STATE OF U.P. AND ORS. versus M/S. LALTA PRASAD VAISH

Citation: [2007] 11 S.C.R. 670 · Decided: 25-10-2007 · Supreme Court of India · Bench: H.K. SEMA · Disposal: Matter referred to larger bench

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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A 
STATE OF U.P. AND ORS. 
V. 
MIS. LAL TA PRASAD V AISH 
OCTOBER 25, 2007 
B 
(H.K. SEMA, ALT AMAS KABIR AND 
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LOKESHW AR SINGH PANT A, JJ.] 
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J 
Industries (Development and Regulation) Act, I 9 5 I -
ss. I BG and 
c 2-Dispute as to whether State had any power to regulate manufacture 
and sale of denatured spirit under Entry 33 of List Ill of the Seventh 
Schedule of the Constitution-Contention of State that the mere 
existence of s. I 8-G of the Act did not oust the competence of State 
legislature-7 Judge Bench of this Court in the Synthetics and 
D Chemicals case had interpreted the provisions of s. I 8-G-Held: If 
decision in that case v.1ith regard to interpretation of s. I 8-G is allowed 
to stand, it would render the provisions of Entry 33(a) of List Ill 
nugatory or otiose-Therefore, this aspect of the matter requires 
reconsideration by a larger Bench of this Court, particularly, when 
E views expressed by the 7 Judge Bench have been distinguished in 
several subsequent decisions of this Court, including two decisions 
rendered by Constitution Benches of five Judges-Questions 
formulated and referred to larger Bench-Constitution of India, I 950--
Seventh Schedule. List III, Entry 33-Uttar Pradesh Excise Act, I 910. 
F 
Dispute arose as to whether the State had any power to regulate 
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the manufacture and sale of denatured spirit under Entry 33 of List 
III of the Seventh Schedule of the Constitution notwithstanding 
Section 2 and Section 18G of the Industries (Development and 
Regulation) Act, 1951. While Section 2 of the Act provides for a 
G declaration as to expediency of control of specified industries by the 
Union in public interest, Section 18-G empowers the Central 
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Government to _secure the equitable distribution and availability at 
fair prices of any article or class of articles relatable to any scheduled 
industry, to provide and regulate the supply and distribution thereof, 
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670 
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STATE v. MIS. LAL TA PRASAD V AISH 
671 
and trade and commerce therein by a notified order. The said Act A 
was amended in 1956 and item No. 26 was inserted in the First 
Schedule of the said Act which, inter alia, empowet·s the Central 
Government to control the fermentation industry including alcohol 
industries. 
Appellants submitted before this Court that the mere existence B 
of Section 18-G in the Statute book did not oust the competence of 
the State legislature to enact legislation in respect of matters falling 
under Entry 33 of List III of the Seventh Schedule to the Constitution 
and that even if a notified order is issued under Section 18-G the 
effects of the same stand nullified by clause (a) of Entry 33. C 
According to the Appellants, this aspect of the matter had not been 
gone into by the 7 Judge Bench of this Court in the Synthetics and 
Chemicals case*while interpreting the provisions of Section 18-G 
of the Act, and therefore, requires reconsideration by a larger Bench 
of this Court. 
D 
Ref erring the matter for reconsideration by a larger Bench, the : 
Court 
HELD: 1.1. The submissions of the Appellant have a good deal 
of force, since by virtue of the interpretation of Section 18-G of the E 
Industries (Development and Regulation) Act, 1951 in the Synthetics 
and Chemicals case the power of the State to legislate with matters 
relating to Entry 33 of List III have been ousted, except to the extent 
as explained in the Synthetics and Chemicals case, where the State's 
power to regulate, as far as regulating the use of alcohol, which would F 
include the power to make provisions to prevent and/or check 
industrial alcohol being used as intoxicant liquor, had been accepted. 
It was also stated in the judgment that the Bench recognised the 
power of the State to regulate not as an emanation of police power 
but as an expression of the sovereign power of the State. 
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[Para 35] [686-B-D J 
1.2. The 7 Judge Bench in the Synthetics and Chemicals case 
did not have the benefit of the views expressed by this Court earlier 
in Ch. Tikaramji case where the State's power to l.egislate under the H 
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SUPREME COURT REPORTS 
[2007] 11 S.C.R. 
"'1 
A Concurrent List stood ousted by legislation by the Central 
Government under Entry 52 of List I and also in view of Section 
18-G of the Act. [Para 35) [686-E] 
1.3. If the decision in the Synthetics and Chemicals case with 
B regard to the interpretation of Section 18-G of the Act is allowed to 
stand, it

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