Full Judgment Text
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PETITIONER:
SUBHASH PHOTOGRAPHICS ETC. ETC.
Vs.
RESPONDENT:
UNION OF INDIA AND ORS.
DATE OF JUDGMENT11/05/1993
BENCH:
JEEVAN REDDY, B.P. (J)
BENCH:
JEEVAN REDDY, B.P. (J)
VENKATACHALA N. (J)
CITATION:
1993 SCR (3) 654 1993 SCC Supl. (3) 323
JT 1993 (4) 116 1993 SCALE (2)909
ACT:
Customs Act, 1962/Customs Tariff Act, 1975/Project Imports
Regulations, 1986:
Ss. 156. 157,159/First Schedule, Second Schedule, Chapter
90, Chapter 98. Heading 98.01, Chapter Notes (1) and (2)
Regulation/(3)-"Industrial Plant "-Meaning of-Photographic
machinery does not fall within the purview of "industrial
plant".
Administrative Law:
Delegated Legislation-Chapter 98 of Customs Tariff Act,
1975-Concessional rate of duty on certain articles including
"industrial plant"--Chapter Note (2) conferring power on
Central Board of Customs and Excise to define expressions
used in Chapter 98--Project imports Regulations made Board
defining "industrial plant"-- Exclusion of industrial
systems meant for establishments designed to offer services
of any description such as photographic studios, photo-
graphic film processing laboratory etc. from the purview of
"industrial plant "-Held-Regulation making power conferred
on Board by s. 157 of Customs Act, 1962 is same as rule-
making power conferred on Central Government under s. 156-
Regulations should not be contrary, to rules made under s.
156-Project Import Regulations cannot be said to have
travelled beyond purview of statute-Board by defining
"industrial plant" has not travelled beyond its brief-
Chapter Note (2) does not amount to excessive delegation of
Parliaments essential legislative function.
Words and Phrases:
"Industrial Plant" occurring in Chapter 98 of Customs Tariff
Act, 1975-Meaning of.
HEADNOTE:
The Customs Tariff Act 1975 by its First and Second
Schedules provided the rates of and custom duties to be
levied under the Customs Act, 1962. Chapter 98 introduced
in Second Schedule prescribed a concessional rate of duty in
respect of articles and items specified therein. As per
Chapter
655
Note (1), if a particular article mentioned in Chapter 98
also fell under some other Chapter/heading, still such item
would be governed by Chapter 98 and not by that other
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chapter/heading.
Photographic machinery was covered under Chapter 90 wherein
the rate of duty was far higher, but for purposes of duty it
was claimed as "industrial plant" under Chapter 98.01. The
expression "industrial plant" was defined neither in Customs
Tariff Act nor in Customs Act.
Chapter Note (2) of Chapter 98 of the Customs Tariff Act
laid down that Heading 98.01 would apply to all goods
imported in accordance with the regulations made under. s.
157 of the Act and the expressions used in heading 98.01
should have the meaning assigned to them in the said
regulations. Accordingly, the Project Import Regulations,
1986 were framed. Regulation (3) of said Regulations
defined "industrial plant" exduding from its purview
industrial systems meant for "establishments designed to
offer services of any description" such as. photographic
studios, photographic film processing laboratories etc.
On coming into force of the Project Import Regulations, the
Customs authorities refused to treat the photographic
equipment imported by the appellants as industrial plant
falling under heading 98.01 and sought to levy duty thereon
under Chapter 90 of the Customs Tariff Act, 1975.
The appellant filed writ petitions before the High Court
challenging the validity of the Project Import Regulations,
1986. The writ petitions were dismissed. Hence the appeals
by special leave.
The appellant contended that regulations made by the Central
Board of customs and Excise under s. 157 of the Customs Act
1962, not being subject to Parliament’s scrutiny in the
sense that they were not required to be laid on the floor of
the Houses of Parliament under s. 159 stand on an inferior
footing to rules made by the Central Government under s.
156, and therefore, the regulation making power was confined
only to peripheral and procedural matters and not for making
substantive provisions; the Act specified the articles and
things subjected to duty as also the rates of duty and such
A power was not left to be exercised by a delegate; the
Parliament did not contemplate delegating to the Board the
power to cut down the field and ambit occupied by the
provisions of the Customs Act or the Customs Tariff Act and
such a power, if delegated to the Board, would amount to
excessive delegation of legislative power; Regulation (3) of
the Project Imports Regu-
656
lation defining "Industrial plant" was outside the purview
of the regulation making power conferred by s. 157 as the
same took away under the garb of defining the said
expression the beneficial rate of duty provided by the
Parliament in the interest of industrial progress of the
country.
Dismissing the appeals, this Court,
HELD : 1. The regulation-making power conferred on the
Central Board of Customs and Excise by s. 157 of the customs
Act, 1962 is not confined only to peripheral and/or
procedural matters. The Parliament has appointed the
Central Government and the Board to make rules/regulations
to carry out purposes of the Act. The character of Rules
and of the Regulations made under ss. 156 and 157 of the Act
respectively Is the same-both constitute delegated
legislation. The Regulations are subject to an additional
limitation viz., they should not be contrary to the Rules
made under s. 156. The purpose of sub-section (2) in both
the sections is to allocate certain matters to each of them
exclusively; subject to these sub-sections, both the
delegates can exercise the power vested in them for carrying
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out the purposes of the Act. (662G-H, 663-G-H, 664-A)
2.1. It is not for the Court to question the wisdom of the
Government’sor for that matter, of Board’s policy.
Enactments like Customs Act and Customs Tariff Act are not
merely taxing statutes but are also potent instruments in
the hands of the Government for regulating the economy and
the industrial development of the country. Power of
taxation is one of the weapons in the Government’s armoury
to regulate the economy. A certain industry may require
encouragement while another may not. Such legislations can
be properly administered only by constantly adjusting them
to the needs of the situation. This calls for a good amount
of discretion to be allowed to the delegate. "Flexibility
is essential (in law-making) and it is one of the advantages
of rules and regulations that they can be altered much more
quickly and easily than can Acts of Parliament". Probably,
it is for this reason that the Parliament has through
Chapter Note (2) vested the power to define the expressions,
occurring in Chapter 98, in the Board which is a part of the
Government and is in immediate direct charge of the
administration of the Act alongwith and subject to the
guidance of the Central Government. Looked at from this
angle, it cannot be said that Chapter Note (2) amounts to
excessive delegation of the Parliament’s essentialle
legislative function. (665-D-, G).
2.2. Chapter 98 of the Customs Tariff Act provides a
concessional tariff to industrial plant. The expression
"industrial plant" is a term of wide
657
connotation. All kinds of Industrial plants may not require
to be encouraged. Some may; others may not. Decisions of
this nature have to be made from time to time. Parliament
cannot obviously do this. It has, therefore, rightly left
the function to the Board. In 1986, the Government-which
expression includes the Board-thought that import of
’industrial systems’ meant for ’establishments designed to
offer services of any description such as hotels, hospitals,
photographicstudios, photographic film processing
laboratories, etc need no encouragement in the shape of
concessional custom tariff and they said so through the
Project Imports Regulations, 1986 which cannot he said to
have travelled beyond the purview of the statute. Nor can
it be said that the Board has travelled beyond its brief by
excluding the "Establishments designed to offer services of
any description" from the preview of "industrial plant" as
defined under Regulation (3) of the Project Imports
Regulations. Accordingly, photographic equipment does not
fall within the ambit of "industrial plant". (665-G-H, 666-
A, 668-E)
2.3. It cannot be said that the Parliament has, by
empowering the Board to define the expression "industrial
plant" occurring in Chapter 98, delegated its essential
legislative function. There is, indeed, no self-abnegation
on the part of the Parlimaent. The express power conferred
by Chapter Note (2) of Chapter 98 of Customs Tariff Act is
undoubtedly different from the power of exemption conferred
by Section 25. It makes little difference in principle that
while an exception notification is required to be laid on
the floor of the parliament, Regulations made under Section
157 are not so required. Absence of such requirement does
not mean absence of control by the Parliament over the acts
of the delegate. (661-G-H)
Supreme Court Employee Welfare Association v. Union of lndia
[1989] 4 S.C.C. 187. Avinder Singh v. Punjab [1979] 1
S.C.R. 845 & State of Tamil Nadu v. Hind Stone [1981] 2
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S.C.R. 742, relied on.
Vasantial Maganbhai Sanjanwala v. State of Bombay, [1961] 1
S.C.R. 341 & Devidas v. State of Punjab [1967] 3 S.C.R. 557,
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2684 (NM) /93
etc. etc.
From the Judgment and Order dated 2.4. 92/ 27.4. 92 of the
Bombay High Court in W.P. No. 27 of 1990.
658
Harish N. Salve, R.P. Bhatt, A.K. Ganguli, Dr. Nitin
Kantawala, Ms. Hemantika Wahi, T.V.S.N. Chari, Ms Tanuja
Sheel, Mrs. Sheela S. Rao, P. Parmeswar and E.C. Agrawala,
Ranjit Kumar, R. Venkataramani, Mrs. M. Qamaruddin, Abhijat
P. Medh for the appearing parties.
The Judgment of the Court was delivered by
B.P. JEEVAN REDDY,J. Leave granted. Heard counsel for the
parties.
These appeals arise from the common judgment and order of
the Bombay High Court in a batch of writ petitions. The
question is whether the photographic machinery imported by
the appellants falls under Customs Tariff Heading No. 98.01.
If it falls under it, it is entitled to a concessional rate
of duty. If not, it is chargeable to a higher duty.
The Customs Tariff Act, 1975 was enacted by Parliament with
a view to consolidate and amend the law relating to customs
duties. It repealed the Indian Tariff Act, 1934 and Indian
Tariff (Amendment) Act, 1949. Section 2 says that the rates
at which duties and customs shall be levied under the
Customs Act, 1962 are those specified in the First and
Second Schedules. Section 3 levies additional duty equal to
excise duty. Chapter 98 was introduced in the Schedule with
effect from February 28, 1986. It relates to "Project
Imports; Laboratory Chemicals; Passengers Baggage, Personal
Importation by air or post; Ship Stores". Chapter 98
provides a concessional rate of duty in respect of articles
and items specified therein. Chapter Note (1) declares,
"this chapter is to be taken to apply to all goods which
satisfy the conditions prescribed therein, even though they
may be covered by a more specific heading elsewhere in this
Schedule." In other words, if a particular article mentioned
in Chapter 98 also falls under some other chapter/ heading,
still such item will be governed by chapter 98 and not by
that other chapter/heading. So far as photographic
machinery is concerned, it is not disputed that it falls
under chapter 90 where the rate of duty is far higher.
Chapter Note (2) which is of crucial relevance herein reads
"Heading No. 98.01 is to be taken to apply to all goods
which are imported in accordance with the regulations made
under section 157 of the Customs Act, 1962 (52 of 1962) and
expressions used in this heading shall have the meaning
assigned to them in the said regulations.
(emphasis added)
659
Heading 98.01 (Sub-Heading 9801.00), being relevant
for our purpose, must also be set out:
------------------------------------------------------------
Heading Sub Description of Rate of duty
No. heading article Standard
No. Prefential Areas
------------------------------------------------------------
98.01 98.01.00 All items of machinery 60%
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including prime movers,
instruments, apparatus
and appliance, control
gear and transmission
equipment, auxiliary
equipment (including
those required for
research and development
purposes, test and quality
control), as well as all
components (whether finished
or not) or raw materials for
the manufacture of the aforesaid
items and their components
required for the intial setting
up of a unit, or the substantial
expansion of an existing unit,
of a specified : (1)Industrial plant,
(2) irrigation project,
(3) power project,
(4) mining project,
(5) project for the exploration
or oil or other minerals, and
(6) such other projects as
Central Government may, having
regard to the economic development
of the country notify in the
official Gazette in this behalf;
and spare parts, other raw
materials (including semifinished
material) or consumable stores not
exceeding 10% of the value of the
goods specified. above
660
provided that such spare parts,
raw materials or consumable stores
are essential for the maintenance of
the plant or project mentioned in to
6 above."
(emphasis added)
The expression "industrial plant" is not defined in the
Customs Tariff Act, 1975 or, for that matter, in the Customs
Act, 1962. Chapter Note (2) of Chapter 98, which it must be
emphasized is apart of statute itself, says that the
expressions used in heading No. 98.01 shall have the meaning
assigned to them by the regulations made under Section 157
of the Customs Act and further that heading No. 98.01 shall
apply to all goods which are imported in accordance with
such regulations.
As contemplated by Chapter Note (2) of Chapter 98 of the
Customs Tariff Act, the Central Government framed the
Project Imports Regulations under Section 157 of the Customs
Act, contained in notification No. 230/86-Cus. dated April
3, 1986. They came into force on the same day. Regulation
(1) of these Regulations says that they shall be called
"Project Imports Regulations, 1986" and shall come into
force on April 3, 1986. Regulation (2) says that the said
Regulations shall apply for assessment and clearance of
goods falling under heading No. 98.01. Regulation (3)
defines certain expressions including the expression
"industrial Plant". The definition reads as follows:
"Industrial Plant" means an industrial system
designed to be employed directly in the
performance of any process or series of
processes necessary for manufacture production
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or extraction of a commodity, but does not
include-
(i) establishments designed to offer services
of any description such as hotels, hospitals,
photographic studios, photographic film pro-
cessing laboratories, photocopying studios,
laundries, garages and workshops; or
(ii)a single machine or a composite machine,
within the meaning assigned to it, in Notes 3
and 4 to section XVI of the said Firs
t
Schedule."
A perusal of the definition of "industrial plant" makes it
clear that it seeks to exclude industrial systems meant for
"establishment designed to offer services of
661
any description". It mentions certain service
establishments by way of illustration. Photographic studios
and photographic film processing laboratories happen to be
mentioned specifically as some of the establishments
designed to offer services.
Once the Project Imports Regulations came into force, the
Customs authorities refused to treat the photographic
equipment imported by the appellants and others as
"industrial plant" falling under heading 98.01 of the
customs Tariff Act. They sought to levy duty thereon under
Chapter 90. In view of the refusal of the Customs
authorities to treat the photographic machinery imported by
them as "industrial plant" within the meaning of Chapter 98,
the appellants approached the Bombay High Court by way of
the batch of writ petitions. Their contention was that
until April 3, 1986, photographic machinery was included
within the expression "industrial plant" occurring in
heading 98.01 as well as in tariff heading 84.66 of the old
tariff. This fact was affirmed by the Government of India
when a doubt was raised-in their letter bearing No.F
526/52/83-Cus. (T.U.) dated November 4, 1988. Even
according to the normal meaning and connotation of the
expression "industrial plant", photographic machinery falls
within its purview. This is the sense in which the said
expression is used in the Tariff Entry 98.0 1. If so, the
ambit and field of the said-expression cannot be cut-down by
a regulation made under Section 157 of the Customs Act. If
any particular machinery or equipment is to be excluded from
the purview of the "industrial plant", it can and should be
done only by the Act itself but not by a subordinate
legislation like regulations. It was submitted that the
1986 regulations are outside the purview of Section 157 and
are incompetent. The contentions were negatived and writ
petitions dismissed by the Division Bench.
In these appeals, S/Sri Harish Salve and Kantawaala urged
the following contention :
(1) A perusal of the Customs Tariff Act discloses its
scheme. The Act specifies the articles and things subjected
to duty as also the rate to duty. Specification of articles
is not left to be done by a delegate. It is true that power
of exemption is conferred upon the Central government under
Section 25 of the Customs Act, but it is relevant to notice
that a notification of exemption issued under Section 25 is
required to be laid on the floor of both the houses of
parliament by Section 159 of the Act. This shows the close
control which the Parliament intended to exercise over the
specification of articles and the rate of duty thereon. The
Regulations made under Section 157 are not subject to
Parliament’s scrutiny in the sense that they are not
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required to be laid on the floor of the houses of Parliament
under Section 159. Evidently, Regulations were not supposed
to deal
662
with any matters of substance.
(2) While enacting Section 157, Parliament could never have
contemplated delegating, to the Board, the power to cut-down
the field and ambit occupied by the provisions of the
Customs Act or Customs Tariff Act. Regulations made by the
Board stand on an inferior footing to the rules made by the
Central Government under Section 156. The regulation-making
power was intended to be utilised for the purpose of
providing procedural and peripheral provisions but certainly
not for making a substantive provision cutting down the
content and ambit of the provisions of the Act.
(3) Even if it is held for some reason that such a power was
intended to be and was delegated to the Board, it would be
bad since it amounts to excessive delegation of legislative
power. Regulation (3) of the new. Regulations which
defines the expression "industrial plant" is clearly outside
the province of regulation-making power conferred by Section
157. The legislative history of tariff entry 98 militates
against any such power being exercised by the Board. The
Board cannot take away what the Parliament has given. The
regulation in effect have the effect of amending the
provision in the Act. They take away under the garb of
defining the expression "industrial plant"’, the beneficial
rate of duty provided by Parliament in the interest of
industrial progress of the country. The Regulations are
inconsistent with the provisions of the Customs Tariff Act.
S/Sri Ganguly and T.V.S.N. Chari, learned counsel appearing
for the Central Government, on the other hand, fully
supported the validity of the said regulations. They
pointed out that the validity of chapter Note (2) was not
questioned before the High Court has been expressly recorded
in the judgment under appeal. They submitted that the
appellants should not be permitted to do so at this stage.
Once Chapter Note (2) is taken as good, the challenge to the
1986 Regulations must fail. The said note is not bad as
amounting to excessive delegation of legislative power. In
short, they refuted each and every submission made by the
learned counsel for the appellants.
Customs Act, 1962 and Customs Tariff Act, 1975 are
complimentary. to each other. Section 157 of the Customs
Act confers upon the Central Board of Excise and Customs
(constituted under the Central Boards of Revenue Act, 1963)
the power to make regulations "consistent with this Act and
Rules, generally to carry out the purposes of this Act".
Sub-section (2) particularises certain matters with respect
to which regulations can be made. The specification of
certain matters in sub-section (2) is without prejudice to
the generality of the power conferred by
663
Sub-section (1). This is consistent with the standard
legislative practice. Section 157 reads;
" 157. Central power to make regulations.
(1) Without prejudice to any power to make
regulations contained elsewhere, in this Act,
the Board may make regulations consistent with
this Act and the rules,generally to carry out
the purposes of this Act.
(2) In particular and without prejudice to the
generality of the foregoing power such
regulations may provide for all or any of the
following matters, namely-
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(a) the form of a bill of entry, shipping
bill, bill of export, import manifest, import
reports, export manifest, export report, bill
or transshipment, boat note and bill of
coastal goods;
(b) the conditions subject to which the
transshipment of all or any goods under sub-
section (3) of Section 54, the transportation
of all or any goods under Section 56 and the
removal of ware-housed goods from one
warehouse to another under section 67 may be
allowed without payment of duty,
(c) the conditions subject to which any
manufacturing process or other operations may
be carried on in a warehouse under Section
65."
section 156 confers upon the Central Government the power to
make rules "consistent with this Act generally, to carry out
the purposes of this Act". SubSection (2) of Section 156
again Specifies certain matters with respect to which rules
can be made. The specification in sub-section (2) is
without prejudice to the generality of the power conferred
by sub-section (1).
The Parliament has appointed two authorities i.e. central
government and the Board to make rules/regulations to carry
out the purposes of the Act generally. The character of
Rules and of the Regulations made under Sections 156 and 157
respectively is the same both constitute delegated
legislation. The Regulations are subject to an additional
limitation viz., they should not be contrary to the Rules
664
made under Section 156. The purpose of sub-section (2) in
both the sections is inter alia to allocate certain matters
to each of them exclusively; subject to these subsections,
both the delegates can exercise the power vested in them for
carrying out the purposes of the Act. No established
legislative practice of any considerable duration has been
brought to our notice to read any further limitation into
the regulation-making power under Section 157, assuming that
a legislative practice can be read as a limitation. We
cannot, therefore, accept the contention that regulation-
making power under Section 157 should be confined only to
peripheral and/or procedural matters. It is not necessary
for the purposes of this case to emphasis the need or the
growing relevance of delegated legislation. Moreover,
enactments like customs Act and Customs Tariff Act are not
merely taxing statues but are also potent instruments in the
hands of the Government for regulating the economy and the
industrial development of the country. The ’economic’
ministries had the establishments allied to them keep a
close watch on the economy, closely monitoring its
behaviour. Power of taxation is one of weapons in the
Government’s armoury to regulate the economy. A certain
industry may require encouragement while another may not.
Yet another sector may require to be controlled-nay,
discouraged on some occasions. In an under-developed
country like ours, the emphasis is bound to be more on
capital goods industry rather than on consumer goods’
industry. The domestic industry has also to be protected
and encouraged in certain situations. In 1986, the
government which expression in this discussion includes the
Board-evidently thought that import of ’industrial systems’
meant for ’establishments designed to offer services of any
description such as hotels, hospitals, photographic studios,
photographic film processing laboratories’ etc. needs no
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encouragement in the shape of concessional custom tariff and
they said so through the said Regulations made in April
1986. It is not for the court to question the wisdom of the
government’s or for that matter, of Board’s policy. Board
is a part of the government. It is in direct charge of the
administration of the Act along with the government.
Probably, it is for this reason that the Parliament has,
through Chapter Note (2), vested the power to define the
expressions occurring in Chapter 98 in the Board. In this
scheme of things, we cannot accept the argument of Sri Salve
with respect to some kind of an inherent limitation upon the
regulation-making power of the Board. We cannot say that
the said power is confined only to, what the learned counsel
calls, peripheral and/or procedural matters.
There is another and perhaps more simpler answer to the
attack upon the validity of the said Regulations.
They are relatable not only to Section 157 of the Customs
Act but more
665
particularly to Chapter Note (2) of Chapter 98 of the
Customs Tariff Act. Chapter Note (2) expressly states that
the expressions used in Heading 98.01 shall have the meaning
assigned to them in the said regulations. In accordance
with the said Chapter Note, Project Imports Regulations have
been made excluding "establishments designed to offer
services of any description" from the purview of "industrial
plant". If the said regulations are good any valid, there
can be no escape from what they say; the photographic
equipment does not fall within the ambit of "industrial
plant". In this view of the matter, the relevance of the
alleged legislative practice with respect to regulation-
making power, or of the situation obtaining prior to the
framing of the said regulations, is very little. The
express power conferred by Chapter Note (2) of Chapter 98
cannot be curtailed or abridged with reference to alleged
legislative practice relating to regulation-making power,
assuming that such a practice is established and is
relevant. The only question which really arises is whether
Chapter Note (2) amounts to excessive delegation of
legislative power.
As rightly pointed out by Thommen,J. In Supreme Court
Employees Welfare Association v. Union of India [1989] 4
S.C.C. 187 "where the validity of a subordinate legislation
(whether made directly under the constitution or statute) is
in question, the court has to consider the nature, objects
and scheme of the instrument as a whole, and on the basis of
that examination, it has to consider what exactly was the
area over which and the purposes for which power has been
delegated by the governing law." In statutes like Customs
Act and Customs Tariff Act one has also to keep in mind that
such legislation can be properly administered only by
constantly adjusting it to the needs of the situation. This
calls for a good amount of discretion to be allowed to the
delegate. As is often pointed out "flexibility is essential
(in law-making) and it is one of the advantages of rules and
regulations that they can be altered much more quickly and
easily than can acts of Parliament." We have pointed out
hereinbefore the necessity of constant and continuous
monitoring of the nation’s economy by the government (and
its various institutions) and the relevance of these
enactments as a means of ensuring a proper and healthy
growth. Looked at from this angle, we are unable to see any
substance in the argument that Chapter Note (2) amounts to
excessive delegation of the Parliament’s essential
legislative function. Chapter 98 provides a concessional
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tariff inter alia to industrial plant. The expression
"industrial plant" is a term of wide connotation. All kind
of industrial plants may not require to be encouraged. Some
may; others may not. Decisions of this nature have to be
made from time to time. Parliament cannot obviously do
this. It has, therefore, left the function to the Board
which, as emphasised hereinbefore, is in immediate direct
charge of the administration of the Act, along with and
subject to the guidance of the central
666
government.
In Vasantlal Maganbhai Sanjanwala v. State of Bombay [1961]
1 S.C.R. 341, it is observed by this Court that "self-
effacement of legislative power in favour of another agency
either in whole or in part is beyond the permissible limits
of delegation". At the same time, it is held, "it is for a
court to hold on a fair, generous and liberal construction
of an impugned statute whether the legislature exceeded such
limits. But the said liberal construction should not be
carried by the Courts to the extent of always trying to
discover a dormant or a latent legislative policy to sustain
an arbitrary power conferred an executive authorities. It
is the duty of the Court to strike down without any
hesitation any arbitrary power conferred on the executive by
the legislature". These words were quoted with approval in
a subsequent decision of the Constitution Bench in Devidas
v. State of Punjab [1967] 3 S.C.R. 557.
Krishna lyer, J. emphasised this very aspect in the context
of a taxing statute in Avinder Singh v. Punjab 1979] 1
S.C.R. 845. The learned Judge said:
"..... the legislature cannot self-efface its
personality and make over, in terms plenary,
the essential legislative functions. The
legislature is responsible and responsive to
the people and its representatives, the
delegate may not be and that is why excessive
delegation and legislative, hara kiri have
been frowned upon by constitutional law. This
is a trite proposition but the complexities of
modem administration are so bafflingly
intricate and bristle with details, urgencies,
difficulties and need for flexibility that our
massive legislatures may not get off to a
start if they must directly and
comprehensively handle legislative business in
all their plenitude, proliferation and
particularisation. Delegation of such part of
legislative power becomes a compulsive
necessity for viability. If the 500-odd
parliamentarians are to focus on every
minuscule of legislative detail leaving
nothing to subordinate agencies the annual
output may be both unsatisfactory and
negligible. The law-making is not a turnkey
project, readymade in all detail and once this
situation is grasped the dynamics of
delegation easily follow. Thus, we reach the
second constitutional rule that the essentials
of legislative functions shall not be
delegated but the inessentials, however,
numerous and significant they be, may well be
made over to appropriate agencies. of course,
every delegate is subject to the authority and
control of the principal and exercise of
delegated power can always be directed,
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corrected or cancelled by the principal."
667
Applying the principles aforesaid, we cannot say that the
Parliament has, by empowering the Board to define the
expression "industrial plant" occurring in Chapter 98,
delegated its essential legislative function. Indeed, we
see no self-abnegation on the part of the Parliament. The
power conferred by Chapter Note (2) is undoubtedly different
from the power of exemption conferred, by Section 25. It
makes little difference in principle that while an exemption
notification is required to be laid on the floor of the
Parliament, Regulations made under Section 157 are not so
required. Absence of such requirement does not mean absence
of control by the Parliament over the acts of the delegate.
Nor are we satisfied that by excluding the industrial
systems meant for establishments designed to offer services
of any description, the Board has travelled beyond its brief
Reference may be had, in this connection to the decision of
this court in State of Tamil Nadu v. Hind Stone [1981] 2
S.C.R. 7421 Section 15 of the Mines and Minerals (Regulation
and Development) Act, 1957 empowers the State Government to
make rules for regulating the grant of quarry lease, mining
lease and other mineral concessions in respect of minor
minerals and purposes connected therewith. In exercise of
the said power, the Government of Tamil Nadu framed Tamil
Nadu Minor Mineral concession Rules, 1959. Rule 8 of the
Rules prescribed the procedure for lease of quarries to
private persons. Rule 8(C), which was introduced in the
year 1977, imposed a prohibition on the grant of lease of
quarries in respect of black granite to private persons.
The Rule provided that notwithstanding anything to the
contrary contained in the said rules, no lease for quarrying
black granite shall be granted to private persons on or
after7th December, 1977. It could be ranted only to the
State Government or to a corporation wholly owned by it.
The validity of Rule 8(C) was challenged on the ground that
it travels beyond the purview of the Act inasmuch as the
power to make rules conferred upon the State Government by
Section 15 was meant for regulating the rant of quarry
leases in respect of minor minerals but not for prohibiting
it for creating a monopoly in itself (State Government). It
was also argued that since the decision contained in Rule
8(C) involved a major change of policy, it could be done
only by the legislature and not by a subordinate legislative
body. Both these arguments were rejected. Following
observations are apposite:
"....It was pointed out by the Privy Council
in Commonwealth of Australia v. Bank of New
South Wales- and we agree with what was stated
therein-that the problem whether an enactment
was regulatory or something more or whether a
restriction was direct or only remote or only
incidental involved, not so much legal as
political, social or economic
consideration.... Each case, it was said, must
be judged on its own facts and in its own
setting of time and circumstances and it might
be that in regard to some economic
668
activities and at same Stage of social
development, prohibition with a view to State
monopoly was the only practical and reasonable
manner of regulation.
Another of the submission of the learned
counsel was that the G.O.Ms. No. 1312 dated
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December 2, 1977 involved a major change of
policy, which was a legislative function and
therefore beyond the competence of a
subordinate legislating body. We do not agree
with the submission. Whenever there is as
witch over from ’private sector’ to ’public
sector’ it does not necessarily follow that a
change of policy requiring express legislative
sanction is involved. It depends on the
subject and the statute. For example, if a
decision is taken to impose a general and
complete ban on private mining of all minor
minerals, such a ban may involve the reversal
of a major policy and so it may require
Legislative sanction. But if a decision is
taken to ban private mining of a single minor
mineral for the purpose of conserving it, such
a ban, if it is otherwise within the bounds of
the authority Given to the Government by the
Statute, cannot be said to involve any change
of policy."
The statement of law is clear and we agree with it
respectfully. We are, therefore, of the considered opinion
that Chapter Note (2) cannot be faulted as an instance of
excessive delegation of essential legislative function nor
can the Project Imports Regulations be faulted on the ground
of travelling beyond the purview of the statute.
For the above reasons, the appeals fail and are dismissed.
No costs.
RP. Appeals failed.
669