Background
Gujarat Methyl Alcohol Rules, 1981 have been notified by the State Government of Gujarat under the Bombay Prohibition Act, 1949 (now the Gujarat Prohibition Act, 1949), which prohibits the manufacture, sale, possession, and consumption of intoxicating liquor and related substances in the State. Methyl alcohol (methanol) — though not an intoxicant in the conventional sense — is a hazardous and toxic substance with industrial, medical, scientific, and educational applications, and is therefore brought within the regulatory ambit of the Prohibition Act through these specific Rules.
The Rules establish a comprehensive licensing framework governing the purchase, possession, use, sale, storage, and transport of methyl alcohol in Gujarat, requiring separate licences for persons seeking to purchase, possess, or use methyl alcohol (Form M.A.I) and for persons seeking to sell methyl alcohol (Form M.A.II). The framework mandates strict record-keeping, monthly returns, delivery chalan-based movement controls, storage conditions, restricted operating hours for sale, and inspection rights for Prohibition and Excise officers. The Rules also regulate the manufacture of Section 24A articles — such as toilet preparations, medicinal preparations, antiseptic preparations, and flavouring extracts containing alcohol — to prevent diversion of alcohol for use as an intoxicating beverage.
Applicability
Gujarat Methyl Alcohol Rules, 1981 apply to all persons in Gujarat who purchase, possess, use, sell, manufacture, import, or deal in methyl alcohol or articles containing alcohol falling under Section 24A of the Gujarat Prohibition Act, 1949. This includes holders of a Form M.A.I licence — persons using methyl alcohol for medical, scientific, educational, industrial, or professional purposes, or as a denaturant — who are subject to obligations relating to sourcing, storage, accounts, and monthly returns; holders of a Form M.A.II licence — persons engaged in the sale of methyl alcohol — who are subject to additional obligations relating to operating hours, storage limits, sale restrictions, partnership declarations, and inspection access; and manufacturers and importers of Section 24A articles (toilet, medicinal, and antiseptic preparations, and alcohol-containing flavouring extracts), who are subject to stock declaration, accounting, and alcohol-content restrictions to prevent misuse of such articles as intoxicating beverages.
Compliance Requirement Under the act in Accordance with the Rules & Regulations:
Any person desiring to purchase, possess, or use methyl alcohol for medical, scientific, educational, industrial, or professional purposes, or for the purposes of any art, or for use as a denaturant at their own distillery, shall apply to the Licensing Authority for a licence in Form M.A. VII. On receipt of the application, the Licensing Authority shall make such inquiries as deemed necessary for verification of the details specified, and if satisfied that there is no objection, may grant a licence in Form M.A.I on payment of the licence fee and deposit specified in the Table to Rule 4 (based on quantity). The licence is valid for up to two years and shall not extend beyond 31st March of the second year.
Any person desiring to sell methyl alcohol shall apply to the Licensing Authority for a licence in Form M.A. VIII. On receipt of the application, the Licensing Authority shall make such inquiries as deemed necessary, and if satisfied that there is no objection, may grant a licence in Form M.A.II on payment of a licence fee of ₹5,000 and a deposit of ₹50,000 per annum. The licence is valid for up to two years and shall not extend beyond 31st March of the second year. Renewal must be applied for at least one month before expiry; late renewal attracts an additional 25% fee.
Every holder of a Form M.A.I licence must submit a monthly return in Form M.A. IV to the Superintendent or District Inspector of Prohibition and Excise of their district before the 11th day of every month, covering the previous month’s receipts, consumption, and balance of methyl alcohol.
Every person who imports or manufactures any of the articles mentioned in Section 24A — including toilet preparations, medicinal preparations, antiseptic preparations, and flavouring extracts or essences containing alcohol — shall: (a) submit to the Collector, within such period and in such form as prescribed, a declaration of the quantity of such articles in their possession on importation or manufacture; and (b) maintain accounts of such articles in the prescribed form and submit such returns as may be prescribed.
When transit or storage losses of methyl alcohol exceed 5%, the licensee must: (a) inform the Licensing Authority within 96 hours of the arrival of the methyl alcohol consignment; and (b) not write off any losses exceeding 5% without the prior permission of the Licensing Authority.
The licensee shall keep at the licensed premises a visit book, paged and stamped with the seal of the Collector, Superintendent of Prohibition and Excise, or District Inspector of Prohibition and Excise, in which visiting officers may record remarks while inspecting the licensed premises. On termination of the licence period, the licensee shall deliver up the visit book, the accounts, and the licence to the local Prohibition and Excise Inspector.
No manufacturer of any article mentioned in Section 24A — toilet preparations, medicinal preparations, antiseptic preparations, or flavouring extracts/essences containing alcohol — shall sell, use, or dispose of any liquor purchased or possessed for such manufacture otherwise than as an ingredient of the authorised article. No more alcohol shall be used in manufacture than is necessary for extraction or solution of the elements contained therein and for preservation of the article, subject to a maximum of 12% by volume if derived from fermentation. The manufacturer shall not knowingly sell any such article for use as an intoxicating drink.
The Form M.A.I licensee shall not obtain supply of methyl alcohol except from: (a) an excise or Customs bonded warehouse under a delivery chalan; (b) any part of India outside the State of Gujarat under a delivery chalan; or (c) a licensed dealer of methyl alcohol or a Form M.A.I licence holder, under a delivery chalan showing the names and addresses of the supplier and purchaser and the quantity supplied in each consignment, which must accompany the consignment in transit by road, river, or sea. The licensee shall not receive any methyl alcohol at the licensed premises, or remove any methyl alcohol from the premises, except under a delivery chalan.
The Form M.A.I licensee shall keep, at the licensed premises, a bound book of accounts in Form M.A. III. The accounts shall be clearly and correctly written, and all delivery chalans, invoices, and other documents relating to methyl alcohol received at or removed from the premises shall be filed along with the accounts.
The licensee shall not use the methyl alcohol possessed under the licence except for the permitted purpose stated in the licence, and shall not keep or use methyl alcohol at any place other than the licensed premises. The licensee shall not prepare methyl alcohol for use as, or as a mixture with, a beverage, nor use it in the production of any article to be used wholly or partially as a beverage or as an ingredient in any internal medicine, nor use it as an ingredient in the manufacture of any essence, extract, colouring, or flavouring agent of a substance that can be taken internally.
Except with the permission of the Licensing Authority, the Form M.A.II licensee shall not sell, transfer, or sub-let the right of selling methyl alcohol conferred by the licence, nor enter into any agreement or arrangement in the nature of a sub-lease in connection with such right. The licensee shall not sell methyl alcohol to any person in the State unless such person holds a valid Form M.A.I (purchase, possession, and use) licence or a Form M.A.II (sale) licence.
The Form M.A.II licensee shall keep, at the licensed shop, a bound book of stout paper, paged and stamped with the official seal of the Collector, Superintendent, or District Inspector of Prohibition and Excise, containing accounts in Form M.A. V. The accounts shall be clearly and correctly written up to date daily, and all delivery chalans, invoices, and other documents relating to methyl alcohol received or sold shall be filed with the accounts.
The holder of a Form M.A.II (sale) licence shall not keep or sell methyl alcohol at any location other than the licensed premises specified in the licence.
The licensee may keep methyl alcohol not exceeding 250 litres in quantity at the licensed premises only in full corked bottles or in metal drums securely closed. The licensee shall not keep methyl alcohol exceeding 250 litres at the licensed premises unless the building in which such premises are situated is fire-proof and is not used or intended for use for residential purposes.
Except with the permission of the Licensing Authority, the sale licensee shall not keep the licensed premises open or sell methyl alcohol after 9:00 p.m. or before 6:00 a.m.
The sale licensee must ensure that the licensed premises, the methyl alcohol kept therein, and all account books, delivery chalans, invoices, and other related documents are open to inspection at all times by any officer empowered under Section 122 of the Gujarat Prohibition Act, 1949. The licensee shall allow any inspecting officer to take samples of the methyl alcohol kept at the licensed premises, free of cost, for the purpose of analysis.
If a Form M.A.II licence is suspended or cancelled during its currency, or its renewal is denied, the entire stock of methyl alcohol in balance with the licensee on the date of such suspension, cancellation, or non-renewal shall forthwith be sealed by the Licensing Authority or its representative. The licensee shall not tamper with such seal or dispose of the sealed material without the prior written permission of the Licensing Authority.
Every holder of a Form M.A.II licence shall submit a monthly return in Form M.A. VI before the 11th day of each month to the Superintendent of Prohibition and Excise or the District Inspector of Prohibition and Excise of their district.
No person shall be recognised as a partner of the licensee for the purposes of the licence unless the partnership has been declared to the Licensing Authority before the licence is granted and the names of the partners have been entered jointly in the licence. Where a partnership is entered into after the grant of the licence, the licensee must apply to the Licensing Authority to alter the licence and add the name(s) of the new partner(s) before such partner joins the business.
The Form M.A.II licensee shall carry on the business under the licence either personally, or through an agent or servant duly authorised in that behalf.
Unless the licensee also holds a licence in Form M.A.I, the Form M.A.II licensee shall not use methyl alcohol for any purpose other than sale.
The Form M.A.II licensee shall not obtain supply of methyl alcohol except from: (a) an excise or Customs bonded warehouse under a delivery chalan; (b) any part of India outside the State of Gujarat under a delivery chalan; or (c) a licensed dealer of methyl alcohol under a delivery chalan showing the names and addresses of the supplier and purchaser and the quantity supplied in each consignment, which must accompany the consignment in transit by road, river, or sea. The licensee shall not receive any methyl alcohol at the licensed premises, or remove any from the premises, without a delivery chalan.
Penalty & Consequences
The following penalty provisions under the Gujarat Prohibition Act, 1949 apply across the compliance obligations covered in this blog. These have been consolidated and de-duplicated for ease of reference:
The Licensing Authority may suspend or cancel any licence, permit, pass, or authorisation granted under the Act for non-payment of dues, breach of licence conditions, specified convictions, cessation of the purpose for which it was granted, or fraud or misrepresentation in obtaining the licence. Consequential cancellation of other licences held by the same person may also be ordered.
Where a licensee breaches any condition of the licence, the Licensing Authority may, in addition to any other penalty to which the licensee may be liable, cancel or suspend the licence for such breach.
Whoever, being the holder of a licence, permit, pass, or authorisation granted under the Act, or a person in the employ of such holder or acting with their express or implied permission on their behalf: (a) fails to produce the licence, permit, pass, or authorisation on demand by a Prohibition Officer or any other duly empowered officer when it is in their possession; or (b) wilfully does or omits to do anything in contravention of any rule, regulation, or order made under the Act — shall, on conviction, be punished for each such offence with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.
Whoever, in contravention of Section 59A or Section 59AA: (a) manufactures, imports, or exports any article mentioned in Section 24A; (b) sells, uses, or disposes of any liquor otherwise than as an ingredient of an article mentioned in Section 24A; (c) uses more alcohol in the manufacture of such article than the quantity necessary for extraction, solution, or preservation purposes; or (d) knowingly sells any such article for use as an intoxicating drink, or sells it under circumstances from which such use might reasonably be inferred — shall be liable to punishment as prescribed under Section 67A of the Act.
Whoever is guilty of any wilful act or intentional omission in contravention of the provisions of the Act, or any rule, regulation, or order made thereunder, or of any licence, permit, pass, or authorisation granted under the Act, where such act or omission is not otherwise made an offence under the Act, shall, on conviction, be punished with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.
Failure to furnish the declaration, information, or returns required under Section 107A, or producing false accounts in connection therewith, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.
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