. Unless the cess in question can be brought under any of the Entries from 45 to 63 it cannot be levied as a tax at all. " It was further observed at p. 163 of the report as follows: "It is constitutionally by impermissible for any State Government to collect any amount which is not strictly of the nature of a fee in the guise of a fee. If in the guise of a fee the legislation imposes a tax it is for the Court on scrutiny of the scheme of the levy to determine its real character. If on a true analysis of the provisions levying the amount	 the Court comes to the conclusion that it is	 in fact	 in the nature of a tax and not a fee	 its validity can be justified only by bringing it under any one of the entries in list II of the Seventh Schedule to the Consti tution under which the State can levy a tax. " It has to be borne in mind that by common standards ethyl alcohol (which has 95%) is an industrial alcohol and is not fit for human consumption. The petitioner and the appellants were manufacturing ethyl alcohol (95%) (also known as rectified spirit) which is an industrial alcohol. ISI specification has divided ethyl alcohol (as known in the trade) into several kinds of alcohol. Beverage and industri al alcohols are clearly and differently treated. Rectified spirit for Industrial purposes is defined as "spirit puri fied by distillation having a strength not less than 95% of volume by ethyl alcohol". Dictionaries and technical books would show that rectified spirit (95%) is an industrial alcohol and is not potable as such. It appears	 therefore	 that industrial alcohol which is ethyl alcohol (95%) by itself is not only non potable but is highly toxic. The range of spirit of potable alcohol is from country spirit to whisky and the Ethyl Alcohol content varies between 19 to about 43 per cent. These standards are according to the ISI specifications. In other words	 ethyl alcohol (95%) is not alcoholic liquor for human consumption but can be used as raw material input after processing and substantial dilution in the production of Whisky	 Gin	 Country Liquor	 etc. In many decisions	 it was held that rectified spirit is not alcohol fit for human consumption. Reference may be made in this connection to Delhi Cloth and General Mills Co. Ltd. vs The Excise Commissioner	 U.P. Allahabad and Anr. Special Appeal No. 177 of 1970	 decided on 29th March	 1973. In this connection	 it is important to bear in mind the actual provision of entry 8 of list II. Entry 8 of list II cannot support a tax. The above entry contains the 678 words "intoxicating liquor". The meaning of the expression "intoxicating liquor" has been tightly interpreted by the Bombay High Court in the Balsara 's case (supra). The deci sion of the Bombay High Court is reported in AIR 1951 Bombay 210	 at p. 214. In that light	 perhaps	 the observations of Fazal Ali	 J. in Balsara 's case (supra) requires considera tion. It appears that in the light of the new experience and development	 it is necessary to state that "intoxicating liquor" must mean liquor which is consumable by human being as it is and as such when the word "liquor" was used by Fazal Aft	 J.	 they did not have the awareness of full use of alcohol as industrial alcohol. It is true that alcohol was used for industrial purposes then also	 but the full potentiality of that user was not then comprehended or understood. With the passage of time	 meanings do not change but new experiences give new colour to the meaning. In Har Shankar 's case (supra)	 a bench of five judges have surveyed the previous authorities. That case dealt with the auction of the right to sell potable liquor. The position laid down in that case was that the State had the exclusive privilege or right of manufacturing and selling liquor and it had the power to hold public auctions for granting the right or privilege to sell liquor and that traditionally intoxicating liquors were the subject matters of State monopoly and that there was no fundamental right in a citizen to carry on trade or business in liquor. All the authorities from Coo verji Barucha 's case to Har Shankar 's case (supra) dealt with the problems or disputes arising in connection with the sale	 auction	 licensing or use of potable liquor. Only in two cases the question of industrial alcohol had come up for consideration before this Court. One is the present decision which is under challenge and the other is the decision in Indian Mica & Micanite Industries 's case (supra). In the latter case	 in spite of the earlier judg ments including Bharucha 's case	 denatured spirit required for the manufacture of micanite was not regarded as being within the exclusive privilege of the State. It appears that in that decision at p. 321 of the report	 it was specifical ly held that the power of taxation with regard to alcoholic liquor not fit for human consumption	 was within the legis lative competence of central legislature. The impost by the State was held to be justifiable only if it was a fee there by impliedly and clearly denying any consideration or price for any privilege. For the first time	 in the Synthetics & Chemicals Ltd. 's case (supra)	 the concept of exclusive privilege was introduced into the area of industrial alcohol not fit for human consumption. Balsara 's case (supra) deal with the question of reasonable restr 679 iction on medicinal and toilet preparations. In fact	 it can safely be said that it impliedly and sub silentio clearly held that medicinal and toilet preparations would not fall within the exclusive privilege of the State. If they did there was no question of striking down of section 12 (c) & (d) and section 13(b) of the Bombay Prohibition Act	 1949 as unreasonable under Article 19(1)(f) of the Constitution because total prohibition of the same would be permissible. In K.K. Narula 's case ; 	 it was held that there was right to do business even in potable liquor. It is not necessary to say whether it is good law or not. But this must be held that the reasoning therein would apply with greater force to industrial alcohol. Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health. If the meaning of the expression "intoxicating liquor" is taken in the wide sense adopted in Balsara 's case	 it would lead to an anamolous result. Does Article 47 oblige the State to prohibit .even such industries as are licensed under the IDR Act but which manufacture industrial alcohol? This was never intended by the above judgments or the Constitution. It appears to us that the decision in the Synthetics & Chemi cals Ltd. 's case (supra) was not correct on this aspect. Reference in this connection may be made to the decision in Inspector of Taxes vs Australian Mutual Provident Socie ty	 [1959] 3 All England Law Report 245	 at p. 256 of the report	 Lord Denning in his dissenting judgment observed as follows: "My Lords	 I ask myself: What authority is to be given in these circumstances to the deci sion of this House in 1947? Is it to be fol lowed from step to step regardless of conse quences? Are we to hold that the tax under r. 3 is a tax on the profits of the business for all purposes	 including the purposes of the Double Taxation Agreement	 which this House never had in mind at all? I think not. The doctrine of precedent does not compel your Lordships to follow the wrong path until you fall over the edge of the cliff. As soon as you find that you are going in the wrong direction	 you must at least be permitted to strike off in the right direction	 even if you are not allowed to retrace your steps. And that is that I would ask your Lordships to do. I would invite your Lordships to say that the decision of this House in 680 1947 has no application to the meaning of the word "profits" in the Double Taxation Agree ment." Justice Jackson in his dissent in the case of Common wealth of Massachusetts Et A.I vs USA	 92 Lawyers	 Edition p. 968 also upheld the right to set right what was said wrongly in the past. It was submitted that the activity in potable liquor which was regarded safe and exclusive right of the state in the earlier judgments dealing with the potable liquor were sought to be justifiable under the police power of the State	 i.e.	 the power to preserve public health	 morals	 etc. This reasoning can never apply to industrial alcohol manufactured by industries which are to be developed in the public interest and which are being encouraged by the State. In a situation of this nature	 it is essential to strike a balance and in striking the balance	 it is difficult to find any justification for any theory of any exclusive fight of a State to deal with industrial alcohol. Restriction valid under one circumstance may become invalid in changing cir cumstances. Reference may be made to the observations of Justice Brandeis in Nashiville	 Chattangooga & St. Louis Railway vs Herbert section Waiters	 79 Lawyers Edition 949. See also Leo Nebbia vs People of the State of New York	 78 Lawyers ' Edn. 940 at p. 941. Similar is the effect of the approach of this Court in Motor General Traders & Anr. vs State of Andhra Pradesh & Ors. etc. ; 	 It is not necessary for us here to say anything on the imposts on potable alcohol as commonly understood. These are justified by the lists of our legislature practised in this country see the observations of Hidayatullah J. as the Chief Justice then was	 in M/s Guruswamy vs State of My sore	 at p. 573 574 and other decisions mentioned hereinbefore. In that view of the matter	 it appears to us that the relevant provisions of the U.P. Act	 A.P. Act	 Tamil Nadu Act	 Bombay Prohibition Act	 as mentioned hereinbefore	 are unconstitutional in so far as these purport to levy a tax or charges imposts upon industrial alcohol	 namely alcohol used and usable for industrial purposes. Having regard to the principles of interpretation and the Constitutional provisions	 in the light of the language used and having considered the impost and the composition of industrial alcohol	 and the legislative practice of this country	 we are of the opinion that the impost in question cannot be justified as State imposts as these have 681 been done. We have examined the different provisions. These are not merely regulatory. These are much more than that. These seek to levy imposition in their pith and substance not as incidental or as merely disincentives but as attempts to raise revenue for States ' purposes. There is no taxing provision permitting these in the lists in the field of industrial alcohol for the State to legislate. Furthermore	 in view of the occupation of the field by the IDR Act	 it was not possible to levy this impost. After 1956 amendment to the IDR Act bringing alcohol industries (under fermentation industries) as item 26 of the First Schedule to IDR Act the control of this industry has vested exclusively in the Union. Thereafter	 licences to manufacture both potable and nonpotable alcohol is vested in the Central Government. Distilleries are manufacturing alcohol under the Central Licences under IDR Act. No privi lege for manufacture even ii one existed	 has been trans ferred to the distilleries by the State. The State cannot itself manufacture industrial alcohol without the permission of the Central Government. The States cannot claim to pass a right which these do not possess. Nor can the States claim exclusive right to produce and manufacture industrial alco hol which are manufactured under the grant of licence from the Central Government. Industrial alcohol cannot upon coming into existence under such grant be amenable to States ' claim of exclusive possession of privilege. The State can neither rely on entry 8 of list I1 nor entry 33 of list III as a basis for such a claim. 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 18G of the IDR Act	 has evinced clear intention to occupy the whole field. Even otherwise sections like section 24A and 24B of the U.P. Act do not constitute any regulation in respect of the industrial alcohol as product of the scheduled industry On the contrary	 these purport to deal with the so called transfer of privilege regarding manufacturing and sale. This power	 admittedly	 has been exercised by the State purporting to act under entry 8 of list II and not under entry 33 of list III. The position with regard to the control of alcohol industry has undergone material and significant change after the amendment of 1956 to the IDR Act. After the amendment	 the State is left with only the following powers to legis late in respect of alcohol: (a) it may pass any legislation in the nature of prohibition 682 of potable liquor referable to entry 6o of list II and regulating powers. (b) it may lay down regulations to ensure that non potable alcohol is not divert ed and misused as a substitute for potable alcohol. (c) the state may charge excise duty on potable alcohol and sales tax under entry 52 of list II. However	 sales tax cannot be charged on industrial alcohol in the present case	 because under the Ethyl Alcohol (Price Control) Orders	 sales tax cannot be charged by the state on industrial alcohol. (d) however	 in case State is rendering any service	 as distinct from its claim of so called grant of privilege	 it may charge fees based on quid pro quo. See in this con nection	 the observations of India Mica 's case (supra). On an analysis of the various Abkari Acts and Excise Acts	 it appears that various Provinces/States reserve to themselves in their respective States the right to transfer exclusive or other privileges only in respect of manufacture and sale of alcohol and not in respect of possession and use. Not all but some of States have provided such reservation in their favour. The price charged as a con sideration for the grant of exclusive and other privileges was generally regarded as an excise duty. In other words	 excise duty and price for privileges were regarded as one and the same thing. So called privilege was re served by the State mostly in respect of country liquor and not foreign liquor which included denatured spirit. On an analysis of the aforesaid decisions and practice	 we are clearly of the opinion that in respect of industrial alcohol the States are not authorised to impose the impost they have purported to do. In that view of the matter	 the contentions of the petitioners must succeed and such imposi tions and imposts must go as being invalid in law so far as industrial alcohol is concerned. We make it clear that this will not affect any impost so far as potable alcohol as commonly understood is concerned. It will also not affect any imposition of levy on industrial alcohol fee where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed. This will not affect any regulating measure as such. We must	 however	 observe that these imposts and levies have 683 been imposed by virtue of the decision of this Court in Synthetics & Chemicals Ltd. 's case (supra). The States as well as the petitioners and manufacturers have adjusted their rights and their position on that basis except in the case of State of Tamil Nadu. In that view of the matter	 it would be necessary to state that these provisions are de clared to be illegal prospectively. In other words	 the respondents states are restrained from enforcing the said levy any further but the respondents will not be liable for any refund and the tax already collected and paid will not be refunded. We prospectively declare these imposts to be illegal and invalid	 but do not affect any realisations already made. The writ petitions and the appeals are dis posed of accordingly. The review petitions	 accordingly	 succeed though strictly no grounds as such have been made out but in the view we have taken	 the decision in the Synthetics & Chemicals Ltd. 's (supra) cannot be upheld. In the view we have taken also	 it is not necessary to decide or to adjudicate if the levy is valid as to who would be liable	 that is to say	 the manufacturer or the producer or the dealer. With regard to writ petition No. 405 1/78 (Chemicals & Plastics India Ltd. vs State of Tamil Nadu)	 certain orders were passed by this Court on 1st November	 1978	 1st Septem ber	 1986	 1st October	 1986 and 10th October	 1986. It is stated that the present demand of the Central Excise Depart ment from 1st March	 1986 on alcohol manufactured by the company in their captive distillery is over Rs.4 crores. This Court by its order dated 1st October	 1986 as confirmed on the 16th October	 1986 had permitted the State Government to collect the levy on alcohol manufactured in company 's captive distillery subject to adjustment of equities and restrained the central excise authorities from collecting any excise duty on such alcohol. It is	 therefore	 necessary to declare that in future no further realisation will be made in respect of this by the State Government from the petitioners. So far as the past realisations made are con cerned	 we direct that this application for that part of the direction	 should in accordance with our decision herein be placed before a division bench for disposal upon notice both to the State Government and the Central Government. In the facts and the circumstances of the case	 the parties will bear and pay their own costs. OZA	 J. While I agree with my learned brother Hon. Mukharji	 J. as regards the conclusions but I would like to add the following reasons. In these matters the main question that arise for considera tion is 684 about the validity of the levies made by the respondent States on Alcohol which is utilised by the industries for manufacturing the products where Alcohol is the raw materi al. Some of these industries themselves manufacture Alcohol as they have their own distilleries and from their distill eries through pipelines it goes to their industrial units where this is used as a raw material whereas some are indus tries which purchase Alcohol or denatured spirit on being allotted by the Government. It is alleged that in addition to excise duty levied by the Central Government	 excise duty and various levies in various names like vend fee	 transport fee and others numbering about eight levies are imposed by the State Government. The main contention on behalf of the industries is that the State Legislature has no authority in view of Entry 84 of List I read with Entry 51 of List II to impose such levies. This being Alcohol which does not fall within the ambit of "Alcoholic liquors for human consump tion". It is only the Centre which has the authority under Entry 84 of List I to tax. Entry 51 of List II authorises the State Legislature to impose a tax on "Alcoholic liquors for human consumption. " It is further contended that Entry 8 in List II which talks of intoxicating liquors only authorises the State Legislature to enact laws to regulate but does not empower the State Legislature to impose any levy and the various levies which have been imposed by the State Legislature on industrial alcohol and even Mithylated spirit could not be brought within the ambit of regulatory duties for purposes of regulation only and therefore could not be justified under Item 8 of List II. It was also contended that the State ultimately falls back on the consideration for parting with the privilege to sell alcoholic liquors which has been the basis of series of decisions of this Court based on English and American deci sions but according to the learned counsel for the petition ers this doctrine of privilege and consideration for sale of privilege also could be available to the State only in respect of alcohol or alcoholic liquors which are for human consumption. According to the learned counsel by merely widening the definition of intoxicating liquors in respec tive excise laws enacted by the State the ambit of authority of taxation could not be enlarged by the State Legislature when in List II Item 51 the words used are Alcoholic liquors for human consumption. Entry 84 in List I reads: "84. Duties of excise on tobacco and other goods manufactured or produced in India ex cept 685 (a) alcoholic liquors for human consumption. (b) opium	 Indian hemp and other narcotic drugs and narcotics	 but including medicinal and toilet prepara tions containing alcohol or any substance included in sub paragraph (b) of this entry. " Entry 51 in List 11 reads: "51. Duties of excise on the following goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or pro duced elsewhere in India: (a) alcoholic liquors for human consumption; (b) opium	 Indian hemp and other narcotic drugs and narcotics; but not including medicinal and toilet prepa rations containing alcohol or any substance included in sub paragraph (b) of this entry. " A comparison of the language of these two entries clear ly demonstrates that the powers of taxation on alcoholic liquors have been based on the way in which they are used as admittedly alcoholic liquor is a very wide term and may include variety of types of alcoholic liquors but our Con stitution makers distributed them into two heads: (a) for human consumption (b) other than for human consumption Alcoholic liquors which are for human consumption were put in Entry 51 List II authorising the State Legislature to levy tax on them whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of exise. This scheme of these two entries in List I and II is clear enough to indi cate the line of demarcation for purposes of taxation of alcoholic liquors. What has been excluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation. 686 Entry 8 in List 2 reads: "8. Intoxicating liquors	 that is to say	 the production	 manufacture	 possession	 trans port	 purchase and sale of intoxicating liq uors. " This Entry talks of intoxicating liquors and further on refers to production	 manufacture	 possession	 transport	 purchase and sale of these liquors. It appears that the State has levied some kind of duties in various names at each of these stages used in this Entry i.e. production	 manufacture	 possession	 transport	 purchase and sale. But from the scheme of entries in the three lists it is clear that taxing entries have been specifically enacted confer ring powers of taxation whereas other entries pertain to the authority of the Legislature to enact laws for purposes of regulation. If we compare Entry 8 in List II with entry 51 it is clear that when Entry 51 authorises the State Legisla ture to levy tax and duties on alcoholic liquors falling in Entry 51	 Entry 8 confers authority on the State Legislature to enact laws for regulation. Similarly are Entries in List I. As regards regulation or regulatory fees it was contended that Entry 52 in List I empowers the Parliament to declare the industries which the Union proposes to control in public interest under Industries Development and Regulation Act. Entry 52 List I reads as under: "52. Industries	 the control of which by the Union is declared by Parliament by law to be expedient in the public interest. " Such a declaration is made by the Parliament and this industry i.e. industry based on fermentation and alcohol has been declared to be an industry under that Act and therefore is directly under the control of the Centre and therefore even in respect of regulation the authority of the State Legislature in Entry 8 List II could only be subject to the Industries Development and Regulation Act or Rules made by the Centre. Under these circumstances therefore it is clear that the State Legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre. The main emphasis it appears is that this duty on alco hol and alcoholic liquors is a substantial revenue of State and it appears that it 687 was this obsession which was reflected and demonstrated when this concept of consideration for parting with privilege was invented by our courts on the basis of some judgments from United States based on some judgments from England and it is on this basis that all through the States have been justify ing their respective levies and duties on alcohol and alco holic beverages and overcome the test of reasonableness	 double taxation and of limitation as it being a considera tion for transfer of privilege it could be anything and no limits could be placed thereupon. The main edifice of the argument on behalf of the State is that the State has the sole privilege to deal with in Alcohol and alcoholic substances. This	 according to the arguments	 is equally applicable to alcohol for human con sumption and also for denatured spirit or other categories of alcoholic liquors which though may be described as not for human consumption but are potential substances which easily could be converted as intoxicating liquors fit for human consumption. It is on this basis that the learned counsel appearing for the States and the Advocate General of the States drew our attention to various extracts of the text books on organic chemistry as it was contended that there are so many types of alcohol known in the organic chemistry of which ethyl alcohol is one which is used as a beverage when dilut ed upto a particular percentage and also is used for indus trial purposes in high concentration or sometimes denatured. The main theme of the argument was that ethyl alcohol which is a product of distillation after fermentation is extracted in various concentrations and can also be extracted in a very high concentration above 90 percent which generally is termed as rectified spirit. It is not in dispute that this high concentration of ethyl alcohol is a raw material for various industries. Sometimes it is supplied after being mixed by Mithylated alcohol or being denatured by other processes only to safeguard against its use for conversion into alcoholic beverages for human consumption. As it is well known that when the ethyl alcohol is diluted by water and its percentage is brought to 40 or 45 or below then it become fit for human consumption and it was therefore argued that various duties for purposes of regulation are imposed by the State itself to prevent the conversion of rectified spirit or mithylated alcohol to be diverted from industrial to portable use. The basis of the privilege doctrine appears to be that alcoholic drinks or intoxicating drinks are expected to be injurious to health and therefore the trade in these commod ities is described as obnoxious and 688 therefore a citizen has no fundamental right under Article 19(1)(g) of the Constitution and therefore the trade in alcoholic drinks which is expected to be injurious to health and obnoxious is the privilege of the State alone and the State can part with this privilege on receipt of the consid eration. This basis of the privilege doctrine has to be examined in the context of our Constitution especially Article 21 and Article 47. The concept of royal privilege has been derived histori cally from England as Great Britain continues to be a Monar chy with democracy. The Head of the State is the Crown. It was on these bases that what has not been provided for was supposed to be the privilege of the Crown but under Indian Constitution the Head of the State and the three function aries of the State	 the Executive	 the Legislature and the Judiciary have their powers defined under the Constitution. There is nothing like privilege vested in any one of the functionaries of the State and in the background of this basic feature of our Constitution the doctrine of privilege is difficult to reconcile with. If we examine this privilege of trading in commodities injurious to health and dangerous to life in the context of Article 21 and Article 47 of our Constitution. Article 21 of the Constitution reads: "21. Protection of life and personal liberty No person shall be deprived of his life or personal liberty except according to procedure established by law." This Article casts a duty on the State to protect the life of every citizen except as is provided under Article 21. If we compare this duty of the State with the scheme of privi lege which means that the State has a privilege to endanger human life (the life of a citizen) such a privilege runs contrary to Article 21. Another significant article of our Constitution is Article 47. It reads as under: "47. Duty of the State to raise the level of nutrition and the standard of living and to improve public health The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and	 in particular	 the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. " This Article appears in the Chapter of Directive Principles of State 689 Policy. Inclusion of this Article in this Chapter clearly goes to show that it is the duty of the State to do what has been enacted in Article 47 and in fact this Article starts with the phrase "Duty of the State" and the duty is to improve public health and it is further provided that this duty to improve public health will be discharged by the State by endeavouring to bring about prohibition. It sounds contradictory for a State which is duty bound to protect human life	 which is duty bound to improve public health and for that purpose is expected to move towards prohibition claims that it has the privilege of manufacture and sale of alcoholic beverages. which are expected to be dangerous to human life and injurious to human health	 transferring this privilege of selling this privilege on consideration to earn huge revenue without thinking that this trade in liquor ultimately results in degradation of human life even endan gering human life and is nothing but moving contrary to the duty cast under Articles 21 and 47 and ideal of prohibition enshrined in Article 47. In view of articles 21 and 47 with all respect to the learned Judges who so far accepted the privilege doctrine it is not possible to accept any privi lege of the State having the right to trade in goods obnox ious and injurious to health. The other stand of States to justify these levies is based on the doctrine of police powers. The doctrine of police powers enunciated in number of decisions of the American Courts and which has been the subject matter of discussion by various authors in texts on jurisprudence as referred to in Indian context under our Constitution does not appear to be applicable. In the Constitution of U.S.A. basic factor which must be kept in mind is: that various States after getting independence from their European Mas ters came together to form a Federal State and therefore what was not conceded to the Federal State i.e. the residu ary powers vested in the State and as it was not conceded to the Federal Government that this residuary power of mainte nance of law and order peace so essential for the develop ment in a civilised society was evolved as a doctrine of police powers vested in the State. In India as the Constitu tion was enacted or was framed after having the experience of various countries in the World	 the concept of fundamen tal rights and rights like life	 liberty	 procedure estab lished by law and various legislative functions which were divided between the States and the Union left no scope for any power except which could be derived from any provision in the Constitution coupled with an Entry in one of the three Lists which would indicate the power vested in either the State or the Centre. Apart from it the scheme of our Constitution is that there are no residuary powers which vest in the State and the scheme of our Constitution also reveals that in case of 690 any conflicts it is the Centre which prevails and not the State and therefore trying to apply the doctrine of police powers which has been conceived of in the American decisions which the Government of a State in the United States and to apply it to a State under Indian Constitution	 will only mean to do violence to the scheme of our Constitution. What police powers have been enunciated under the American Con stitution clearly will fall within the ambit of Articles 19	 21	 22 and respective entries in the Schedule of the Consti tution. In fact	 under our Constitution no powers could be conceived for which there is no provision in any one of the entries in the three Lists or which could not be justified under any specific Article of the Constitution. Thus even this concept of the doctrine of police powers could not be of any help to justify the levies imposed by the State on alcohol or alcoholic liquors. These questions about the privilege and the doctrine of police powers in fact would be material to be considered when the question about the various levies imposed by the State in respect of alcoholic beverages is considered and so far as the present cases are concerned which pertain to only alcoholic liquors which are not for human consumption i.e. which are meant for industrial use. The only question will be as to whether the State could justify the respective levies under any of the entries in List II. The main theme of the argument on behalf of the States has been that they have imposed levies because the alcohol which is not for human consumption is a commodity which could be easily converted into alcoholic liquors for human consumption and therefore the levies have been imposed assuming that it is for human consumption or in other words the contention has been that these levies have been imposed in order to prevent the conversion of alcoholic liquors which are not for human consumption to those which are for human consumption. A contention therefore was suggested that these levies could be justified as regulatory fees although it was frankly conceded that although the revenue earned out of it is substantial and may not be justifiable as fees but have been imposed and it was therefore that the main theme on behalf of the respondents has been based on the doctrine of the privilege of the State to trade in these commodities as that trade is considered to be obnoxious and injurious to public health. In our opinion	 therefore as far as the present case is concerned the State in exercise of powers under Entry 8 of List II and by appropriate law regulate and that regulation could be to prevent the conversion of alcoholic liquors for industrial use to one for human 691 consumption and for purpose of regulation	 the regulatory fees only could be justified. In fact	 the regulation should be the main purpose	 the fee or earning out of it has to be incidental and that is why the learned counsel appearing for the State attempted to use this terminiology by saying that the purpose is regulation	 the earnings are incidental but frankly conceded that in fact the earnings are substantial. In fact in some of the excise laws in the States they have even used terminiology relying on the doctrine of privilege and parting with privilege but in my opinion it is not necessary for us to go into those questions in greater detail as we are not here concerned with the trade in alco holic liquors meant for human consumption and therefore in view of clear demarcation of authority under various items in the three Lists	 Entry 8 List II could not be invoked to justify the levies which have been imposed by the State in respect of alcoholic liquors which are not meant of human consumption. N.P.V. Petitions & Appeals allowed.

Writ Petitions/Civil appeals challenging the notifica tion dated 31st May	 1979 which substituted a new rule 17(2) of U.P. Excise Rules and provided for a vend fee	 the amend ment to section 49 of the Bombay Prohibition Act	 1949 treating exclusive privilege for State in liquor trade and imposing a transport fee	 the Bombay Prohibition Act	 1949 as amended from time to time along with ordinance No. 15 of 1981 amending the Bombay Prohibition Act	 1949 and Section 49 added by reason of which the State was granted exclusive privilege of importing	 exporting	 transporting	 manufactur ing	 bottling	 selling	 buying	 processing or using any intoxicant; and seeking a declaration that alcohol plant of the petitioner company was not covered by the A.P. Excise Act	 1968. 'A.P. Distillery Rules	 1970	 and A.P. Rectified Spirit Rules. 1971 and that alcohol plant of the company was not a 'distillery ' within the meaning of the said expression under the A.P. Distillery Rules and	 therefore	 the Distill ery Rules had no application thereto and seeking an order to restrain from interfering with and/or regulating and con trolling production	 distribution	 movement and supply of alcohol from the plant of the company and the Tamil Nadu Prohibition Act	 were filed in this Court. Review Petitions against the judgment and order of this Court dated 19th December	 1979 in State of U.P. etc. vs Synthetics and Chemicals Ltd. and Ors. ; 	 re agitating challenge 625 to sections 24A and 24B of the U.P. Excise Act	 1910 as amended in 1972 and 1976	 declaring exclusive privilege of the Government for manufacture and sale of foreign liquor as defined	 which included denatured spirit and industrial alcohol	 were also filed. The petitioners/appellants contended that the levies made by the respondent States on alcohol	 which was utilised as raw material by the industries for manufacturing the products were invalid. Some of three industries 'themselves manufactured alcohol as they had their own distillaries ' and from where it passed through pipelines to their industrial units	 where this was used as a raw material	 whereas some purchased alcohol or denatured spirit on being allotted by the Government. It was alleged that	 in addition to excise duty levied by the Central Government	 excise duty and various levies in various names like vend lee	 transport fee and others numbering about eight levies were imposed by the State Government. It was also contended that the State Legislature had no authority	 in view of Entry 84 of List I read with Entry 51 of List I1 to impose such levies; this being alcohol which did not within the ambit of alcoholic liquors for human consumption. It is only the centre which had the authority to tax under Entry 84	 and that Entry 8 In List II only authorised the State Legislature to enact laws to regulate but did not empower it to impose any levy and the various levies which hod been imposed by the State Legislature on industrial alcohol and even methylated spirit could not be brought within the ambit of regulatory duties for purposes of regulation only	 and	 therefore	 could not be justified under Entry 8 of List H	 that doctrine of privilege and consideration for sale of privilege could be available to the State only in respect of alcohol or alco holic liquors which were for human consumption. that by merely widening the definition of intoxicating liquors in respective excise laws enacted by the States	 the ambit of authority of taxation could not be enlarged by the State Legislature when in List II Entry 51 the words used were alcoholic liquors for human consumption. It was further contended that though the direction and commitment to im provement of the standards of living contained in Article 47 of the Constitution must be kept in view	 this improvement could be achieved primarily by industrialisation involving increased production and employment and giving priority to the core sectors	 that the Industries (Development & Regula tion) Act	 1951 was enacted with a view to developing and controlling various important industries and that the peti tioners/appellants were predominantly and primarily con cerned with using ethyl alcohol (rectified spirit) as an industrial raw material and this industrial alcohol is required as an input for further manufacture of downstream products. 626 It was submitted on behalf of Union of India that the legislative competence of the State enactments in the var ious States would have to be determined by reference to Entries 7	 52	 59	 84	 96 and 97 of List I and Entries 8	 24	 26	 27	 51	 52	 54	 56	 62 of List II and Entries 19 and 33 of List III	 that then was a dichotomy between Entry 84 of List I and Entry 52 of List II	 but this would not con trol the interpretation of other entries and that there was no such dichotomy in Entry 8 of List II	 that the power to levy taxes had to be read from entry relating to the taxes and not from general entry	 that none of the taxing entries in List II was controlled by Entry 52 of List I	 that State 's privilege to completely prohibit or farm out liquor containing alcohol for consumption did not comprehend a similar right of the State with regard to other intoxicating liquids containing alcohol and to so prohibit or collect fee for farming out	 would be unconstitutional under Article 19(1)(g) of the Constitution	 that under Entry 51 of List II	 State Legislature had no power to levy excise duty on industrial alcohol	 as it was not fit for human consumption	 and though the State could collect an amount called vend fee	 shop rent	 etc. for conferring on a citizen the right to manufacture and sell alcoholic liquors if it is for human consumption	 this power did not extend to industrial alcohol or alcohol contained in the medicinal or toilet prepara tions; On behalf of the respondent States; it was contended that: (a) Entry 52 of List I was an exceptional entry	 which not only prescribed the field of legislation but also ena bled and empowered the Parliament to make laws to the exclu sion of the State and that	 being exclusionary in nature unlike entries merely delineating fields of legislation	 this entry had to be strictly and	 therefore	 narrowly construed; (b) whenever the Constitution intended the Parliament to assume legislative competence in respect of the entire field	 a declaration of an unqualified nature was provided for unlike qualified provi sion like Entry 52 of List 1	 (c) the words 'control ' and 'regulation ' were	 at times	 held to he interchangeable or used synonymously	 but their use in the various entries either singly or jointly	 indi cated that they were sought to convey a different sense and the word 'control ' had in the context	 a narrower meaning	 excluding details of regulatory nature by the State; (d) comparing Entries 7	 23	 24	 27	 62	 64 and 67 of List I with Entry 52	 would demonstrate that under entry 52	 it was not the entire 627 field which was sought to be covered but only the control of industries; and that the absence of inclusion of qualifying words like 'the control of which ' could not be brushed aside; (e) in view of the declaration made in Section 2 of the I.D.R. Act	 1951 and the provisions made therein	 the entire field was not occupied and the vend fee or other impost by the State legislatures were not infringing in the field treaded by the Central Legislature; the Act did not preclude or eclipse the legislative powers of the State; the Act also did not apply on its own terms to the levy; these operated on different tracks; (f) the Parliament had no power to legislate on indus trial alcohol	 since industrial alcohol was also alcoholic liquor for human consumption and Entry 84 in List I express ly excluded this category and	 therefore	 the residuary Entry 97 of List I would not operate as against its own legislative intent; (g) the State had legislative competence to impose the levy since it was	 both on its language and in pith and substance	 legislation failing under Entry 8 List II	 intox icating liquor	 and Entry 51 List II	 alcoholic liquor for human consumption	 and what was required was intoxicating liquor and/or alcoholic liquor for human consumption; (h) that the State had exclusive right to deal in liq uor	 and this power was reserved by and/or derived under	 Article 19(6) and 19(6)(ii) of the Constitution	 for parting which a charge was levied	 and in a series of decisions it had been ruled that the charge was neither a fee nor a tax and was termed as privilege; (i) there was no dichotomy between Ethyl Alcohol	 to be used for beverages and for industrial purposes	 and in any case the levy was on manufacture of the Ethyl Alcohol	 and the dichotomy attempted to be drawn in Entry 84 of List I on the basis of the development of the concept of industrial alcohol and the inapplicability of the concept of potable liquor to the industry of alcohol was not valid. (j) the levy was consistent with wider interpretation of alcoholic liquor based on pre existing legislative history; (k) when two interpretations were possible	 the choice must fall on that interpretation which validated existing State legislations designed to raise revenues and rejection of the other interpretation 628 which was destructive of the scheme of distribution of powers; (1) the words 'alcoholic liquor ' in Lists I & II of the 7th Schedule to the Constitution must be interpretated so as to mean and take within its sweep alcohol as first obtained in the process of or as a product of fermentation industry at which stage	 it was capable of being rendered potable	 and the fact that it may be rendered unfit for human con sumption	 did not render the substance any less liable for taxation; (m) imposition of a fee would be the most effective method of regulating intoxicating liquor other than alcohol and could be justified as the reasonable measure in regard to intoxicating liquor as it is the duty of the State	 being a welfare State	 to denature by incurring extra cost and effort; quid pro quo was not necessary and	 even if it was necessary	 the requirements were met; and the price fixation was 'a valid method in regulation of consumption; (n) under its police powers	 the State had to regulate health	 morality	 welfare of society and incidental pauper ism and crime; (o) in enacting a law with respect to intoxication liquor as part of the legislative power	 measures of social control and regulation of private rights were permissible and as such may even amount to prohibition; (p) it has been accepted by Courts all along that the 'police power ' of the State enabled regulations to be made regarding manufacture	 transport	 possession and sale of intoxicating liquor; and such police power could be exer cised as to impose reasonable restrictions as to effectuate the power; (q) trade in alcoholic drinks or intoxicating drinks	 being obnoxious and injurious to health	 a citizen had no fundamental right under Article 19(1)(g) of the Constitution and it Is the privilege of the State alone and it can part with this privilege on receipt of a consideration; (r) the levy was stipulated jointly or severally	 both under ' Entries 8 of List II	 Entry 51 of List II	 Entry 33 of List III and what was described as police powers regula tory and other incidental charges	 and the levy was justi fied	 being a regulatory power under Article 19(6)	 and 19(6)(ii); the State had. a monopoly in alcohol trade and Article 31C 629 granted immunity to the challenge under Articles 13	 14 and 19 of the Constitution	 and under Article 298	 trading power of the State must be recognised	 coupled with century old monopoly of the State in alcohol; and (t) the vend fee was a pre constitutional levy	 and so saved under Article 277 of the Constitution: it was not a law either under Article 246 or Article 254 and was	 there fore	 outside the purview of the Central Act. On the questions: (i) whether the vend fee in respect of the industrial alcohol under different legislations and rules in different States was valid; (ii) whether the power to levy excise duty m case of industrial alcohol was with the State legislature or the Central legislature; (iii) what was the scope and ambit of Entry 8 List Ii of the Seventh schedule of the Constitution; and (iv) whether	 the State Government had exclusive right or privilege of manufactur ing	 selling	 distributing	 etc. of alcohols including industrial alcohol	 and what was the extent	 scope and ambit of such right of privilege	 Allowing the Writ Petitions	 Civil Appeals and Review Petitions	 this Court	 HELD: Majority: (E.S. Venkataramiah	 C.J.I	 Sabyasachi Mukharji	 Ranganath Misra	 B.C. Ray	 K.N. Singh and section Natarajan	 JJ.) Per Sabyasachi Mukharji	 J. 1.1 The relevant provisions of the U.P Excise Act	 1910	 A.P. Excise Act	 1968	 Tamil Nadu Act	 and Bombay Prohibi tion Act	 1949 are unconstitutional insofar as these purport to levy a tax or charge imposts upon industrial alcohol	 namely	 alcohol used and usable for industrial purposes. [680G H] 1.2 Having regard to the principles of interpretation and the Constitutional provisions	 in the light of the language used and	 having considered the impost and the composition of industrial alcohol	 and the legislative practice of this country. the imposts in question cannot be justified as State imposts. [680G H] 1.3 The different provisions	 in question are not merely regulatory	 but are much more than that. These seek to levy imposition in their pith and substance	 not as incidental or as merely disincentives	 630 but as attempts to raise revenue for States ' purposes. There is no taxing provision permitting these in the lists in the field of industrial alcohol for the State to legislate. Furthermore	 in view of the occupation of the field by the Industrial Development and Regulation Act	 it was not possi ble to levy this impost. Besides	 in view of the language used in the specific provision the levy is not on the manu facture of alcohol as such. Therefore	 these levies cannot in essence be sustained as duty of excise	 [681A B] 2.1 The meaning of the expressions used in the Constitu tion must be found from the language used. The words of the Constitution should be interpreted on the same principle of interpretation as one applies to an ordinary law but these very principles of interpretation compel one to take into account the nature and scope of the Act which requires interpretation. [672H	 673A] 2.2 A Constitution is the mechanism under which laws are to be made and not merely an Act which declares what the law is to be. [673B] 2.3 It is also well settled that a Constitution must not be construed in any narrow or pedantic sense and that con struction which is most beneficial to the widest possible amplitude of its power	 must be adopted. An exclusionary clause in any of the entries should be strictly and	 there fore	 narrowly construed. No entry should	 however	 be so read as not to rob it of entire content. A broad and liberal spirit should	 therefore	 inspire those whose duty it is to interpret the Constitution	 and the Courts are not free to stretch or to pervert the language of an enactment in the interest of any legal or constitutional theory. Constitu tional adjudication is not strengthened by such an attempt but it must seek to declare the law. It must not try to give meaning on the theory of what the law should be	 but must so look upon a Constitution that it is a living and organic thing and must adapt itself to the changing situations and pattern in which it has to be interpreted. Where division of powers and jurisdiction in a federal Constitution is the scheme	 it is desirable to read the Constitution in harmoni ous way. Further	 in deciding whether any particular enact ment is within the purview of one Legislature or the other	 it is the pith and substance of the legislation in question that has to be looked into. [673B E] 3.1 It is well settled that the various entries in the three lists of the Indian Constitution are not powers but fields of legislation. The power to legislate is given by Article 246 and other Articles of the Constitution. The three lists of the 7th Schedule to the Constitution are legislative heads or fields of legislation. These demarcate the area over 631 which the appropriate legislatures can operate. [673F] 3.2 It is also well settled that widest amplitude should be given to the language of the three entries but some of these entries in different lists or in the same list may over ride and sometimes may appear to be in direct conflict	 with each other	 then and then comes the duty of the Court to find the true intent and purpose and to examine the particular legislature in question. Each general word should be held to extend to all anciliary or subsidiary matters which can fairly and reasonably be comprehended in it. [673F G] 3.3 In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other in the same list. It has to be inter preted that the Constitution must be interpreted as the organic document in the light of the experience gathered. [673H] 3.4 In the Constitutional scheme of division of power under the legislative lists	 there are separate entries pertaining to taxation and other laws. [674A] The relevant entries in the Seventh Schedule to the Constitution demarcate legislative fields and are closely linked and supplement one another. [674E] The Constitution of India like most other Constitutions is an organic document. It should be interpreted in the light of the experience. It has to be flexible and dynamic so that it adapts itself to the changing conditions and accommodates itself in a pragmatic way to the goals of national development and the industrialisation of the coun try. This Court should	 therefore	 endeavour to interpret the entries and the powers in the Constitution in such a way that it helps to the attainment of undisputed national goals	 as permitted by the Constitution. [674C D] M.P.V. Sundararamier & Co. vs State of A.P.	 ; at pages 1480 82	 relied on. The India Cement Ltd. etc. vs The State of Tamil Nadu etc.	 and Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act	 1938 at 37 38	 referred to. 4.1 The expression of a Constitution must be understood in its common and normal sense. Industrial alcohol as it ISI	 is incapable of 632 being consumed by a normal human being. The expression 'consumption ' must also be understood in the sense of direct physical intake by human beings in this context. No doubt	 utilisation in some form or the other is consumption for the benefit of the human beings	 if industrial alcohol is uti lised for production of rubber	 tyres used. But the utilisa tion of those tyres in the vehicle of man cannot in the context in which the expression has been used in the Consti tution	 be understood to mean that the alcohol has been used for human consumption. [665C D] 4.2 The expression 'alcoholic liquor for human consump tion ' was meant and still means that liquor which	 as it is	 is consumable in the sense capable of being taken by human beings as such as beverage of drinks. Hence	 the expression under Entry 84 List I must be understood in the light. [665E] 4.3 Constitutional provisions specially dealing with delimitation of powers in a federal polity must be under stood in a broad commonsense point of view as understood by common people for whom the Constitution is made. In termi nology	 as understood by the framers of the Constitution and as also viewed at the relevant time of its intepretation it is not possible to proceed otherwise. Alcoholic or intoxi cating liquors must be understood as these are	 what these are capable of or able to become. [665G H] 5.1 By common standards ethyl alcohol (which has 95%) is an industrial alcohol and is not fit for human consumption. The petitioners and the appellants were manufacturing ethyl alcohol (95%) (also known as rectified spirit) which is an industrial alcohol. ISI specification has divided ethyl alcohol (as known in the trade) into several kinds of alco hol. Beverage and industrial alcohols are clearly and dif ferently treated. Rectified spirit for industrial purposes is defined as "spirit purified by distillation having a strength not less than 95% of volume by ethyl alcohol". Dictionaries and technical books would show that rectified spirit (95%) is an industrial alcohol and is not potable as such. Therefore	 industrial alcohol which is ethyl alcohol (95%) by itself is not only non potable but is highly toxic. The range of spirits of potable alcohol is from country spirit to whisky and the Ethyl Alcohol content varies be tween 19 to about 43 per cent. These standards are according to the ISI specifications. Therefore	 ethyl alcohol (95%) is not alcoholic liquors for human consumption but can be used as raw material input after processing and substantial dilution in the production of whisky	 Gin	 Country Liquor	 etc. [677D G] 633 Delhi Cloth and General Mills Co. Ltd. vs The Excise Commissioner	 U.P. Allahabad and Anr.	 Special Appeal No. 177 of 1970	 decided on 29.3.1973	 referred to. 6.1 Entry 8 of List I which contains the words "intoxi cating liquor ' ' cannot support a tax. The meaning of this expression has been rightly interpreted by the High Court in Balsara ' s case. Hence	 the observations of this Court in Balsara 's case require consideration. [677H	 675A B] 6.2 In the light of the new experience and development	 "intoxicating liquor" must mean liquor which is consumable by human being as it is. When the word "liquor" was used by this Court	 it did not have the awareness of full use of alcohol as industrial alcohol. It is true that alcohol was used for industrial purposes then also	 but the full poten tiality of that user was not then comprehended or under stood. With the passage of time	 meanings do not change but new experience give new colour to the meaning. [675B C] F.N. Balsara vs State of Bombay	 AIR 1951 Born 210 & 214	 approved. State of Bombay & Anr. vs F.N. Balsara	 ; Har Shankar & Ors. etc. vs The Dy. Excise & Taxation Commissioner & Ors.	 ; ; Adhyaksha Mathur Babu 's Sakti Oushadhalaya Dacca (P) Ltd. vs Union of India	 ; M/s Guruswamy & Co. etc. vs State of Mysore & Ors. 	 ; State of Mysore vs S.D. Cawasji & Co. & Ors.	 ; ; R.C. Jallv. Union of India	 [1962] Suppl 3 S.C.R. 436; Om Prakash vs Giriraj 'Kishore; 	 ; Inspector of Taxes vs Australian Mutual Provident Society	 [1959] 3 All England Law Report 245 and Commonwealth of Massachusetts Et AI vs USA	 92 Lawyers	 Edition p. 968	 referred to. 6.3 Article 47 of the Constitution imposes upon the State the duty to endeavour to bring about prohibition of the consumption except for medicinal purpose of intoxicating drinks and products which are injurious to health. If the meaning of the expression "intoxicating liquor" is taken in the wide sense adopted in Balsara 's case	 it would lead to an anamolous result and would oblige the State to prohibit even such industries as are licensed under the IDR Act but which manufacture industrial alcohol. This was never intend ed by the Constitution or judgments of this Court. There fore	 the decision in the Synthetics & Chemicals Ltd. 's case was not correct on this aspect. [679C D] State of U.P.	 etc. vs Synthetics & Chemicals Ltd. & Ors. etc.	 634 ; and State of Bombay & Anr. vs F.N. Balsara	 	 overruled. K.K. Narula vs State of J & K	 ; 	 referred to. The Indian Constitution does not recognise police power as such. But	 the exercise of sovereign power	 which gives the State sufficient authority to enact any law	 subject to the limitations of the Constitution to discharge its functions must be recognised. The Indian Constitution as a sovereign State has power to legislate on all branches except to the limitation as to the division of powers be tween the Centre and the States	 and also subject to the fundamental rights guaranteed under the Constitution. The Indian State	 between the Centre and the States	 has sover eign power. The sovereign power is plenary and inherent in every sovereign State to do all things which promote the peace	 morals	 education and good order of the people. Sovereignty is difficult to define. This power of sovereign ty is	 however	 subject to Constitutional limitations. [666F H] 8.1 In interpreting the provisions of the Constitution	 one should go by the plain words used by the Constitution makers. Importing of expression like 'police power '	 which is a term of variable and indefinite connotation	 can only make the task of interpretation more difficult. [671B] State of West Bengal vs Subodh Gopal & Ors.	 at 601 604 and Kameshwar Prasad & Ors. vs The State of Bihar & Anr.	 ; 	 referred to. 8.2 The power of the State to regulate	 though not as emanation of police power	 but as an expression of the sovereign power of the State is recognised	 but that power has its limitations. [671G] 8.3 Whether the States have the police power or not	 they have the power to regulate the use of alcohol	 and that power must include power to make provisions to prevent and/or check industrial alcohol	 being used as intoxicating or drinkable alcohol. However	 the question is whether	 in the garb of regulations	 a legislation which is in pith and substance	 fee or levy which has no connection with the cost or expenses administering the regulation	 could be imposed purely as regulatory measure. [671D E] In the instant case	 judged by the pith and substance of the legisla 635 tion in question	 these levies cannot be treated as part of regulatory measures.[671E] 9.1 The activity in potable liquor	 which was regarded as a safe and exclusive right of the State earlier	 cannot be justified under the police power of the State	 i.e.	 the power to preserve public health	 morals	 etc. This reasoning can never apply to industrial alcohol manufactured by indus tries which are to be developed in the public interest	 and which are being encouraged by the State. In such a situa tion	 it is essential to strike a balance	 and while doing so	 it is difficult to find any justification for any exclu sive right of a State to deal with industrial alcohol. Restriction valid under one circumstance may become invalid in changing circumstances. [680C D] Nashville	 Chattangooga & St. Louis Railway vs Herbert section Walters	 79 Lawyers ' Edition 949; Leo Nebbia vs People of the State of New York	 78 Lawyers ' Edn. 940 at p. 941 and Motor General Traders & Anr. vs State of Andhra Pradesh 9.2 Arbitrary and excessive imposts under the so called privilege of the States are a great disincentive for devel opment of industries in the public interest and for indus trial development in general and can render units unviable and sick. It is essential that there should be uniformity in the industry so that these are free from the vagaries and arbitrary and differential treatment meted out from State to State and even in the same State from time to time. [644C D] 9.3 Right to tax or levy must be in accordance with the provisions of the Constitution. It is clear that all duties of excise	 save and except the items specifically excepted in entry 84 of List 1	 are generally within the taxing power of the Central Legislature. The State Legislature has power	 though limited in imposing duties of excise. That power is circumscribed under Entry 51 of List II of the 7th Schedule to the Constitution. [666H	 667A	 674G] 10. In view of the subsequent amendments and additions to the levies	 the levies in question are not pre Constitu tional levies. [662E] 11.1 After 1956 amendment to the Industries (Develop ment and Regulation) Act	 1951 bringing alcohol industries (under fermentation industries)as item 26 of the First Schedule to the Act	 the control of this industry has vested exclusively in the Union. Thereafter	 licences to 636 manufacture both potable and non potable alcohol is vested in the Central Government. Distilleries are manufacturing alcohol under the Central Licences under IDR Act. No privi lege for manufacture even if one existed	 has :been trans ferred to the distilleries by the State. The State cannot itself manufacture industrial alcohol without.the permission of the Central Government. The States cannot claim to pass a right which these do not possess. Nor can these States claim exclusive right to produce and manufacture industrial alco hol which are manufactured under the grant of licence from the Central Government. Industrial alcohol cannot upon coming into existence under such grant be amenable to States ' claim of exclusive possession of privilege. The State can neither rely on Entry 8 of List II nor Entry 33 of list III as a basis for such a claim. It 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 tile whole field. Even otherwise	 sec tions like Section 24A and 24B of the U.P. Act do not con stitute any regulation in respect of the industrial alcohol as product of the scheduled industry. On the contrary	 these purport to deal with the so called transfer of privilege regarding manufacturing and sale. This power	 admittedly	 has been exercised by the State purporting to act under Entry 8 of list II and not under Entry 33 of list III. [681C F] 11.2 The position with regard to control of alcohol industry has	 therefore	 undergone material and significant change and the State is left with only powers to pass any legislation in the nature of prohibition of potable liquor referable to Entry 6 of list II and regulating powers	 lay down regulations to ensure that non potable alcohol is not diverted and misused as a substitute for potable alcohol	 and charge excise duty on potable alcohol and sales tax under Entry 52 of list II; however	 sales tax cannot be charged on industrial alcohol in the present case	 because under the Ethyl Alcohol (Price Control) Orders	 sales tax cannot be charged by the State on industrial alcohol; and in case State is rendering any service	 as distinct from its claim of so called grant of privilege	 it may charge fees based on quidpro quo. [681G H	 682A C] Indian Mica and Micanite Industries vs State of Bihar	 	 relied on. 12.1 On an analysis of the various Abkari Acts and Excise Acts	 it is clear that various provinces/States reserve to themselves in their respective States the right to transfer exclusive or other privileges only in respect of manufacture and sale of alcohol and not in respect of 637 possession and use. Not all but some of States have provided such reservation in their favour. The price charged as a consideration for the grant of exclusive and other privi leges was generally regarded as an excise duty. In other words	 excise duty and price for privileges were regarded as one and the same thing. So called privilege was reserved by the State mostly in respect of country liquor and not for eign liquor which included denatured spirit. [682D E] 12.2 On an analysis of various decisions and practice	 it is clear that is respect of industrial alcohol the States are not authorised to impose the impost they have purported to do. Hence	 such impositions and impost must go as being invalid. However	 this would not affect any impost so far as potable alcohol as commonly understood is concerned. It will also not affect any impositions of levy on industrial alco hol fee	 where there are circumstances to establish that there was quid pro quo for the fee sought to be imposed. This will also not affect any regulating measure as such. [682F G] The provisions are	 therefore	 declared to be illegal and invalid prospectively. The Respondent States are re strained from enforcing the said levy any further but they will not be liable for any refund and the tax already col lected and paid will not be refunded. [683B] In respect of Tamil Nadu	 no further realisations will be made in future by the State Government from the petition ers. Regarding past realisations	 the application for that part of the direction should be placed before a Division Bench	 for disposal upon notice both to the State and the Central Governments. [683F] Calcutta Gas Co. (Proprietory) Ltd. vs The State of West Bengal . and Ors.	 [1962] Suppl. 3 SCR 1; Nashirwar etc. vs The State of M.P.; 	 ; SheopatRai & Ors. vs State of U. P.	 [1972] All. L.J. 1000; Indian Mica & Mican ite Industries Ltd. vs State of Bihar & Ors.	 [1971] Suppl. SCR 319; Town Municipal Committee	 Amraoti vs Ramachandra Vasudeo Chimote & Anr.	 ; ; P.N. Kaushal etc. vs Union of India; 	 ; M/s Guruswamy & Co. etc. vs State of Mysore & Ors.	 ; Coo verjee B. Bharucha vs The Excise Commissioner and the Chief Commissioner	 Ajmer & Ors.	 [19541 SCR 873; Crowley vs Christensen	 [1890] 34 Lawyers ' Edn. 620 and Southern Phar maceuticals & Chemicals Trichur & Ors. vs State of Kerala & Ors. etc. ; 	 at 537	 referred to. 638 Per Oza	 J. (Concurring) 13.1 The State Legislature had no authority to levy duty or tax on alcohol which is not for human consumption as that could only be levied by the Centre. [686G] 13.2 A comparison of the language of Entries 84 of List I and 51 of List II clearly demonstrates that the powers of taxation on alcoholic liquors have been based on the way in which they are used. Admittedly	 alcoholic liquor is a very wide term and may include variety of types of alcoholic liquors	 but our Constitution makers have distributed them into heads	 namely	 (a) for human consumption	 and (b) other than for human consumption. Alcoholic liquors which are for human consumption were put in Entry 51 List II authorising the State Legislature to levy tax on them whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of excise. This scheme of these two entries in List I and II is clear enough to indicate the line of demarcation for pur poses of taxation of alcoholic liquors. What has been ex cluded in Entry 84 has specifically been put within the authority of the State for purposes of taxation. [685E H] 13.3 From the scheme of entries in the three lists	 it is clear that taxing entries have been specifically enacted conferring powers of taxation	 whereas other entries pertain to the authority of the Legislature to enact laws for pur poses of regulation. If Entry 8 in List II is compared with Entry 51 it is clear that while Entry 51 authorises the State Legislature to levy tax and duties on alcoholic liq uors failing under this entry	 Entry 8 confers authority on the State Legislature to enact laws for regulation. Similar ly are Entries in List I. But since a declaration has been made by the Parliament under Entry 52	 List I	 declaring the industry based on fermentation and alcohol to be an industry under the Industrial (Development and Regulation) Act	 1951	 and placing it directly under the control of the Centre	 even in respect of regulation	 the authority of the State Legislature in Entry 8	 List II could only be subject to the Act or rules made by the Centre. Therefore	 in view of clear demarcation of authority under various items in the three Lists	 Entry 8 List II could not be invoked to justify the levies which have been imposed by the State in respect of alcoholic liquors which are not meant for human consumption. [686C D	 F G] The State	 in exercise of powers under Entry 8 of List II and by appropriate law may	 however	 regulate and that regulation could be to 639 prevent the conversion of alcoholic liquors for industrial use to one for human consumption and for the purpose of regulation	 the regulatory fees only could be justified. In fact	 the regulation should be the main purpose	 the fee or earning out of it has to be incidental. [690H	 691A] 14.1 There is nothing like privilege vested in any one of the functionaries of the State. In the background of this basic feature of our Constitution	 the doctrine of privilege is difficult to reconcile with when this privilege of trad ing in commodities injurious to health and dangerous to life is examined especially in the context of Article 21 and Article 47 of our Constitution. [688C D] 14.2 Article 21 castes a duty on the State to protect the life of every citizen except as is provided under the Article. If this duty of the State is compared with the scheme of privilege	 it means that the State has a privilege to endanger human life (the life of a citizen). Such a privilege runs contrary to Article 21 [688F] 14.3 Article 47 appears in the Chapter of Directive Principles of State Policy. Inclusion of this Article in this Chapter clearly goes to show that it is the duty of the State to do what has been provided in this Article. It has provided that it is the duty of the State to improve public health and this duty will be discharged by endeavouring to bring about prohibition. It	 therefore	 sounds contradictory for a State	 which is duty bound to protect human life	 to claim that it has the privilege of manufacture and sale of alcoholic beverages which are expected to be dangerous to human life and injurious to human health and transferring this privilege of selling this privilege on consideration to earn huge revenue without thinking that this trade in liquor ultimately results in degradation of human life even endan gering human life and is nothing but moving contrary to the duty cast under Articles 21 and 47 and ideal of prohibition enshrined in Article 47. [688H	 689A C] Therefore	 in view of Articles 21 and 47	 the State cannot claim the privilege of having the right to trade in goods obnoxious and injurious to health. [689D]