TaxTMI 
TaxTMI 
TaxTMI 
1975 (2) TMI 89
X X X X Extracts X X X X
X X X X Extracts X X X X
....arrack, on excise duty, on health cess and on education cess for the period from December 28, 1967, to January 31, 1968, and made similar demands for the month of February, 1968, also. The appellant and other excise contractors filed writ petitions in the High Court of Karnataka challenging the validity of the levy and collection of excise duty, education cess, health cess and sales tax. The High Court accepted some of the contentions of the appellant, granted him reliefs on that basis but rejected the other prayers. The appellant has filed these appeals on the basis of certificates granted by the High Court against the order. The contentions raised by the counsel for the appellant before this court were: that no excise duty can be levied on a licensee in respect of the quantity of arrack purchased by him from Government depots, that the power to fix the rate of excise duty conferred under section 22 of the Mysore Excise Act of 1965 on the Government was bad for the reason that it was an abdication by the State Legislature of its essential legislative function and that no sales tax could be levied on the price of sale of arrack since section 19 of the Mysore Sales Tax Act, 1957, u....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... who is competent to establish or license a warehouse wherein intoxicants may be deposited and kept under clause (e) of section 16 and, therefore, it is not a warehouse established or licensed by the State Government. We see no force in this contention. Section 23 provides that excise duty shall be levied on the excisable articles issued from a warehouse also. We see no reason to think that a warehouse established or licensed under section 16(e) is not a warehouse within the meaning of that expression in section 23. The second contention raised by the appellant was that section 22 of the Act provides for delegation of the power to fix the rates of excise duty to the Government by making rules and since no guidance has been furnished to the Government by the Act for fixing the rate, there was abdication of essential legislative function by the legislature and, therefore, the section is bad. The High Court after referring to the preamble of the Act said that it was the policy of the Act both to raise revenue and to discourage consumption of liquor by making the price of liquor sufficiently high, that that would serve as a guidance to fix the rates of excise duty and that the rate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a certain notification being issued by the Government in that regard. This provision, it was contended, was ultra vires because there was an abdication of essential legislative functions by the legislature with respect to the imposition of tax inasmuch as the State Government was given the power to condone the breaches of the Act and to set at naught the Act itself. This, it was contended, was an indirect exempting or dispensing power. Hidayatullah, J., speaking for the majority, said that regard being had to the democratic set-up of the municipalities which need the proceeds of these taxes for their own administration, it is proper to leave to these municipalities the power to impose and collect these taxes. He further said that apart from the fact that the Board was a representative body of the local population on whom the tax was levied, there were other safeguards by way of checks and controls by Government which could veto the action of the Board in case it did not carry out the mandate of the legislature. In Devi Dass Gopal Krishnan v. State of Punjab [1967] 20 S.T.C. 430 (S.C.); [1967] 3 S.C.R. 557., the question was whether section 5 of the East Punjab General Sales Tax Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... who paid taxes provided a great check on the elected councillors imposing unreasonable rates of tax. He then said: "The guidance may take the form of providing maximum rates of tax up to which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing the rates after such consultation. It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watch-dog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided." In Sita Ram Bishambhar Dayal v. State of U.P. [1972] 29 S.T.C. 206 (S.C.); [1972] 2 S.C.R. 141., section 3-D(1) of the U.P. Sales Tax Act, 1948, had provided for levying taxes at such rates as may be prescribed by the State Government not exceeding the maximum prescribed therein. Hegde, J., in speaking for the court, observed: "However much one might deplore the 'New Despotism' of the executive, the very complexity of the modern society and the demand it makes on its Government have set in motion forces which have made it abs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n upon a motion made in either House." In Bernard Schwartz's "An Introduction to American Administrative Law " it is stated: "In Britain, parliamentary control over delegated legislation is exercised through the various forms of 'laying' prescribed in enabling Acts. Through them, the legislature is enabled at least in theory to exercise a continuing supervision over administrative rules and regulations." As Dean Land is pointed out, the English techniques for laying the rules before the Houses have several virtues. "For one thing, they bring the legislative into close and constant contact with the administrative See Landis, "The Administrative Process", page 77 (1938)." The legislature may also retain its control over its delegate by exercising its power of repeal. This was the basis on which the Privy Council in Cobb & Co. v. Kropp [1967] 1 A.C. 141 (P.C.)., upheld the validity of delegation of the power to fix rates to the Commissioner of Transport in that case. The question there was whether the Queensland Legislature had legislative authority under the impugned Acts to invest the Commissioner of Transport with power to impose and levy licence and permit fees. It was not dis....