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Issues Involved:
1. Constitutionality of delegation of taxing powers to municipal corporations. 2. Effect of the Validation Act on the levy of tax from July 1, 1959, to March 31, 1966. 3. Validity of the resolutions passed by the Municipal Corporation regarding the levy of tax. 4. Whether the Central Government could modify the rates specified in the resolution. 5. Whether the tax was imposed on the production or consumption of electricity. 6. Whether the sanction by the Central Government was valid. 7. Whether Section 150 of the Delhi Municipal Corporation Act suffers from excessive delegation of legislative power. Detailed Analysis: 1. Constitutionality of Delegation of Taxing Powers to Municipal Corporations: The main contention was whether Section 150 of the Delhi Municipal Corporation Act suffers from the vice of excessive delegation of legislative power. The judgment emphasized that the essential legislative function must consist of the determination of legislative policy and its formulation as a binding rule of conduct. The delegation to the Corporation was upheld because the Act provided sufficient guidance and limits, such as the need for government sanction and the democratic accountability of the Corporation's elected members. 2. Effect of the Validation Act on the Levy of Tax: The Validation Act was passed to validate the levy of electricity tax from July 1, 1959, to March 31, 1966. The High Court initially held that the Validation Act failed to validate the levy and collection of tax for the period from April 1, 1960, to March 31, 1966. However, the Supreme Court disagreed, stating that the Validation Act explicitly validated the rates and the levy and collection of tax for the entire period from July 1, 1959, to March 31, 1966. 3. Validity of the Resolutions Passed by the Municipal Corporation: The resolutions passed by the Municipal Corporation on February 9, 1959, and June 24, 1959, were found to be valid. The Supreme Court held that the resolutions were in accordance with the provisions of the Delhi Municipal Corporation Act and were properly sanctioned by the Central Government. 4. Modification of Rates by the Central Government: The High Court had held that the Central Government could not modify the rates specified in the resolution under Section 150(1) but could only either withhold sanction or sanction them. The Supreme Court, however, upheld the validity of the Central Government's modification of the rates, stating that the sanction given by the Central Government was valid and within its authority. 5. Imposition of Tax on Production or Consumption of Electricity: The contention that the tax was imposed on the production of electricity rather than its consumption was rejected. The Supreme Court clarified that the tax was indeed on the consumption of electricity, even if generated by a person for their own consumption. 6. Validity of the Sanction by the Central Government: The Supreme Court held that the sanction by the Central Government was valid. Although the order was signed by the Deputy Secretary, it was approved by the appropriate authorities within the Central Government, fulfilling the requirements of the Constitution. 7. Excessive Delegation of Legislative Power: The Supreme Court concluded that Section 150 of the Delhi Municipal Corporation Act did not suffer from excessive delegation of legislative power. The Act provided sufficient guidance, limits, and safeguards, such as the need for government sanction and the democratic accountability of the Corporation's elected members. The delegation was deemed permissible and within the constitutional limits. Conclusion: The Supreme Court allowed the appeals, set aside the High Court's order insofar as it was against the appellant, and dismissed the writ petitions. The Court upheld the validity of the Validation Act, the resolutions passed by the Municipal Corporation, and the sanction by the Central Government. It also concluded that Section 150 of the Delhi Municipal Corporation Act did not suffer from excessive delegation of legislative power.
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