In a recent case state of Orissa vs utkal distilleries ltd, 2009 the apex court held that under constitution the state is only empowered to levy excise duty or tax on alcoholic liquor used for the consumption of human. If the alcohol is used for any purpose other than consumption by human, the excise duty is fixed by centre only.
The bench consists of justice L Nageshwar rao and justice BR Gavai is hearing the appeal.
The court observed its judgment in synthetic and chemical limited and others vs state of Uttar Pradesh and others. The court held in the above mentioned judgment that the state has no authority to impose tax or duty on alcohol manufactured by industry, which is not for the consumption of human. On industrial alcohol the tax or duty can only be imposed by centre.
The bench observed that the constitution maker perfectly differentiated between alcohol used for human consumption and alcohol used for other than human consumption.
Under list 2 entry 51 the state is empowered to impose duty or tax on alcohol use for consumption by human.
Under entry 84 its clearly specified that the centre is empowered to impose duty or tax on alcohol used for purpose other than consumption by human.