Report No. 158
1.3.2. Effect of enaction of Industries (Development & Regulation) Act, 1951 upon the powers of the State Governments.-
By virtue of the Constitution of India which came into effect from January 26, 1950, the powers of legislation in respect of alcohol were distributed between List I and List II of the Seventh Schedule to the Constitution. Duties of excise on tobacco and other goods manufactured or produced in India except, inter alia, alcoholic liquors for human consumption, and opium, Indian hemp and other narcotic drugs and narcotics, but including medicinal and toilet preparations containing alcohol or any assistance included in sub-paragraph (b) of this entry, were given to Parliament under Entry 84, List I.
But duties of excise on goods manufactured or produced in the State and countervailing duties at the similar rates, inter alia, alcoholic liquors, the State was given power by Entry 51 of List II to legislate. By Entry 8 of List II, the States were given power to legislate on liquors, that is to say production, manufacture, processing, transport, purchase and sale thereof.
The entries in the three lists of the Seventh Schedule to the Constitution of India are legislative heads or fields of legislation. These demarcate the area over which appropriate legislation can operate. These neither impose any implied restriction on the legislative power conferred by Article 246 of the Constitution, nor prescribe any duty to exercise that legislative power in any particular manner. Hence the language of the entries should be given the widest scope, "to find out which of the meaning is fairly capable because these set up machinery of the Government".
Each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it. In interpreting an entry it would not be reasonable to import any limitation by comparing or contrasting that entry with any other one in the same list. It is in this background that one has to examine the present controversy. (India Cement Ltd. v. State of Tamil Nadu, 1990 (1) SCC 12, para. 18).
Legislative power normally includes all incidental and subsidiary powers, except the power to tax which is neither incidental nor subsidiary to the power to legislate on a matter or a topic (M.P.V. Sundararamier & Co. v. State of Andhra Pradesh, (1958) SCR 1422 referred in State of Mysore v. M/s. D. Cawasji & Co., (1971) 2 SCR 799.
1.3.3. On or about May 8, 1952, Parliament enacted the Industries (Development and Regulation) Act, 1951 (IDR Act) declaring in terms of Entry 52 of List I, that the control by Parliament of the industries specified in the First Schedule to the said Act is expedient in public interest. The result of this declaration read with the First Schedule to the said Act was, that the States were denuded of their power to legislate conferred upon them by Entry 24 of List II to the extent of industries specified in the First Schedule to the IDR Act.
1.3.4. In the year 1956 the First Schedule to the IDR Act, was amended including some more industries therein. Item 26 which was one of the industries so added, reads:-
"26. Fermentation Industries: (i) alcohol; (ii) other products of fermentation industries".
Therefore, by way of insertion of Item 26 in the First Schedule to the said Act, the Central Government was empowered to control the Fermentation Industries including alcohol industries.