States Can Regulate Industrial Alcohol: 9-Judge Bench (2024)

States Can Regulate Industrial Alcohol as ‘Intoxicating Liquor’ Under Entry 8: Nine-Judge Bench Overrules Synthetics 8:1

Published: 21 October 2026 · NyayVidhan

A nine-Judge Bench held by 8:1 that ‘intoxicating liquor’ in Entry 8 of List II is not limited to potable alcohol and covers alcohol that could be used noxiously, such as rectified spirit, extra neutral alcohol and denatured spirit. Parliament cannot take over the industry of intoxicating liquor under Entry 52 of List I, and Synthetics and Chemicals (7J) was overruled (Chandrachud CJI, para 140). Nagarathna J. dissented, holding that Synthetics was correctly decided (Nagarathna J., para 31).

Key holdings

Entry 8 of List II is both an industry-based and a product-based entry (Chandrachud CJI, para 140).

Parliament cannot take control of the intoxicating liquor industry under Entry 52 of List I (Chandrachud CJI, para 72).

Rectified spirit, extra neutral alcohol and denatured spirit fall within Entry 8; a hand sanitiser does not (Chandrachud CJI, para 140).

Synthetics (7J) is overruled (Chandrachud CJI, para 140).

Nagarathna J. would have upheld Synthetics, subject only to a clarification and the deletion of the words ‘both potable and’ (Nagarathna J., para 31).

Case explainer by NyayVidhan: an account of this judgment and the law it laid down, not the court's text. The judgment itself is the authoritative version.

Brief Facts

Uttar Pradesh levied an ad valorem licence fee on sales of specially denatured alcohol to industries licensed under Form FL 41, and the Allahabad High Court allowed a challenge to it (Chandrachud CJI, paras 22-23). In the State's appeal a three-Judge Bench, by an order of 25 October 2007, framed questions on Section 18G of the IDRA and Entry 33 of List III (Chandrachud CJI, paras 23-24). On 8 December 2010 a Constitution Bench said that Synthetics (7J), which confined Entry 8 to potable alcohol, required consideration by nine Judges (Chandrachud CJI, paras 25, 27). The nine-Judge Bench was not limited to the referred questions (Chandrachud CJI, para 26).

Court's Findings

Entry 8 of List II is both an industry-based and a product-based entry, reaching from raw materials to consumption (Chandrachud CJI, paras 57-58). A declaration under Entry 52 of List I denudes the State only to the extent of the control that Parliament's law specifies (Chandrachud CJI, paras 64-65). As Entry 8 is not subject to Entry 52, Parliament cannot take control of the industry of intoxicating liquor (Chandrachud CJI, paras 71-72). The word ‘intoxicating’ looks to effect, not ingredient (Chandrachud CJI, para 112). Entry 8 covers alcohol prone to noxious use, including denatured alcohol, but not final products such as hand sanitiser (Chandrachud CJI, paras 113-115). Synthetics (7J) misread FN Balsara and Article 47 (Chandrachud CJI, paras 116-119). Bihar Distillery's purpose-based division had no constitutional basis (Chandrachud CJI, para 129). Item 26 of the IDRA's First Schedule must be read as excluding intoxicating liquor (Chandrachud CJI, para 132). Dissenting, Nagarathna J. held that Entry 8 reaches the prevention of misuse of industrial alcohol but not industrial alcohol as such (Nagarathna J., paras 12, 31), and that Section 18G occupies the field under Entry 33(a) of List III without a notified order (Nagarathna J., para 30).

Legal Principle

‘Intoxicating liquor’ in Entry 8 of List II covers not only potable alcohol but all alcohol that could be used noxiously to the detriment of public health, from raw materials to consumption, and Parliament cannot take that field over by a declaration under Entry 52 of List I (Chandrachud CJI, paras 113, 140).

Precedents Relied Upon

Synthetics and Chemicals Ltd. v. State of UP (1990) 1 SCC 109
Overruled Discussed at ¶ 1, 116, 140
Confined ‘intoxicating liquor’ in Entry 8 to potable liquor; overruled by the majority.
State of Bombay v. FN Balsara 1951 SCC 860
Relied Upon Discussed at ¶ 8, 77, 79
Did not limit ‘intoxicating liquor’ to beverages; a wider meaning covers substitutes for intoxicating drinks.
Southern Pharmaceuticals and Chemical v. State of Kerala (1981) 4 SCC 391
Relied Upon Discussed at ¶ 80, 81
Alcohol-containing preparations capable of noxious use fall within ‘intoxicating liquor’ in Entry 8.

View all precedents (6)

Ishwari Khetan Sugar Mills v. State of UP (1980) 4 SCC 136
Relied Upon Discussed at ¶ 61, 64
A declaration under Entry 52 takes away State power only to the degree of control the law spells out.
Bihar Distillery v. Union of India (1997) 2 SCC 727
Overruled Discussed at ¶ 18, 126, 128, 129
Its purpose-based division of rectified spirit between Union and States, a later reading of Synthetics, had no constitutional basis; that reading was overruled.
Tika Ramji v. State of UP AIR 1956 SC 676
Distinguished Discussed at ¶ 8, 135, 138, 140
Its reading of ‘industry’ was held not relevant, since intoxicating liquor falls under Entry 8; its correctness was left undecided.