THE HIGH COURT IS HAVING NO POWER TO ISSUE DIRECTION TO RE-FRAME THE SUBORDINATE LEGISLATION.

[Mr. M. GOVINDARAJAN]

The Constitution have demarcated the ambit of power and the boundaries of the three organs of the Society by laying down the principles of separation of powers, which is being adhered to for carrying out democratic functioning of the country as detailed below: 

• For the legislation the exclusive domain is with the legislature;
• Subordinate legislations are framed by the executives by exercising the delegated power conferred by the Statute, which is rule making power;
• The judiciary has been vested with the power to interpret the aforesaid legislations and to give effect to them’ 

Therefore it is always appropriate for each of the organs to function within its domain.  It is inappropriate for the courts to issue a mandate to legislate an act and also to make a subordinate legislation in a particular manner. 

In ‘Narinder Chand HemRaj V. Lt. Governor, Administrator, Union Territory, Himachal Pradesh’- (1971) 2 SCC 747 the Supreme Court held that the power to impose tax is undoubtedly a legislative power.   That power can be exercised by the legislature directly or subject to certain conditions, the legislature may delegate that power to some other authority.   But the exercise of that power whether by the legislature or by its delegate is an executive does not convert that power into an executive or administrative power.  No court can issue a mandate to a legislature to enact a particular law.   Similarly no court can direct a subordinate legislative body to enact or not to enact a law which it may be competent to enact.  The Constitution lays down that no tax can be levied and collected except by authority of law.   Hence the levy of tax can only be done by the authority of law and not by any executive order.   Unless the executive is specially empowered by law to give any exemption, it cannot say that it will not enforce the law as against a particular person.   No court can give a direction to a Government to refrain from enforcing a provision of law. 

In ‘Supreme Court Employees’ Welfare Association V. Union of India’ – (1989) 4 SCC 187 the Supreme Court held that there can be no doubt that no court can direct a legislature to enact a particular law.   Similarly, when an executive authority exercises a legislative power by way of subordinate legislation pursuant to the delegated authority of a legislature, such executive authority cannot be asked to enact a law which he has been empowered under the delegated legislative authority. 

In ‘State of U.P. V. Mahindra & Mahindra Limited’ – 2011 -TMI - 203162 - SUPREME COURT OF INDIA the assessee was engaged in the business of manufacture of tractors.  A notification was issued by the Government of Uttar Pradesh on 12.9.1986 exempted tractors with power take off horse power not exceeding 25’ from the payment of sales tax subject to the condition that the said tractors had been exempted from the payment of excise duty.  The Government of India had issued notification on 16.4.1985 making an amendment in the notification of the Government of India in respect of the table annexed to the notification inserting by way of substitution of the words ‘Tractors of Draw bar horse power not exceeding 25’.   Another notification was issued on 17.7.1985 substituting the words ‘draw bar’ with the words ‘power take off horse’. These notifications relate to the payment excise duty. 

During the relevant assessment year a show cause notice was issued to the assessee by the Assistant Commissioner (Assessment) – I, Sales Tax, Lucknow alleging that at the time of survey made, and as per the literature made available it was found that the Horse power of the tractors of the assessee had been disclosed as 30 horse power.  The Authority directed the assessee to submit the reply as to why the return filed by the assessee would not be rejected and a provisional assessment order for the period in question may not be completed under the relevant rules. 

The assessee field a detailed reply to the show cause.   The Assessing Officer passed an order on 21.3.1992 on the basis of the Notification of U.P. Government dated 12.9.1986 denying exemption from payment of sales tax to the tractors of the assessee. 

Against this order the assessee filed a writ petition before the Allahabad High Court with the prayer-

• to issue direction to modify or amend the notification so as to bring in conformity with the Central Government and conformity in respect of measuring strength or engine by all manufacturer ;
• to direct the Department to clearly state in the said notification the basis of exemption being cubic capacity of the Tractor Engine not exceeding 1800 CC for exemption for sales tax in place of PTOHO;
• to direct the Department to exempt the assessee tractor engine and specify the cubic capacity of the Tractor engine not exceeding 1800 CC and bring it at par with Circular No.89/97/CE, dated 01.03.1987 issued by the Central Government to clear the anomaly and ambiguity in both the circulars, which creates discrimination among manufacturer of fuel efficiency engines and rest ones;
• to refrain the department to desist from recovering disputed sales tax. 

The assessee did not challenge the assessment order passed by the Assessing Officer.   The High Court held that since the Central Government has by notification dated 28.2.1987 replaced the word 25 PTOHP by the word 1800 CC and thereby exempted the tractor having the capacity not exceeding 1800 from excise duty, the same wordings, namely, tractors with power take off horse power not exceeding 25 should also be read as Tractors not exceeding 1800 CC which would stand exempted from levy of the sales tax. 

The Department challenged the order of the High Court before the Supreme Court.  The following points are put forth by the appellants: 

• there is no power vested on the High Court to issue such a direction to the executive to re-frame the subordinate legislation;
• the High Court exceeded its jurisdiction by issuing such direction in a field where the High Court cannot and should not tread. 

The Supreme Court held that the High Court has directed the subordinate legislation to substitute wordings in a particular manner, thereby assuming to itself the role of a supervisory authority, which  is not a power vested in the High Court.   It is settled law that so far exemption clauses are concerned there should be strict interpretation of the same.  The High Court exceeded its jurisdiction in passing the said orders and issuing directions for inserting certain additional words into notification of exemption issued by UP Government.  The Supreme Court set aside the order of High Court.