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The power given by section 2 of the Laws Act had exhausted itself when the Bengal Act was extended, with some alterations, to Delhi by Notification dated 28 4 1951. Ratio |
The impugned notification has been issued on 7 12 1957, more than 6 1/2 years after the extension. Ratio |
There is nothing in the opinion of this Court rendered in Re: (supra) to support Mr. B. Sen 's contention that the power given by section 2 could be validly exercised within one year after the extension. Ratio |
What appears in the opinion of Fazl Ali J. at page 850, is merely a quotation from the report of the Committee on Minister 's Powers which considered the propriety of the legislative practice of inserting a "Removal of Difficulty Clause" in Acts of British Parliament, empowering the executive to modify the Act itself s... |
This device was adversely commented upon. Ratio |
While some critics conceded that this device is "partly a draftsman 's insurance policy, in case he has overlooked something" (e.g. Sir Thomas Carr, page 44 of his book "Concerning English Administrative Law"), others frowned upon it, and nicknamed it as "Henry VIII Clause" after the British Monarch who was a notorious... |
It was in this perspective that the Committee on Minister 's Powers examined this practice and recommended: 803 ". first, that the adoption of such a clause ought on each occasion when it is, on the initiative of the Minister in charge of the Bill, proposed to Parliament to be justified by him upto the essential. Ratio |
It can only be essential for the limited purpose of bringing an Act into operation and it should accordingly be in most precise language restricted to those purely machinery arrangements vitally requisite for that purpose; and the clause should always contain a maximum time limit of one year after which the power shoul... |
It may be seen that the time limit of one year within which the power under a Henry VIII Clause should be exercisable, was only a recommendation, and is not an inherent attribute of such power. Ratio |
In one sense, the power of extension cum modification given under section 2 of the Laws Act and the power of modification and adaptation conferred under a usual 'Henry VIII Clause, ' are kindred powers of fractional legislation, delegated by the legislature within narrow circumscribed limits. Ratio |
But there is one significant difference between the two. Ratio |
While the power under section 2 can be exercised only once when the Act is extended, that under a 'Henry VIII Clause ' can be invoked, if there is nothing to the contrary in the clause more than once, on the arising of a difficulty when the Act is operative. Ratio |
That is to say, the power under such a Clause can be exercised whenever a difficulty arises in the working of the Act after its enforcement, subject of course to the time limit, if any, for its exercise specified in the statute. Ratio |
Thus, anything said in Re: (supra), in regard to the time limit for the exercise of power under a 'Henry VIII Clause ', does not hold good in the case of the power given by section 2 of the Laws Act. Ratio |
Fazl Ali J., did not say anything indicating that the power in question can be exercised within one year of the extension. Ratio |
On the contrary, the learned Judge expressed in unequivocal terms, at page 849: "Once the Act became operative any defect in its provision cannot be removed until amending legislation is passed." Secondly, the alteration sought to be introduced by this Notification (7 12 1957) in section 6(2), goes beyond the scope of ... |
(2) of section 6. STA |
and the legislative policy inherent therein. Ratio |
Section 6(2), as it stood immediately before the impugned notification, requires the State Government to give by Notification in the Official Gazette "not less than 3 months notice" of its intention to add to or omit from or otherwise amend the Second Schedule. Ratio |
The primary key to the problem whether a statutory provision is mandatory or directory, is the intention of the law maker as expressed in the law, itself. Ratio |
The reason behind the provision may be a further aid to the ascertainment of that intention. Ratio |
If the legislative intent is expressed clearly and strongly in imperative words, such as the use of 'must ' instead of "shall", that will itself be sufficient to hold 804 the provision to be mandatory, and it will not be necessary to pursue the enquiry further. Ratio |
If the provision is couched in prohibitive or negative language, it can rarely be directory, the use of peremptory language in a negative form is per se indicative of the intent that the provision is to be mandatory (Crawford, the Construction of Statutes pp.523 24). Ratio |
Here the language of sub section (2) of section 6 is emphatically prohibitive, it commands the Government in unambiguous negative terms that the period of the requisite notice must not be less than three months. Ratio |
In fixing this period of notice in mandatory terms, the legislature had, it seems taken into consideration several factors. Ratio |
According to the scheme of the Bengal Act, the tax is quantified and assessed on the quarterly turnover. Ratio |
The period of not less than three months notice conforms to that scheme and is intended to ensure that imposition of a new burden or exemption from tax causes least dislocation and inconvenience to the dealer in collecting the tax for the Government, keeping accounts and filing a proper return, and to the Revenue in as... |
Another object of this provision is that the public at large and the purchasers on whom the incidence of the tax really falls, should have adequate notice of taxable items. Ratio |
The third object seems to be that the dealers and others likely to be affected by an amendment of the Second Schedule may get sufficient time and opportunity for making representations, objections or suggestions in respect of the intended amendment. Ratio |
The dealers have also been ensured adequate time to arrange their sales adjust their affairs and to get themselves registered or get their licenses amended and brought in accord with the new imposition or exemption. Ratio |
Taking into consideration all these matters, the legislature has in its judgment solemnly incorporated in the statute, fixed the period of the requisite notice as "not less than three months" and willed this obligation to be absolute. Ratio |
The span of notice was thus the essence of the legislative mandate. Ratio |
The necessity of notice and the span of notice both are integral to the scheme of the provision. Ratio |
The sub section cannot therefore be split up into essential and non essential components, the whole of it being mandatory. Ratio |
The rule in Raza Buland Sugar Co. 's case (supra) has therefore no application. Ratio |
Thus section 6(2) embodies a determination of legislative policy and its formulation as an absolute rule of conduct which could be diluted, changed or amended only by the legislature in the exercise of its essential legislative function which could not, as held in Re: (supra) and Rajnarainsingh 's case (supra) be deleg... |
For these reasons we are of opinion that the learned single Judge of the High Court was right in holding that the impugned notification was outside the authority of the Central Government as a delegate under section 2 of the Laws Act. Ratio |
Before proceeding further, we may mention here in passing that the point for decision in Benarsi Das Bhanot 's case (supra) relied on by the Division Bench of the High Court, was different from the one 805 before us. Ratio |
There, the constitutional validity of section 6(2) of the Central Provinces and Berar Sales Tax Act, 1947, was questioned on the ground of excessive delegation. Ratio |
In the instant case the validity of section 6(2) of the Bengal Act, as such is not being impeached. Ratio |
There is yet another facet of the matter. Ratio |
By the impugned notification, the Central Government did not directly seek to amend section 6(2). Ratio |
Perhaps it was not sure of its competence to do so more than 6 1/2 years after the extension of Bengal Act to Delhi. Ratio |
It therefore chose to amend section 6(2) indirectly through the amendment of its earlier notification dated 28 4 51, which was only a vehicle or instrument meant for extension of the Bengal Act to Delhi. Ratio |
On such extension, the notification had exhausted its purpose and had spent its force. Ratio |
It had lost its utility altogether as an instrument for modification of the Bengal Act. Ratio |
Therefore, the issue of the impugned notification which purported to amend section 6(2) through the medium of a "dead" notification, was an exercise in futility. Ratio |
In any case, an amendment which was not directly permissible could not be indirectly smuggled in through the back door. Ratio |
We now turn to the main ground on which the judgment of the appellate Bench of the High Court rests. Ratio |
The question is, was the invalidity from which the impugned notification, dated 7 12 1957, suffered cured by the Amendment Act of 1959 ? The Bench seems to think that by passing this Amendment Act, Parliament had put its seal of approval on the Bengal Act as it stood extended and amended by the Notifications of 1957 an... |
We find no basis for this surmise. Ratio |
This Amendment Act leaves section 6(2) untouched; it does not even indirectly, refer to the impugned notification or the amendment purportedly made by it in section 6(2). Ratio |
Nor does it re enact or validate what was sought to be achieved by the impugned Notification. Ratio |
No indication of referential incorporation or validation of the impugned notification or the amendment sought to be made by it, is available either in the preamble or in any other provision of the Amendment Act. Ratio |
In Krishna Chandra vs Union of India,(1) relied upon by the learned Counsel for the Respondents, the central issue for consideration was, whether R. 20(2) framed by the Bihar Government under section 15 of the and the second proviso to section 10(2) of the Bihar Land Reforms Act, 1950 were constitutionally valid. Ratio |
By the combined operation of these statutory provisions, the petitioners therein were called upon to pay certain rent and royalties in respect of mining operations. Ratio |
Those demands were challenged in Baijnath Kedia vs State of Bihar(2) wherein this Court held that the Bihar legislature had no jurisdiction to enact the second proviso to section 10(2) of the Bihar Act because section 15 of the Central Act, read with section 2 thereof, had appropriated the whole field relating to minin... |
The upshot of that decision was, that the action taken by the 806 Bihar Government in modifying the terms and conditions of the leases which were in existence anterior to the Rules and the levy sought to be made on the strength of the amended Bihar Act and Rule, were unsustainable. Ratio |
Thereupon the State persuaded Parliament to enact the Validation Act of 1969 with a view to remove the road blocks which resulted in the decision in Kedia 's case (supra). Ratio |
Section 2 of the Validation Act runs thus: "Validation of certain Bihar State laws and action taken and things done connected therewith. STA |
(1) The laws specified in the Schedule shall be and shall be deemed always to have been, as valid as if the provisions contained therein had been enacted by Parliament. STA |
(2) Notwithstanding any judgment, decree or order of any court, all actions taken, things done, rules made, notification issued or purported to have been taken, done, made or issued and rents or royalties realised under any such laws shall be deemed to have been validly taken, done, made, issued or realised, as the cas... |
(3) For the removal of doubts, it is hereby declared that nothing in sub section (2) shall be construed as preventing any person from claiming refund of any rents or royalties paid by him in excess of the amount due from him under any such laws. STA |
" The precise question before the Court was, whether a statute or a rule earlier declared by the Court to be unconstitutional or otherwise invalid can be retroactive through fresh validating legislation enacted by the competent legislature. Ratio |
Answering this question in the affirmative, this Court, speaking through Krishna Iyer, J. observed: "where Parliament having power to enact on a topic actually legislates within its competence but, as an abbreviation of drafting, borrows into the statute by reference the words of a State Act not qua State Act but as a ... |
The distinction between the two legal lines may sometimes be fine but always is real. Ratio |
807 If Parliament has the power to legislative on the topic, it can make an Act on the topic by any drafting means, including by referential legislation." "Taking a total view of the circumstances of the Validation Act Parliament did more than simply validate an invalid law passed by the Bihar Legislature but did reena... |
" The position in the instant case is entirely different. Ratio |
Here, Parliament despite its presumed awareness of the impugned Notification, has said nothing in the Amending Act of 1959, indicating that it (Parliament) has by 'longhand ' or 'shorthand ' method incorporated, re enacted or validated the impugned notification or the amendment sought to be made thereby, while passing ... |
The appellate Bench was therefore in error in holding that Parliament had validated or re enacted referentially with retrospective effect what was sought to be done by the impugned notification, when it passed the Amending Act, 1959. Ratio |
The High Court has tried with the aid of this Court 's decision in Venkatrao vs State of Bombay (supra) to spell out the proposition that mere amendment of an Act by a competent legislature, amounts to re enactment of the parent Act. Ratio |
We find nothing in this Court 's decision in Venkatrao 's case which warrants the enunciation of such a sweeping rule. Ratio |
All that was decided in Venkatrao 's case was that the assent given by the President to the Amending Act would be deemed to be an assent accorded to the parent Act, also. Ratio |
The decision in Venkatrao 's case therefore does not advance the case of Shri B. Sen. Shri B. Sen 's alternative argument that the notifications whereby the exemptions from tax have been withdrawn in regard to Durries, pure silk, country liquor etc. Ratio |
are not assailable because those exemptions were earlier granted without giving three months ' notice, is manifestly unsustainable. Ratio |
Firstly, so far as fruits, fresh and dried (item 8), Pepper, tamarind and chillies (item 11), Turmeric (item 14), ghee (item 16), and knitting wool, (item 21A) are concerned, they were exempted goods in the Schedule of the Bengal Act, as modified and extended by the Notification, dated 28 4 1951, to Delhi. Ratio |
No question of giving notice for granting these exemptions therefore arose. Ratio |
Secondly, the validity of the notifications whereby exemptions were granted to pure silk, liquor etc.after the extension of the Bengal Act to Delhi is not in issue. Ratio |
This plea was not set up by the Respondents in their affidavits. Ratio |
Whether or not notice for the requisite period was given before issuing the exemption notifications, was a question of fact depending on evidence. Ratio |
Thirdly, to allow the Respondents to take their stand on such a plea would be violative of the fundamental principle of natural justice, according to which, a party cannot be allowed to take advantage of its own lapse or wrong. Ratio |
The statute 808 has imposed a peremptory duty on the Government to issue notice of not less than three months, of its intention to amend the Second Schedule. Ratio |
It therefore cannot be allowed to urge that since it had disobeyed this mandate on an earlier occasion when it granted the exemptions it can withdraw the exemptions in the same unlawful mode. Ratio |
Two wrongs never make a right. Ratio |
Nor could the Respondents derive any authority or validity from section 21 of the General Clauses Act, for the notifications withdrawing the exemptions. Ratio |
The source from which the power to amend the Second Schedule, comes is section 6(2) of the Bengal Act and not section 21 of the General Clauses Act. Ratio |
Section 21, as pointed out by this Court in Gopichand vs Delhi Administration(1) embodies only a rule of construction and the nature and extent of its application must be governed by the relevant statute which confers the power to issue the notification. Ratio |
The power therefore had to be exercised within the limits circumscribed by section 6(2) and for the purpose for which it was conferred. Ratio |
For all the foregoing reasons, we are of opinion that the impugned notification, dated 7 12 1957, purporting to substitute the words "such previous notice as it considers reasonable" for the words "not less than three months notice" in section 6(2) of the Bengal Act is beyond the powers of the Central Government, confe... |
In consequence, the notification dated 1 4 1958, 19 9 1959, 29 6 1966 and 31 7 1970 in so far as they withdrew the exemptions from tax in the case of Durries, pure silk, country liquor, kirayana articles etc.were withdrawn without complying with the mandatory requirement of not less than three months notice enjoined by... |
In the result we allow these appeals, set aside the judgment of the appellate Bench of the High Court and declare the Notification dated 7 12 1957, and the subsequent notifications in so far as they withdrew the exemptions from tax, mentioned above, to be unconstitutional. Ratio |
In the circumstances of the case, we leave the parties to bear their own costs. RPC |
V.P.S. Appeals allowed. RPC |
Civil Appeals Nos. FAC |
58 59 and 880 883 of 1971. FAC |
From the Judgment and order dated 10 4 1970 of the Madras High Court in Writ Petition Nos. FAC |
437/67 and 520/68 and Tax Cases Nos. FAC |
135 138 of 1970 respectively. FAC |
P. Ram Reddy, A. V. Rangam and Miss A. Subhashini, for the Appellant in C.As. FAC |
58 59/71. FAC |
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