HC strikes down rules allowing Maha govt to regulate denatured

In a setback to the Maharashtra government, the Bombay High Court has struck down certain provisions of the 'Bombay Denatured Spirit Rules' by which the state wanted to regulate the possession, use, sale, import and export of denatured spirit and ethanol.

The state government had recently introduced new rules by which it could regulate the possession, use, sale, import, export of denatured spirit and impose duty fees on it. It said the rules were aimed at ensuring that the denatured spirit was not diluted and misused for consumption as 'hooch'.

Several companies which manufacture denatured spirit and ethanol had approached the high court, challenging the new rules.

The companies claim that they have already acquired a licence from the state under the rules for manufacturing the denatured spirit.

According to the petitioners, the companies manufacture ethanol by the re-distillation process of denatured spirit, which is in-turn used as ad-mixture in motor spirit.

They claimed that the state government only has the power to levy duty on alcoholic beverages for human consumption, including regulating the rectified spirit, which can be diverted for potable purposes.

The state government's role to regulate and control comes to an end the moment the rectified spirit becomes denatured, the petitions said.

During the arguments on the petitions, government pleader Abhinandan Vagyani had earlier said that denatured spirit was capable of being re-natured.

The rules prohibit any person from altering or attempting to alter the denatured spirit by dilution with water or any method with the intention that such spirit may be used for human consumption as an intoxicating liquor, he said.

Vagyani pointed out that there have been several cases which have resulted in casualties after people consumed denatured spirit as 'hooch', and since there was no control or regulation overuse and sale of denatured spirit, the state government has enacted the rules.

On December 13, a division bench of Justices A S Oka and Riyaz Chagla, in its ruling on the petitions, had struck down rules 23 to 62 of the Bombay Denatured Spirit Rules as "ultra vires and unconstitutional".

"There shall be no license required under the Maharashtra Prohibition Act for sale, purchase, transport, possession, storage, dehydration, import and export of denatured spirit," the high court said.

The court noted that the power of the government in the case of rectified spirit supplied for industrial purposes is only to see and ensure that the spirit is not diverted or misused for potable purposes.

"The state can make necessary regulations requiring the industry to submit periodical statements of raw material and the finished product (rectified spirits) and is entitled to verify their correctness," the court added.