Delegated tax power upheld where statutory policy and rate ceiling controlled schedule changes and taxation of tobacco remained valid.

Section 17 of the Assam Value Added Tax Act, 2003 was upheld because the Government's power to amend the Schedules and vary tax rates was guided by the Act's legislative policy and limited by an express ceiling on enhancement. The notification dated April 5, 2007, which omitted tobacco from the First Schedule and brought it under the Fifth Schedule at 12.5 per cent, remained within that statutory limit. In fiscal taxation, the choice of goods to tax and the applicable rate was treated as a matter of legislative discretion, and no abdication of essential legislative function or arbitrary exercise of delegated power was found.

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Issues: Whether section 17 of the Assam Value Added Tax Act, 2003 and the notification dated April 5, 2007 were unconstitutional on the ground of excessive delegation or arbitrary exercise of power.

Analysis: Section 17 empowered the Government, by notification, to amend the Schedules and vary the rate of tax, but its exercise was controlled by the preamble of the Act, which disclosed the legislative policy of imposing and collecting tax on sales or purchases of goods in Assam. The provision also contained an express ceiling that the rate of tax could not be enhanced beyond forty paise in a rupee. The notification merely omitted tobacco from the First Schedule, with the result that it became taxable under the Fifth Schedule at 12.5 per cent, which was within the statutory limit. In such fiscal matters, the choice of what to tax and at what rate lies within legislative discretion, and the Court found no abdication of essential legislative function or arbitrary use of delegated power.

Conclusion: The challenge to section 17 of the Assam Value Added Tax Act, 2003 and the notification dated April 5, 2007 failed. Both were held to be valid and not unconstitutional.

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