9911796707
|
Home
Issues Involved:
1. Validity of the demand for cess under Section 11(1) of the Madras Commercial Crops Markets Act, 1933. 2. Whether the amendment of Section 11(1) by Act 33 of 1955 constitutes a colorable legislation. 3. Whether the levy under Section 11(1) is invalid as a tax not included in the Consolidated Fund of the State. 4. Whether the delegation of the power to fix the rate of tax to the executive is illegal. 5. Whether the provisions of Section 11(1) are hit by Article 14 of the Constitution. Issue-wise Detailed Analysis: 1. Validity of the Demand for Cess under Section 11(1): The petitioner challenged the demand for cess on groundnuts purchased between 23-11-1955 and 30-6-1957, arguing it was not under the authority of law. The court examined the provisions of the Madras Commercial Crops Markets Act, 1933, and its amendments. It was found that the demand notice issued on 11-7-1957 was prior to the government's notification fixing the rates of cess on 28-8-1958. Therefore, there was no determination of the fee by the government for the period in question, rendering the demand invalid. 2. Colorable Legislation Argument: The petitioner argued that the amendment of Section 11(1) by Act 33 of 1955, which changed the term "fee" to "cess by way of sales tax," was a colorable legislation intended to circumvent a court decision. The court disagreed, stating that the State Legislature had the power to levy a tax in the shape of sales tax on goods. The amendment was seen as effectuating the original intention of the enactment and not as a colorable device. The court cited the principle that the doctrine of colorable legislation does not involve questions of bona fides or mala fides but rather the competency of the legislature. 3. Inclusion in the Consolidated Fund: The petitioner contended that the levy as a tax was invalid as it would not be included in the State's Consolidated Fund. The court noted that the cess was intended solely for the purposes mentioned in Section 13 of the Act, such as the establishment and maintenance of markets. The market committee was considered a local authority, and the tax collected was for local purposes, not augmenting the general revenues of the State. Therefore, such taxes need not be included in the Consolidated Fund under Article 266 of the Constitution. 4. Delegation of Power to Fix Tax Rate: The petitioner argued that Section 11(1) amounted to excessive delegation of legislative powers to the State Government. The court agreed, stating that while the legislature can delegate the authority to promulgate rules and regulations, it must declare the policy of the law and fix the legal principles. In this case, Section 11(1) provided uncontrolled power to the executive to fix the rate of tax without any guiding principles or limits, amounting to excessive delegation and thus invalid. 5. Article 14 of the Constitution: The petitioner contended that Section 11(1) was invalid as it was not general in scope and applied only to selected areas, violating Article 14 of the Constitution. The court found no substance in this contention, stating that the Act's objective was to protect producers of commercial crops, and it was valid to apply the Act initially to selected areas. The court also noted that the absence of a right of appeal in the Act did not violate Article 14, as procedural rights in local body enactments often do not include an appeal, and affected parties could resort to civil courts or challenge the levy in criminal courts. Conclusion: The court concluded that the Market Committee could not demand the cess for groundnuts purchased from 23-11-1955 to 30-6-1957 under Section 11(1) of the Madras Commercial Crops Markets Act, as Section 11(1) was invalid. A writ was issued prohibiting the first respondent from enforcing the notice, with no order as to costs.
|
