TMI Blog1971 (11) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned single Judge. Delhi was a Part C State in 1950. By virtue of section 2 of the Part C States (Laws) Act, 1950, the Central Government had the power by notification in the official Gazette to extend to a Part C State any enactment which was in force in a State at the date of the notification with such restrictions and modifications as the Central Government thought fit. In exercise of its powers under section 2 of the Part C States (Laws) Act, 1950, the Central Government in 1951 by a Notification No. S.R.O. 615 dated the 28th April, 1951, extended the Bengal Finance (Sales Tax) Act, 1941, to the Union Territory of Delhi with certain restrictions and modifications as were laid down in the said notification. In sub-section (2) of section 6 of the Bengal Act, before it was extended to the Union Territory of Delhi, vide S.R.O. 615 dated the 28th April, 1951, the State Government had the power after giving by notification in the official Gazette, not less than three months' notice of its intention to do so, by a like notification to add to the schedule, and thereupon the schedule was to be deemed to be amended accordingly. Sub-section (1) of section 6 envisaged that n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the State Government of its intention to do either of the three things, namely, "to add" to, "omit from" or "otherwise amend" the schedule was not less than three months. In 1957, by Notification No. S.R.O. 3908 dated the 7th December, 1957, the Central Government in the exercise of the powers conferred on it by section 2 of the Union Territories (Laws) Act, 1950 (30 of 1950) made the following amendment in its Notification No. S.R.O. 615 dated the 28th April, 1951, whereby the Bengal Act was extended to the Union Territory of Delhi subject to the modifications made in the Act as specified in the said S.R.O.: "in the said notification in the modification to the Bengal Act aforesaid, in item 6 relating to sub-section (2) of section 6 after subitem (a) the following shall be inserted: (aa) for the words 'not less than three months' notice' the words 'such previous notice as it considers reasonable' shall be substituted." The validity of this notification as also the subsequent notifications made thereafter in pursuance of the abovesaid notification dated the 7th December, 1957, has been challenged. To complete the history of the various amendments made to the Bengal Act as ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on durries was leviable from 1st July, 1966, at the rate mentioned in the abovesaid notification. Besides, the Chief Commissioner, Delhi, in Notification F.4(87)164-Fin.(E)(IV) dated the 30th June, 1966, notified the rate of sales tax to be levied on durries in accordance with the said notification. Sales tax was also levied on "kiryana", "dry fruit", "knitting wool" and other commodities at different rates. Before the learned single judge the following grounds were urged on behalf of the petitioner who is now respondent in the appeal before us: "(1) The power given by section 2 of the Union Territories (Laws) Act, 1950, to the Central Government to extend enactments in force in a State to a Union Territory with such restrictions and modifications as it thinks fit could be exercised by the Government only to make such modifications in the enactment so applied as were necessary in view of the peculiar local conditions. The modification in section 6(2) made by S.R.O. 3908 dated 7th December, 1957, was not necessitated by this reason. It was, therefore, ultra vires section 2 of the Union Territories (Laws) Act, 1950; (2) such a modification could be made once when the Bengal Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Government was empowered to make such modifications by virtue of section 2 of the Part C States (Laws) Act, 1950. As regards amending the schedule by substituting "Second Schedule", the same was done by the amending Act, 1956, and that the impugned notification was issued on 7th December, 1957, and was operative when in 1959, Parliament looking at the Bengal Act as it was, approved of the Act by introducing the requisite amendments to the Act which 'Parliament in its wisdom thought proper and necessary. This was done by the Amendment Act 20 of 1959 and whatever infirmity may have existed in the Act, it stood rectified and cured by the seal of approval that Parliament put on the Bengal Act. In this respect it would be useful to consider a subsequent decision of their Lordships of the Supreme Court in Venkatrao Esajirao Limbekar v. State of BombayA.I.R. 1970 S.C. 126., which does not appear to have received adequate attention of the learned Judge and has not been followed. In that case, the appellant assailed the vires of the provisions of section 38E of the Hyderabad Tenancy and Agricultural Lands Act (Act No. 21 of 1950) as amended by Act No. 3 of 1954. One of the grounds of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d have no efficacy. It was accordingly urged that the amendment to the schedule substituting it by Second Schedule and incorporating clause (aa) in section 6[1951] S.C.R. 747. by the impugned Notification No. S.R.O. 3908 dated the 7th December, 1957, being non est the Bengal Act as it existed in 1959 was not available to Parliament to amend the same by amending Act (20 of 1959). In this view of the matter, it was submitted that a new enactment was required to be passed. Besides, it was urged that the only change that was incorporated in the Act by the amending Act of 1959 was that for the word "State" except wherever it occurred in the expression "State Government", the words "Union Territorry" were substituted. Accordingly, it was contended that the Parliament did not apply its legislative mind to the Act and it cannot be said that the infirmity was rectified by the amending Act of 1959. In the present appeal, the Bengal Act as extended by S.R.O. 615 dated the 28th April, 1951, did not suffer from any infirmity. It is conceded by the learned counsel for the respondent that the Central Government at the time it extended the Bengal Act was competent to introduce such modificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 2 of the Part C States (Laws) Act or the Union Territories Act, the powers of the Central Government are limited to make modifications and restrictions to an enactment in force in a Part A State while extending the enactment to a Part C State or the Union Territory and thereafter the Central Government ceases to enjoy the power to further make amendments' in the enactment so extended. Such a power stands exhausted as soon as an enactment in force in Part A State is extended to a Union Territory and thereafter it is not open to the Central Government to exercise any power of making further additions or restrictions to an extended enactment. To sustain his contention the learned counsel for the respondent drew support from In re Delhi Laws Act[1951] S.C.R. 747. and urged that Fazl Ali, J., had observed at page 846: "The power of introducing necessary restrictions and modifications is incidental to the power to apply or adapt the law, and in the context in which the provision as to modification occurs, it cannot bear the sinister sense attributed to it. The modifications are to be made within the framework of the Act and they cannot be such as to affect its iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment of any law (other than a Central Act) which was for the time being applicable to that Part C State. The learned counsel for the respondent, therefore, contended that the power bestowed upon the Central Government by virtue of sub-section (2) of section 6 of the Bengal Act to omit from or otherwise amend the Second Schedule, could not be sustained as the same was not necessary and integrated with extending the law. The learned counsel appearing for the respondent contended that the Bengal Act as originally extended to the Union Territory of Delhi in 1951, contained one schedule as mentioned in sub-section (2) of section 6 and according to sub-section (1) of the said section, no tax was payable under the Act on the sale of goods specified in the first column of the schedule subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof; that subsequently in 1957 by the impugned notification the period of three months' notice required to be given of its (Central Government's) intention so to do, to add, to omit from or otherwise amend the schedule, was curtailed to such period as may be considered reasonable by the Central Gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion .... but the said power must inevitably be exercised within the limits prescribed by the provisions conferring the said power", remarked: "It follows, therefore, that the answer to the question whether the Central Government can exercise the power of modification repeatedly depends not so much on section 21 of the General Clauses Act but on section 2 of the Union Territories (Laws) Act, 1950. Normally section 2 does not so contemplate. Exceptionally, this may be permitted but as stated above the exceptional circumstances have not come into being." We do not see which exceptional circumstances the learned single judge has in view. In any event, no such circumstances have been stated. We, therefore, express our respectful dissent from the view taken by the learned Judge. In our opinion, section 21 of the General Clauses Act gives power to the Central Government to add to, amend, vary or rescind any notification, etc., provided the power to do so does not run counter to the policy of the Legislature or affect any change in its essential features. The learned single judge further observed: "The power of modification is thus an integral part of a power of extension. It cannot, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting for the words "goods sold to or by the State Government" the words "goods sold by the State Government" with the result that the appellant who was prior to the amendment entitled to exemption in respect of 'the goods sold to the Government could no longer claim it by virtue of the amendment. A contention was raised in that case that the impugned notification was bad as being an unconstitutional delegation of legislative authority. The argument advanced was that power to execute a law could be delegated to the executive but the power to make it must be exercised by the Legislature itself. Dealing with the contention, their Lordships of the Supreme Court observed at page 435: "That it is not unconstitutional for the Legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be levied, the rates at which it is to be charged in respect of different classes of goods, and the like. Further, the power conferred on the State Government by section 6(2) to amend the schedule relating to exemption is in consonance with the accepted legislative practice relating to the topic, and was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution confers a power and imposes a duty on the Legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency." On merits, it was held in the above case(3) that in the amendment made in section 5 since after the word "rates" the words "not exceeding two pies in a rupee" were inserted, the said section as amended was valid. Earlier in Vasantlal Maganbhai Sanjanwala v. State of Bombay[1961] 1 S.C.R. 341., it was observed that it is well-established that the power of delegation is a constituent element of the legislative power as a whole and that keeping in view the challenge of the complex socioeconomic problems, the Legislatures of ten find it convenient and necessary to delegate subsidiary or ancillary power to delegates of their choice for carrying out the policy laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Bengal Finance (Sales Tax) Act, 1941, rather the modification gave effect to the policy of enactment which was to bring construction contracts within the ambit of the taxation powers of the State and the impugned provisions were held to be intra vires. The principle deducible from the authorities considered above is that the power of delegation is a constituent element of legislative power; that the Legislature can delegate subsidiary and ancillary powers to delegates of their choice; that it is not unconstitutional for the Legislature to leave it to the executive to determine details relating to the working of taxation laws-such as the selection of persons on whom the tax is to be levied, the rates at which it is to be charged in respect of different classes of goods and the like; that the delegate cannot modify the law in its essential features; that the essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct; that the Legislature cannot abdicate its functions in favour of another and that the Legislature will act ultra vires, "if it undertakes to delegate the trust instead of executing it"; and that in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nths to such period as the Central Government may consider reasonable in giving notice of its intention to add to, omit from or otherwise amend the schedule, the valuable right of the dealers of being heard before the sales tax is levied has been interfered to their prejudice. The question to be considered, therefore, is whether in curtailing the period of three months' notice to a shorter period of such duration as the Government may consider reasonable would amount to impairing the right of the general public acquired under the Bengal Act as extended to the Union Territory of Delhi or whether it would amount to making only a structural modification necessary for the requirements of the Union Territory of Delhi. In Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur[1965] 1 S.C.R. 970., the appellant objected to the payment of water tax. Before the Supreme Court in appeal it was contended that there was no publication of the proposal and the draft rules in respect of the water tax as provided by section 131(3) read with section 94(3) of the U.P. Municipalities Act. Further, it was contended that as the provision of section 131(3) was mandatory and was not complied with, action ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld therefore be seen that the purpose of giving notice to the general public as envisaged in sub-section (2) of section 6 of the Bengal Act is to invite objections and to provide for a reasonable opportunity of being heard to those who are likely to be affected by the tax before imposing it. The question, therefore, would be as to what can be termed as "reasonable opportunity" of being heard. Whether giving a notice by a period of "not less than three months" alone would be a reasonable period or "such previous notice as the Central Government considers reasonable" would amount to providing a reasonable opportunity. We have given our anxious consideration to the matter and are of the opinion that all that sub-section (2) of section 6 of the Bengal Act requires is that the notice of the intention of the Government is required to be given for the information of the public, who must be heard well before the requisite addition or amendment is made and it cannot be said that three months' notice alone would meet the requirements of law. We would, however, like to state that the period of notice should be reasonable so as not to deprive the general public of their right to file object ..... X X X X Extracts X X X X X X X X Extracts X X X X
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