The recent Supreme Court judgement has clarified the definition of ‘intoxicating liquors’ in the context of state regulations, significantly impacting the federal structure of governance in India. 

Background

• The case questioned whether: 
  • The States hold authority over all forms of alcohol—including industrial alcohol—or
  • The Union government could claim jurisdiction via the Industries (Development and Regulation) Act (IDRA) of 1951. 
• IDRA 1951 includes “fermentation industries” under subjects on which the Union can exercise control, sparking debate over whether industrial alcohol should fall under State or Union jurisdiction. 
• The primary contention was whether “intoxicating liquors” in the State List includes both potable and non-potable forms of alcohol, or if it should be limited to alcoholic beverages meant for consumption.

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Supreme Court Ruling and its scope

• A nine-judge Bench of the Supreme Court, led by Chief Justice D.Y. Chandrachud, provided clarity on the matter. 
• The majority opinion held that Entry 8 in the State List applies broadly to all forms of alcohol, including industrial alcohol, not limited to alcoholic beverages. 
• Chief Justice Chandrachud emphasised that allowing Parliament to regulate the entire alcohol industry would disrupt the federal balance, heavily tilting power towards the Union. 

Judicial Trends Reinforcing Federalism

• This decision preserves the autonomy of States over significant economic activities, ensuring that central laws do not overreach into areas constitutionally reserved for State regulation.
• The ruling also aligns with a recent decision in July, where the Supreme Court upheld States’ authority to tax mineral rights and mineral-bearing lands. 

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Conclusion

The Supreme Court’s ruling on alcohol regulation reinforces a balanced federal structure, granting states significant regulatory powers over vital industries. As discussions on industrial versus potable alcohol persist, it’s essential to consider the broader implications of these rulings on governance and economic stability.

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