TaxTMI 
TaxTMI 
2011 (4) TMI 1416
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.... mandate enshrined under Article 19(1)(a) and 19 (1)(g) of the Constitution of India. Rule has been also impugned being framed in contravention of statutory provisions contained in the U.P. Municipal Corporation Act, 1959 (hereinafter referred to as the Act.). 3- While making reference vide order dated 28.10.2010, the Division Bench of this Court at Lucknow had shown its disagreement to a judgment of another Division Bench delivered at Allahabad whereby identical writ petition was dismissed. The case is reported in 2010 (4) ALJ 293 Taj Advertising & others vs. State of U.P. & others. It would be convenient to set out briefly at the outset the material facts on which the bunch of writ petitions were filed and the reference has been made to the larger Bench. 4- Petitioner no. 1 of Writ Petition No. 2716 (M/B) of 2010 is the advertiser having business of advertisement in various forms whereas the petitioner no. 2 is the Secretary and petitioner no. 3 is the President. 5- The State Government in pursuance to power conferred by Section 227 read with Section 192, 219, sub section (1) of Section 540 and Section 550 of the Act and Section 21 of the U.P. General Clauses Act ( herei....
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....ment. Rule 5 further provides that every owner of land or building shall give undertaking in writing and in case of any default he will be liable to pay the tax. Rule 5 of the impugned Rule is reproduced as under:- (1)Every application for obtaining permission shall be made in the prescribed Form, specified in Schedule-1, which shall be obtained from Municipal Corporation office by paying Rupees five hundred or can be downloaded from the website of the Corporation, however, the receipt of the cost of application shall be submitted alongwith the application at the time of submitting the application. (2)Every application, referred to in sub rule (1), shall contain detailed information about the land, building or place where the proposed advertisement or hoarding is sought to be erected, exhibited, displayed, stuck, pasted, written, drawn or hung alongwith the site plan of such land, building or place and shall include the following information:- (a) full specification showing the length, height, and weight of the sign, the location where it is to be erected, the manufacturer's name and address and where applicable, the number of lights and electrical....
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....permission to erect a tree guard exhibits or displays any advertisement on such tree guards, he shall be liable to pay tax under these rules; (8)Permission shall be granted subject to such conditions as may be imposed by the Municipal Commissioner in the interest of public safety and decency; (9)Every application shall be accompanied by the full amount of premium offered; 9- Under rule 6 it has been provided that the permission so granted shall be effective only for the period for which it was granted, provided that tax or taxes with premium has been paid and deposited in the Municipal Fund. It further provides that the advertisers shall remove or wipe off the advertisement within one week from the expiry of the period for which the permission was granted and the advertiser shall be abide by these rules and regulations laid down by the Municipal Commissioner. Under rule 7 it has been provided that the Municipal Commissioner shall fix the minimum premium amount for every site and the site for advertisement shall be decided by the allotment committee under the Chairmanship of Municipal Commissioner consisting of other members. 10- Power to reject applicatio....
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.... 12- Rate of tax on advertisements and hoardings has been defined in Schedule-2 of the Rule which is reproduced as under:- (1) "For erection or display of advertisements and hoardings on land, walls and building public places and roads owned or controlled by the corporation:- Super Class : Rs. 2000/- per square meter per year 'A' Class : Rs. 1200/- per square meter per year 'B' Class : Rs. 1000 per square meter per year 'C' Class : Rs. 800 per square meter per year (2)If such hoarding or advertisement is reflected by electrical or electronically controlled light devices (including L.C.D.) then the rate shall be fifty percent extra over and above the rate specified in article 1 above. (3) (1) Advertisement on power driven four wheeler vehicle (Excluding road show) Light vehicle Rs. 5000/- per year per vehicle Heavy vehicle Rs. 20,000/-per year per vehicle Road show at the following rates:- (1) Three wheeler : Rs. 50/- per day (2) Four wheeler : Rs. 500/- per day (3)Six wheeler : Rs. 1000/- per day (4) Hoarding boards on Electric or other poles....
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...., J. and Hon'ble Pankaj Mithal, J.) 13- In Taj Advertising (supra) it was pleaded by the petitioners' counsel that the State while making rules had not followed the procedure prescribed under sections 199 to 203 of the Act, hence it is bad in law. It was further pleaded that the impugned rule infringes the right to carry on business of advertisement, hence it is violative of Article 19(1)(g) of the Constitution of India. On the other hand, the State defended the said Rules on the ground that they are only restrictive in nature and does not completely oust the petitioners from carrying on business of advertisement. 14- Paras 3 and 4 of the Taj Advertisement judgment (supra) are reproduced as under:- 3- The contention of learned counsel for the petitioners is that they have a fundamental right to carry business of advertising. The impugned Rules infringe their above right and as such are ultra vires. Secondly, the procedure prescribed under Sections 199 to 203 of the U.P. Municipal Corporation Act, 1959 (hereinafter referred to as an Act) has not been followed in enacting the aforesaid Rules. 4- The respondents have defended the aforesaid Rules on the ....
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....sing Case (supra) and after hearing, referred the matter to Hon'ble Chief Justice for constitution of a larger Bench and in consonance thereof, the present full bench has been constituted. 17- The Division Bench had referred, inter alia, the following questions to be considered and answered by the larger Bench. (1) (1)Whether the State Government had legislative competence to frame the Rules, 2009? (2)Whether the State Government in any case could have framed 'Rules' in general for all the municipal corporations, that too without taking recourse to Section 206 of the Act? (3)Whether delegation of power could be made under the Rules framed by the State Government to the Central Government? (4)Whether the licence for putting hoardings/advertisements on public properties, owned by private owners, can be given by public auction ? (5)Whether the impugned rules are ultra vires to the provisions of Articles 14, 19(1) (a) and 19(1)(g) of the Constitution of India? (6)Whether the Rules, 2009 are invalid, they having been framed without following the provisions of Sections 199 to 203 of the Act? (7)Whether the provisions of....
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....overnment is fully entitled to make Rules in question in pursuance to power conferred by Section 540 read Section 305 and 306 of the Act. 20- It shall be appropriate to have glance on the scheme provided under the Act. Entire Act has been divided into 25 Chapters dealing with containing provisions with regard to various issues which falls within the domain of Corporation, which are as under:- Chapter I- Definition Clause (II) Constitution and Governance of Corporation (III) Proceedings of the Mahapalika, Executive Committee, Development Committee and other committee (IV) Officers and Staff (V) Duties and Powers of the Corporation and Corporation Authorities (VI) Property and Contracts and Chapter VI-A- Finance Commission (VII) Corporation and other Funds (VIII) Borrowing Powers (IX) Corporation Taxation (X) Drains and Drainage (XI) Water supply (XII) Streets (XIII) Building Regulations) (XIV) Improvement Scheme (XV) Sanitary Provisions (XVI) Regulation of Markets, Slaughter-Houses, Certain Trades and Acts, Etc. (XVII) Vital Statistics (XVIII) Compensation (XIX) Penalties (XX) Proceedings Before Judge, District Judge, Magistrate and others (XXI) Recovery of Taxes and other Cor....
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....on establishing or acquiring electricity supply or public transport undertaking or other public utility services, such other committee or committees of the Corporation as the Corporation may with the previous sanction of the State Government establish with respect thereto. 23- Under Section 138 of the Act, State Government may make rules for the purposes of carrying into effect the provisions of this Chapter and similarly under section 153 of the Act, the State Government has been conferred power to make rules with regard to constitution of corporation and other funds provided under Chapter VII of the Act. Under Section 171 of the Act again the State Government has been conferred power to make rules with regard to Item provided under Chapter VIII of the Act. 24- The matter with regard to corporation tax has been dealt with under Chapter IX of the Act. Section 172 deals with the tax to be imposed under the Act conferred by the provisions contained in Chapter IX of the Act. Section 192 deals with the matter with regard to advertisement. Section 193 empowers the Municipal Commissioner not to grant any permission in case advertisements contravenes any bye-law made by the Corporat....
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....tate Legislature has no power to impose in the State under the Constitution of India: Provided that where any tax was being lawfully levied in the area included in the City immediately before the commencement of the Constitution of India such tax may continue to be levied and applied for the purposes of this Act until provision to the contrary is made by Parliament. Section 173. Property taxes leviable.-- (1) For the purposes of Sub-section (1) of Section 172 property taxes shall comprise the following taxes which shall, subject to the exceptions, limitations, and conditions hereinafter provided, be levied on buildings and lands in the City- (a) a general tax which may be levied, if the Corporation so determines, on a graduated scale; (b) a water tax [leviable in areas where water is supplied by the Corporation;] (c) drainage tax leviable in areas provided with sewer system by the Corporation; (d) a conservancy tax in areas in which the Corporation undertakes the collection, removal and disposal of excrementitious and polluted matter from privies, urinals and cesspools. (2)Save as otherwise expressly provided in this act or rules made thereunder, these taxes sh....
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....y street. Explanation 1-- The word "structure" in this section shall include any movable board on wheels used as an advertisement or an advertisement medium. Explanation 2-- "Public place" shall, for the purpose of this section mean any place which is open to the use and enjoyment of the public, whether it is actually used or enjoyed by the public or not. Section 193--Prohibition of advertisement without written permission of Municipal Commissioner-- (1) No advertisement shall, after the levy of the tax under Section 192 has been determined upon the Corporation, be erected, exhibited, fixed or retained upon or over any land, building, wall, hoarding or structure within the City or shall be displayed in any manner whatsoever in any place without the written permission of the "Municipal Commissioner". (2) The "Municipal Commissioner shall not grant such permission if, (i)the advertisement contravenes any bye-law made by the Corporation under [Clause (48) of Section 541, or (ii)the tax, if any, due in respect of the advertisement has not been paid. (3) Subject to the provisions of Sub-section (2) in the case of any adverti....
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....ntrary to the provisions of Section 192 or Section 193 or after the written permission for the erection, exhibition, fixation or retention thereof for any period shall have expired or become void, the "Municipal Commissioner may, by notice in writing require the owner or occupier of the land, building, wall, hoarding or structure upon or over which the same is erected, exhibited, fixed or retained to take down or remove such advertisement or may enter any building, land or property and have the advertisement removed. 25- Chapter IX also contains the provision with regard to procedure which is to be adopted for imposition of tax, for framing of proposal and subsequent procedure which is to be adopted after framing of proposal, confers power on the State Government to reject, sanction or modify the proposal. Power has been conferred on the State Government to modify, abolish or decline the proposal of the Corporation with regard to imposition of tax. State Government has been conferred power under Section 206 of the Act to require Corporation to impose taxes. For convenience Section 199, 200, 201, 202, 203,204, 205 and 205 of the said Act are re-produced as under:- ....
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....n connection therewith to the State Government. Section 201. Power of State Government to reject, sanction or modify proposal- Upon receipt of the proposals and objection under the preceding section the State Government may either refuse to sanction the proposals or return them to the Corporation for further consideration or sanction them without modification or with such modification not involving an increase of the amount to be imposed, as it seems fit. Section 202. Resolution of Corporation directing imposition of taxes:- (1) When the proposals have been sanctioned by the State Government, the State Government, after taking into consideration the draft rules submitted by the Corporation, shall proceed forthwith to make such rules in respect of the tax as far the time bing it considers necessary. (2) When the rules have been made the order of sanction and a copy of the rules shall be sent to the Corporation, and thereupon the Corporation shall by special resolution direct the imposition of the tax with effect from a date to be specified in the resolution. Section 203- Imposition.--(1) A copy of resolution passed under Section 202 shall be submi....
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.... Government may pass suitable order imposing, increasing, modifying or varying the tax and thereupon the order of the State Government shall operate as if it had been a resolution duly passed by the Corporation. 26- Under Chapter IX, Section 219 provides that the Rules shall be framed to regulate the matter with regard to assessment, collection or composition of taxes. Section 220 deals with the composition of tax and Section 221 deals with exemption from tax. Section 225 empowers the Corporation with regard to supplementary tax and Section 227 deals with the power to make rules. For convenience Sections 225 and 227 are re-produced as under:- Section 225:- Any tax imposable under this Act may be increased or newly imposed by way of imposing supplementary taxation:-- Whenever the Corporation determines to have recourse to supplementary taxation in any financial year, it shall do so by increasing, for the unexpired portion of the said year, the rates at which any tax imposable under this Act is being levied, subject to the limit and conditions for such tax prescribed in this Act or in the order or sanction of the State Government or by levying, with due sanction, a tax....
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....appointed day upon or over any land, building, or structure, save and except as permitted as hereinbefore provided the owner or person in occupation of such land, building or structure shall be deemed to be the person who has erected, fixed or retained such sky-sign in contravention of the provisions of this section, unless he proves that such contravention was committed by a person not in his employment or under his control, or was committed without his connivance. (3) If any sky-sign be erected , fixed or retained contrary to the provisions of this section, or after permission for the erection, fixing or retention thereof for any period shall have expired or become void, the "Municipal Commissioner may, by written notice, require the owner or occupier of the land, building, or structure upon or over which the sky sign is erected, fixed or retained, to take down and remove such sky sign. Section 306:- Regulation and control of advertisements:- (1) "The Municipal Commissioner may, by notice in writing, require the owner or the person in occupation of any land, building, wall hoarding or structure to take down or remove within such period as is specified in the not....
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....ion of Section 541 are reproduced as under:- Section 540:- Making of rules by State Government'- (1) In addition to the power conferred upon the State Government under the preceeding Chapters of this Act to make rules the State Government may make rules to carry out the purposes of the Act and may also make model rules for the guidance of a Corporation in any manner connected with the carrying out of the provisions of this or any other enactment. Explanation- The power conferred by this sub-section includes the power to make rules regulating the holding of meetings of the Corporation and its Committees and the conduct of business at such meetings till bye-laws are framed under the Act for the purpose. (2) The power of the State Government to make rule under this Act shall be subject to the condition of the rules being made after previous publication and of not taking effect until they have been published in the official Gazette. (3) Any rule made by the State Government may be general for all Corporations or may be special for any one or more Corporations to be specified. Section 541:- Bye-laws for what purpose to be made:- The Corpo....
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....e is two meaning of a word and one making the statute absolutely vague, and meaningless and other leading to certainty and a meaningful interpretation are given, in such an event the later should be followed. 34- In Deevan Singh vs. Rajendra Pd. Ardevi (2007)10 SCC528 the Supreme Court observed that while interpreting a statute the entire statute must be first read as a whole then section by section , clause by clause , phrase by phrase and word by word .the relevant provision of statute must thus read harmoniously. 35- In 2010 (3) SCC 34, Snehadeep Structures Private Limited Vs. Maharashtra Small-Scale Industries Development Corporation Limited, Supreme Court observed that definite and clear meaning should be given while interpreting the statutory provision irrespective of its consequences. 36- In 2010 (3) SCC 765, Securities and Exchange Board of India Vs. Ajay Agarwal with regard to Social welfare legislation, Supreme Court ruled that it is the duty of High Court to accord an interpretation which promotes purpose of law and if possible, to eschew the one which frustrates it. Accordingly, while considering the provision contained in Section 540 of the Act, the Courts ....
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....s the Governor may, having regard to the size of the area and the municipal services being provided or proposed to be provided by an industrial establishment in that area and such other factors as he may deem fit, by public notification, specify to be an industrial township. (2) In this article, 'a transitional area' 'a smaller urban area' or 'a larger urban area' means such area as the Governor may, having regard to the population of the area, the density of the population therein, the revenue generated for local administration, the percentage of employment in non-agricultural activities, the economic importance or such other factors as he may deem fit, specify by public notification for the purposes of this Part. Article 243 ZE:- Committee for Metropolitan Planning:- (1) There shall be constituted in every Metropolitan area, a Metropolitan Planning Committee to prepare a draft development plan for the Metropolitan area as a whole. (2)The Legislature of a State may, bylaw, make provision with respect to- (a) the composition of the Metropolitan Planning Committees; (b) the manner in which the seats in such Committ....
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.... Act provides that the Municipal Corporation constituted under Article 243 Q of the Constitution shall be a body corporate. Article 243 (Q) itself provides that the Municipal Corporation shall be constituted for an urban area. Some of the Corporations of Metropolitan Cities are attracted by Article 243 (ZE) of the Corporation. Article 243 (ZE) speaks for the Constitution of Metropolitan Planning Committee to prepare the plans for the development which includes financial matters. 40- The word 'Corporation' in ENCYCLOPAEDIC LAW DICTIONARY by Dr. A. R. BISWAS, page 366 has been defined as under:- "Corporation"- 'Corporation' means the municipal authorities of a town or city; a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession owning properties etc. A corporation aggregate has been defined as a collection of individuals united into one body under a special denomination, having perpetual succession under an artificial form, and vested by policy of the law with the capacity of acting in several respects as an individu....
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....rom the shareholders who own it and having rights to issue stock and exist indefinitely; a group or succession or persons established in accordance with legal rules into a legal or juristic person that has a legal personality distinct from the natural persons who make it up, exists indefinitely apart from them, and has the legal powers that its constitution gives it,- Also termed corporation aggregate; aggregate corporation; body corporate; corporate body. See Company [Cases: Corporations incorporate, vb.-incorporate, adj. 43- The NEW LEXICON WEBSTER'S DICTIONARY OF THE ENGLISH LANGUAGE COPYRIGHT (year 1987) Lexicion Publication, INC, Page 218, the word 'Corporation' has been defined as under:- "Corporation- a body or society entitled to act as a single person, esp. a body of municipal authorities (law) an artificial person created by charter etc,. Made up of many persons (corporation aggregate) or one (corporation sole) [fr. L. corporatio (corporationis, action of incorporating]." 44- Thus, in view of reading the definition given in various dictionaries (supra) it is evident that the corporation is a body of municipal authorities entitled to act as a sin....
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....nd centre of the personality of the 'corporation' 50- The Bombay High Court in the case reported in 2000-I LLJ 1123 State of Maharashtra vs. Dr. Rustom Franroze Hakim held that the Corporation is a body corporate and is not the same as the State Government. 51- Madhya Pradesh High Court in the case reported in 2001-II LLJ 1679 Food Corporation of India vs. Employees of FCI held that the Corporation is a public utility establishment. 52- Throughout the government system, it has often been found convenient to confer corporate power on a particular body that performs public functions. According to Professor H.W. R. Wade (Administrative Law Tenth Edition) to quote:- "whenever Parliament is willing to grant a sufficient measure of autonomy, the public corporation is commonly employed. It has a legal existence of its own, and can be given statutory functions which can operate outside the normal organization of the service of the Crown. It offers scope for many kinds of governmental experiment, under which central control, local control, particular expertise and independence can be blended in the desired proportions". Learned author further observed that there is a wid....
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.... acts cannot be ratified and the doctrines of estoppel or acquiescence do not apply in such cases. It has a separate legal entity and, therefore, can sue or be sued in its corporate name. It can hold and dispose of property by such name. Depending on the provisions of the statute of its creation a corporation is largely autonomous in finance and management. It has funds of its own. It operates an activity on behalf of the government which may be regulatory, benefactory, commercial or development. The statute may delegate rule making power to a corporation; such rules and regulations are binding if they are within the authority, made in the manner laid down by the statute and do not violate any provision of the Constitution. A statutory corporation is a 'State' within the definition of the term in Article 12 of the Constitution, and therefore, is subject to the writ jurisdiction of the Supreme Court and high Courts under Articles 32 and 226 of the Constitution. 55- Keeping in view the constitutional provisions (supra) and definition of word 'corporation', there appears no doubt that though the corporations discharge their obligations in pursuance to....
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....nment to impose tax under List 2 of Schedule-7 of the Constitution, shall be available to the Corporations to impose taxes within their jurisdiction. 58- Apart from Sub-section (2) of Section 172, Section 192 confers additional power to the Corporation empowering it to impose tax on the advertisement. Further Section 193 provides that without written permission of the Municipal Commissioner, no advertisement shall be exhibited. It further provides that in case advertisement contravenes any bye-law made by the corporation under Clause (48) of Section 541 of the Act, no permission shall be granted. It further provides that the permission shall be granted only for the period for which tax is paid. Section 194 of the Act further provides that the permission granted under Section 193 of the Act shall be void in case advertisement contravenes any bye-law made by the corporation under Clause (4)8 of Section 541 of the Act. Section 195 further provides that it is the beneficiary of the advertisement, who shall be responsible to face punitive action in the event of contravention of provision or bye-laws with regard to advertisement. 59- The Provisions contained in Sections 172 t....
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....ose tax under Section 206 of the Act by publishing its direction or order in the official Gazette and order so notified shall be implemented by the Corporation through its special resolution. 63- Thus, the power of the state government is supervisory power with regard to tax matter whereas original power to impose tax vests in the Corporation itself. Any other meaning given to statutory provision will make the corporations a department of the State Government which does not seem to aim and object of Article 243 (Q) and other related provisions of the Constitution. 64- Under Section 306 of the Act also power has been conferred on the Municipal Commissioner to ensure that the advertisement should be removed after serving a notice. In Section 314, the power of the State Government is without prejudice to the generality of the foregoing powers i.e. power of the corporation to make rules. Section 540 of the Act confers additional power on the state government to make rules to carry out the purpose of the Act and may also make model rules for guidance of corporation. Power conferred under Section 540 of the Act does not intend to ignore the executive body of the corporations to tak....
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.... into a binding rule of conduct vide in re: Article 143, Constitution of India reported in AIR 1961 SC 4, p. 7 (para 4) Vasanlal Maganbhai Sanjawala vs. State of Bombay. However, the delegation may be valid only when the legislative policy and guidelines to implement it are adequately laid down and the delegate is only empowered to carry out the policy within the guidelines laid down by the Legislature vide AIR 1972 SC, 1917, p. 1922 Tata Iron & Steel Co. vs. Workmen, (1972) 1 SCC 383, Gwalior Rayon Mills. vs. Asstt. Commr, Sales Tax AIR 1974 SC 1660, p. 1669 (para 22): (1974) 4 SCC 98; P.N. Kaushal vs. Union of India, AIR 1978 SC 1457, p. 1472: (1978) 3 SCC 558; Ajoy Kumar Banerjee vs. Union of India (1984) 3 SCC 127, pp. 147, 148: AIR 1984 SC 1130; A.S. Barasuraman vs. State of Tamil Nadu, AIR 1990 SC 40, p. 43 : (1989) Supp (1) SCC 430, Agriculture Market Committee vs. Shalimar Chemical Works, AIR 1997 SC 2502, p. 2507: (1997) 5 SCC 516. In view of above, delegation of unfettered powers to the Municipal Commissioner to impose tax in the form of penalty seems to be an instance of excessive delegation, contrary to the statutory provisions (supra). 69- A plain reading of stat....
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....there is a special resolution. The special resolution is the sine qua non of the notification. The provision contained in the Act is almost para materia to the U.P. Municipalities Act, 1960. 73- In Raghuvendra Kripal (supra) their Lordships held that the selection of tax for imposition in municipal area by the legislative will express in the statutory provision and the decision by the Municipal Board is subject to further check by the Government. Relevant portion of the judgment is as under:- "The matter may be looked at from another point of view. Excessive delegation is most often found when the legislature does not perform all the essential legislative functions and leaves them to some other agency. The Legislature here performs all essential functions in the imposition of the tax. The selection of tax for imposition is a Municipal area is by the legislative will express in Section 128. Neither the Municipal Board, nor the government can go outside the list of taxes therein included. The procedure for the imposition of tax is also laid down by the Legislature for the Municipal board to follow and the State Government is there to ensure due observance of that procedur....
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....egal. Granted legislative competence, it is not sufficient to declare merely that the decision of the Court shall not bind for that is tantamount to reversing the decision in exercise of judicial power which the Legislature does not possess or exercise. 76- In (2000) 3 SCC Page 40 Kunj Behari Butail vs. State of Himachal Pradesh while interpreting the word power to make rules to carry out purpose of the Act, Supreme Court observed that the delegated legislature must advance the purpose of the Statute and unless it does so it cannot be sustained. Relevant paras of the judgment is as under:- "Para 13-It is very common for the legislation to provide for a general rule making power to carry out the purpose of the Act. When such a power is given, it may be permissible to find out the object of the enactment and then see if the rules framed satisfy the rest of having been so frame as to fall within the scope of such general power confirmed. If the rule-making power is not expressed in such a usual general form then it shall have to be seen if the rules made are protected by the limits prescribed by the patent act. (See: Sant Saran Lal vs. Parsuram Sahu3, AIR para 19). ....
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....the purpose of determining the constitutionality of the statute alone vis-a-vis the field of legislative power as envisaged under Article 245 of the Constitution of India but also having regard to the object and purpose, the statute sees to achieve. Para 38:- When a disqualification is provided, it is to operate at the threshold in respect of the players in the field of trading in electricity. When, however, a regulatory statute is sought to be enforced, the power of authority to impose restrictions and conditions must be construed having to the purpose and object it seeks to achieve. Dealing in any manner with generation, distribution and supply and trading in electrical energy is vital for the economy of the country. The private players who are permitted or who are granted licence in this behalf may be reasonable. Concededly, the doctrine of proportionality may have to be invoked. Para 39:- The superior courts would ensure that the subordination legislation has been framed within the four corners of the Act and is otherwise valid. The issue therefore, which arises for our consideration is as to whether the delegation having been made for the purpose of carrying ....
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....cutive, legislature and judiciary. When we talk of State action, the devil lies in the detail. The approach to writing of laws, rules, notifications, etc. has to showcase these concerns. Para 73- The image of law which flows from this framework is its neutrality and objectivity: the ability of law to put sphere of general decision-making outside the discretionary power of those wielding governmental power. Law has to provide a basic level of "legal security" by assuring that law is knowable, dependable and shielded from excessive manipulation. In the context of rule making, delegated legislation should establish the structural conditions within which those processes can function effectively. The question which needs to be asked is whether delegate legislation promotes rational and accountable policy implementation. While we say so, we are not oblivious of the contours of the judicial review of the legislative Acts. But, we have made all endeavours to keep ourselves confined within the well-known parameters. Para 74- A subjectively worded normative device also enables the agency to acquire rents. It determines the degree of accountability and responsiveness of offi....
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....ent may pass suitable order imposing, increasing, modifying, or varying the tax thereupon and in such event the order of the State Government shall operate as if it had been a resolution duly passed by the Corporation. 84- In view of above, the tax imposed by the State Government straightaway without exercising the power conferred by the Act i.e. issuance of direction by notification in gazette to impose tax seems to be an act of exceeding of jurisdiction. Impugned Rules have been framed by the Government in contravention of statutory provisions (supra) contained in the Act. By framing the impugned Rules, the State Government seems to have acted treating the Corporations of the State as its department which seems to not the aim and object of Article 243 (Q) of the Constitution. 85- It is a recognized canon of construction that an expression used in a rule, bye-law or form made in exercise of a power conferred by a statute must unless there is anything repugnant in the subject or context have the same meaning as is assigned to it under the statute vide (1985) 4 SCC 404 Onkarlal Nandlal vs. State of Rajasthan. However it is subject to rider that the rules should be consistent w....