Facts of the Case
Under a Sales Tax Act enacted by the legislature, the power to fix the rate of sales tax was delegated to the Government. The statute prescribed a minimum and maximum rate, within which the Government was authorized to determine the exact rate from time to time. A trader challenged this delegation before the court, contending that the legislature had abdicated its essential legislative function and that the delegation amounted to excessive delegation of legislative power, rendering the provision unconstitutional.
Issues in the Case
- Whether delegation of power to fix tax rates amounts to excessive delegation.
- Whether fixing minimum and maximum limits constitutes adequate legislative guidance.
- Whether the legislature has abdicated its essential legislative function.
- Whether the delegated legislation violates Article 14 or constitutional principles.
Legal Principles Covered to Support Case Proceedings and Judgements
The doctrine of delegated legislation permits the legislature to delegate subordinate powers to the executive, provided the essential legislative function is not abdicated. The essential function consists of laying down policy, principles, and standards.
In In re Delhi Laws Act (1951), the Supreme Court held that while the legislature cannot delegate its essential legislative function, it may delegate ancillary powers necessary for implementation. Similarly, in Municipal Corporation of Delhi v. Birla Cotton Mills (1968), the Court upheld delegation where the legislature fixed minimum and maximum tax limits, leaving the exact rate to be determined by the executive.
In Avinder Singh v. State of Punjab (1979), it was held that fixing the rate of tax within prescribed limits does not amount to excessive delegation, as sufficient guidance exists. The legislature retains control by defining the taxable event, rate structure, and limits, ensuring constitutional validity.
Possible Judgement
The court is likely to hold that the delegation of power to the Government to fix sales tax rates within minimum and maximum limits does not amount to excessive delegation. The legislature has laid down the policy and boundaries, retaining its essential legislative function. Therefore, the trader’s challenge would fail, and the provision empowering the Government to fix tax rates would be upheld as constitutionally valid.
About lawgnan
Delegated legislation and excessive delegation are high-scoring topics in Administrative Law examinations. Understanding how courts balance legislative control with administrative flexibility is essential for LLB and judiciary aspirants. For more exam-focused Administrative Law notes, delegation case laws, constitutional principles, and problem-based answers, visit lawgana.in. LawGana provides simplified explanations, structured answers, and landmark judgments tailored for Indian law students. Follow lawgana.in to master Administrative Law concepts and improve your legal reasoning and answer-writing skills.
