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[The power to make modification in a legislation does not include power to make
modification in any essential feature]
Section 2 of the Part C States (Laws) Act, 1950 (later re-titled as Union Territories (Laws)
Act, 1950), empowered the Central Government to extend by notification in the Official
Gazette, to any Part C State, or to any part of such State, with such restrictions and
modifications as it thinks fit, any enactment which was in force in a Part A State at the time of
notification. In exercise of this power, the Central Government by notification No. SRO 615
dated April 28, 1951, extended to the then Part C State of Delhi, the Bengal Finance (Sales
Tax) Act, 1941 with, inter alia, these modifications:
In sub-section (2) of Section 6,-
(b) for the words “add to the Schedule”, the words “add to or omit or otherwise amend the
Schedule” shall be substituted.
For the schedule of the Bengal Act, this notification substituted a modified schedule of goods
exempted under Section 6. The relevant items in the modified schedule were: 8. Fruits, fresh
and dried (except when sold in sealed containers); 11. Pepper, tamarind and chillies. 14.
Turmeric; 16. Ghee; 17. Cloth of such description as may from time to time be specified by
notification in the Gazette costing less than Rs.3 per yard or such other sum as may be
specified.
Section 6 of the Bengal Act after its extension to Delhi, as modified by the said notification,
read:
- (1) No tax shasll be payable under this Act on the sale of goods specified in the first
column of the Schedule subject to the conditions and exceptions if any set out in the
corresponding entry in the second column thereof.
(2) The State Government after giving by Notification in the Official Gazette ‘not less than 3
months’ notice of its intention to do so may by like notification add to or omit from or
otherwise amend the Schedule and thereupon the Schedule shall be deemed to be amended
accordingly, (emphasis supplied)
By a notification dated October 1, 1951, in sub-section (1) of Section 6, the words “the first
column of schedule were omitted and for the words “in the corresponding entry in the second
column thereof the word “therein” was substituted.
By a notification country liquor was included in the schedule as item No. 40 of exempted
goods with effect from April 19, 1952. On November 1, 1956, as a result of the coming into
force of the States Reorganization Act, 1956, and the Constitution (Seventh Amendment) Act,
1956, Part C States were abolished; Part C State of Delhi became a Union territory and the
Delhi Legislative Assembly, was also abolished. In 1956, Part C States (Laws) Act, 1950
(hereinafter referred to as Laws Act) also became the Union Territories (Laws) Act, 1950,
with necessary adaptations. On December 1, 1956, Parliament passed the Bengal Finance
(Sales Tax) (Delhi Amendment) Act, 1956 which introduced amendments in different
sections of the Bengal Act as applicable to Delhi. It made only two changes in Section 6.
Firstly, the word ‘schedule’, wherever it occurred, was replaced by the words “Second
Schedule”. Secondly, the words “Central Government” were substituted for the words “State
Government”.
41
On December 7, 1957, in the Gazette of India Extraordinary there appeared a notification,
which read as below:
SR0 3908 – In exercise of the powers conferred by Section 2 of the Union Territories (Laws)
Act, 1950 (30 of 1950), the Central Government hereby makes the following amendment in
the notification of the Government of India in tne Ministry of Home Affairs No. S. R. 0. 615,
dated the 28th April, 1951 [extending to the Union Territory of Delhi the Bengal Finance
(Sales Tax) Act, 1941 subject to certain modifications] namely:-
In the said notification, the modifications to the Bengal Act aforesaid in item 6 [relating to
sub-section (2) of Section 6], after sub-item (a) the following sub-item shall be inserted,
namely:-
(aa) for the words “not less than three months’ notice”, the word; “such previous notice as it
considers reasonable” shall be substituted.
R. S. SARKARIA, J. – 10. The vires of this notification dated December 7, 1957, is the
subject of primary challenge in these appeals (the impugned notification). - Item 17 in the Second Schedule of the Bengal Act was amended with effect from
December 14, 1957 by Notification No. SRO 3958, as under: - All varieties of cotton, woollen, rayon or artificial silk fabric but not including real silk
fabrics.
Conditions subject to which tax shall not be payable: In respect of tobacco, cotton fabrics,
rayon or artificial silk fabrics and woollen fabrics as defined in items 9, 12, 12A, 12B at the
First Schedule to the Central Excises and Salt Act, 1944 (1 of 1944), included in entries (a)
and (e) above, no tax under the Bengal Finance (Sales Tax) Act, 1941, shall be payable in the
Union Territory of Delhi only it additional duties of excise have been levied on them under
the Additional Duties of Excise (Goods of Special Importance) Act, 1957. - The aforesaid condition was withdrawn by notification No. GSR 203, dated April 1, 1958.
[By various notifications issued between 1958 and 1970, exemption was withdrawn from the
country liquor, of all varieties of cotton fabrics, rayon, or artificial silk fabrics and woollen
fabrics but not including durries, druggets and carpets. The appellants included the dealers of
durries, knitting wool, pure silk, kirana and country liquor who were aggrieved on account of
various notifications withdrawing exemption on the items in which they were dealing]. - In the High Court, the validity of the withdrawal of the exemptions was challenged on
these grounds:
(1) The power given by Section 2 of the Laws Act to the Central Government to extend
enactments in force in a State to a Union territory, with such restrictions and modifications, as
it thinks fit, could be exercised only to make such modifications in the enactment as were
necessary in view of the peculiar local condition. The modification in Section 6(2) of the
Bengal Act made by SRO 3908, dated October 7, 1957, was not necessitated by this reason. It
was therefore, ultra vires to the Section 2 of the Laws Act.
(2) Such a modification could be made only once when the Bengal Act was extended to Delhi
in 1951. No modification could be made after such extension.
(3) The modification could not change the policy of the legislature reflected in the Bengal
Act. The impugned modification was contrary to it, and
(4) The modifications giving notice to withdraw the exemptions and the notifications issued
pursuant thereto withdrawing the exemptions from sales tax with respect to durries, ghee,
42
(and other items relevant to these petitions) were void as the statutory notice of ‘not less than
three months’ as required by Section 6(2) prior to its modification by the impugned
notification of December 7, 1957, had not been given. - Finding on all the four grounds in favour of the writ petitioners, the learned Single Judge
declared:
that the purported modification of Section 6(2) of the Bengal Finance (Sales Tax) Act, 1941,
by the Government of India’s notification No. SRO 3908, dated December 7, 1957, was
ineffective and Section 6(2) continues to be the same as before as if it was not so modified at
all.
In consequence, he quashed the government notifications Nos. GSR 964, dated June 16, 1966
and GSR 1061, dated June 29, 1966, because they were not in compliance with the
requirement of Section 6(2) of the Bengal Act. - The contentions canvassed before the learned Single Judge was repeated before the
appellate Bench of the High Court. The Bench did not pointedly examine the scope of the
power of modification given to the Central Government by Section 2 of the Laws Act with
specific reference to the purpose for which it was conferred and its precise limitations. It did
not squarely dispel the reasoning of the learned Single Judge that the power of modification is
an integral part of the power of extension and “cannot therefore be exercised except for the
purpose of the extension”. It refused to accept that reasoning with the summary remark, from
the extracts quoted by the learned Single Judge from the judgment of the Supreme Court in
Re Delhi Laws Act [AIR 1951 SC 332] and from the judgment in Rajnarain Singh v.
Chairman, Patna Administration Committee, Patna [AIR 1954 SC 569], the principle
deduced by the learned Judge does not appear to follow. We are therefore not inclined, as at
present advised, to support the above observations. The Bench, however, hastened to add:
However, since the matter was not argued at great length and the appellants’ Counsel rested
his submissions on the other aspects of the case, we would not like to express any definite
opinion on the question as to whether the power of making any modifications or restrictions
in the Act can only be exercised at the time of extending the Act and that it cannot be done
subsequently by the Central Government in exercise of its power. - Apart from the grounds taken in their writ petitions, the learned Counsel for the appellants
have tried to raise before us another ground under the garb of what they styled as “merely an
additional argument”. They now seek to challenge the vires of the notification No. SRO 615,
dated April 28, 1951, in so far as it relates to the insertion in subsection (2) of” Section 6 of
that Act, between the words “add to” and “the Schedule”, of the words “or omit or otherwise
amend”. It is argued that this insertion was beyond the power of modification conferred on
the Central Government by Section 2 of the Laws Act. The point sought to be made out is that
if the insertion made by the notification dated April 28, 1951, in Section 6(2) was ineffective
and non est in the eye of law, the Central Government would have no power to “omit”
anything from the exempted goods itemised in the schedule. It is argued that under Section
6(2) sans this insertion, the Central Government was empowered only to “add to” and not
“omit” from the exempted items enumerated in the schedule, and consequently, the
withdrawal of the exemptions in question was ultra vires the Central Government. - In the present appeal, the Bengal Act as extended by SRO 615, dated April 28, 1951, did
not suffer from any infirmity. It is conceded by the learned Counsel for the respondent that
43
the Central Government at the time it extended the Bengal Act was competent to introduce
such modifications and restrictions as it thought fit. - On behalf of the appellants, it is contended that the power of modification conferred on
the Central Government by Section 2 of the Laws Act is not an unfettered power of delegated
legislation but a subsidiary power conferred for the limited purpose of extension and
application to a Union territory, an enactment in force in a State. It is maintained that only
such modifications are permissible in the exercise of that power which are necessary to adapt
and adjust such enactment to local the conditions. - According to Shri Ashok Sen, the power given by Section 2 is a power of ‘conditional
legislation’ which is different from the power of ‘delegated legislation’. It is submitted that it
is not a recurring power; it exhausts itself on extension, and in no case this power can be used
to change the basic scheme and structure of the enactment or the legislative policy ingrained
in it. The submission is that the impugned notification, dated December 7, 1957, is bad
because it has been issued more than 6½ years after the extension of Bengal Act, and it
attempts to change the requirement of Section 6(2) as to “not less than three months’ notice”
which is the essence of the whole provision. - Shri Ashok Sen further submits that by the amending Act 20 of 1959, Parliament did not
put its seal of approval on the impugned notification or the changes sought to be made by it in
Section 6 of the Bengal Act. It is stressed that the amending Act of 1959, did not touch
Section 6 at all and therefore, it could not be said, by any stretch of imagination, that
Parliament had referentially or impliedly incorporated or approved the purported change
made by the impugned notification, in the Bengal Act. - As against the above, Shri B. Sen, the learned Counsel for the Revenue submits that the
impugned notification does not change the essential structure or the policy embodied in
Section 6(2) of the Bengal Act. According to Counsel, the policy underlying Section 6(2) is
that reasonable notice of the Government’s intention to add to or omit anything from the
Second Schedule must be given by publication in the Official Gazette. It is maintained that
the requirement as to “not less than three months’ notice” in the section was not a matter of
policy but one of detail or expedience, it was only directory, and the modification made by
the impugned notification did not go beyond adjusting and adapting it to the local conditions
of Delhi. Bengal, it is pointed out, is a big, far-flung State while the territory of Delhi is a
small, compact area and therefore, it would not be necessary or unreasonable to give a notice
of less than three months for every amendment of the schedule. It is argued that the power to
add or omit from the Second Schedule conferred on the Government is in consonance with
the accepted practice of the legislature; that it is usual for the legislature to leave a discretion
to the Executive to determine details relating to the working of taxation laws, such as the
selection of persons on whom the tax is to be levied or rates at which it is to be charged in
respect of different classes of goods and the like. - Shri B. Sen further contends that the power of modification given by Section 2 of the
Laws Act, does not exhaust itself on first exercise; it can be exercised even subsequently if
through oversight or otherwise, at the time of extension of the enactment, the Central
Government fails to adapt or modify certain provisions of the extended enactment for
bringing it in accord with local conditions. In this connection support has been sought from
the observations of Fazal All, J. at p. 850 of the report in Re Delhi Laws Act. Our attention has
44
also been invited to Section 21 of the General Clauses Act which, according to Counsel, gives
power to the Central Government to add to, amend, vary or rescind any notification etc. if the
power to do so does not run counter to the policy of the legislature or effect any change in its
essential features. - Learned Counsel has further tried to support the reasoning of the appellate Bench of the
High Court, that whatever infirmity may have existed in the impugned notification and the
modification made thereby in Section 6(2), it was rectified and cured by Parliament when it
passed the Amendment Act 20 of 1959. It is urged that the Bengal Act together with the
modifications made by notifications, dated April 28, 1951 and December 7, 1957, must have
been before Parliament when it considered and passed the Amendment Act of 1959. Our
attention has been invited to its preamble which is to the effect: “An Act further to amend the
Bengal Finance (Sales Tax) Act, 1941, as in force in the Union Territory of Delhi”, and also
to the words “as in force in the Union Territory of Delhi” in Section 2 of the amending Act. - An alternative argument advanced by Shri B. Sen, is that if in Section 6(2) the
requirement as to “not less than three months’ notice” was mandatory and a matter of
legislative policy, then the exemptions from tax granted to durries, pure silk, etc. after the
issue of the impugned notification must be treated non est and void ab initio, inasmuch as the
amendments of the Second Schedule whereby those exemptions were granted, were made
without complying with the requirement of “not less than three months’ notice”. It is argued
that if this requirement was a sine qua non for amendment of the Second Schedule, it could
not be treated mandatory in one situation and directory in another. If it was mandatory then
compliance with it would be abolutely necessary both for granting an exemption and
withdrawing an exemption from tax. In this view of the matter, according to Shri B. Sen, the
withdrawal of the exemption through the impugned notification was a mere formality; the
notifications simply declared the withdrawal of something which did not exist in the eye of
law. Appellants cannot, therefore, have any cause of grievance if the invalid and still-born
exemptions were withdrawn by the questioned notifications. - In reply to this last argument, learned Counsel for the appellants submit that this ground
of defence was not pleaded by the Revenue in its affidavit before the learned Single Judge.
This, according to the Counsel, was a question of fact which required evidence for its
determination, and was therefore required to be pleaded. Since the respondents did not do so,
they should not have been allowed to take it for the first time at the time of arguments. Even
otherwise – proceeds the argument – the respondents are not competent to take this stand
which is ‘violative of the basic canon of natural justice, according to which, no party can be
allowed to take advantage of its own wrong. It is stressed that the object of the requirement of
not less than three months’ notice, was to afford an opportunity to persons likely to be
adversely affected, to raise objections against the proposed withdrawal or curtailment of an
exemption from tax. That being the case, only the persons aggrieved could have the necessary
locus standi to complain of a non-compliance with this requirement. - In Re Delhi Laws, this Court inter alia examined the constitutional validity of Section 2 of
the Laws Act in the light of general principles relating to the nature, scope and limits of
delegated legislation. - The Court by a majority held that the first part of this section which empowers the Central
Government to extend to any Part C State or to any part of such State with such modifications
45
and restrictions as it thinks fit any enactment which is in force in a Part A State, is intra vires,
and that the latter part of this section which empowers the Central Government to make
provision in any enactment extended to a Part C State, for repeal or amendment of any law
(other than a Central Act) which is for the time being applicable to that Part C State, is ultra
vires. Consequent upon this opinion, the latter part of the section was deleted by Section 3 of
the Repealing and Amending Act, 1952 with effect from August 2, 1951. - Before proceeding further, it will be proper to say a few words in regard to the argument
that the power conferred by Section 2 of the Laws Act is a power of conditional legislation
and not a power of ‘delegated’ legislation. In our opinion, no useful purpose will be served to
pursue this line of argument because the distinction propounded between the two categories
of legislative powers makes no difference, in principle. In either case, the person to whom the
power is entrusted can do nothing beyond the limits which circumscribe the power; he has to
act – to use the words of Lord Selbourne – “within the general scope of the affirmative words
which give the power” and without violating any “express conditions or restrictions by which
that power is limited”. There is no magic in a name. Whether you call it the power of
“conditional legislation” as Privy Council called it in Burah case, or ‘ancillary legislation’ as
the Federal Court termed it in Choitram v. C. I. T., Bihar [AIR 1947 FC 32] or ‘subsidiary
legislation’ as Kania, C.J. styled it, or whether you camouflage it under the veiling name of
‘administrative or quasi-legislative power’ – as Professor Cushman and other authorities have
done it – necessary for bringing into operation and effect an enactment, the fact remains that it
has a content, howsoever small and restricted, of the law-making power itself. There is ample
authority in support of the proposition that the power to extend and carry into operation an
enactment with necessary modifications and adaptations is in truth and reality in the nature of
a power of delegated legislation - In the instant case, the precise question with which we are faced is whether the purported
substitution of the words “such previous notice as it considers reasonable” for the words “not
less than three months’ notice” in Section 6(2) by the impugned notification dated
December?, 1957 was in excess or the power of ‘modification’ conferred on the Central
Government by Section 2 of the Laws Act. - This question has to be answered in the light of the principles enunciated by this Court in
Re Delhi Laws Act relating to the nature and scope of this power. - Out of the majority who upheld the validity of this provision of Section 2 of the Laws Act,
with which we are concerned, Fazi Alt, J. explained the scope of the words “such
modifications as it thinks fit” in Section 2, thus:
These are not unfamiliar words and they are often used by careful draftsmen to enable laws
which are applicable to one place or object to be so adapted as to apply to another. The power
of introducing necessary restrictions and modifications is incidental to the power to apply or
adapt the law, and in the context in which the provision as to modification occurs, it cannot
bear the sinister sense attributed to it. The modifications are to be made within the framework
of the Act and they cannot be such as to affect its identity or structure or the essential purpose
to be served by it. The power to modify certainly involves discretion to make suitable
changes, but it would be useless to give an authority the power to adapt a law without giving
it the power to make suitable changes. - Vivian Bose, J. also observed in a similar strain, at p. 1124:
46
The power to “restrict and modify” does not import the power to make essential changes. It is
confined to alterations of a minor character such as are necessary to make an Act intended for
one area applicable to another and to bring it into harmony with laws already in being in the
State, or to delete portions which are meant solely for another area. To alter the essential
character of an Act or to change it in material particulars is to legislate, and that, namely, the
power to legislate, all authorities are agreed, cannot be delegated by a legislature which is not
unfettered. - Mukherjea, J. was of the view that the “essential legislative functions” which consist in
the determination or choosing of the legislative policy and of formally enacting that policy
into a binding rule of conduct cannot he delegated. Dealing with the construction of the words
“restrictions” and “modifications” in the Laws Act, the learned Judge said, at pages 1004-
1006:
The word “restrictions’… connotes limitation imposed on a particular provision so as to
restrain its application or limit its scope; it does not by any means involve any change in the
principle. It seems to me that in the context and used along with the word “restriction” the
word “modification” has been employed also in a cognate sense, and it does not involve any
material or substantial alteration. The dictionary meaning of the expression “to modify” is to
“tone down” or to “soften the rigidity of the thing;” or “to make partial changes without any
radical alteration”. It would be quite reasonable to hold that the word “modification” in
Section 7 of the Delhi Laws Act (which is almost identical with the present Section 2. Laws
Act) means and signifies changes of such character as are necessary to make the statute which
is sought to be extended suitable to the local conditions of the province. I do not think that the
executive Government is entitled to change the whole nature or policy underlying any
particular Act or to take different portions from different statutes and prepare what has been
described before us as “amalgam” of several laws … these things would be beyond the scope
of the section itself, (emphasis supplied) - S. R. Das, J. (as he then was) delineated the scope of the power of “modification” given
under Section 7 of the Delhi Laws Act, 1912 at p. 1089 as follows:
It may well be argued that the intention of Section 7 of the Delhi Laws Act was that the
permissible modifications were to be such as would, after modification, leave the’ general
character of the enactment intact. One of the meanings of the word “modify” is given in the
Oxford Dictionary, Vol. I, page 1269 as “to alter without radical transformation”. If this
meaning is given to the word “modification” in Section 7 of the Delhi Laws Act, then the
modifications contemplated thereby were nothing more than adaptations which were included
in the expressions mutatis mutandis and the “restrictions, limitations or proviso” mentioned in
the several instances of’ conditional legislation referred to by the Privy Council (in Burah’s
case). - It is to be noted that the language of Section 7 of the Delhi Act was substantially the same
as that of the first portion of Section 2 of the Part C States Laws Act, as it then stood. What
Das, J. said about the scope of “restrictions and modifications” in the context of Section 7 of
the Delhi Act, substantially applies to the ambit and meaning of these words occurring in
Section 2 of the Laws Act.
47 - Again, in Rajnarain Singh case, Vivian Bose, J. speaking for the Court, summed up the
majority view in regard to the nature and scope of delegated legislation in Re Delhi Laws,
thus:
In our opinion the majority view was that an executive authority can be authorised to modify
either existing or future laws but not in any essential feature. Exactly what constitutes an
essential feature cannot be enunciated in general terms, and there was some divergence of
view about this in the former case, but this much is clear from the opinions set out above: it
cannot include a change of policy. - Bearing in mind the principles and the scope and meaning of the expression “restrictions
and modifications” explained in Re Delhi Laws Act; let us now have a close look at Section 2.
It will be clear that the primary power bestowed by the section on the Central Government, is
one of extension that is bringing into operation and effect, in a Union territory, an enactment
already in force in a State. The discretion conferred by the section to make ‘restrictions and
modifications’ in the enactment sought to be extended, is not a separate and independent
power. It is an integral constituent of the powers of extension. It cannot be exercised apart
from the power of extension. This is indubitably clear from the preposition “with” which
immediately precedes the phrase ‘such restrictions and modifications’ and conjoins it to the
principal clause of the section which gives the power of extension. - The power given by Section 2 exhausts itself on extension of the enactment; it cannot be
exercised repeatedly or subsequently to such extension. It can be exercised only once,
simultaneously with the extension of the enactment. This, if one dimension of the statutory
limits which circumscribe the power. The second is that the power cannot be used for a
purpose other than that of extension. In the exercise of this power, only such “restrictions and
modifications can be validly engrafted in the enactment sought to be extended, which are
necessary to bring it into operation and effect in the Union territory. “Modifications” which
are not necessary for, or ancillary and subservient to the purpose of extension, are not
permissible. And, only such “modifications” can be legitimately necessary for such purpose
as are required to adjust, adapt and make the enactment suitable to the peculiar local
conditions of the Union territory for carrying it into operation and effect. In the context of the
section, the words; “restrictions and modifications” do not cover such alterations as involve a
change in any essential feature, of the enactment or the legislative policy built into it. This is
the third dimension of the limits that circumscribe the power. - It is true that the word “such restrictions and modifications as it thinks fit”, if construed
literally and in isolation, appear to give unfettered power of amending and modifying the
enactment sought to be extended. Such a wide construction must be eschewed lest the very
validity of the section becomes vulnerable on account of the vice of excessive delegation.
Moreover, such a construction would be repugnant to the context and the content of the
section, read as a whole, and the statutory limits and conditions attaching to the exercise of
the power. We must, therefore, confine the scope of the words “restrictions and
modifications” to alterations of such a character which keep the inbuilt policy, essence and
substance of the enactment sought to be extended, intact, and introduce only such peripheral
or insubstantial changes which are appropriate and necessary to adapt and adjust it to the local
conditions of the Union territory.
48 - The impugned notification, dated December 7, 1957, transgresses the limits which
circumscribe the scope and exercise of the power conferred by Section 2 of Laws Act, at
least, in two respects. - Firstly, the power has not been exercised contemporaneously with the extension or for the
purposes of the extension of the Bengal Act to Delhi. 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 April 28, 1951. The impugned notification has been issued on
December 7, 1957, more than 61/ 2 years after the extension. - T
here is nothing in the opinion of this Court rendered in Re Delhi Laws Act to support Mr B.
Sen’s contention that the power given by Section 2 could be validly exercised within one year
after the extension. What appears in the opinion of Fazi Ali, J. at page 850, is merely a
quotation from the report of the Committee on Ministers’ 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 so far as necessary for
bringing it into operation. This device was adversely commented upon. While some critics
conceded that this device is “partly a draftsman’s insurance policy, in case he has overlooked
something”, others frowned upon it, and nicknamed it as “Henry VIII clause” after the British
monarch who was a notorious personification of absolute despotism. It was in this perspective
that the Committee on Ministers’ Powers examined this practice and recommended:
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 should lapse. - It may be seen that the time-limit of one year within wh
ich the power under a ‘Henry VIII clause’ should be exercisable, was only a recommendation,
and is not an inherent attribute of such power. In one sense, the power of extension-cummodification 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. But there is one
significant difference between the two. 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. 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. - Thus, anything said in Re Delhi Laws Act, 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. Fazal Ali, J. did not say anything indicating that the power in
question can be exercised within one year of the extension. 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.
49 - Secondly, the alteration sought to be introduced by this notification (December 7, 1957) in
Section 6(2), goes beyond the scope of the ‘restrictions and modifications’ permissible under
Section 2 of the Laws Act; it purports to change the essential features of sub-section (2) of
Section 6, and the legislative policy inherent therein. - 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-. 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. The reason behind the provision may be a
further aid to the ascertainment of that intention. 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 the provision to be mandatory, and it will not be necessary to pursue the
enquiry further. 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. 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. - In fixing this period of notice in mandatory terms, the legislature had, it seems taken into
consideration several factors. According to the scheme of the Bengal Act, the tax is quantified
and assessed on the quarterly turnover. 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
assessing and collecting the same. 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 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. 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. - 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. The span of notice was thus the essence of
the legislative mandate. The necessity of notice and the span of notice both are integral to the
scheme of the provision. The sub-section cannot therefore be split up into essential and nonessential components, the whole of it being mandatory. The rule in Raza Buland Sugar Co.
case has therefore no application. - 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 Delhi Laws
Act and Rajnarain Singh case be delegated to the Government.
50 - 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. - Before proceeding further, we may mention here in passing, that the point for decision in
Banarsi Das Bhanot case relied on by the Division Bench of the High Court, was different
from the one before us. 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. In the instant case the .validity of Section 6(2) of the Bengal Act, as such, is not
being impeached. - There is yet another facet of the matter. By the impugned notification, the Central
Government did not directly seek to amend Section 6(2). Perhaps, it was not sure of its
competence to do so more than 6 years after the extension of Bengal Act to Delhi. It therefore
chose to amend Section 6(2) indirectly through the amendment of its earlier notification dated
April 28, 1951, which was only a vehicle or instrument meant for extension of the Bengal Act
to Delhi. On such extension, the notification had exhausted its purpose and had spent its
force. It had lost its utility altogether as an instrument for modification of the Bengal Act.
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. In any case, an
amendment which was not directly permissible could not be indirectly smuggled in through
the backdoor. - We now turn to the main ground on which the judgment of the appellate Bench of the
High Court rests. The question is, was the invalidity from which the impugned notification,
dated December 7, 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 1951 and 1957. - We find no basis for this surmise. 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). Nor does it re-enact or validate what was sought to be achieved by
the impugned notification. 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. - 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. are not assailable
because those exemptions were earlier granted without giving three months’ notice, is
manifestly unsustainable. - Firstly, so far as fruits, fresh and dried (item No. 8), pepper, tamarind and chillies (item
No. 11). turmeric (item No. 14). ghee (item No. 16), and knitting wool (item No. 21A) are
concerned, they were exempted goods in the schedule of the Bengal Act, as modified and
extended by the notification, dated April 28. 1951. to Delhi. No question of giving notice for
granting these exemptions therefore arose. 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. This plea was not set up by the respondents in their affidavits. Whether or not
notice for the requisite period was given before issuing the exemption notifications, was a
question of fact depending on evidence. Thirdly, to allow the respondents to take their stand
51
on such a plea would be violative of the fundamental principle of natural histice, according to
which, a party cannot be allowed to take advantage of its own lapse or wrong. The statute 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. 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. Two wrongs never make a right. - Nor could the respondents derive any authority or validity from Section 21 of the General
Clauses Act, for the notifications withdrawing the exemptions. The source from which the
power to amend the Second Schedule, comes from Section 6(2) of the Bengal Act and not
from Section 21 of the General Clauses Act. Section 21, as pointed out by this Court in Gopi
Chand v. Delhi Administration [AIR 1959 SC 609] 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. The power, therefore, had to be exercised within the limits
circumscribed by Section 6(2) and for the purpose for which it was conferred. - For all the foregoing reasons, we are of opinion that the impugned notification, dated
December 7, 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, conferred on it by Section 2 of the
Laws Act. In consequence, the notifications, dated April 1, 1958, September 19, 1959, June - 1966 and July 31, 1970 in so far as they withdrew the exemptions from tax in the case of
durries, pure silk, country liquor, kirana articles etc. without complying with the mandatory
requirement of not less than three months’ notice enjoined by Section 6(2) of the Bengal Act,
are also invalid and ineffective. - In the result, we allow these appeals, set aside the judgment of the appellate bench of the
High Court and declare the notification dated December 7, 1959, and the subsequent
notifications in so far as they withdrew the exemptions from tax mentioned above, to be
unconstitutional. la the circumstances of the case, we leave the parties to bear their own costs.
The students are also advised to read Brij Sunder Kapoor v. Ist Addl. Dist. Judge,
AIR 1989 SC 572 and Ramesh Birch v. Union of India, AIR 1990 SC 560
