Regulatory levy on industrial alcohol supervision upheld as within State competence under Entry 33, not an excise tax.

Section 58A of the Bombay Prohibition Act was treated as a regulatory levy for supervision of industrial alcohol manufacture and storage, recoverable from the person carrying on the activity. It was distinguished from a tax or excise duty, so the State's competence was upheld despite the limits recognised in Synthetics & Chemicals Ltd. The measure was traced to Entry 33 of List III, which permits State regulation of trade, commerce, production, supply and distribution of the relevant goods, and the absence of central legislation on the specific regulatory aspect supported competence. The challenge based on absence of quid pro quo was rejected.

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Issues: Whether the demand under Section 58A of the Bombay Prohibition Act for the cost of excise staff appointed to supervise the manufacture and storage of industrial alcohol was beyond the State's legislative competence and invalid in view of the decision in Synthetics & Chemicals Ltd.

Analysis: Section 58A was treated as a regulatory provision authorising supervision of manufacture and related operations, with the cost of the staff to be recovered from the person carrying on the activity. The decision in Synthetics & Chemicals Ltd. did not eliminate the State's power to regulate industrial alcohol to prevent diversion or misuse, even though the State could not impose a tax or duty on industrial alcohol under the relevant taxing entries. The challenged levy was distinguished from a tax or excise duty and was upheld as a regulatory measure traceable to Entry 33 of List III, which permits both Parliament and the States to legislate on trade, commerce, production, supply and distribution of the covered products, subject to Article 246 of the Constitution of India. The absence of central legislation occupying the field on the particular regulatory aspect also supported the State's competence. The argument based on lack of quid pro quo was not accepted.

Conclusion: The demand under Section 58A was valid and within the State's competence; the challenge failed.

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