State legislature has no authority to levy tax on alcohol not for human consumption: SC

The apex court said that the Constitution Bench has held that the Constitution makers distributed the term alcohol liquor into two heads -- for human consumption and other than for human consumption.

State legislature has no authority to levy duty or tax on alcohol which is not for human consumption as that could be levied only by the Centre, the Supreme Court said on Thursday.

A bench of Justices L Nageswara Rao and B R Gavai said that the State was only empowered to levy excise duty on alcoholic liquor for human consumption and has no power to levy excise duty on wastage of liquor after distillation. The apex court said that the Constitution Bench has held that the Constitution makers distributed the term 'alcohol liquor' into two heads -- for human consumption and other than for human consumption. It has been held that the alcoholic liquors, which are for human consumption, are put in Entry 51 List II authorising the State Legislature to levy tax on them, whereas alcoholic liquors other than for human consumption have been left to the Central Legislature under Entry 84 for levy of duty of excise, the top court said.

''The Constitution Bench clearly held that the State Legislature had no authority to levy duty or tax on alcohol, which is not for human consumption as that could be levied only by the Centre,'' the bench said.

The top court was hearing an appeal filed by the Orissa government challenging the judgement passed by the High Court which allowed the petitions filed by the company and set aside the demand notices issued by authorities.

The apex court dismissed the appeal filed by the state.

''We see no reason to interfere with the impugned judgement and order. The appeals, therefore, are found to be without merit and as such, dismissed,'' it said.

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