Power Over Industrial Alcohol Reserved For Union, AG Tells Supreme Court [Day 3]

The Supreme Court Constitution Bench last week( on April 4) resumed its third day of hearing the issue relating to the State's power to regulate and levy tax on industrial alcohol. The underlying issue is whether 'intoxicating liquor' over which the States have power, includes 'industrial alcohol'. The Union in its opening arguments countered the earlier contention of the appellants that the term 'liquor' should be given the widest interpretation possible. As per the Union, what is important is to understand simple terms like 'liquor' from the perspective of the framers of the Constitution when interpreting different entries within the 7th Schedule. It was contended that Entry 52 List I (Industries controlled by the Union in Public Interest) and Entry 33 List III (Concurrent Powers of Union and State over trade, commerce, production, supply etc of a Union-controlled industry) exist in a symbiosis. The symbiotic relationship is established by the fact that there co-exists a dependency between the said entries. While Entry 52 List I declares the Union of controlling industry in the public interest, Entry 33 List III has to be seen as an extension of the former, where it species concurrent control over the processes that entail within the 'controlled industry'. None of the two can be understood without relying upon each other. Attorney General (AG) Mr R Venkataramani appearing on behalf of the Union contended that the present case requires seeing meanings of terms like liquor and intoxicating liquor from a constitutional lens, with due regard to the distribution of powers and duties between the Union and the States. Taking the example of the term 'telegraph', he argued that when the telegraph was invented, society was not developed to envision the telephone which came subsequently with technological and scientific advancements. However, the Court have in previous decisions interpreted the term 'Telegraph' to also mean telephone. He placed emphasis on the fact that the framers of the constitution made a conscious effort to use a different terminology under Entry 8 List II (regulation powers to the state with regards to 'Intoxicating Liquor') - 'intoxicating liquor' as opposed to the general term 'liquor' used otherwise. The prevalence of a different choice of terminology in itself shows the intention of the framers to distribute Union-State powers on different subjects - liquor and intoxicating liquor respectively. The AG stressed that the correct way of understanding the 7th schedule is, to see how the governments at the centre and state approach the process of lawmaking or carve a public policy out of the want of necessity. The main question posed by the AG was the purpose of the existence of a division of authority between the Union and the States under Entry 33 List III. He suggested that the rationale behind this framework either was an objective which remains untapped so far or the broadening of the application of an existing objective.“Therefore the necessity element will always be built in Entry 52 List I. Entry 33 List III could not have been brought in List III if Parliament thought that bringing in the concept of an industry under Union control was sufficient to deal with all matters relating to Union control, then it could have ended so. So is there a purpose in saying that both parliament and the state will have a concurrent competence under Entry 33 List II, and If so, what purpose will it serve? either it was for a new purpose or serve a purpose already in existence and expands its use or its exercise.” The CJI noted that the scope of Entry 52 List I ( Industries controlled by the Union in Public Interest) was clear. It only concerned itself with the production or manufacturing processes of the industry, since Entry 33 List III gives the power to the State to regulate trade, production, and distribution of products from industries under Union control and similar imported goods.“The extent of Entry 52 in List I itself is in a restricted area, it at least excludes trade, commerce, production, supply, and distribution which is taken to List III. “ The AG replied that there are two ways of seeing industry, one is to separate the product of an industry and the trade, commerce, supply and distribution processes that go into making the product; the second perspective is we see all these processes as “one continuum of activity, an economic activity of production and thereafter supply , distribution etc.” Explaining in the present context of the working of the market, the AG submitted that production alone does not stop at making the product but also includes “the next series of actions - trade, commerce, supply and distribution”. He asserted, “There is a continuum of economic activity”. Entry 33 List III & Entry 52 List I Have A Symbiotic Relationship - AG Analyses The Union submitted that there exists a symbiotic relationship between Entry 33 List III and Entry 52 List I. Entry 33 List III brings within ...

Power Over Industrial Alcohol Reserved For Union, AG Tells Supreme Court [Day 3]

Anmol Kaur Bawa

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