Bombay High Court: The Court in its judgment passed by a Bench comprising of A.S. Oka and Riyaz I. Chagla, JJ., held that the provisions from Rules 23 to 62 of The Denatured spirits Rules, 1959 are unconstitutional and further clarified that ‘role of the State’ while dealing with rectified spirit supplied for industrial purpose is only to check whether during the course of manufacturing or after manufacturing the ‘denatured spirit’ is not misused or diverted for potable use.
A series of petitions by the manufacturers of denatured spirit were filed before the Bombay High Court challenging the impugned Denatured Spirit Rules, 1959 in so far as it regulates the possession, use, sale, import, export and transportation of the denatured spirit for the purpose of industrial use, to declare it ultra vires and unconstitutional and further seeking clarification on the Bombay Prohibition Act, 1949.
Furthermore, the petitioners who were the manufacturers of Ethanol contented that since the declaration of fermentation industries in the year 1956, the Union of India has taken alcohol and other products of fermentation under its control whereby the State has lost its power to regulate the same, and also claimed that, denatured spirit is not fit for human consumption and hence the state cannot make rules pertaining to sale, import, export, use, possession and transportation of the denatured alcohol.
This Court cited State of UP v. VAM Organics Chemical Ltd., (2004) 1 SCC 225 and Bihar Distillery v. Union of India, (1997) 2 SCC 727 : AIR 1997 SC 1208 and held Rules 23 to 62 of the Denatured Spirit Rules, 1959 to be ‘ultra vires and unconstitutional’ and ordered them to be struck down and also further clarified that the state cannot make new rules pertaining to the sector of Denatured Spirits. [M/s. Arss Biofuel Pvt. Ltd. v. State Of Maharashtra, 2017 SCC OnLine Bom 9340, decided on 13.12.2017]