Issue of controlling liquor sale goes to SC larger bench

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New Delhi, Nov 7(UNI) The Supreme Court has referred to a nine judge-bench the issue of interpretation of sections 2 and 18G of the Industries (Development and Regulation)Act 1951 whether the state is debarred from legislating for regulation of manufacture and sale of denatured spirit.

A bench comprising Justices H K Sema, Altamas Kabir and Lokeshwar Singh Panta referred the appeal of the Uttar Pradesh government and others to a larger bench holding that law laid down by a seven judge-bench of this court in Synthetics and Chemicals Case if allowed to stand would render the provisions of Entry 33(a) of list III nugatory or otiose.

The apex court has formulated six substantial questions of law to be referred to a larger bench for authentic prouncement on the powers of the states to legislate regulations for regulating the manufacture and sale of denatured spirit also known as country made liquor.

The important questions of law formulated are Does section 2 of the Industries(Development and Regulation) Act 1951 have any impact on the field covered by section 18-G of the said Act or Entry 33 of list III of the seventh Schedule of the Constitution? In the absence of any notified order by the Central Government under section 18-G of the above Act, is the power of the state to legislate in respect of matters enumerated in Entry 33 of List III ousted? Does the interpretation given in Synthetics and Chemicals Case (1990) 1SCC 109, in respect of section 18-G of Act correctly state the law regarding the states' power to regulate industrial alcohol as a product of the Scheduled Industry under Entry 33 of List III of the seventh Schedule of the Constitution in view of clause (a) thereof? Does the mere enactment of section 18-G of the above Act, give rise to a presumption that it was the intention of the Central government to cover the entire field in respect of Entry 33 of List III so as to oust the states' competence to legislate in respect of matters relating thereto? Does section 18G of the aforesaid Act fall under Entry 52 of List I of the seventh Schedule of the Constitution, or is it covered by Entry 33 of List III thereof? The three judge-bench directed, "Let the matter be placed before the hon'ble Chief Justice of India for consideration and appropriate orders." The petitioners had come in appeal against the Allahabad High Court judgment declaring the licence fee imposed by the state of UP as illegal on the grounds that it was beyond the competence of the state legislature to control the manufacture and sale of denatured spirit and also to check its diversion for human consumption.

Section 18 G empowers the Central government to secure the equitable distribution and availability at fair prices of any article or class of articles relatable to any Scheduled Industry, to provide and regulate supply and distribution thereof, and trade and commerce therein by a notified order.

The apex court concluded by observing, "We are, therefore, also of the view that this aspect of the matter requires reconsideration by a larger bench of this court, particularly, when the views expressed by 7 judge-bench on the aforesaid question have been distinguished in several subsequent decisions of this court, including the two decisions rendered by Constitution benches of five judges." UNI

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