State of U.P. & Ors. v. M/s Lalta Prasad Vaish and sons

State of U.P. & Ors. v. M/s Lalta Prasad Vaish and sons

the scope and ambit of Entry 8 - List II was also considered. It is in the context of the taxing power of the States, i.e., to levy excise duty on “industrial alcohol” and/or impost(s) such as vend fees which was the point of controversy. In the above backdrop, the question was crystallised to whether the expression “intoxicating liquors” in Entry 8 - List II is confined to potable liquor or includes all liquors. It was observed that the expression “alcoholic liquors for human consumption” used by the framers of the Constitution in Entry 51 – List II and Entry 84 – List I meant that liquor which is consumed by human beings directly as a beverage or as a drink. It was observed that alcoholic liquor or “intoxicating liquors” must be understood as common people would understand it and not what certain alcoholic products are capable of being transformed or converted into. That when excise duty was being levied under Entry 84 - List I, it did not include alcoholic liquors for human consumption but included denatured spirit which is “industrial alcohol”. It was observed that merely because the denatured spirit could be treated with water and transformed into alcoholic liquors into human consumption which did not involve a process of manufacture, the States would not have the legislative competence to levy excise duty under Entry 51 - List II. 10.4 Subsequently, in Synthetics and Chemicals (2J), it was clarified that the question which arose for consideration before the seven-Judge Bench was with regard to the validity of “vend fee and other fees” charged by the States. The two-Judge Bench clarified that the seven-Judge Bench had answered the question whether, “intoxicating liquors” in Entry 8 - List II was confined to only potable liquor or other liquors also and it was held that it included only potable liquor and not “industrial alcohol”. However, it was clarified that the State has the power to levy taxes on sale or purchase of goods under Entry 54 - List II and therefore paragraph 86 of the seven-Judge Bench in Synthetics and Chemicals (7J) was clarified in those terms. It was observed that in paragraph 86 by an accident (due to an inadvertence) the prohibition of sales tax being levied by the States on the “industrial alcohol” was adverted to without there being a discussion on that aspect of the matter and, therefore, to that extent the dictum of the seven-Judge Bench in Synthetics and Chemicals (7J) was per incuriam.

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It was further clarified that the seven-Judge Bench was only concerned with the question whether the State Legislature could levy vend fee or excise duty on “industrial alcohol” and that the said question was answered in the negative by holding that “industrial alcohol” being unfit for human consumption, the State Legislature was incompetent to levy any duty of excise under Entry 51 - List II. 10.5 In the above context, it was also observed that alcohol can be divided into two categories, namely, potable and non- potable alcohol. That alcohol which is potable is “intoxicating liquors” for human consumption directly as a beverage and comes within the scope and ambit of Entry 8 - List II and the State Legislature has the power to regulate such “intoxicating liquors” by making relevant laws. However, non-potable liquor or “industrial alcohol” as it is popularly called, can be diluted and consumed as a beverage, and the State has an obligation and powers to regulate and ensure that there is no such abuse having regard to Article 47 of the Constitution being a Directive Principle of State Policy. Hence, under Entry 8 - List II, the State can make laws for prevention of production, possession, sale etc. of non-potable alcohol as “intoxicating liquors”. Such regulation would be intra vires Entry 8 - List II and would not be in conflict with any other Entry in List I, II or List III. This would also be in line with Article 47 of the Constitution. 10.6 The aforesaid view was affirmed in Bileshwar Khand Udyog by holding that clarity was brought about in respect of “industrial alcohol” in Synthetics and Chemicals (7J) and the competency of the State to frame any legislation to levy any tax or duty on “industrial alcohol” was excluded. However, under Entry 33 - List III, there was power vested in the State insofar as “industrial alcohol” was concerned as the said product was a product of a scheduled industry, namely, Item 26 of the First Schedule of the IDRA which was enacted pursuant to Entry 52 - List I. This is subject to the intention of the Parliament to occupy the field as per the provisions of the IDRA, in particular, under Section 18G of the said Act. Gujchem Distillers also followed the aforesaid judgment. Khoday Distilleries also emphasised the fact that the State has the power to completely prohibit the manufacture, sale, possession, distribution and consumption of potable liquor as a beverage but the State

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cannot prohibit trade and business in medicinal and toilet preparations containing liquor or alcohol. In the same way, the State cannot prohibit trade or business in “industrial alcohol” which is not used as a beverage but used legitimately for industrial purposes. It was held that restrictions imposed by the States on trade or business in “industrial alcohol” or in medicinal and toilet preparations containing liquor or alcohol could be for the purpose of preventing their abuse or diversion for use as or in beverages. 10.7 In Shree Krishna Gyanoday Sugar Ltd. it was categorically observed that the excise authorities under the concerned State Act could supervise the working of the distilleries which had composite licences to manufacture not only denatured spirit and other spirits for industrial use but also potable spirit or country liquor in order to prevent alteration of denatured spirit and make it fit for human consumption. Therefore, at the distilleries of the licencees, supervision had to be provided as it was a regulatory measure. In this context also, it was clarified that the denatured spirit is a spirit which is not fit for human consumption and non-potable, and was also called as “other commercial spirits” under the rules in question, as they are used for industrial purposes or any other purpose other than human consumption as a beverage. This was opposed to potable liquor which is fit for human consumption. It was finally observed that in respect of such distilleries having composite licencees, the State will have to provide the cost of supervisors and the same could not be foisted on such distilleries. 10.8 Jeevan Reddy, J., in Bihar Distillery, also held that insofar as “intoxicating liquors or potable liquors” are concerned, they fall in the exclusive province of the State. However, alcohol can be used for the industrial purposes even without denaturing it. Significantly, it was held that Entry 8 - List II uses the expression “intoxicating liquors” which signifies “liquor for human consumption”. The absence of the words “for human consumption” in Entry 8 – List II is irrelevant as the word “intoxicating” signifies human consumption, i.e., as a beverage and all aspects of its production, manufacture, possession, transport, sale and purchase of “intoxicating liquors” are covered under the said Entry. Also the accidental error in para 85 of the Synthetics and Chemicals (7J) was explained to say that all

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potable liquor shall be governed by Entry 8 - List II which is within the exclusive domain of the State. Further, Entry 8 - List II is outside the purview of Entry 24 - List II and the Union cannot take control of “intoxicating liquors” by making a declaration in terms of Entry 52 - List I. It was further observed that Synthetics and Chemicals (7J) mainly dealt with “industrial alcohol”, i.e., denatured rectified spirit. 10.9 In Bihar Distillery, this Court further observed that the States have the power to legislate under Entry 33(a) – List III provided the field is not occupied by the Union. That there was a clear line of demarcation at the stage of removal or clearance of the product, i.e., if the clearance is for “industrial” purpose, the duties of excise and all other control is with the Union but if the removal or clearance is for obtaining or manufacturing “potable liquor”, the levy of duty and other control is with the State. It was observed that there was a need for joint control and supervision of the process of manufacture of rectified liquor and its use and disposal for ensuring that “industrial alcohol” was not misused by diverting it for potable purpose and consequently certain concrete observations were made in the said judgment which is of a binding nature. 10.10 The challenge to the notification issued by the excise commissioner, Uttar Pradesh dated 18.05.1990 was a subject matter of controversy in Vam Organic I, in the context of legislative competence of the State of Uttar Pradesh to impose tax or levy on “industrial alcohol”, ethyl alcohol and rectified spirit. It was observed that the expression “industrial alcohol” is not used in any of the three Lists of the Seventh Schedule of the Constitution. Referring to Synthetics and Chemicals (7J), this Court observed that the judgment in the aforesaid case proceeded to consider that rectified spirit was the ingredient for “intoxicating liquors” or alcoholic liquors for human consumption. The same was referred to as “industrial alcohol” in respect of which the State has no power whatsoever under Entries 8 and 51 – List II, while the States have the exclusive competence to legislate on “intoxicating liquors” or “alcoholic liquors for human consumption” but if any alcoholic preparation is diverted for human consumption, the States would have the power to legislate under Entry 8 - List II.

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10.11 Again, Jeevan Reddy, J. speaking for the Court in Bihar Distillery noted that in Synthetics and Chemicals (7J) a distinction was drawn between rectified spirit meant exclusively for industries (“industrial alcohol”) and rectified spirit exclusively used for obtaining potable alcohol. The said judgment did not deal with rectified spirit which could be converted to potable alcohol as such. That insofar as the first category was concerned, it was under the exclusive control of the Union and the second category was under the control of the State at all stages including the establishment of the distillery. 10.12 In Vam Organic II, the history of the legislations on “intoxicating liquors” as well the earlier judgments of this Court were considered and it was observed that the State Legislatures are constitutionally not competent to levy tax on “industrial alcohol” since the coming into force of the IDRA on 08.05.1952. It was opined that Synthetics and Chemicals (7J) continued to hold the field and therefore, the States’ power was limited to regulation of non-potable alcohol for the limited purpose of preventing its use as alcoholic liquors.

Further Analysis:

11. The survey of the aforesaid decisions of this Court and their analysis clearly indicate the golden thread of continuity in all of them, i.e., this Court has been clear on what is meant by the expression “industrial alcohol” as simplified to refer to all alcohol which is “not fit for human consumption as a beverage or non-potable alcohol”. By contrast, the use of the expression “potable alcohol” refers to “intoxicating liquors” used for human consumption as a beverage or as a drink. However, in paragraph 85 of Synthetics and Chemicals (7J) the expression “both potable and” is an inadvertent insertion inasmuch as there was no reason to state that licences to manufacture potable alcohol was vested in the Central Government. Therefore, to that extent the judgment in Synthetics and Chemicals (7J) calls for a clarification. Apart from that the following points would emerge from paragraph 85: (i) That, on insertion of Item 26 of the First Schedule to IDRA, the control of “Fermentation Industries” has vested exclusively in the Union.

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(ii) Therefore, even the States cannot themselves manufacture “industrial alcohol” without the permission of the Central Government. (iii) “Industrial alcohol” cannot be amenable to States’ claim to possession of exclusive privilege and the States can neither rely on Entry 8 – List II nor Entry 33 – List III as a basis for such claim. (iv) The States cannot claim that under Entry 33 – List III, it can regulate “industrial alcohol” as a product of the scheduled industry as the Union under Section 18G of the IDRA has evinced a clear intention to occupy the whole field. The doctrine of occupied field under Article 254 has been applied in the said case which shall be adverted to later. (v) Any exercise of power by the States under Entry 8 – List II is not an exercise of power under Entry 33 – List III. 11.1 The aforesaid judgments state that insofar as “intoxicating liquors” or potable liquors are concerned, Entry 8 - List II is the regulatory Entry while Entry 51 - List II is the taxation Entry which provides for imposition of excise duty on potable liquor also called alcoholic liquors for human consumption. Conversely, insofar as “industrial alcohol” is concerned, the control of the said industry is vested with the Union owing to Section 2 of the IDRA read with the other provisions of the said Act, which enactment has been made by virtue of Entry 52 - List I. That the Union has taken under its control “Fermentation Industries” as per Item 26 of the First Schedule to the IDRA which has been enacted by the Parliament in relation to Entry 52 - List I excluding “intoxicating liquors”. “Fermentation Industries” relates to various products manufactured, processed, etc. as a result of fermentation process. Such products of fermentation are broadly classified as “industrial alcohol” (non-potable alcohol) and “intoxicating liquors” (potable alcohol). This classification is for the purpose of identifying the nature of the product, its use in the industry and consequently, dividing the subject of the legislation between the Parliament and the State Legislature. 11.2 The aforesaid decisions also indicate that merely because “industrial alcohol” or non-potable alcohol such as rectified spirit can be converted into “intoxicating liquors” or alcohol fit

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for human consumption as a beverage (potable alcohol), that would not empower the State Legislature to tax or impose any levy on such “industrial alcohol”. However, since the expression “intoxicating liquors” in Entry 8 - List II deals specifically with alcohol used as a beverage and meant for human consumption, it would be within the scope and ambit of the said Entry for the State Legislature to regulate any abuse or conversion of “industrial alcohol” as a beverage, which is, in fact, harmful when consumed. Therefore, having regard to Article 47 of the Constitution, a State Legislature can even prohibit manufacture of “intoxicating liquors” in a State as one of the objects of which would be to negate the conversion or abuse of “industrial alcohol” as alcohol fit for human consumption. 11.3 The judgment of this Court in Synthetics and Chemicals (7J), was also clear about the controversy before it, namely, the competence of the Uttar Pradesh State Legislature to impose vend-fee on “industrial alcohol” when the same is a product of “Fermentation Industries” and, therefore, under the control of the Union. 11.4 However, the sum and substance of the controversy has to be answered by this Court on the premise that, despite there being clarity in the minds of the authorities under the States as well as the Centre, repeated imposition of imposts in the form of tax or excise duties etc., have brought several cases before this Court for adjudication. Ultimately, those who are in the business of “industrial alcohol” or “intoxicating liquors”, namely, non-potable and potable liquor respectively are clear about the nature of their business and the products that they are dealing with. Hence, I feel that it is incumbent for this Court to enhance the clarity and not create a further legal regime which would cause confusion and legal uncertainty in the economy.

Meaning of “intoxicating liquors”:

12. Before embarking on an enquiry in this Reference to understand the scope of the expression “intoxicating liquors” as it appears in Entry 8 – List II, it would be useful to highlight that this Court has relied on pre-constitutional legislations and the Constitution of India while interpreting the scope of the expression “intoxicating liquors”.

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12.1 At the outset, I may refer to Cooley’s “Constitutional Limitations” [2nd ed. Boston : Little, Brown & Company, p.58], wherein it is explained as follows: “In interpreting clauses we must presume that words have been employed in their natural and ordinary meaning. Says Marshall, Ch. J.: “The framers of the Constitution, and the people who adopted it, must be understood to have employed words in their natural sense, and to have understood what they meant.” This is but saying that no forced or unnatural construction is to be put upon their language; and it seems so obvious a truism that one expects to see it universally accepted without question; but the attempt is so often made by interested subtlety and ingenious refinement to induce the courts to force from these instruments a meaning which their framers never held, that it frequently becomes necessary to re-declare this fundamental maxim.” (underlining by me) Therefore, one task before this Court is to ascertain to what extent “intoxicating liquors” had acquired a natural and ordinary meaning at the time of the Constitution coming into force. 12.2 I may note another cardinal rule of interpretation explained by Sir Maurice Gwyer C.J., of the Federal Court of India in In Re: the Central Provinces and Berar Act No. XIV of 1938, 1939 1 FCR 80, while discussing the principles of interpretation of a constitutional provision as under: “I conceive that a broad and liberal spirit should inspire those whose duty it is to interpret it; but I do not imply by this that they are free to stretch or pervert the language of the enactment in the interests of any legal or constitutional theory, or even for the purpose of supplying omissions or of correcting supposed errors. A Federal Court will not strengthen, but only derogate from, its position, if it seeks to do anything but declare the law; but it may rightly reflect that a Constitution of a Government is a living and organic thing, which of all instruments

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has the greatest claim to be construed ut res magis valeat quam pereat.” 12.3 The learned Chief Justice Dr. Chandrachud, in his opinion has conducted an extensive inquiry into identification of legislative meaning of the phrase and its legislative history, but found that no conclusive answer can be reached on the legal import of “intoxicating liquors”. With due respect, I view that such an enquiry needs to give due primacy to the ordinary and natural meaning of words and also test their connotations in colloquial use by the Constitution makers so as to give it a constitutional flavour.

A Historical Perspective: 12.4 A historical enquiry would show that “intoxicating liquors” was first used in Entry 31 – List II in the Government of India Act, 1935. This was a departure from the legislative head in Devolution Rules framed under the Government of India Act, 1919 insofar as the Entry therein was “alcoholic liquor”. The revisions in List II of Government of India Act, 1935 were partly the product of a Joint Select Committee chaired by Lord Linlithgow. Later, the word “liquors” was also qualified by the word “intoxicating”. 12.5 I may briefly refer to the following remarks of Brewer, J. in South Carolina vs. United States (1905) 199 US 437 (“South Carolina”): “To determine the extent of the grants of power, we must, therefore, place ourselves in the position of the men who framed and adopted the Constitution, and inquire what they must have understood to be the meaning and scope of those grants.” 12.6 In this backdrop, it is useful to draw sustenance from certain contemporaneous legislations and Hansard records that go to show that the phrase “intoxicating liquors” was used in the context of consumption. On 30.04.1889, the House of Commons on a motion moved by Mr. S. Smith to discuss how the fiscal system of the Government of India led to the establishment of spirit distilleries, liquor and opium shops in a large number of places where till recently (from the date of question) they

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never existed had several references to “intoxicating liquors” exclusively in the context of consumption. On 29.06.1904, Mr. Herbert Roberts, a person interested in temperance asked the Secretary of State for India whether he was aware that the number of ‘shops open for the sale of “intoxicating liquors” and drugs in India rose from 97,910 in 1901–02 to 99,497 in 1902–03’ and whether he was in a position to explain the reasons for this increase in the number of shops opened and the consequent increase in consumption. Most interestingly, on 13.07.1937, in a sitting of the House of Lords, Lord Clwyd (formerly Mr. Herbert Roberts) asked the Secretary of State for India the following question: “To ask His Majesty’s Government what was the amount in pounds sterling of the net Excise revenue of India for the years 1933–1934, 1934–1935 and 1935–1936 respectively; what was the recorded consumption of country spirits in 1935–1936 in Bengal, Madras, Bombay, Sind, Bihar and Orissa, the United Provinces, the Punjab, the North-West Frontier Province, the Central Provinces and Berar, Assam and Burma respectively; what was the number of shops licensed for the sale of intoxicating liquor, the net amount of Excise revenue, and the cost of Excise administration in each Province in 1930–1931 and 1935–1936; and what was the percentage of Excise revenue compared with the total revenue accruing to the Provincial Governments in each case for the year 1935–1936.” 12.7 This enquiry reflects that “intoxicating liquors” has not only been a term of common parlance but was also used in administration for assessment and regulation of consumption of spirits in provinces in pre-independence India from the point of view of collection of revenue.

Constituent Assembly Debates: 12.8 I might also take persuasive strength from the use of the expression “intoxicating liquors” in Constituent Assembly Debates in the context of Article 47. Sri B.G. Kher speaking on the ruin caused by the consumption of alcohol noted the use of “intoxicating liquors” and drugs as a vice.

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12.9 The aforesaid discussion points to the fact that there was a consumption-oriented meaning attached to “intoxicating liquors” that was used for legal and administrative purposes. To ascertain the breadth of the phrase “intoxicating liquors” as it was used by the draftsmen of the Constitution and the Government of India Act, 1935 one cannot be bound by only the definitions provided in legislative enactments, or lack thereof. 12.10 The Constitution of India clearly employs three distinct expressions relevant to the present controversy: (a) Entry 51 - List II refers to duties on ‘alcoholic liquors for human consumption’; (b) Article 47 uses the words “consumption of ‘intoxicating drinks’”; and (c) Entry 8 – List II uses the words in question – “intoxicating liquors” 12.11 I may observe that the expression “alcoholic liquors for human consumption” as it appears in Entry 51 – List II and intoxicating drinks as it appears in Article 47 have been categorically used in the context of human consumption as a beverage, as rightly observed by the learned Chief Justice in his opinion. Herein, I might note that appellants have sought to contend that the expression “intoxicating liquors” as it appears in Entry 8 – List II has no explicit neighboring context which would indicate that it is restricted to mean only potable liquor. 12.12 The first interpretive question therefore is, whether the absence of the context of consumption expands “intoxicating liquors” to also include “industrial alcohol”. In my opinion, the words “intoxicating liquors” itself explains that Entry 8 – List II does not seek to travel beyond “intoxicating liquors” meant for human consumption i.e., potable alcohol. This was also the view of Jeevan Reddy, J. in Bihar Distillery. 12.13 Another distinguishing consideration is the use of “intoxicating” as an adjective to liquor i.e., as a qualifier whereas elsewhere in the Constitution the word “alcoholic” accompanies the word liquor. Learned Chief Justice has carefully found following three inferences which are summarized as under:

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a) Ingredient vs. Effect: “Alcoholic liquor” defines the scope of the provision based on the ingredient, that is, alcohol whereas “intoxicating liquors” defines the scope based on effect i.e. intoxication. Therefore, liquor which is not colloquially considered alcoholic liquor may be covered by the phrase “intoxicating liquors”. b) Broader intent: ‘Intoxicate’ means either the ability of someone to lose control of their behavior or poison. Thus, the purpose of substituting the adjective which indicates the impact with the ingredient seems to have enhanced the scope of the Entry to cover all liquor which has an impact on health; and c) Public interest purpose: There is a discernible public interest in covering the entire stage from production to sale of “intoxicating liquors”. Additionally, Entry 31 – List II in the Government of India Act, 1935 also regulated narcotic drugs and opium along with “intoxicating liquors”. However, references to them were deleted to prevent overlapping with entries in the Concurrent List. In substance, the inference that is drawn is that all – alcohol, narcotic drugs and opium – are products which can be noxiously used because they are also used as raw materials in the production of other products. 12.14 What prima facie appears is that the “intoxication” effect is a sine qua non for the legislative competence of States on any liquors potentially coming within the scope of Entry 8 – List II. In the absence of an “intoxicating” effect from liquors, a State Legislature cannot legislate on the subject. However, in my view, what is required to be seen is the nature of the product which leads to such an intoxicating effect upon human consumption of the same. Here, the expression consumption must be explained. It is not all kinds of human consumption, direct or indirect, which is the determining factor. It is only direct consumption i.e. as an ingestion by the act of drinking as a beverage or a drink. An indirect consumption by use of alcoholic liquors as a raw material for any other product, industrial, medicinal or a toilet item cannot be included as part of Entry 8 – List II. Secondly, merely because there can be a potential misuse of “industrial alcohol”, for example, by converting

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rectified spirit (“industrial alcohol”) as a beverage which has an intoxicating effect, Entry 8 – List II cannot be stretched to include such “industrial alcohol”. The prevention of abuse of “industrial alcohol” as a beverage is also covered under Entry 8 – List II. Thus, what is carved out of “Fermentation Industries” in Entry 24 – List II is only “intoxicating liquors” used as beverage and thus, for direct human consumption the said subject is placed in Entry 8 – List II. This would imply that the rest of “Fermentation Industries” would be within the scope and ambit of Entry 24 – List II which is subject to Entry 52 – List I and is a scheduled industry as per Section 2 read with Item 26 of First Schedule of IDRA. 12.15 One must also be cognizant of the fact that Entry 8 – List II concerns itself with “intoxicating liquors” even from a historical perspective. Constitutional framers were not engaged in a theoretical task of demarcating legislative fields but in their utmost wisdom and pragmatism distributed legislate fields between Parliament and State Legislatures that would continue to determine the governance of the nation. One must note that a construction of Entry 8 – List II should not potentially give the States the legislative competence to legislate on “industrial alcohol” which is a scheduled industry under IDRA. That Entry 8 – List II which deals with “intoxicating liquors” cannot also subsume industries for manufacture of “industrial alcohol”, etc. 12.16 Therefore, in deciding on “intoxicating liquors”, the contours of interpretation must be concerned only with the very nature of the product of “intoxicating liquors” rather than the entire industry concerning alcohol. Entry 8 – List II provides the legislative competence to States to regulate production, manufacture, possession, transport, purchase and sale of only “intoxicating liquors”. It must follow from this that what is being produced or manufactured or possessed or transported or purchased or sold must actually be “intoxicating liquors” and not any other alcoholic product. 12.17 Halsbury’s Laws of England (Fourth Edition), Volume 26 defines the meaning of “intoxicating liquors” as discussed in the context of the distinction between wholesale and retail trade. It is stated that “Dealing wholesale” means “the sale at

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any one time to any one person of not less than two gallons or one case of spirits, wine or made-wine, or not less than four and a half gallons or two cases of beer”. “Selling by retail” means “the sale at any one time to any one person of not more than two gallons or one case of spirits, wine or made-wine or not more than four and a half gallons or two cases of beer or cider”. The following definitions are apposite: (i) “Spirits” is defined to mean spirits of any description and includes all liquors mixed with spirits and all mixtures, compounds and preparations made with spirits, but does not include methylated spirits : Customs and Excise Act, 1952. (ii) “Wine” means liquor obtained from the alcoholic fermentation of fresh grapes or the must of fresh grapes, whether or not it is fortified with spirits or flavoured with aromatic extracts. (iii) “Made-wine” means any liquor obtained from the alcoholic fermentation of any substance or by mixing a liquor so obtained or derived from a liquor so obtained with any other liquor or substance, but does not include wine, beer, black beer, spirits or cider. This definition replaced an earlier one in different terms of “British wine”. (iv) The definition of “beer” includes ale, porter, stout and any other description of beer and any other liquor which is made or sold as a description of beer or as a substitute for beer which on analysis of a sample at any time is found to be of a strength exceeding two degrees of proof, but does not include liquor made elsewhere than upon the licenced premises of a brewer for sale which on analysis of a sample at any time is found to be of an original gravity not exceeding 1,016 degrees and to be of a strength not exceeding two degrees of proof : Customs and Excise Act, 1952. (v) “Intoxicating liquors” means spirits, wine, beer, cider and any fermented, distilled or spiritous liquor but (apart from cider) does not include any liquor for the sale of which by wholesale no excise licence is required : Licensing Act, 1964.

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(vi) “Cider” means cider or perry of a strength less than 8.7 per cent of alcohol by volume at 20 degrees Centigrade obtained from the fermentation of apple or pear juice without the addition at any time of any alcoholic liquor or liquor or substance which communicates colour or flavour other than such as the Commissioner of Customs and Excise may allow as appearing to them to be necessary to make cider or perry : Customs and Excise Act, 1952. (vii) “Intoxicating liquors other than spirits” includes beer, wine, made-wine and cider. 12.18 It may also be useful to outline some undisputed elements of “industrial alcohol”. It is an undisputed position that “industrial alcohol” is not meant to be consumed as a human beverage. In other words, it is not produced or manufactured to be meant for direct human consumption as a beverage. However, only when misused, as an intoxicating substance after some treatment, howsoever limited, “industrial alcohol” certainly could cause the “intoxicating” effect on direct human consumption. 12.19 Two distinguished interpretations have been contended before us. In effect, the respondents contend that “intoxicating liquors” must be so constructed that it includes only “liquors which are meant to intoxicate” as is. Per contra, the appellants contend that it is a cardinal rule of interpretation that legislative Entries be given the widest possible construction and therefore Entry 8 – List II should be read as “liquors which can intoxicate even when mischievously used”. The effect of the appellants’ construction is that Entry 8 – List II will give States the legislative field on “industrial alcohol”, which by design is not sought to be intoxicating but rather could intoxicate because of its misuse. 12.20 Before proceeding further, I may first note a notable feature of the phraseology of Entry 8 – List II of the Constitution of India and Entry 40 – List II, as Entry 8 appeared in the Draft Constitution. Neither in the Constitution nor in the Draft Constitution was there any other Entry in List II that used an adjective as a qualifier. Whether use of the word “intoxicating” enlarges or limits the scope of “liquors” is something that needs to be answered. Herein, “intoxicating” is an adjective that is adjoined to “liquors” and explains an effect that is

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caused. In this regard, learned Solicitor General contended that “intoxicating” has been used to expand beyond the limits of “alcoholic liquors” because States have an interest in regulating other “intoxicating liquors” such as bhang. It needs no labour that an “intoxicating” effect can be said to be caused only upon actual consumption by human beings. Unlike potable alcohol, “industrial alcohol” by its design, intent and purpose is neither sought to be consumed and cause an intoxicating effect nor is it produced keeping in mind its intoxicating effect on human beings. If we were to read “industrial alcohol” as “intoxicating liquors” which even though by design is neither supposed to be consumed nor have an effect on health but has the constituents that could be “intoxicating” when misused, it would enable a cumbersome interpretational plane. 12.21 It is useful to allude to the sine qua non of Entry 8 – List II i.e. the intoxicating effect. In my view, the sine qua non of Entry 8 – List II i.e. the “intoxicating” effect of liquor has to be read as (i) an effect, and (ii) an intended effect of the industry and its products. One might argue that even “industrial alcohol” due to its very constituents could cause an intoxicating effect, when mischievously consumed, albeit with dire consequences. However, such an argument ignores that the fundamental nature of “industrial alcohol” is that it is non-potable i.e. when put to its actual use, neither is it intended to be consumed by human beings as a beverage nor, as a corollary, is sought to cause an “intoxicating” effect on human beings. “Industrial alcohol” can be said to cause an “intoxicating” effect only when it is mischievously directed away from its actual purpose and use and towards human consumption. To accept such a rationale for interpreting Entry 8 – List II would lead to an anomalous situation wherein the marginal mischievous use of “industrial alcohol” would bring in the whole industry of “industrial alcohol” to Entry 8 – List II and take it out of Entry 24 – List II viz. “industrial alcohol” which is not always meant to intoxicate a human being but could only sometimes when used mischievously or abused would wholly become a legislative field for States to legislate. It is to avoid such an abuse that States have the powers to prevent by suitable legislative and administrative measures, as has been held in the aforesaid decisions of this Court.

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12.22 Viewed from another perspective, the exception (mischievous use) cannot lead to governing of the norm (original intended use) through such construction of Entry 8 – List II. Put into practice, this would translate into legislative regulation of production, manufacture, possession, transport, purchase and sale of the entire industry and product of “industrial alcohol” only because of its possible misuse or mischievous use. This reading would be tantamount to attaching to the constitutional intent an absurdity i.e. the part governing the whole or in other words, bringing within the ambit of Entry 8 – List II something which is an exception as a main aspect of the Entry. A careful revisit pertinent at this point would be to paragraph 86 of Synthetics and Chemicals (7J), wherein it was held that States continue to have legislative competence to ensure that non-potable alcohol is not misdirected to potable alcohol. That is different from saying that States have the right to regulate “industrial alcohol” or non-potable alcohol. A power to legislate as to the principal matter specifically mentioned in the Entry also includes within its expanse, legislation touching incidental and ancillary matters. However, ancillary matters by a backdoor cannot be included within the Entry, beyond what is covered as the principal. Herein, the ancillary matter being prevention of mischievous use of “industrial alcohol” would be within Entry 8 – List II but “industrial alcohol” as such would not be included. Hence, the analysis of the relevant Entries in the three Lists must be in the backdrop of the aforesaid discussion.

Analysis of relevant Entries in the three Lists:

13. While analysing Entry 52 – List I which deals with industries, the control of which by the Union is declared by Parliament by law to be expedient in public interest, it would be useful to refer to Entries 7 and 54 – List I. What is common in all these three Entries is that there is a declaration made by the Parliament. Entries 7, 52 and 54 – List I read as under: “7. Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. xxx

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52. Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. xxx

54. Regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest.” 13.1 What is common between Entry 52 – List I and Entry 54 – List I is the fact that control of industries or regulation and development of mines and mineral development respectively is to the degree or extent under the control of the Union which is expressed by a declaration made by Parliament by law to be expedient in the public interest. Thus, under Entry 52 – List I, the intent to control an industry: (i) by the Union; (ii) by a declaration by Parliament by law; and (iii) which law is expedient in the public interest are the key phrases to be taken note of. Thus, if there is a declaration by Parliament by law (such as IDRA) to control any of the industries by the Union, such as “Fermentation Industries” which is expedient in the public interest then, to the extent of such control, the industries would be covered under Entry 52 – List I. This is also evident on a reading of Entry 24 – List II which also deals with the field of legislation being “industries” subject to the provision of Entries 7 and 52 – List I. As already noted above, Entry 7 – List I pertains to industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. Entry 52 – List I deals with “industries”, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. 13.2 In Ishwari Khetan, the facts were that the Governor of Uttar Pradesh promulgated an Ordinance on 03.07.1972, styled as U.P. Sugar Undertaking (Acquisition) Ordinance, 1971, with a view to transferring and vesting sugar undertakings set out in the Schedule to the Ordinance in the U.P. State Sugar Corporation Limited, a Government Company within the meaning of Section 617 of the Companies Act, 1956. Subsequently, the Ordinance was repealed and replaced by an Act. The Schedule to the Act enumerated twelve sugar undertakings which stood transferred to and vested in the

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Corporation w.e.f. 03.07.1971, the date on which the Ordinance was issued. Writ Petitions were filed before the Allahabad High Court challenging the constitutional validity of the Ordinance as well as the Act on various grounds. The Division Bench of the High Court had repelled the contentions advanced on behalf of the petitioners therein and upheld the constitutional validity of the Act. Before this Court, the main thrust of the attack was that the U.P. Legislature lacked legislative competence to enact the impugned Act. This was because under Entry 52 – List I the Parliament had made the requisite declaration in Section 2 of the IDRA and in view of Item 25 of the First Schedule to the Act i.e. sugar, being a declared industry therein, that industry was excluded from Entry 24 - List II. Hence U.P. State Legislature was denuded of all legislative power to legislate in respect of sugar industry and the impugned legislation was void on account of legislative incompetence. 13.2.1 D.A. Desai, J. for himself and on behalf of V.R. Krishna Iyer and S. Murtaza Fazal Ali, JJ. wrote for the majority. This Court analysed the relevant Entries keeping in view the legislative perspective and historical background through which Entries 7 and 52 – List I, Entry 24 - List II and Entry 33 - List III, inter alia, had passed through. Considering Entry 52 – List I and Entry 24 - List II, it was observed that “industry” as a head of legislation is to be found in Entry 24 - List II with the limitation that it is subject to Entries 7 and 52 - List I. The difference in the language in which Entries 7 and 52 - List I is couched has a bearing on the interpretation of Entry 52 - List I. The subject “industry” being enumerated in List II, the State Legislature has power to legislate in respect to it and keeping aside the words “subject to the provision of Entries 7 and 52 of List I”, the State Legislature alone can legislate in respect of the legislative head “industry”. Ipso facto Parliament would have no power to legislate in respect of industry as a legislative head. Under Entry 52 - List I, unless and until a declaration is made by Parliament by law to assume control over specified industries, the embargo on the power of Parliament to legislate in respect of industry would

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not be lifted. The declaration has to be made by Parliament by law to assume control over specified industry in public interest. Thus, the extent of control would be known by the declaration so made by law. This would necessarily depend upon the legislation enacted spelling out the degree of control assumed which is a pre-requisite for assuming control over a specified industry. As a result to that extent, the State Legislature would be denuded of its powers to legislate under Entry 24 - List II. It was contended that the industry in respect of which control is assumed for the purpose of their development and regulation have been set out in the First Schedule and in the manner provided in the statute i.e. IDRA which also provides the limit of control to the extent mentioned in the said Act. It was contended that Section 2 has to be read along with the Act and not read de hors the Act. This would mean the provision of the Act would make the control concrete and specific and the manner in which exercise has to be laid down and not some abstract control. Thus, the control has to be concrete and the mode and method of its exercise must be regulated by law. That under the IDRA, Sections 3 to 30 set out various modes and methodology, power and procedure to effectuate the control which the Union acquired by virtue of the declaration contained in Section 2 of the IDRA. On these contentions, it was observed that absence of the words “to the extent herein provided” in Section 2 of the IDRA would not lead to the conclusion that the control assumed was to be something in abstract, total and unfettered and not as per the provisions of the IDRA. It was thus held that to the extent Union acquired control by virtue of declaration in Section 2 of the IDRA as amended from time to time, the power of the State Legislature under Entry 24 - List II to enact any legislation in respect of declared industry so as to encroach upon the field of control occupied by IDRA would be taken away. 13.2.2 In this regard, reliance was placed on Baijnath Kedia vs. State of Bihar, AIR 1970 SC 1436 (“Baijnath

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Kedia”). Thus to the extent the provision of the IDRA occupies the field, the State Legislature stands denuded of its power to legislate in respect of such declared industry. Examining the provision of the IDRA, it was held that in pith and substance, the impugned Act was one for acquisition of scheduled undertakings to the corporation, which would in no way come in conflict with any of the provision of the IDRA or would not trench upon any control exercise by the Union under the various provisions of the IDRA. That the IDRA is not concerned with the ownership of industrial undertaking in declared industry except the control over the management of the undertaking by the owner. Thus the legislative power of the State under Entry 24 - List II is eroded only to the extent control is assumed by the Union pursuant to a declaration made by the Parliament in respect of a declared industry as spelt out by the legislative enactment and the field occupied by such enactment is the measure of erosion. Subject to such erosion, on the remainder the State Legislature will have power to legislate in respect of a declared industry without in any way trenching upon the occupied field. It was held that State Legislature which is otherwise competent to deal with industry under Entry 24 – List II can deal with that industry in exercise of other powers enabling it to legislate under different heads set out in Lists II and III and this power cannot be denied to a State. The second limb of the submission therein is not related to the present controversy and need not be adverted to. It was finally observed that the impugned Act was not intended to take over management or control of any industrial undertaking by the State Government as in pith and substance, it was enacted to acquire the scheduled undertakings in terms of Entry 42 – List III. 13.2.3 In Ishwari Khetan, Pathak, J. (as he then was) for himself and for Koshal, J. (minority view) observed that while they broadly agreed with the final conclusion, on several points, reached by Desai, J. in his judgment, they preferred to refrain from expressing any opinion

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on the question whether the declaration made by Parliament in Section 2 of the IDRA in respect of the industries specified in the First Schedule to that Act can be regarded as limited to removing from the scope of Entry 24 - List II only so much of the legislative field as is covered by the subject matter and content of that Act or it can be regarded as effecting the removal from that Entry of the entire legislative field embracing all matters pertaining to the industries specified in the declaration. It was further opined that the observations made by this Court in Hingir-Rampur Coal Co., Ltd. vs. The State of Orissa, AIR 1961 SC 459 (“Hingir-Rampur”); State of Orissa vs. M.A. Tulloch and Co., AIR 1964 SC 1284 (“M.A. Tulloch”); Baijnath Kedia vs. State of Bihar, AIR 1970 SC 1436 (“Baijnath Kedia”); and State of Haryana. vs. Chanan Mal, AIR 1976 SC 1654 (“Chanan Mal”), would not be of assistance in this behalf. In each of those cases, the declaration made by Parliament in the concerned enactment limited the control of the regulation of the mines and the development of minerals to the extent provided in the enactment. Whether the terms in which the declaration has been made in Section 2 of the IDRA, a declaration not expressly limiting control of the specific industries to the extent provided by the Act, can be construed as being so limited was a matter which, they thought, should be dealt with in some more appropriate case. That the range of considerations encompassed within the field of enquiry to which the point was amenable had not been sufficiently covered before the Court. “This was for the good reason and, hence, the provocation was limited.” Therefore, the controversy could be adequately answered on the ground that the legislation impugned therein fell within Entry 42 - List III and would not be related to Entry 52 - List I or Entry 24 - List II. 13.2.4 Therefore, there was a reluctance to enter upon an examination of the mutually competing claims of Entry 52 - List I and Entry 24 - List II — Entries which deal with “industries”. Consequently, the appeals were dismissed.

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13.3 When the expression “subject to” is used in an Entry in List II it would imply that the said Entry is subordinate to the respective Entries in List I and has to be read along with the relevant Entry in List I. Thus, on a conjoint reading of Entry 24 – List II with Entry 52 – List I, it is apparent that Entry 24 – List II is subject to Entry 52 – List I. The expression “subject to” in the Entries in List II has been a subject matter of interpretation in several decisions and is of legal import. 13.3.1 As per Black’s Law Dictionary, 5th Edition, Pg.1278, “subject to” means “liable, subordinate, subservient, inferior, obedient to, governed or affected by.” 13.3.2 The relevant judgments of this Court on the point are discussed as under: a) In Hingir Rampur Coal Company vs. State of Orissa (1961) 2 SCR 537 (“Hingir Rampur”), while interpreting the import of the expression “subject to” in Entry 23 – List II and the interplay of that Entry with Entry 54 – List I, this Court observed as undisputed the position in law that, once a Central Act containing a declaration by Parliament covering the field is passed as required by Entry 54 – List I, the State Legislature had no legislative competence to enact a legislation on the subject that has already been occupied by a Central legislation – not for reason of repugnancy but rather competence at the very inception. b) In Gujarat University vs. Shri Krishna Ranganath Mudholkar, AIR 1963 SC 703 (“Shri Krishna”), this Court was tasked with interpreting Entry 11 - List II, which, although stands omitted now, earlier read as ‘Education including universities, subject to the provisions of Entries 63, 64, 65 and 66 of List I and Entry 25 of List III’. Therein, it was held that use of the expression “subject to” in Entry 11 - List II clearly indicated that legislation in respect of excluded matters cannot be made by the State Legislature. By the Constitution (Forty-Second Amendment), 1976, Entry 11 – List II was omitted, as noted

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above, and Entry 25 – List III was substituted as, ‘Education, including technical education, medical education and universities, subject to the provisions of Entries 63, 64, 65 and 66 of List I; vocational and technical training of labour.’ In this context, this Court in Baharul Islam vs. The Indian Medical Association, 2023 SCC OnLine SC 79 (“Baharul Islam”), while referring to Modern Dental College & Research Centre vs. State of Madhya Pradesh (2016) 7 SCC 353 (“Modern Dental College”), explained that where one Entry is made ‘subject to’ another Entry, it means that out of the scope of the former Entry a field of legislation covered by the latter Entry has been reserved to be specially dealt with by the appropriate Legislature. c) Similarly, while interpreting the significance of a constitutional provision being subject to another in The South India Corporation (P) Ltd. vs. The Secretary, Board of Revenue Trivandrum, AIR 1964 SC 207 (“South India Corporation”), this Court observed that the expression “subject to” conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. d) Helpful reference may also be made to the import of “subject to” in legislative uses. In Ashok Leyland Ltd. vs. State of Tamil Nadu (2004) 3 SCC 1 (“Ashok Leyland Ltd.”) this Court held that “subject to” is an expression whereby a limitation is expressed. 13.4 Having noted as above, it is also crucial to examine the interplay between Entry 52 – List I, Entry 24 – List II and Entry 8 – List II. Entry 24 – List I is a regulatory Entry which provides State Legislatures with the competence to legislate on “industries” subject to Entry 7 – List I and Entry 52 – List I. In effect, Entry 52 – List I enables the Union to take an industry out of the legislative competence of States and bring it within Entry 52 – List I. In the instant cases, the primary question is whether there is any overlap between Entry 52 – List I and

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Entry 8 – List II. In other words, is there any conflict between the exclusive competence of State Legislatures under Entry 8 – List II and the regulation of industries the control of which by the Union is declared by Parliament by law to be expedient in the public interest under Entry 52 – List I? 13.4.1 It is a settled law that the meaning of “industries” in Entry 52 – List I and Entry 24 – List II is coextensive. Therefore, what is out of Entry 24 – List II will also not be within Entry 52 – List I. In that context, it has been contended before us that Entry 8 – List II is a unique Entry as it is not limited to only the product of “intoxicating liquors” but also takes within its sweep the “industry” of “intoxicating liquors”. It was also submitted that Entry 8 – List II unlike Entry 24 – List II is not subject to Entries in List – I and therefore the industry of “intoxicating liquors” is the exclusive domain of State Legislatures. The import of such a position is that if Entry 8 – List II is held to be both an industry-based and product-based Entry, the Entry would empower States to legislate on both the product of “intoxicating liquors” and production of the product as well. Furthermore, as Entry 8 – List II is not subject to Entry 52 – List I, the industry of “intoxicating liquors” will be out of Entry 24 – List II, and therefore, coextensively under Entry 52 – List I the Union would not have the legislative competence to legislate on what lies exclusively within Entry 8 – List II. 13.4.2 Learned Chief Justice Dr. Chandrachud in his proposed judgment has observed that the Seventh Schedule differentiates between the industry and product of industry and, even further, Entry 8 – List II is special because such a distinction made in the general Entries is not adopted in Entry 8 – List II. As rightly pointed out, it is the potential overlap between Entry 52 – List I and Entry 8 – List II which must be resolved herein. 13.4.3 In this regard, reference to the dictum of this Court in Calcutta Gas Company is apposite, wherein the interpretation between Entries 24 and 25 – List II in relation to Entry 52 – List I was considered. It was observed that Entry 24 – List II in its widest amplitude

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takes in all industries, including that of “gas and gas- works”. So does Entry 25 – List II which comprehends gas industry. There is, therefore, an apparent conflict between the two Entries and they overlap with each other. It was observed that in such a contingency the doctrine of harmonious construction must be invoked. While Entry 24 – List II covers a very wide field, that is, the field of entire industry being within the legislative competence of the State, Entry 25 – List II dealing with “gas and gas-works”, can be confined to a specific industry, that is, the “gas industry”. This was possibly because only one or two States are concerned with “gas industry” and it was not considered to be of an all-India importance and therefore, was carved out of Entry 24 – List II and given a separate Entry as Entry 25 – List II, as otherwise if a declaration by law was made by Parliament within the meaning of Entry 7 or Entry 52 - List I, gas and “gas industries” would be taken out of the legislative power of States. Therefore, by the doctrine of harmonious construction, “gas and gas works” were found to be within the exclusive field allotted to the States and outside the legislative field of Parliament. It was further observed that the expression “industry” in Entry 52 - List I bears the same meaning as that in Entry 24 - List II, with the result that the said expression in Entry 52 - List I also does not take in the industry of “gas and gas works”. If so, it followed that the IDRA, in so far as it purported to deal with the “gas industry” is beyond the legislative competence of Parliament. 13.4.4 Keeping the aforesaid dictum in mind, it must be observed that Entry 8 – List II being a special Entry prevails over the general Entry 24 – List II. Therefore, while Entry 52 – List and Entry 8 – List II overlap on the aspect of “industry” of “intoxicating liquors”, Entry 52 – List I cannot takeover the “industry” of “intoxicating liquors”. 13.5 Therefore, the next question is whether Entry 8 – List II which deals with “intoxicating liquors”, that is to say, the production, manufacture, possession, transport, purchase and sale of

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“intoxicating liquors” is restricted to only alcoholic liquors for human consumption i.e., potable alcohol or it would also extend to non-potable alcohol or “industrial alcohol”. In other words, if “industrial alcohol” is read within the meaning of Entry 24 – List II then, whether, on account of the declaration made by the Parliament in Section 2 of the IDRA in terms of Entry 52 – List I it would be excluded from Entry 24 – List II and included under Entry 52 – List I as per the provisions of the IDRA. In other words, the question is whether Entry 8 – List II which deals with “intoxicating liquors” would take within its scope and ambit “industrial alcohol”? One of the ways of answering these questions would be to compare Entry 84 – List I as it stood prior to 16.09.2016 with Entry 51 – List II although both are taxation Entries. Entry 84 – List I dealt with duties of excise on tobacco and other goods manufactured or produced in India except – (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this Entry. Entry 51 – List II talks of duties of excise on the goods manufactured or produced in the State and countervailing duties at the same or lower rates on similar goods manufactured or produced elsewhere in India, namely, - (a) alcoholic liquors for human consumption; (b) opium, Indian hemp and other narcotic drugs and narcotics, but not including medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of this Entry. Both are taxation entries. 13.6 On a comparative reading of the said two Entries, what is evident is that excise duty on goods manufactured as per Entry 84 – List I excludes duty of excise on alcoholic liquors for human consumption. This is subject to the further exception that, if, any medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of the said Entry, namely, opium, Indian hemp and other narcotic drugs and narcotics, then, the excise duty is leviable as per Entry 84 – List I by the Union or Central Government. Conversely, under Entry 51 – List II, goods manufactured or produced in the State would be subject to excise duty such as on – a) alcoholic liquors for human consumption; b) opium, Indian hemp

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and other narcotic drugs and narcotics, but does not include medicinal and toilet preparations containing alcohol or any substance included in sub-paragraph (b) of the said Entry. In other words, alcoholic liquors not meant for human consumption and medicinal and toilet preparations containing alcohol or any substance such as opium, Indian hemp and other narcotic drugs and narcotics would be subject to excise duty leviable under Entry 84 – List I by the Central Government. Insofar as alcoholic liquors for human consumption is concerned, the States have the power to levy excise duty. 13.7 Therefore, in my view, the framers of the Constitution bifurcated alcoholic liquors for human consumption as distinct from alcohol used for medicinal and toilet preparations or any other liquor including “industrial liquor” on which excise duty is leviable under Entry 84 – List I. What is the purpose of excluding levy of excise duty under Entry 84 – List I on alcoholic liquors for human consumption and including the same under Entry 51 – List II and thereby giving the powers to the State Legislature to levy excise duty on such alcoholic liquors? The intent of the framers of the Constitution was to categorize alcoholic liquors into following two categories and accordingly divide the legislative powers between Parliament and State Legislature: (a) alcoholic liquors for human consumption (potable alcoholic liquors); and (b) alcoholic liquors not for human consumption such as “industrial alcohol” (non-potable alcoholic liquors). At this stage itself, it is made clear that if alcoholic liquor, which is manufactured for the purpose of using the same as a raw material in the manufacture or production of any other “industrial product” and is subject to a process, would not come within the scope and ambit of “alcoholic liquors for human consumption”. As noted, the said product is also known as “industrial alcohol”. Such “alcoholic liquors” or “industrial alcohol” are not used directly for human consumption as a beverage. On the other hand, it would be an abuse of such “industrial alcohol”, if consumed as a beverage. Merely because it can be subjected to a process and mischievous human consumption is possible, does that make “industrial alcohol” “alcoholic liquors for human

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consumption” within the meaning of Entry 84 – List I and Entry 51 – List II and also “intoxicating liquors” within the scope and ambit of Entry 8 – List II? 13.8 A person or an entity which is not engaged in the manufacture of alcoholic liquors for human consumption as a beverage is not authorised to manufacture “industrial alcohol” and subject it to a process and sell it as alcoholic liquors for human consumption. The same is prohibited and has to be dealt with having regard to the scope and ambit of Entry 8 – List II. On the other hand, it is only “intoxicating liquors” which is directly for human consumption as a beverage and the production, manufacture, possession, transport, purchase and sale of such “intoxicating liquors”, as per Entry 8 – List II, which is within the competence of State Legislature i.e. for the purpose of regulation of such “intoxicating liquors” which would also entail levy of an excise duty on such “intoxicating liquors” as per Entry 51 – List II as alcoholic liquor for human consumption. Therefore, on “intoxicating liquors” which is alcoholic liquors directly for human consumption as a beverage, excise duty is levied by the State Legislature and regulated under Entry 8 – List II. Also, under Entry 84 – List I, the Parliament has no power to levy any such excise duty on such “intoxicating liquors” meant for human consumption as a beverage as it is an expressly excluded item. In other words, alcoholic liquors for human consumption is thus directly relatable to “intoxicating liquors” and the expression “intoxicating liquors” in Entry 8 – List II means alcoholic liquors directly for human consumption as a beverage. Thus, no other alcoholic liquors can be regulated as per Entry 8 – List II except to ensure that there is no abuse/misuse of “industrial alcohol” being treated for human consumption by subjecting it to a particular process; nor can any excise duty be levied on such liquor by the State Legislature. Hence, any “intoxicating liquors” would mean alcoholic liquors for human consumption which is produced, manufactured, possessed, transported, purchased or sold and can be regulated under Entry 8 – List II by the State Legislature but alcoholic liquors which are not for human consumption as a beverage would not come within the scope of the expression “intoxicating liquors”, such as “industrial alcohol” which

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would in turn be regulated by Entry 24 – List II which Entry is subject to Entry 52 – List I and can be controlled by the Union exclusively. Thus, “industrial alcohol” and medicinal and toilet preparations which contain alcohol can be taxed as per Entry 84 – List I by the Central Government in the form of central excise duty. 13.9 Merely because “industrial alcohol” by a process can be converted to alcohol for human consumption as a beverage does not entitle the State Legislature to tax or regulate “industrial alcohol”. On the other hand, the States as per Entry 8 – List II have the power to regulate “intoxicating liquors” which is for human consumption as a beverage and in that regard have the power to prohibit “industrial alcohol” being converted to alcohol for human consumption as a beverage. This is in order to protect the health of citizens which is a Directive Principle of State Policy under Article 47 of the Constitution and in order to prohibit unauthorised use/misuse of “industrial alcohol” produced in the State from being converted and sold as “intoxicating liquors” meant for human consumption as a beverage. 13.10 This interpretation would become clearer on a reading of Entry 33(a) – List III which deals with, inter alia, 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 the public interest, and also includes imported goods of the same kind as such products. Therefore, if products of any industry where the control of such industry by the Union has been declared by Parliament by law to be expedient in public interest are manufactured in India or imported into India, then as per Entry 33(a) – List III, on the production, supply and distribution of and trade and commerce of such industrial products, the State Legislature would not have any exclusive power to pass a law under Entries 26 and 27 – List II as they are subject to Entry 33(a) – List III. In other words, in view of the passing of the IDRA, under Entry 52 – List I and the inclusion of, inter alia, products of “Fermentation Industries” such as “industrial alcohol” in Item 26 of the First Schedule of the IDRA, the State Legislatures would be subject to the powers of the Parliament to pass

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a law in the matter of production, supply, distribution, trade and commerce of such industrial product. 13.11 Therefore, if the control of any industry has been declared by Parliament by law to be expedient in the public interest, then in such a case, in the matter of production, supply and distribution of products of such industry, Entry 27 – List II would be subject to Entry 33(a) – List III. Thus, the subject production, supply and distribution of goods found in Entry 27 – List II as well as in Entry 33(a) – List III regarding any product of an industry has a nexus with Entry 52 – List I. 13.12 Further, Entry 24 – List II which deals with industries, is itself subject to Entry 52 – List I. Therefore, if any industry is mentioned in the First Schedule of the IDRA which is a legislation passed by the Parliament by virtue of Entry 52 – List I, a reading of the same conjointly with Entry 33(a) – List III would mean that particular industry which has been mentioned in the First Schedule of IDRA would be under the control of the Union. However, as far as the products of such industry are concerned, Entry 33(a) – List III deals with the aspect of production and supply and distribution as well as trade and commerce. Thus, if any particular industry is not mentioned or is deleted from the First Schedule of IDRA, then automatically Entry 33(a) – List III would not apply to such industrial products and the subject would squarely fall within the scope and ambit of Entry 24 – List II and Entry 27 – List II.

14. There is another way of looking at the Entries under consideration. As already noted, Entry 24 - List II which deals with the subject “industries”, enables legislative competence to the State Legislature to enact laws on the said subject. Therefore, at a first glance the subject “industries” is a State subject. However, Entry 24 - List II is subject to Entries 7 and 52 - List I which have been discussed above. In particular, Entry 52 - List I deals with “industries”, the control of which is taken over by the Union by a declaration made by the Parliament by law as it is expedient in public interest. In respect of “such industries”, as covered within the scope and ambit of Entry 52 - List I, it would imply that under Entry 33(a) - List III, insofar as the products of any such industry are concerned where the control of such industry by the Union is declared by the Parliament by law to

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be expedient in public interest and import of goods of the same kind as such products have to be read in consonance with the scheme of the Entries. It would mean that if any legislation has been made by the Parliament, such as the IDRA and an industry is named in the First Schedule thereof such as “Fermentation Industries” in the instant cases, the State Legislation would be subject to the Parliamentary legislation. The said Entry is in the Concurrent List and the Parliament as well as the State Legislature have the competence to pass such laws. Then, the question that would arise, is whether, there would be repugnancy between the laws made by Parliament and laws made by a State Legislature and if so, how could it be resolved. 14.1 In this regard, Section 18G which is a part of Chapter IIIB of the IDRA could be considered. The said Section states that the Central Government, so far as it appears to be necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry, i.e. any of the industries specified in the First Schedule of IDRA may, notwithstanding anything contained in any other provision of the IDRA by notified order, provide for regulating the supply and distribution thereof and trade and commerce therein. This provision deals particularly with regard to regulation of supply and distribution, trade and commerce of any article relatable to scheduled industry. Sub- section (2) of Section 18G states that without prejudice to the generality of the powers conferred by sub-section (1) of Section 18G, a notified order made may provide for various aspects. Sub-section (4) of Section 18G states that no order made in exercise of any power conferred by this section shall be called in question in any court. 14.2 One of the contentions raised in this batch of cases is with regard to whether the Central Government has to, in fact, issue a notified order with regard to regulating the supply and distribution and trade and commerce of any article or class of articles relatable to any scheduled industry so as to indicate that the State Legislature cannot pass any legislation under Entry 33(a) - List III. In my considered view, the fact that an industry is a scheduled industry under the IDRA would imply that at any time the Central Government is empowered to issue a notified order providing for regulating the supply and distribution and trade and commerce of the products of such a scheduled

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industry. But in the absence of there being an issuance of a notified order as such can the State Legislature be denuded of their powers to pass any law under Entry 33(a) - List III? 14.3 Having regard to the emerging situation in the economy in the matter of supply and distribution and trade and commerce of any article or class of articles relatable to any scheduled industry, the Central Government may issue a notified order for the purpose of regulating the same so as to secure its equitable distribution and availability at fair prices of the products of such industry. 14.4 A situation may suddenly arise making it necessary or expedient to issue a notified order under Section 18G of the IDRA. One cannot envisage the emerging circumstances in an economy such as the Indian economy where the need for issuance of such a notified order would arise. It could be for instance to curb hoarding and black marketeering of a particular article of a scheduled industry in order to stifle price rise. It could be for ensuring a minimum or maximum price for any article related to a scheduled industry which is a raw material or ancillary input for a product/article of another scheduled or non-scheduled industry. Sudden rise in prices of commodities/ articles relatable to any scheduled industry due to natural disasters, floods, famines, financial emergency or other such reasons could necessitate issuance of a notified order under Section 18G of the IDRA. Of recent occurrence is the Covid-19 pandemic which would have necessitated issuance of notified orders on certain articles related to scheduled industries. The field of legislation must therefore be left open for the Central Government to act by issuance of a notified order as and when thought necessary or expedient to secure and achieve the objects stated in the said provision. 14.5 But, can it be held that in the absence of any such notified order issued by the Central Government, the States could pass laws under Entry 33(a) - List III? Would it lead to a legal confusion and an overlapping and contradiction? This is because if it is held that in the absence of there being a notified order actually issued by the Central Government under Section 18G of the IDRA, the States are empowered to pass laws under Entry 33(a) - List III and such laws are in

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fact made under the aforesaid Entries by the States and the Central Government subsequently decides to issue a notified order under Section 18G of the IDRA, the question would be, what would be the fate of the laws made by the States if they overlap with the notified order issued under Section 18G of the IDRA? Obviously, the control of any industry being taken over by the Union under the provisions of the IDRA would imply that the Central Government is empowered to issue a notified order in terms of Section 18G of the said Act as and when it is necessary or expedient to secure the equitable distribution and availability at a fair price of any article related to any scheduled industry. In such a case, the notified order being issued under Section 18G of the IDRA, would have an overriding effect on the States’ laws if any made under Entry 33(a) – List III in regard to trade and commerce, supply and distribution of such articles or products of the scheduled industry which are covered under the notified order and the same would no longer be applicable wherever there is a conflict in the laws. 14.6 A law made by the State Legislature under any Entry of List III or Concurrent List is no doubt subject to Article 254 of the Constitution. However, Entry 33(a) - List III is in a way unique inasmuch as the said Entry would have to be read in the context of Entry 52 - List I which relates to the IDRA which is enacted by Parliament under the said Entry and therefore, inter alia, to Section 18G of the IDRA. When Entry 52 - List I and any law such as IDRA empowers the Union or Central Government to take certain steps under the provisions of the said Act, it would imply that the State Legislature is, per se, denuded of its powers to make any law under Entry 33(a) - List III. Applying the above interpretation, when once the Central Government has the powers under Section 18G of the IDRA in the matter of regulating supply and distribution and trade and commerce of any article of a scheduled industry so as to secure the equitable distribution and availability at fair price, the field/ contours as covered under Section 18 of IDRA is occupied by the Parliament and, consequently by the Central Government to issue a notified order as and when the necessity arises. 14.7 The reason for holding so is because List III which is the Concurrent List is governed by Article 254 of the Constitution which deals with inconsistency between laws made by

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Parliament and laws made by the Legislatures of the States. The same is expressed as the doctrine of repugnancy. Clause (1) of Article 254 states that – (i) if any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent to enact, or (ii) to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, subject to clause (2) thereof, the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law, shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. Under Article 13(3)(a), law includes any ordinance, order, bye- law, rule, regulation, notification, custom or usage having in the territory of India the force of law. 14.8 Clause (2) of Article 254 is an exception to clause (1). It states that where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. The proviso states that nothing in clause (2) of Article 254 would prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State. 14.9 What is of significance under the second portion of Article 254(1) is that the law has to be passed by the Parliament either before or after the law made by the Legislature of such a State, secondly, such a law must be with respect to one of the matters enumerated in the Concurrent List. The above is a case of actual repugnancy. There can also be a case of what can be called potential repugnancy, which is also expressed as the doctrine of occupied field which shall be discussed at this stage in the context of the observations made in Synthetics and Chemicals (7J).

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Entry 33(a) – List III vs. Entry 52 - List I: Observations in Synthetics and Chemicals (7J):

15. Article 246 of the Constitution deals with the division of legislatives subjects between the Parliament and the Legislatures of the States. Both sub-clauses (1) and (2) begin with a non-obstante clause while sub-clause (3) begins with a “subject to” clause. On a holistic reading of Article 246, it emerges that the Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I and it also has the power to make laws with respect to any of the matters enumerated in List III or the Concurrent List (vide clause (2) of Article 246). The non-obstante clauses in clauses (1) and (2) of Article 246 in my view, are significant inasmuch as they envisage parliamentary supremacy over laws made by the State Legislature even in respect of a subject enumerated in List II as clause (3) of Article 246 is subject to clauses (1) and (2) of Article 246. This is despite the State Legislatures having exclusive competence over the subjects mentioned in List II. However, the said position would apply only when there is a conflict between a State Law and a Union Law which is irreconcilable or cannot be interpreted harmoniously. 15.1 The Parliament as well as the Legislature of any State have also concurrent powers to make laws in respect of any of the matters enumerated in List III. This is notwithstanding anything in clause (3) of Article 246 but is subject to clause (1) thereof. This would imply that any law made by the Legislature of a State in List III or the Concurrent List is subject to a law made by Parliament in List I. This also has a bearing on first part of the clause (1) of Article 254. Therefore, in my view, the doctrine of parliamentary supremacy is writ large in Articles 246 and 254 both in the manner of arrangement of the subjects in the three Lists as well as the extent to which the State Legislatures have competence with regard to the subjects assigned to them particularly in List III or the Concurrent List. 15.2 In this case, we have to consider Entry 33(a) – List III in light of Entry 52 - List I and the observations made by this Court in Synthetics and Chemicals (7J). Entry 33(a) – List III is in the Concurrent List and it speaks of trade and commerce in, and 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 the

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public interest, and imported goods of the same kind as such products. A dissection of this Entry would indicate that insofar as products of any industry which is a scheduled industry in terms of a law made by Parliament by virtue of Entry 52 – List I viz. where the control of such scheduled industry has been assumed by the Union (insofar as trade and commerce in, and production, supply and distribution of the products of such industry), both the Union as well as the States have concurrent powers to enact laws. It must be remembered that Entry 33(a) – List III is a field of legislation and therefore, deals with the concurrent legislative competence of both the Union as well as the State Legislature. An enactment under such an Entry by the State is subject to the application of the principle of repugnancy as envisaged in Article 254 of the Constitution discussed above. 15.3 One cannot lose sight of the fact that the IDRA has been enacted by Parliament taking control of certain industries such as the “Fermentation Industries”, which is the subject matter of controversy in the present cases, on the strength of Entry 52 – List I. The degree of control envisaged under the various provisions of the IDRA have been detailed in the various provisions of the said Act. Section 18G was inserted to IDRA w.e.f. 01.10.1953. The said Section in the IDRA is also a provision which has been inserted pursuant to Entry 52 - List I. The said Section empowers the Central Government to issue a notified order for securing the equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry. The expression “notified order” is defined in Section 3(e) of the IDRA to mean the issuance of a notification in the official gazette. 15.4 It is necessary to note that Entry 33(a) – List III will apply only when a law such as IDRA has been enacted pursuant to Entry 52 – List I, which has enabled the Union to take control of certain industries such as “Fermentation Industries”. While Entry 33(a) – List III is a field of legislation which deals with trade and commerce in, and the production, supply and distribution of, inter alia, the products of the scheduled industry under IDRA, Section 18G thereof deals with securing equitable distribution and availability at fair prices of any article or class of articles relatable to any scheduled industry. The Explanation

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to Section 18G states that the expression “article or class of articles” relatable to any scheduled industry includes any article or class of articles imported into India which is of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry. An article manufactured or produced in the scheduled industry is nothing but a product of a scheduled industry. Therefore, the expression “the products of any scheduled industry” comes within the scope and ambit of the expression “article or class of articles” relatable to any scheduled industry. Thus, Section 18G which pertains to a scheduled industry is also relatable to Entry 33(a) – List III though it is a part of IDRA which is a Parliamentary law enacted on the basis of Entry 52 – List I. 15.5 The question that would then arise is, whether, by the mere insertion of Section 18G to the IDRA with effect from 01.10.1953, the State Legislatures have been denuded of their legislative competence in the matter of regulation of supply and distribution and trade and commerce of products of any scheduled industry. The conundrum which has arisen in this case is on account of the observation in paragraph 85 of Synthetics and Chemicals (7J), which, inter alia, reads as under: “85. … 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 18-G of the IDR Act, has evinced clear intention to occupy the whole field.…” The aforesaid observations mean that by the very insertion of Section 18G to the IDRA, there is a denudation of the State’s legislative competence vis-à-vis Entry 33(a) – List III with respect to a product of a scheduled industry which in the instant cases is the “Fermentation Industries”. 15.6 The aforesaid observation which has led to a reference to this nine-Judge Bench has to be considered in light of Entry 52 – List I, Entry 33(a) – List III and Section 18G of the IDRA. As already stated, it is pursuant to Entry 52 – List I that the IDRA has been enacted by the Parliament declaring the taking of control of industries mentioned in the First Schedule to the said Act called a scheduled industry. Entry 33(a) – List III deals with trade and commerce in, and production, supply and

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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 the public interest and imported goods of the same kind as such products i.e. with reference to a scheduled industry. The nexus between Entry 33(a) – List III and Entry 52 – List I is with regard to the Union taking control of certain industries such as “Fermentation Industries” in the instant cases by a declaration made by Parliament by law. Section 2 of the IDRA has made such a declaration and hence, it is in respect of the products of any industry whose control has been taken by the law i.e. IDRA, pursuant to Entry 52 – List I that Entry 33(a) – List III gives the legislative competence to both the Parliament as well as the State Legislatures. 15.7 As already noted, the IDRA is enacted by Parliament under Entry 52 – List I taking control of, inter alia, “Fermentation Industries” as noted in Item 26 of the First Schedule to the said Act. Section 18G deals with any article or class of articles relatable to any scheduled industry i.e. “Fermentation Industries” in the instant cases. The Explanation to Section 18G states that the expression “article or class of articles” relatable to any scheduled industry i.e. “Fermentation Industries” herein includes any article or class of articles imported into India which is of the same nature or description as the article or class of articles, manufactured or produced in the scheduled industry. The explanation is inclusive and not an exhaustive one. For immediate reference Item 26 of the First Schedule of the IDRA pursuant to the 2016 amendment is extracted as under: “26. The fermentation industries (other than potable alcohol): (i) Alcohol (ii) other products of fermentation industries.” The said Item 26 was added w.e.f. 08.05.1952 even prior to the insertion of Section 18G to the IDRA which is w.e.f. 01.10.1953. However, w.e.f. 14.05.2016, Item 26 has been amended to clarify that “Fermentation Industries” refers to industries others than potable alcohol. This is for the reason that “intoxicating liquors” in Entry 8 – List II is equated to only

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potable alcohol and rest of the industry of the “Fermentation Industries” other than potable alcohol is a scheduled industry. 15.8 Once an industry is a scheduled industry under the provisions of IDRA, in the context of Section 18G the Central Government may notwithstanding anything contained in any other provision of IDRA by a notified order provide for regulating the supply and distribution thereof and trade and commerce therein of a product of scheduled industry. A notified order may also provide - (a) for the purpose of controlling the prices at which any such article or class of articles may be bought or sold for; (b) for regulating the licences, permits or otherwise the distribution, transport, disposal, acquisition, possession, use or consumption of any such article or class thereof; (c) for prohibiting the withholding from sale of any such article or class thereof ordinarily kept for sale; (d) for requiring any person manufacturing, producing or holding in stock any such article or class thereof to sell the whole or part of the articles so manufactured or produced during a specified period or to sell the whole or a part of the articles so held in stock to such person or class of persons in such circumstances as may be specified in the order; (e) for regulating or prohibiting any class of commercial or financial transactions relating to such article or class thereof which in the opinion of the authority making the order are, or if unregulated are likely to be, detrimental to public interest; (f) for requiring persons engaged in the distribution and trade and commerce in any such article or class thereof to mark the articles exposed or intended for sale with the sale price or to exhibit at some easily accessible place on the premises the price-lists of articles held for sale and also to similarly exhibit on the first day of every month, or at such other time as may be prescribed, a statement of the total quantities of any such articles in stock; (g) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters; and

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(h) for any incidental or supplementary matters, including, in particular, the grant or issue of licences, permits or other documents and the charging of fees therefor. 15.9 Sub-section (4) of Section 18G provides that no order made in exercise of any power conferred under Section 18G shall be called in question in any court. Thus, a notified order may be issued by the Central Government bearing in mind the situations and conditions which may arise in the Indian economy pertaining to a particular scheduled industry. Article 254, Repugnancy and Doctrine of Occupied Field:

16. There is also a further angle to the matter in the context of concurrent powers of Parliament and State Legislatures vis-à-vis Entry 33(a) – List III and Article 254 of the Constitution. Nicholas in his Australian Constitution, 2nd Edition, page 303, refers to three tests of inconsistency or repugnancy: (i) There may inconsistency in the actual terms of the competing statutes; (ii) Though there may be no direct conflict, a State law may be inoperative because the commonwealth law; or commonwealth court is intended to be a complete exhaustive Code; and (iii) Even in the absence of intention, a conflict may arise when both State and commonwealth seek to exercise their powers over the same subject matter.” 16.1 In Tika Ramji, this Court accepted the above three rules evolved by Nicholas, among others, as a useful guide to test the question of repugnancy. The same was also quoted by this Court in M/s. Hoechst Pharmaceuticals Ltd. vs. State of Bihar, AIR 1983 SC 1019 (“Hoechst Pharmaceuticals Ltd.”). In the said case, it was observed that the question of repugnancy between a law made by Parliament and a law made by the State Legislature arises only in case both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent List and there is direct conflict between the two laws. It is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy, become void. Article 254(1) has no application to cases of repugnancy due to overlapping found between List II on the one hand and Lists I and III on

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the other. If such overlapping exists in any particular case, the State law would be ultra vires because of non-obstante clause in Article 246(1) read with the opening words “subject” in Article 246(3). In such a case, the State law will fail not because of repugnance to the Union law but due to want of legislative competence. Thus, the question of repugnancy arises only when both the Legislatures are competent to legislate in the same field, that is, with respect to one of the matters mentioned in the Concurrent List. Hence, Article 254(1) cannot apply unless both the Union and the State laws relate to a subject specified in the Concurrent List and they occupy the same field. 16.2 Thus, Article 254 of the Constitution applies the doctrine of repugnancy in the context of the legislative subjects which are enumerated in List III or the Concurrent List. While applying the principles of repugnancy under Article 254, a sine qua non is to identify the conflict between the laws made by the Parliament and the laws made by the State Legislature. The conflict between the said laws is the basis for the application of Article 254. The conflict could be direct when both the laws cannot operate together or it could be indirect when the State law entrenches upon a Parliamentary or Central law. But when laws made by the Parliament or the State Legislature can be implemented without there being any conflict, the principle of repugnancy would not apply inasmuch as there would be no contrary results owing to the applicability of both sets of laws. In other words, there cannot be a situation where obeying the State laws would result in disobeying the Parliamentary laws. Thus, when laws are made under an Entry in List III or the Concurrent List by both the Parliament as well as by the State Legislature, the Court must first ascertain whether the two sets of laws can operate harmoniously, if not, whether harmonious interpretation could be given to the said laws so as to avoid a conflict between the two. It is only when there is a conflict between the two sets of laws inasmuch as the State laws would be abridging the Parliamentary law, in such a case, the doctrine of Parliamentary supremacy would apply i.e. when a harmonious interpretation is not possible. Even if the two laws overlap, if they are complimentary to each other, in such a case, there would be no application of the principle of Parliamentary supremacy. Thus, when there is absolute

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inconsistency between the two sets of laws, and they are not reconcilable then, the principle of Parliamentary supremacy would apply in the context of repugnancy. 16.3 The next question that would arise is, whether, the principle of repugnancy in Article 254 of the Constitution could have a wider ramification inasmuch as even in the absence of there being two sets of laws which have been made by the Parliament and by the State Legislature but owing to the nature of the law that the Parliament has made, the State Legislature is incompetent in making a law on the same subject. In other words, whether a law enacted by the Parliament can prevent a law being made by the State Legislature on the same subject on the premise that the field has been occupied by the Parliamentary law. This is expressed in what is known as the doctrine of occupied field. By this, it would mean that the law enacted by the Parliament has occupied the field in its entirety and consequently, the States have no legislative competence to make a law on the very same aspect. In other words, if a law is made by the Parliament, does it occupy the entire field so as to reduce or negate the legislative competence of the State Legislature to make a similar law? How does one determine whether the legislative field has been occupied? Firstly, there must be a Parliamentary law in place with an intention to occupy the field. Secondly, the contours of the field must be determined. Consequently, the State Legislature would be prevented from making the law in terms of what has been determined by the Parliament to occupy the field. Thus, the intention to occupy the field must be explicit and clear and discernible with the result that the State Legislature would have a reduced field or the legislative competence would be one of total prohibition to make a similar law. For instance, whether the Parliamentary law intends to put in place a complete and exhaustive regulatory scheme, as a result of which the State Legislature is denuded of its powers to make any State regulation in the field as a whole. This intention would have to be discerned on a reading of the statute as a whole and the particular provisions which should emanate such an intention. Thus, there must be a clear intention to occupy the field by a Parliamentary legislation. Further, the extent of the field sought to be occupied must be clearly demarcated. In other words, whether the Parliament