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Subordinate Legislation - Cannot override Statutes |
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Subordinate Legislation - Cannot override Statutes |
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In this small write up I had tried to summarize basic judicial verdicts which restricts the applicability of subordinate legislation beyond the boundaries specified in the Statutes. (1) Now if there is any conflict between a statute and the subordinate legislation, it does not require elaborate reasoning to firmly state that the statute prevails over subordinate legislation and the bye-law, if not in conformity with the statute in order to give effect to the statutory provision the Rule or bye-law has to be ignored. The statutory provision has precedence and must be complied with. - BABAJI KONDAJI GARAD ETC. VERSUS THE NASIK MERCHANTS CO-OPERATIVE BANK LTD., NASIK & ORS. ETC. [1983 (10) TMI 270 - SUPREME COURT] (2) In COMMISSIONER OF INCOME-TAX, AP VERSUS TAJ MAHAL HOTEL [1971 (8) TMI 2 - SUPREME COURT] it was held by the Supreme Court that “the Rules were meant only for the purpose of carrying out the provisions of the Act and they could not take away what was conferred by the Act or whittle down its effect.” (3) COMMISSIONER OF INCOME-TAX, MADRAS VERSUS S. CHENNIAPPA MUDALIAR [1969 (2) TMI 10 - SUPREME COURT] that if a rule clearly comes into conflict with the main enactment or if there is any repugnancy between the substantive provisions of the Act and the Rules made therein, it is the rule which must give way to the provisions of the Act. In Bimal Chandra Banerjee v. State of M.P. and Ors., 1970 (8) TMI 30 - SUPREME COURT, Hegde J. was examining the provisions of the M.P. Excise Act, 1915. The legislature levied excise duty only on those articles which came within the scope of Section 25 of that Act. The rule-making authority, which was the State Government, purported to levy duty on articles, which did not fall within the scope of the Section. Holding this act of the State Government to be ultra vires the Section, it was observed as under: - “No tax can be imposed by any bye-law or rule or regulation unless the statute under which the subordinate legislation is made specially authorizes the imposition even if it is assumed that the power to tax can be delegated to the executive. The basis of the statutory power conferred by the statute cannot be transgressed by the rule making authority. A rule making authority has no plenary power. It has to act within the limits of the power granted to it. ------- CA Akash Phophalia 9799569294 gst@akashphophalia.com
By: CA Akash Phophalia - April 10, 2020
Discussions to this article
The Supreme Court set aside all the orders-in-original whereby penalty was imposed upon the parties under Rule 96 ZP of Central Excise Rules, 1944 under Compounded Levy scheme) as there was no machinery provision in the Central Excise Act itself.
Sir, 1. What are your observations/expert views over amendments carried out in section 140 retrospectively w.e.f. 1.7.2017 by Finance Act, 2020, to legalise the time limit specified in rule 117 after various high courts announced decisions in party’s favour. 2. Filing of SLP By the Govt.in the case of AAP & Co.: Union of India & Ors. v. AAP And Co. 2019 (12) TMI 706 - SC ORDER How far it is a correct step by the Govt. to minimise litigation.
The government has power to introduce retrospecive amendment. Although I would like to quote from th article of gagan Gungani published on taxmann about "Retrospective amendment" - Retrospective taxation is distasteful. It undermines the government’s credibility and the rule of law and introduces unpredictability into the tax system. The poor taxpayer is left floundering because he cannot predict the consequences of entering into a business transactions.
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