TaxTMI 
TaxTMI 
2010 (8) TMI 715
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....f multicrore scams by the elected representatives and in such a situation, the State exchequer could not be further burdened. On the other hand various farmers have committed suicide on account of financial hard-ships. There are various categories of people who need financial help as against the Members of Legislative Assembly. 3. In the reply filed by the Under Secretary, Government of Punjab which has also been adopted by the Secretary, Vidhan Sabha, the stand taken is that by enacting the law in question, there was no discrimination. The earlier writ petition on the same issue seeking direction to restrain the State from wasting of funds was dismissed being C. W. P. No. 17018 of 2006 decided on August 7, 2007, R. S. Bhalla v. State of Punjab. In the reply filed by the Income-tax Department, the stand taken is that the State Legislature has trespassed its jurisdiction on the domain of the Central Government. The legislation is discriminatory against other assessees whose burden is borne by them. In the affidavit filed on behalf of the State, it is stated that the State Legislature had the competency to pass the law in question under entries 38 and 40 of List II of the S....
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....rce is to be deducted by the employer where tax is payable by the employer. Even if it is accepted that the State Government is not the employer of the Members of Legislative Assembly, there is no bar to tax being paid by persons other than the assessees. The judgment of the hon'ble Supreme Court relied upon by learned counsel for the petitioner in Justice Deoki Nandan Agarwala v. Union of India [1999] 237 ITR 872 (SC) ; AIR 1999 SC 1951 does not help him. It was held therein that even if the relationship of employer and employee did not exist between the Government and the judges, the judges of the Supreme Court and the High Court could be taxed. The impugned provision does not exempt MLAs from tax. It only provides for payment of tax by the State Government instead of by the assessee. 10. Principles for determining whether or not there is any encroachment on the legislative power are well known. The scheme of distribution of legislative powers and the principles of interpretation of entries in Schedule VII to the Constitution were summed up by the hon'ble Supreme Court in Hoechst Pharmaceuticals Ltd. v. State of Bihar [1983] 4 SCC 45 and reiterated in State of West Beng....
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....further question need be asked and Parliament's legislative competence must be upheld. Where there are three Lists containing a large number of entries, there is bound to be some over-lapping among them. In such a situation the doctrine of pith and sub-stance has to be applied to determine as to which entry does a given piece of legislation relate. Once it is so determined, any incidental trenching on the field reserved to the other Legislature is of no con-sequence. The court has to look at the substance of the matter. The doctrine of pith and substance is sometimes expressed in terms of ascertaining the true character of legislation. The name given by the Legislature to the legislation is immaterial. Regard must be had to the enactment as a whole, to its main objects and to the scope and effect of its provisions. Incidental and superficial encroachments are to be disregarded. (6) The doctrine of occupied field applies only when there is a clash between the Union and the State Lists within an area common to both. There the doctrine of pith and substance is to be applied and if the impugned legislation substantially falls within the power expressly conferred upon the Legi....
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....uishing and classifying persons or things to be subjected to such laws. 3. The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary. 4. The principle underlying the guarantee of article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no dis-crimination between one person and another if as regards the subject matter of the legislation their position is substantially the sam....
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....by the statute upon a body of administrators or officers to make selective application of the law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. In such cases, the power given to the executive body would import a duty on it to classify the subject-matter of legislation in accordance with the objective inducted in the statute. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can be annulled as offending against the equal protection clause. On the other hand, if the statute itself does not disclose a definite policy or objective and it confers authority on another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory, irrespective of the way in which it is applied. 10. Whether a law conferring discretionary powers on an administrative authority is constitutionally valid or not should not be on the assumption that such authority will act in an arbitrary manner in exercising the discretion committed to it. Abuse of power given by law does occur ; but t....