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PETITIONER: GWALIOR RAYON SILK MFG. (WVG.) CO.  LTD.

       Vs.

RESPONDENT: THE ASSTT.  COMMISSIONER OF SALES TAX & ORS.

DATE OF JUDGMENT21/12/1973

BENCH: KHANNA, HANS RAJ BENCH: KHANNA, HANS RAJ RAY, A.N. (CJ) MATHEW, KUTTYIL KURIEN ALAGIRISWAMI, A. BHAGWATI, P.N.

CITATION:  1974 AIR 1660            1974 SCR  (2) 879  1974 SCC  (4)  98  CITATOR INFO :  RF         1975 SC1389  (11,12)  F          1975 SC1604  (3)  RF         1975 SC2299  (151)  RF         1976 SC 714  (42)  D          1976 SC1031  (29)  R          1982 SC 710  (55)  RF         1982 SC1126  (9)  R          1984 SC1130  (28)  R          1984 SC1194  (19,20,22)  F          1988 SC 567  (14)  RF         1989 SC 222  (4,9)  R          1990 SC 560  (13,16)  RF         1991 SC 672  (29)

ACT: Central  Sales Tax Act, 1956-S. 8(2) (b)-Whether it  suffers from the vice of excessive delegation.

HEADNOTE: Sec.  8(2)(b)  of the Central Sales Tax Act  1956,  provides that the tax payable by any dealer on his turnover, in so  far as it relates to the sale of goods the course of inter-state trade or commerce, not falling within sub-sec. (1) in,  case of  goods other than declared goods, shall be calculated  at the rate of ‘ per cent or at the rate applicable to the safe or  purchase,  of such goods inside the  appropriate  state, whichever is higher. etc. The  short question which arose for determination  in  these four  appeals was whether the provisions of sec. 8(2)(b)  of the  Central  Sales Tax Act, 1956 suffer from  the  vice  of excessive  delegation because the parliament, in not  fixing the  rate itself and in adopting the rate applicable to  the gate  or purchase of goods inside the appropriate State  had not laid down any legislative policy and thus abdicated  its legislative function.  The High Court answered this question in the live and upheld the constitutional validity of  those provisions. Dismissing the appeals, HELD  : (I) There is clear legislative policy which  can  be

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found  in  the provisions of Sec. 8 (2) (b) of  the  Central Sales  Tax.   Act  1956.  The ’ Policy of the  law  in  this respect is that in case the rate of local sales tax be  less than 10 per cent in such ,in event, the dealer, if the  case does  not fall within Sec. 8(1) of the Act ’  should  pay Central  Sales  Tax  at  the rate of  10  per  cent.   If, however  the  rate of , local sales tax  for  the  goods concerned  be  more  than 10 per cent, in  that  event,  the policy is that the rate of the Central Sales Tax shall  also be  the  same as (bat of the local sales tax  for  the  said goods.   The object of the law thus is that the rate of  the Central Sales tax shall in no event be less than the rate of local  sales  tax for the goods in question  though  it  may exceed the local rate in case that rate be less than 10  per cent. [984 A] For  example,  if the local rate of tax in  the  appropriate State  for the non-declared goods be 6 per cent, in such  an event  a dealer, whose case is not covered by sec.  8(1)  of the Act, would have to pay Central Sales Tax at a rate of 10 per cent.  In case, however, the rate of local sales tax for such  goods  be 12 per cent the rate of  Central  Sales  tax would  also be 12 per cent because otherwise if the rate  of Central  Sales Tax were only 10 per cent,  the  unregistered dealer  who  purchases goods in the  course  of  inter-State trade  would  be  in a better position  than  an  intrastate purchases and there would be no disincentive to the- dealers to  desist from selling goods to unregistered purchasers  in course  of  inter-State  trade.   The  object  of’  the  law apparently  is  to deter inter-State sales  to  unregistered dealers as such inter--State Sales would facilitate  evasion of tax. [984 C] (2) It is also not possible to fix the maximum rate under or Sec. 8(2) (b) because the local sales tax varies from  State to  State.  The rate of local sales tax can also be  changed by  the  State legislatures from time to time.   It  is  not within  the competence of the parliament to fix the  maximum rate of local Sales tax.  The fixation of the rate of  local Sales tax is essentially a matter for the State legislatures and the parliament does not have any control in the  matter. The  parliament  has therefore necessarily, if it  wants  to prevent evasion of payment of Central Sales Tax, to tack the rate  of such tax with that of local sales tax, in case  the rate of local sales tax exceeds t particular limit. [984 E] State  of Madras V. N.K. Nataraja Mudaliar, [1968] 3  S.C.R. 829, referred to and 748SCI/174 880 B.  Sharma   Rao   v.  The   Union   Territory   of Pondicherry,  [1967]  2 S.C.R.  650  explained  and distinguished.. (3) The  growth  of the legislative  power  of  the executive  is  a  significant  development  of  the twentieth century.  The theory of laissez-faire has been  given  a go-by and  large  and  comprehensive powers  are being assumed by the State with a  view to  improve social and economic well-being  of  the people.    Most   of   the   modern   socioeconomic legislations passed by the legislature Jay down the guiding principles and the legislative policy.  The legislatures because of limitation imposed upon  by the  time factor hardly go into matters of  detail. Provision   is,   therefore  made   for   delegated legislation  to  obtain  flexibility,   elasticity, expedition  and  opportunity  for  experimentation. The  practice of empowering the Executive  to  make

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subordinate legislation within a prescribed  sphere has   evolved  out  of  practical   necessity   and pragmatic needs of a modern welfare state. [890 D] (4) In  questions  of  delegated  legislation,  the principle  which has been well established is  that the  legislature  must  lay  down  the  guidelines, principles  or  policy for the  authority  to  whom power to make subordinate legislation is entrusted. The  correct  position  of  law  thus  is  that  an "unlimited  right of delegation is not inherent  in the   legislative  power  itself.   This   is   not warranted by the provisions of the Constitution and the legitimacy of delegation depends entirely  upon its  being used is in ancillary measure  which  the legislature  considers  to  be  necessary  for  the purpose   of  exercising  its  legislative   powers effectively and completely.  The legislatures  must retain  in its own hands the essential  legislative functions   which   consist   in   declaring    the legislative policy and laying down the stand  which is  to be enacted into a rule of law, and what  can be delegated is the task of subordinate legislation which  by  its  very nature  is  ancillary  to  the statute  which  delegates  the  power  to  make  it provided the legislative policy is enunciated  with sufficient clearness or a standard laid down.   The courts  cannot  and should not interfere  with  the discretion   that   undoubtedly  rests   with   the legislature  itself  in determining the  extent  of delegation necessary in a particular case." [892 C] In  Delhi  Laws  Act 1912, [1951]  S.C.R.  747  and Municipal  Corporation  of  Delhi  v.  Birla  Mills [1968]  3  S.C.R. 231, Devi Das  Gopal  Krishan  v. State of Punjab A.I.R. 1967 S.C. 1895;  Harishankar Bagla  v.  The State of  Madhya  Pradesh  [1955]  1 S.C.R. 380; Pandit Banarasi Das Bhagat v. The State of  Madhya  Pradesh  &  Ors.  [1959]  S.C.R.   427; Corporation  of Calcutta & Anr. v.  Liberty  Cinema [1965] 2 S.C.R. 477 and Sita Ram Bishembhar Dayal & Ors.  v.   State of U.P. & Others [1972]  2  S.C.R. 141, referred to. It is not possible to subscribe to the view that if the  legislature  can repeal an  enactment,  as  it normally  can, it retains enough control  over  the authority  making the subordinate legislation  and, as such, it is not necessary for the legislature to lay down legislative policy, standard or guidelines in the statute.  The acceptance of this view  would lead   to   startling   results.    Supposing   the Parliament  tomorrow  enacts  that  as  the   crime situation in the country has deteriorated, criminal law to be enforced in the country from a particular date  would  be  such as is framed  by  an  officer mentioned  in the enactment.  Can it be  said  that there   has   been  no  excessive   delegation   of legislative power even though the Parliament  omits to  lay  down  in  the  statute  any  guideline  or legislative policy for the making of such  criminal law  ?  The  vice of such an  enactment  cannot  be ignored or lost sight of on the ground that if  the Parliament  does  not approve the law made  by  the officer  concerned, it can repeal the enactment  by which that officer was autborised to make the  law, [894 H-895 C] (per C.J. and Mathew J :)

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(1) Delegation is not handing over or  transference of  a power from one person or body of  persons  to another.    Delegation  may  be  defined   as   the entrusting, by a person or body of persons, of  the exercise of a power residing in that person or  body of  persons, to another person or body of  persons, with  complete  power of revocation  or  amendment, remaining in the grantor or delegator. [899-G] (2) Delegation  often  involves  the  granting   of discretionary   authority  to  another,  but   such authority is purely derivative.  The ultimate power always  remains  in  the  delegator  and  is  never renounced. [900 A] Wills J in Huth v.  Clarke, [1890] 25, Q.B.D.  391, 395 and Hodge v. The Queen [1883] 9 A.C. 117. 881 (3)What is prohibited, is the conferment of arbitrary  power by the legislature upon a subordinate body without reserving to  itself control over that body and the self-efacement  of legislative  power  in favour of another  agency  either  in whole  or in part.  In other words, the  legislature  should not abdicate its essential function. [904 C] Devi  Das  Gopal Krshan v. State of Punjab [1967]  3  S.C.R. 557,  Corporation of Calcutta & another v.  Liberty  Cinema, [1965] 2 S.C.R. 477; Municipal Board, Nagpur v.  Raghuvendra Kripal,  [1966] 1 S.C.R. 950; The Municipal  Corporation  of Delhi v. Birla Cotton and Spinning and Weaving Mills, [1968] 3  S.C.R. 251 and Sita Ram Bishembar Dayal v. State of  U.P. [1972] 2 S.C.R. 141, referred to. (4)The   concept  of  ’abdication’  seems  no  less   vague, fluctuating  and uncertain than the "transfer to  others  of the  essential legislative functions".  Some  writers  think that  a legislature does not ’abdicate’ unless it  withdraws from  the field and surrenders its responsibility  therefor; and  to  some,  there seems to be  ’abdication’  whenever  a legislature  while remaining in the field and retaining  its responsibility therefore entrusts to others the  formulation of  policy,  otherwise  than with  a  definite  standard  or purpose laid down by it. [904 D-E] In  re Gray, 57 S.C.R. 150; In re Initiative and  Referendum Act,  [1919]  A.C. 935; In Shannon v. Lower  Mainland  Dairy Products  Board, [1938] A.C. 708 P.C.; R. v. Burah [1878]  5 I.A. 178; In Re the Delhi Laws Act 1912 etc. [1951] S.C.R. 747.referred to. (5)  The crucial point is, whether the legislature preserved its  capacity intact and retained perfect control  over  the delegate  inasmuch  as  it  could at  any  time  repeal  the legislation and withdraw the authority and discretion it bid vested on the delegate. [906 B] (6)  Delegation of ’law making’ power is the dynamo of modem government.   Delegation by the legislature is necessary  in order that the exertion of legislative power does not become a  futility.  Today, while theory still affirms  legislative supremacy, power floats back increasingly to the  Executive. One must not take lightly and say that there can be transfer of  legislative  power under the guise of  delegation  which would tentamount to abdication.  At the same time, one  must be aware of the practical reality that the parliament cannot go into details of all legislative matters. (906 D-E] (7)  The making of law is only a means to achieve a purpose. It is not a end in itself.  That end can be attained by  the legislature making the law.  But many topics or subjects  of legislation are such that they require expertise,  technical knowledge   and  a  degree  of  adaptability   to   changing situations  etc.,  which parliament might not  possess  and,

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therefore this end is better secured by extensive delegation of   legislative  power.   The  legislative  process   would frequently  bog  down  if a  legislature  were  required  to appraise  before  hand  the myriad situations  to  which  it wishes  a particular policy to be applied and  to  formulate specific rules for each situation. [906 G] (8)In  the  present case, by Sec. 8 (2) (b)  of  the  Act, parliament  has  not  delegated  any  power  to  the   State legislatures.    Therefore,   the   question   was   whether parliament  had abdicated its legislative function  when  it chose   to  adopt  the  rate  to  be  fixed  by  the   state legislatures   for  local  sales.   In  the  present   case, parliament bad fixed the rate of tax on inter-state sales of the  description specified in s. 8(2)(b) of the Act  at  the rate  fixed by the appropriate state legislature is  respect of intra-state-sales with a purpose, namely to chech evation and to prevent discrimination between residents of different states. Further, in the instant case. parliament can  repeal the  provisions of s. 8(2)(b) adopting a higher rate of  tax fixed  by  the appropriate state legislature in  respect  of intrastate  sales.  If parliament can repeal the  provision, there  can be no objection on the score that parliament  has abdicated its legislative function.  It retains its  control over the fixation of the rate itself. [911 H] Cobb & Co. Ltd. v. Kropp. [1967] 1 A.C. 141, referred to. Therefore  there is no excessive delegation  of  legislative power as contended by the petitioner. 882

JUDGMENT: CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 212-215 of From  the judgment and order dated the 29th August, 1972  of the  Madhya  Pradesh  High  Court  at  Jabalpur,  in   Misc. Petitions Nos. 191 of 1968, 30 of 1970, 63. and 64 of 1972. K. Sen, R. V.Patel Biswar up Gupte, R. N. Jhujhunwala  and U.   K. Khaitan, for the appellants (in C. A. 212-215). I.   N.  Shroff, for respondent Nos. 1-3 (in C.A.  212-215). Sen and S. P. Nayar, for respondent No. 4 (in C.A. 212).  S. P. Nayar, for respondent No. 4 (in C.A. 213-215). The judgment of U. R. Khanna, J.  A. Alagiriswami and P.  N. Bhagwati,  JJ. was delivered by Khanna J. K. K.  Mathew,  J. gave  a separate Opinion, on behalf of A. N. Ray, C. J.  and himself. KHANNA, J. The short question which arises for determination in these four appeals on certificate against the judgment of the  Madhya Pradesh High Court is whether the provisions  of section 8(2) (b) of the Central Sales Tax Act, 1956 (Act  54 of  1956) (hereinafter referred to as the Act). suffer  from the  vice of excessive delegation.  The High Court  answered this question in the negative and upheld the  constitutional validity of those provisions.               Sub-sections (1), (2) and (4) of section 8  of               the Act read as under               "(1) Every dealer, who in the course of inter-               Estate trade or commerce-               (a) sells to the Governmentany goods; or               (b)   sells to a registered dealer other  than               the   Government  goods  of  the   description               referred to in subsection (3);               shall  be  liable to pay tax under  this  Act,               which   shall,  be  three  per  cent  of   his               turnover.               (2)The  tax  payable by any dealer  on  his

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             turnover in so far as the turnover or any part               thereof  relates to the sale of goods  in  the               course  of  interstate trade or  commerce  not               falling within sub-section (1)-               (a)   in the case of declared goods, shall  be               calculated at the rate applicable to the  sale               or   purchase   of  such  goods   inside   the               appropriate State; and               (b)   in the case of goods other than declared               goods, shall be calculated at the rate of  ten               per cent or at the rate applicable to the sale               or   purchase   of  such  goods   inside   the               appropriate State, whichever is higher;               and  for  the  purpose  of  making  any   such               calculation any such dealer shall be deemed to               be a dealer liable to pay tax under               883               the  sales tax law of the  appropriate  State,               notwithstanding  that he, in fact, may not  be               so liable under that law.               (4)The provisions of sub-section (1)  shall               not apply to any sale in the course of  inter-               State  trade  or commerce, unless  the  dealer               selling the goods furnishes to the  prescribed               authority in the prescribed manner-               (a)   a declaration duly filled and signed  by               the  registered dealer to whom the  goods  are               sold containing the prescribed Particulars  in               a   prescribed   form   obtained   from   the.               prescribed authority; or               (b)   if the goods are sold to the Government,               not being a. registered dealer, a  certificate               in the prescribed form duly filled and  signed               by a duly authorised officer of Government." It  has  been argued on-behalf of the appellants  that  the, fixation of rate of tax is a legislative function and as the Parliament has, under section 8(2) (b) of the Act, not fixed the  rate  of  central sales tax but has  adopted  the  rate applicable  to  the  sale or purchase of  goods  inside  the appropriate State in case such rate exceeds 10 per cent, the Parliament  has  abdicated its  legislative  function.   The above    provision    is   consequently   stated    to    be constitutionally invalid because of excessive delegation  of legislative  power.  This contention, in our opinion is  not well founded.  Section 8 (2) (b) of the Act has plainly been enacted with a view to prevent evasion of the payment of the central sales tax.  The Act prescribes a low rate of tax  of 3  per  cent in the case of inter-State sales  only  if  the goods  are sold to the Government or to a registered  dealer other  than the Government In the case of such a  registered dealer,  it  is essential that the goods should  be  of  the description mentioned in sub-section (3) of section 8 of the Act.   In order, however, to avail of the benefit of such  a low  rate of tax under section 8(1) of the Act, it  is  also essential  that the dealer selling the goods should  furnish to  the  prescribed  authority in the  prescribed  manner  a declaration duly filled and signed by the registered dealer, to.  whom  the  goods are sold,  containing  the  prescribed particulars in prescribed form obtained from the  prescribed authority,  or if the goods are sold to the  Government  not being  a registered dealer, a certificate in the  prescribed form duly filled and signed by a duly authorised officer  of the Government.  In cases not falling under subsection  (1), the tax payable by any dealer in respect of inter-State sale of  declared  goods is the rate applicable to  the  sale  or

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purchase  of  such goods inside the appropriate  state  vide section  8(2) (a) of the Act.  As regards goods  other  than the  declared goods, section 8(2) (b) provides that the  tax payable  by  any dealer- on the sale of such  goods  in  the course of inter-State trade or commerce shall be  calculated at the rate of 1 0 per cent or at the rate applicable to the sale or purchase of such goods inside the appropriate State, whichever is higher. The  question  with which we are concerned  is  whether  the Parliament  in not fixing. the rate itself and  in  adopting the rate applicable to the sale or purchase of goods  inside the  appropriate  State has not laid  down  any  legislative policy and has  abdicated its legislative function. 884 In  this  connection  we  are  of  the  view  that  a  clear legislative policy can be found in the provisions of section 8(2) (b) of the Act.  The policy of the law in this  respect is that in case the rate of local sales tax be less than  10 per cent, in such an event the dealer, if the case does  not fall  within  section.8(1) of the Act,  should  pay  central sales tax at the rate of 10 per cent.  If, however, the rate of  local sales tax for the goods concerned be more than  10 per  cent, in that event the policy is that the rate of  the central  sales  tax shall also be the same as  that  of  the local,sales tax for the said goods.  The object of law  thus is that the rate of the central sales tax shall in no  event be  less than the rate of local sales tax for the, goods  in question  though it may exceed the local rate in  case  that rate  be less than 10 per cent.  For example, if  the  local rate  of tax in the appropriate State for  the  non-declared goods  be 6 per cent, in such an event a dealer, whose  case is not covered by section 8(1) of the Act would have to  pay central  sales  tax  at a rate of 10  per  cent.   In  case, however,  the rate of local sales tax for such goods  be  12 per cent, the rate of central sales tax would also be 12 per cent  because  otherwise, if the rate of central  sales  tax were only IO per cent, the unregistered dealer who purchases goods  in  the  course of inter-State trade would  be  in  a better  position  than an intra-state  purchaser  and  there would  be  no  disincentive to the dealers  to  desist  from selling  goods to unregistered purchasers in the  course  of inter-State  trade.  The object of the law apparently is  to deter  inter-State  sales to unregistered  dealers  as  such inter-State  sales would facilitate evasion of tax.   It  is also not possible to fix the maximum rate under section 8(2) (b) because the rate of local sales tax varies from State to State.   The rate of local sales tax can also be changed  by the State legislatures from time to time.  It is not  within the competence of the Parliament to fix the maximum rate  of local  sales tax.  The fixation of the rate of  local  sales tax  is essentially a matter for the State Legislatures  and the Parliament does not have any control in the matter,  The Parliament  has  therefore  necessarily,  if  it  wants,  to prevent evasion of payment of central sales tax, to tack the rate  of such tax with that of local sales tax, in case  the rate of local sales tax exceeds a particular limit.  Dealing with the provisions of section 8(2) (b) of the Act, Hegde J. in the case of State of Madras v. N. K. Nataraja Mudaliar(1) observed "Then we come to el. (b) of s. 8 (2), which deals with goods other  than  declared goods.  Here the law at  the  relevant time  was  that the tax shall be calculated at the  rate  of seven percents of the turnover or at the rate applicable  to sale or purchase of such goods inside the appropriate State, whichever  is higher.  As could be seen from the  report  of

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the  Taxation  Enquiry Committee, the main reason  for  this provision  was to prevent as far as possible the evasion  of sales  tax.   The Parliament was  anxious  that  inter-State trade  should be canalised through registered  dealers  over whom the appropriate government has a great deal of control. It is not very easy for. them to evade tax.  A measure which is  intended  to check the evasion of tax is  undoubtedly  a valid  measure.   Further,  inter-State  trade  carried   on through (1)  [1968] 3 SCR 829. 885               dealers coming within s’ 8 (2), must be in the               very  nature of things very little.  It is  in               public  interest to see that in the  guise  of               freedom  of  trade,  they  do  not  evade  the               payment of tax.  If the sales tax they have to               pay is as high or even higher than intre-State               sales  tax  thin they will be  constrained  to               register   themselves   and   pay   the    tax               legitimately   due.    The  impact   of   this               provision on inter-State trade is bound to  be               negligible,  but  at the same time  it  is  an               effective safeguard against evasion of tax." The  adoption  of  the rate of local,  sales  tax  for  the. purpose  of  the  central,  sales tax  as  applicable  in  a particular  State does not show that the Parliament  has  in any way abdicated its legislative function.  Where a law  of Parliament  provides  that the rate. of  central  sales  tax should  be  IO  per cent. or that of the  local  sales  tax, whichever  be higher, a definite legislative policy  can  be discerned  in such a law, the policy being that the rate  of central  sales tax should in no event be less than the  rate of local sales tax.  In such a case, it is as already stated above,  not  possible to mention the precise figure  of  the maximum  rate  of central sales tax in the law made  by  the Parliament  because such a rate is linked with the  rate  of local   sales   tax  which  is  prescribed  by   the   State Legislatures.  The Parliament in making such a law cannot be said to have indulged in self-effacement.  On the  contrary, the  Parliament  by  making  such  a  law  effectuates   its legislative  policy, according to which the rate of  central sales  tax should in certain contingencies be not less  than the rate of the local sales tax in the appropriate State.  A law  made  by  Parliament. containing  the  above  provision cannot  be said to be suffering from the vice  of  excessive delegation  of legislative function.  On the  contrary,  the above   law   incorporates  within  itself   the   necessary provisions  to carry out the objective of  the  legislature, namely,  to prevent evasion of payment of central sales  tax and to plug possible loopholes. There  is,  in our opinion, marked  difference  between  the enactment  of a law which was struck down by this  Court  in the  case  of  B.  Shama  Rao  v.  The  Union  Territory  of Pondicherry(1)  and that contained in section 8 (2)  (b)  of the  Central  Sales  Tax  Act.   In  Shama  Rao’s  case  the Legislative Assembly for the Union Territory of  Pondicherry passed  the  Pondicherry  General Sales Tax  Act  which  was published  on  June  30, 1965.  Section  1(1).  of  the  Act provided  that it would come into force on such date as  the Pondicherry  Government  may  by  notification  appoint  and section 2(1) provided that the Madras General Sales Tax Act, 1959, as in force in the State of Madras immediately  before the commencement of the Pondichery Act, shall be extended to Pondicherry   subject   to   certain   modifications.    The Pondicherry  Government  issued a notification on  March  1,

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1966,  appointing April 1, 1966 as the date of  commencement of   he  Pondicherry  Act.   Prior  to  the  issue  of   the notification, the Madras Legislature had amended the  Madras Act  and. consequently it was the Madras Act as amended  tip to April 1, 1966 which was brought in force in  Pondicherry. A (1)  [1967] 2 SCR 650. 886 Petition was thereupon filed challenging the validity of the Pondicherry Act.  During the pendency of that petition,  the Pondicherry  Legislature  passed Amendment Act 1 3  of  1966 whereby  section 1 (2) of the principal Act was  amended  to read  that the latter Act would come into force on April  1, 1966,  and that all proceedings and action taken under  that Act would be deemed valid as if the principal Act as amended had  been in force at all material times.  ’It was  held  by majority  by  this Court that the Act of 1965 was  void  and still-born and could not be revived by the Amendment Act  of 1966.   According to the Court, the Pondicherry  Legislature not only adopted the Madras Act as it stood at the date when it  passed the principal Act, but in effect it also  enacted that  if the Madras Legislature were to amend its Act  prior to  the  notification of its extension  to  Pondicherry,  it would be the amended Act that would apply.  The Legislature, it  was  held, at that stage could not anticipate  that  the Madras  Act  would  not be amended nor  could  it  would  be carried  out, whether they would character or  whether  they would  be suitable in Ponies the opinion of the  Court,  was that  the Pondicherry Legislature accepted the  amended  Act though it was and could provisions of the amended Act  would be.   There Court, in these circumstances a total  surrender tax legislation by the Pondicherry Assembly in favour of the Madras Legislature. It  would  appear  from  the above  that  the  reason  which prevailed with the majority in striking down the Pondicherry Act  was  the  total surrender in the matter  of  sales  tax legislation by the Pondicherry Legislature in favour of  the Madras  Legislature.  No such surrender is involved  in  the present case because of the Parliament having adopted in one particular  respect  the  rate of local sales  tax  for  the purpose of central sales tax.  Indeed as mentioned  earlier, the  adoption  of the local sales tax is in pursuance  of  a legislative policy induced by the desire to prevent  evasion of  the Payment of central sales tax by discouraging  inter- State  sales to unregistered dealers.  No such policy  could be discerned in the Pondicherry Act which was struck down by this Court. Another  distinction, though not very material, is  that  in the Pondicherry case the provisions of the Madras Act  along with  the subsequent amendments were made applicable  to  an area which was within the Union Territory of Pondicherry and not  in Madras State.  As against that, in the present  case we  find that the Parliament has adopted the rate  of  local sales tax for certain purposes of the Central Sales Tax  Act only   for  the  territory  of  the  State  for  which   the Legislature of that State had prescribed the rate of  ’sales t, x. The central sales tax in respect of the territory of a State is ultimately assigned to that State under article 269 of  the Constitution and is imposed for the benefit of  that State.  We would, therefore, hold that the appellants cannot derive much assistance from the above mentioned decision  of this Court. It may be stated that this Court in two cases has upheld the validity  of  statute  by which  the  legislature  left  the fixation  of  rates  to another body.   This  was,  however,

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subject to the rider that the legislature 887 must provide guidance for such fixation.     In the case  of Corporation of Calcutta & Anr.  V.  Liberty Cinema(1)  while dealing  with  section  548 of the  Calcutta  Municipal  Act relating to the levy of licence fee, on cinema houses Sarkar J  (as  the  then  was)  speaking  for  the  majority  after referring  to the earlier case of Pandit Banarsi Das  Bhanot v. The State of Madhya Pradesh(2) observed:               "This  therefore is clear authority  that  the               fixing of rates may be left to non-legislative               body.  No doubt when the power to fix rates of               taxes is left to another body, the legislature               must provide guidance for such fixation.   The               question  then was much guidance  provided  in               the  Act?  We first wish, to observe that  the               validity of the guidance cannot be tested by a               rigid  uniform rule. that must demand  on  the               object  of  the Act giving power  to  fix  the               rate." In Municipal Corporation of Delhi v. Birla Cotton,  Spinning and, Weaving Mills Delhi & Anr.(3) this Court dealt with the provisions  of sections 113 and 150 of the  Delhi  Municipal Corporation  Act  in the context of levy of  certain  taxes, including tax on consumption or sale of electricity. One  of the questions which arose for determination in that case was with  section- 150, of the above mentioned Act  transgressed the  limits  of permissible delegation.  According  to  that section,  the Municipal Corporation may at a meeting pass  a resolution  for  the levy of any of the taxes  specified  in sub-section (2) of section 113 defining the maximum rate  of tax  to  be levied, the class or classes of persons  or  the description  of  articles and properties to  be  taxed,  the system  of assessment to be adopted and the  exemptions.  if any,  to ranted.  Such a resolution has to be sanctioned  by the Central Government and thereafter the Corporation has to pass a second resolutions determining subject to the maximum rate,  the actual rate of tax.  Wanchoo  CJ.,  Hidayatullah, Sikri,  Ramaswami and Shelat JJ. upheld the validity of  the above  section, while Shah and Vaidialingam  JJ..  dissented and held that section 150(1) of the; Act was void because of excessive   delegation  of  legislative  authority  to   the Corporation.   Wanchoo CJ. and Shelat J. on a  consideration of  the various of the Act held that the power conferred  by section 150 on provisions ration was not unguided and  could not  be  said  to amount  to  excessive  delegation.   After referring  to the earlier authorities, Wanchoo CJ.  speaking for himself and Shelat J. observed :               "A review of these authorities therefore leads               to  the. conclusion that so far as this  Court               is concerned the principle is well established               that  essential legislative function  consists               of   the  determination  of  the   legislative               policy, and its formulation as a binding  rule               of  conduct  and cannot be  delegated  by  the               legislature.  Nor is there any unlimited right               of  delegation  inherent  in  the  legislative               power itself.  This is not               (1) [1965] 2 SCR 477.     (2) [1959] SCR 427-               (3)   [1968] 3 SCR 231.               888               warranted    by   the   provisions   of    the               Constitution.  The  legislature must retain in               its   own  hands  the  essential   legislative               functions  and  what can be delegated  is  the

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             task of subordinate legislation necessary  for               implementing  the purposes and objects of  the               Act.    Where   the  legislative   policy   is               enunciated  with  sufficient  clearness  or  a               standard  is laid down, the courts should  not               interfere.  What guidance should be given  and               to  what extent and whether guidance has  been               given in a particular case at all depends on a               consideration   of  the  provisions   of   the               particular  Act  with which the Court  has  to               deal  including  its  preamble.   Further   it               appears  to us that the nature of the body  to               which  delegation is made to also a factor  to               be  taken  into consideration  in  determining               whether  there is sufficient guidance- in  the               matter of delegation."               Hidayatullah J. (as he then was) speaking  for               himself and Ramaswami J. observed :               "Once  it is established that the  legislature               itself  has willed that a particular thing  be               done and has merely left the "execution of  it               to a chosen instrumentality (provided that  it               has not parted with its control) there can  be               no  question of excessive delegation.  If  the               delegate  acts contrary  to the wishes of  the               legislature the legislature can undo  what the               delegate has done."               It was further observed               "To insist that the legislature should provide               for  every  matter  connected  with  municipal               taxation  would make municipalities  mere  tax               collecting departments and not  self,governing               bodies   which  they  are  intended   to   be.               Government  might  as well collect  taxes  and               make  them  available to  the  municipalities.               That  is not a correct reading of the  history               of  Municipal  Corporations  and  other  self-               governing institutions in our country."               Sikri J. (as he then was) observed               "I  can  see  no sign  of  abdication  of  its               functions  by Parliament in this Act.  On  the               contrary   Parliament  has   constituted   the               Corporation  and  prescribed  its  duties  and               powers in great deal.               But assuming I am bound by authorities of this               court to test the validity of s.113(2)(d)  and               s.150  of  the Act by ascertaining  whither  a               guide  or  policy exists in the  Act,  I  find               adequate  guide  or policy in  the  expression               ’purposes of the’ Act’ in S. 113.  The Act has               pointed  out the objectives or the results  to               be  achieved and taxation can be  levied  only               for the purpose of, achieving the  objectives,               or   the  results.   This,  in  my  view,   is               Sufficient  guidance    especially to a  self-               governing   body  like  the  Delhi   Municipal               Corporation.   It is necessary to rely an  the               safeguards  mentioned  by  the  learned  Chief               Justice to sustain the delegation.".               889               Shah J. (as he then was) speaking for  himself               and  Vaidialingan  J. after referring  to  the               earlier authorities observed               "On  a  review  of  the  cases  the  following               principles  appear  to be well-settled  :  (i)

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             Under  the, Constitution the  Legislature  has               plenary  powers  within its  allocated  field;               (ii) Essentiallegislative function cannot be               delegated by the Legislature,that is,  there               can be no abdication of legislative,  function               orauthority  by  complete  effacement,  or               even   partially  in respect of  a  particular               topic or matter entrusted by the  Constitution               to the Legislature-; (iii) Power to make  sub-               sidiary  or ancillary legislation may  however               be.  entrusted by the Legislature  to  another               body   of  its  choice,  provided   there   is               enunciation of policy, principles or standards               either  expressly  or by implication  for  the               guidance  of  the  delegate  in  that  behalf.               Entrustment of power without guidance  amounts               to   excessive   delegation   of   legislative               authority; (iv) Mere authority to legislate on               a  particular topic does not confer  authority               to  delegate  its power to legislate  on  that               topic  to another body.  The  power  conferred               upon   the   Legislature   on   a   topic   is               specifically entrusted to that body, necessary               intendment  of  the  constitutional  provision               confers  that  power  that  it  shall  not  be               delegated  without  laying  down   principles,               policy,  standard or guidance to another  body               unless the Constitution expressly nation;  and               (v)  the  taxing  provisions  are  not   these               rules."               It was further observed               "The  Constitution  entrusts  the  legislative               functions  to  the legislative branch  of  the               State and directs that the functions shall be-               performed  by that body to which  the  Consti-               tution has entrusted and not by some, one else               to  whom  the,  Legislature at  a  given  time               thinks  it  proper to  delegate  the  function               entrusted  to  it.   A body of  experts  in  a               particular  branch of undoubted  integrity  or               special competence may Probably be in a better               position to exercise the power of  legislation               in that branch, but Constitution has chosen to               invest  the  elected  representatives  of  the               people  to exercise the power of  legislation,               and  not  to’  such bodies  of  experts.   Any               attempt  on the part of the experts to  usurp,               or  of  the representatives of the  people  to               abdicate   the   functions   vested   in   the               legislative  branch is inconsistent  with  the               constitutional   scheme.    Power   to    make               subordinate   or  ancillary  legislation   may               undoubtedly be conferred upon a delegate,  but               the Legislature must in conferring that  power               disclose  the policy, principles or  standards               which  are  to  govern  the  delegate  in  the               exercise  of  that power so as to  set  out  a               guidance.   Any delegation which  transgresses               this   limit  infringes   the   constitutional               scheme." After  referring  to the provisions of the  Delhi  Municipal Corporation  Act,  Shah and Vaidialingam JJ. held  that  the delegation could not 890 be upheld merely because of the. special status,  character,

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competence  or capacity of the delegate or by  reference  to the  provisions made in the statute to prevent abuse by  the delegate  of  its  authority.   Shah  and  Vaidialingam  JJ. accordingly  came to the conclusion that Section 150(1)  was void as it permitted excessive delegation of legislative authority to the Corporation. It  would  appear  from  the above that  not  only  was  the constitutional   validity  of  section  150  of  the   Delhi Municipal  Corporation  Act  upheld  by  the  majority,  the majority of the judges also ’expressed the view that it  was essential for the legislature to lay down the legislative it policy  and  standards  before could delegate  the  task  of subordinate legislations to another body. We find ourselves unable to agree, with the view. which  has been  canvassed  during the course of arguments  that  if  a legislature  confers power to make subordinate or  ancillary legislation  upon  a  delegate,  the  legislature  need  not disclose  any  policy,  principle or  standard  which  might provide  guidance for the delegate in the exercise  of  that power.  It  may  be  stated at the outset that the  growth  of  the legislative  powers  of  the  executive  is  a   significant development  of  the  twentieth  century.   The  theory   of laissez-faire   has  been  given  a  go-by  and  large   and comprehensive  powers are being assumed by the State with  a view  to  improve  social and  economic  well-being  of  the people.   Most  of  the  modern  socioeconomic  legislations passed  by the legislature lay down the  guiding  principles and  the  legislative policy. The  legislatures  because  of limitation  imposed upon by the time factor hardly  go  into matters  of  detail.   Provision  is,  therefore,  made  for delegated  legislation  to obtain  flexibility,  elasticity, expedition   and  opportunity  for   experimentation.    The practice  of  empowering the executive to  make  subordinate legislation  within a prescribed sphere has evolved  out  of practical necessity and pragmatic needs of a modern  welfare state.  At the same time it has to be borne in mind that our Constitution-makers have entrusted the power of  legislation to the representatives of the people, so that the said power may be exercised not only in the name of the people but also by  the people speaking through their representatives.   The rule  against excessive delegation of legislative  authority flows  from and is a necessary postulate of the  sovereignty of  the  people.   The  rule contemplates  that  it  is  not permissible  to  substitute  in the  matter  of  legislative policy   the   views  of  individual   officers   or   other authorities, however competent they may be, for that of  the popular  ’will  as expressed by the representatives  of  the people.   As  observed on page 224 of Vol.   1  in  Cooley’s Constitutional Limitations, 8th Ed.                 "One of the settled maxims in constitutional               law  is,  that the power conferred  upon   the               legislature  to make laws cannot be  delegated               by  that department to      any other body  or               authority.   Where the sovereign power of  the               State has located the authority, there it must               remain; and by the constitutional agency  done               the laws must be Made until the constitution  891                    Itself  is  changed.  The  power  to  whose               judgment,  wisdom  and  patriotism  this  high               prerogative has been intrusted cannot  relieve               itself of the responsibility by choosingother               agencies   upon  which  the  power  shalt   be               devoted,  nor can it substitute the  judgment,

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             wisdom,  and patriotism of any other body  for               those  to which atom the people have seen  fit               to confide this sovereign. trust." According to John Locke when, parliamentary  representatives have  been chosen and the, authority to make laws  has  been delegated  to them,, they have no right, to  redelegate  it. As   against  that  Jeremy  Renthas  in.   The   Limits   of Jurisprudence  Defined  distinguishes  between  laws   which belong  to  the  legislator by conception,  being  his  work alone,  and laws which belong to him by  proadoption,  being the joint work of the legislator and the ’subordinate  power holder’.   In  the  latter case,  he  says,  the  legislator ’sketches out a sort of imperfect mandate which he leaves it to the subordinate holder to fill up’.  To economise its own time   and   to   take  advantage   of   export   skill   in administration, parliament is content to lay down principles and  to  leave  the  details  (frequently  experimental   or requiring constant adjustment in the light of experience) to some  responsible minister or public body. (see Foreword  by Sir  Cecil  Carr  to  Hewitt’s  The  Control  of   Delegated Legislation, 1953 Ed.). The  Constitution, as observed by this Court in the case  of Devi  Dass  Gopal Krishan v. State of  Punjab(1)  confers  a power and imposes duty on the legislature to make laws.  The essential  legislative function is the determination of  the legislative policy and its formulation as a rule of conduct. Obviously  it  cannot abdicate its functions  in  favour  of another.   But in view of the multifarious activities  of  a welfare,  State,  it  cannot presumably  work  out  all  the details  to suit the varying aspect of a complex  situation. It  must necessarily delegate the working out of details  to the  executive  or any other agency.  But  there  is  danger inherent in such a process of delegation.  An  over-burdened legislature  or one controlled by a powerful  executive  may unduly  overstep the limits of delegation.  It may  not  lay down  any policy at all; it may declare its policy in  vague and general terms, it may not set down any standard for  the guidance of the executive; it may confer an arbitrary  power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation.   This self effacement of legislative power  in favour  of  another  agency either in whole or  in  part  is beyond  the permissible limits of delegation.  It is  for  a Court  to hold on a fair, generous and liberal  construction of an impugned statute whether the legislature exceeded such limits. The  question as to the limits or permissible delegation  of legislative  power has arisen before this Court in a  number of  cases.   Those  cases were reviewed  at  length  in  the judgments  of  Wanchoo  CJ.  and Shah  J.  in  the  case  of Municipal  Corporation of Delhi v. Birla Mills  (supra)  and they summed up the conclusions or principles which had been (1)  AIR 1967 S.C, 1895. 892 established by those cases.  Those conclusions or principles have- already been reproduced above. The matter came up for the first time before, this Court  In re Delhi Laws Act, 1912.(1) Although each one of the learned Judges  who beard that case wrote a separate  judgment,  the view which emerged from the different judgments was that  it could not be said that an unlimited right of delegation  was inherent  in  the legislative power itself.   This  was  not warranted  by  the  provisions of  the  Constitution,  which vested  the  power of legislation either  in  Parliament  or State  legislatures.  The legitimacy of delegation  depended

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upon  its  being vested as an ancillary  measure  which  the legislature  considered to be necessary for the  purpose  of exercising   its   legislative   powers   effectively    and completely.   The legislature must retain in its  own  hands the   essential   legislative   function.    Exactly    what constituted  "essential legislative function" wag  difficult to define in general terms, but this much was clear that the essential  legislative  function must at  least  consist  of the,.,  determination  of  the legislative  policy  and  its formulation  as a binding rule of conduct.  Thus  where  the law  passed  by  the legislature  declares  the  legislative policy  and lays down the standard which is enacted  into  a rule   of  law,  it  can  leave  the  task  of   subordinate legislation  like, the making of rules, regulations or  bye- laws which by its very nature is ancillary to the statute to subordinate  bodies.  The subordinate authority must  do  so within the framework of the law which makes the  delegation, and  such subordinate legislation has to be consistent  with the  law  under which it is made and cannot  go  beyond  the limits of the policy and standard laid down in the law.   As long as the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should  not interfere  with the discretion that undoubtedly  rests  with the   legislature  itself  in  determining  the  extent   of delegation necessary in a particular case (see  observations of  Wanchoo CJ. in Municipal Corporation of Delhi  v.  Birla Mills, Supra). In Harishankar Bagla v. The State of Madhya Pradesh(2)  this Court  dealt  with the validity of clause 3  of  the  Cotton Textile (Control of Movement) Order, 1948 promulgated by the Central Government under section 3 of the Essential Supplies (Temporary   Powers)   Act,  1946.   While   upholding   the validity--of  the impugned clause, this Court observed  that the  legislature must declare the policy of the law and  the legal  principles which are to control any given  cases  and must  provide a standard to guide the officials or the  body in  power to execute the law, and where the legislature  has laid down such a principle in the Act and that principle  is the   maintenance  or  increase  in  supply   of   essential commodities  and  of  securing  equitable  distribution  and availability at given prices, the exercise of the power  was valid. In Pandit Banarsi Das Bhanot v. The State of Madhya  Pradesh &  ors. (supra) Venkatarama Aiyar J. speaking  for  majority observed (1) [1951] SCR 747.       (2) [1955] 1 SCR 380. 893               ".... the authorities are clear that it is not               unconstitutional for the legislature to  leave               it-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  laid, the rates at which it is  to  be               charged  in  respect of different  classes  of               goods, and the like." The learned Judge held that the power conferred on the State Government  by  section 6(2) of the  Central  Provinces  and Berar Sales Tax Act, 1947, to amend the Schedule relating to exemptions  was in consonance with the accepted  legislative practice relating to the topic and was not unconstitutional. In Vasantlal- Maganbhai Sanjanwala v. The State of Bombay  & Ors.(1)  the validity of section 6(2) of the Bombay  Tenancy and  Agricultural  Lands Act 67 of 1948 was  assailed.   The said  provision  authorised  the  Provincial  Government  by notification to fix a lower rate of the maximum rent payable

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by the tenants of lands situate in any particular area or to fix such rate on any other suitable basis as it thought fit. Gajendragadkar J. (as he than was) speaking for the majority observed that although the power of delegation was a consti- tuent element of legislative power, the, legislature, cannot delegate its essential legislative function in any case  and before it can delegate any subsidiary or ancillary powers to a delegate of its choice, it must lay down the’  legislative policy  and  principle so as to afford the  delegate  proper guidance in implementing the same. The views expressed by this Court in Corporation of Calcutta &  Anr.  v. Liberty Cinema (supra), B. Shama  Rao  v.  Union Territory of Pondicherry (supra) and Devi Dass Gopal Krishan v.  State  of Punjab (supra) have  already  been  reproduced above.  In Sita Ram Bishambhar Dayal & Ors. v. State of U.P. & Ors.,(2) this Court observed :               "It is true that the power to fix the rate  of               a  tax  is  a legislative  power  but  if  the               legislature  lays down the legislative  policy               and  provides the necessary. guidelines,  that               power can be delegated to the executive." It  would appear from the above that the view taken by  this Court in a long chain of authorities is that the legislature in   conferring  power  upon  another  authority   to   make subordinate  or ancillary legislation must lay down  policy, principle  or  standard for the guidance  of  the  authority concerned.   The said view has been affirmed by  Benches  of this  Court consisting of seven Judges., Nothing cogent,  in our  opinion, has been brought to our notice as may  justify departure  from the said view.  The binding effect  of  that view  cannot  be watered down by the opinion  of  a  writer, however  eminent he may be, nor by observations  in  foreign judgments,made  in  the context of the statutes  with  which they were dealing. (1) [1961] SCR 341.      (2) [1972] 2 SCR 141. 894 Regarding the subject of delegation, it has been observed on page  228 of Cooley’s Constitutional Limitations,  Vol.   I, 8th Edition               "The  maxim  that  power  conferred  upon  the               legislature  to make laws cannot be  delegated               to  any other authority does not preclude  the               legislature  from  delegating  any  power  not               legislative  which  it may  itself  rightfully               exercise.   It  may  confer  an  authority  in               relation  to the execution of a law which  may               involve discretion, but such authority must be               exercised under and in pursuance of the.  law.               The legislature must declare the policy of the               law and fix the legal principle-, which are to               control in given cases: but an  administrative               officer  or by may be invested with the  power               to  ascertain  the facts  and,  conditions  to               which  the  policy and principles  apply.   If               this could not be done there would be infinite               confusion  in the laws,, and in an  effort  to               detail  and to particularise, they would  miss               sufficiency both in provision and execution."               The matter has been dealt with on page 1637 of               Vol. ]it in ’Willoughby on the Constitution of               the   United  States,  2nd  Edition,  in   the               following words :               "The  qualifications to the  rule  prohibiting               the delegation of legislative power which have               been,  earlier  adverted to  are  those  which

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             provide  that while the real law-making  power               may   not   be  delegated,   a   discretionary               authority  may  be granted  to  executive  and               administrative authorities : (1) to  determine               in  specific  cases when and  how  the  powers               legislatively  conferred are to  be  exercised               and (2) to establish administrative rules  and               regulations,    binding   both   upon    their               subordinates  and upon the public,  fixing  in               detail the manner in which the requirements of               the  statutes  are to be met, and  the  rights               therein created to be enjoyed." The matter has also been dealt with in Corpus Juris Secundum Vol.  73, page 324.  It is stated there that the  law-making power  may  not be granted to an administrative body  to  be exercised  under  the guise  of  administrative  discretion. Accordingly, in delegating powers to an administrative  body with   respect  to  the  administration  of  statutes,   the legislature must ordinarily prescribe a policy, standard, or rule  for  their  guidance and must not vest  them  with  an arbitrary  and uncontrolled discretion with regard  thereto, and  a  statute  or ordinance which  is  deficient  in  this respect  is invalid.  In other words, in order to avoid  the pure  delegation of legislative power by the creation of  an administrative  agency, the legislature must set  limits  on such  agency’s  power and enjoin on it a certain  course  of procedure  and rule-. of decision in the performance of  its function;  and, if the legislature fails to  prescribe  with reasonable  clarity  the  limits of power  delegated  to  an administrative agency, or if those limits are too broad, its attempt to delegate is a nullity. We  are  also unable to subscribe to the view  that  if  the legislature can repeal an enactment, as it normally can,  it retains enough control 895 over  the authority making the subordinate legislation  and, as such, it is not necessary for the legislature to lay down legislative  policy, standard or guidelines in the  statute. The acceptance of this view would lead to startling results. Supposing the Parliament tomorrow enacts that as. the  crime situation  in the country has deteriorated, criminal law  to be  enforced in the country from a particular date would  be such as is framed by an officer mentioned in the  enactment. Can  it be said that there has been no excessive  delegation of  legislative, power even though the Parliament  omits  to lay down in the statute any guideline or legislative  policy for  the making of such criminal law ? The vice of  such  an enactment  cannot, in our opinion, be ignored or lost  sight of on the ground that if the Parliament does not approve the law  made  by  the  officer concerned,  it  can  repeal  the enactment  by which that officer was authorised to make  the law. Reference  has  been made to the decision  of  the  Judicial Committee  in the case of Cobb & Co. Ltd. & Ors.  v.  Norman Eggert  Kropp(1).   The  appellant companies  in  that  case brought two actions against the Commissioner for  Transport, who  was  the  nominal  defendant  for  the  Government   of Queens-land.   The  first action was for repayment  of  fees levied  under  the State Transport Facilities  Act  for  the carriage of goods and passengers on motor vehicles  operated by  the appellants in the State of Queens-land.  The  second action  was  for repayment of fees levied  under  the  State Transport Act for the same purposes as in the first  action. The appellants challenged the validity of the legislation in both the actions.  The respondent conceded that the  licence

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fees were an imposition of taxation, which would be  illegal and  void if not done with the authority of  Parliament  but contended  that  the two Acts were  within  the  legislative competence  of  the queens-land legislature.   The  Judicial Committee held that the power of the Queens-land legislature to  legislate for the peace welfare and good  government  of the  state was full and plenary within certain  limits.   It was further held that the Queer legislature was entitled  to use  any  agent or any subordinate agency or  any  machinery that they considered appropriate for carrying out the object and  the  purposes  that they had in  mind  and  which  they designated.  The legislature, it was observed, was  entitled to use the Commissioner for Transport as their instrument to fix  and recover the licence and permit fees, provided  they preserved  their  own capacity intact and  retained  perfect control  over him.  In this context, the Judicial  Committee observed :               "In  their  Lordships’  view  the  Queens-land               legislature    were   fully    warranted    in               legislating in the terms of the Transport Acts               now  being considered.  They  preserved  their               own capacity intact and they retained  perfect               control  over the Commissioner  for  Transport               inasmuch as they could at any time repeal  the               legislation  and withdraw such  authority  and               discretion  as  they had vested  in  him.   It               cannot be asserted that there was a levying of               money by presence or prerogative               (1) [1967] AC 141.               -748SCI/74               896               without   grant  of  Parliament   or   without               parliamentary warrant."               Reference  in  the above observations  to  the               retention    of   control   and   repeal    of               legislation,  in our opinion, should be  taken               to be in the context of the overall effect  of               the  impugned legislation.  The effect of  the               impugned  legislation  had  been  brought  out               clearly  in the judgment of Stable J. and  the               Judicial  Committee quoted with  approval  the               following passage from that judgment               "The Commissioner has not been given any power               to  act  outside  the  law  as  laid  down  by               Parliament.  Parliament has not abdicated from               any  of  its own power.  It has  laid  down  a               framework,  a set of bounds, within which  the               person   holding   the   office   created   by               Parliament   may   grant,  or   retrain   from               collecting fees which are taxes. The   above  passage  shows  that  the  Judicial   Committee expressly   book-note  of  the  fact  that   the,   impugned legislation  had laid down the framework and set  of  bounds within  which the authority holding office could  act.   The above  case,  cannot,  therefore, be an  authority  for  the proposition  that it is not necessary for the Parliament  to lay down a framework and set of bounds within which a person authorised by an enactment could act. We  have  been referred to the literal meaning of  the  word "abdication"  and  it  has  been argued  that  even  if  the legislature  does  not lay down any  guidelines,  policy  or standard for the guidance, of the authority to whom it gives the  power  of  making  subordinate  legislation,  it   (the legislature)  does ;not abdicate its function as long as  it retains  the power to repeal the statute giving that  power.

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What  is the exact connotation of the word "abdication"  and whether there is proper use of the word "abdication" if  the legislature, retains the right of repealing the law by which uncanalised  and  unguided power is conferred  upon  another body for making subordinate legislation are questions  which may  have  some  attraction for literary  purists  or  those indulging  in sonantic niceties; they cannot, in  our  view, detract  from the principle which has been well  established in  a  long  chain of authorities- of this  Court  that  the legislature  must  lay down the  guidelines,  principles  or policy  for the authority to whom power to make  subordinate legislation  is entrusted.  The correct position of law,  if we  may say so with all respect, is what was  enunciated  by Mukherjea J. inthe  Delhi Laws Act case (supra).   Said the learned Judge                 "It  cannot be said that an unlimited  right               of  delegation is inherent in the  legislative               power  itself.  This is not warranted  by  the               provisions   of  the  Constitution   and   the               legitimacy of delegation depends entirely upon               its  being used as an ancillary measure  which               the legislature considers to be necessary  for               the  purpose  of  exercising  its  legislative               powers   effectively  and   completely.    The               legislature  must retain in its own hands  the               essential legislative functions which  consist               in declaring the legislative policy and laying               down the standard which is to be enacted  into               a rule of               897               law, and what can be delegated is the task  of               subordinate  legislation  which  by  its  very               nature  is  ancillary  to  the  statute  which               delegates the power to make it.  Provided  the               legislative   policy   is   enunciated    with               sufficient  clearness or a standard laid  down               the  courts  cannot and should  not  interfere               with  the  discretion that  undoubtedly  rests               with the legislature itself in determining the               extent of delegation necessary in a particular               case." As a result of the above, we hold that section 8 (2) (b)  of the  Central Sales Tax Act does not suffer from the vice  of abdication  or  excessive delegation of  legislative  power. The appeals fail and are dismissed with costs.  One  hearing fee. MATHEW,  J.-These  appeals  are preferred on  the  basis  of certificates  granted  by the High Court of  Madhya  Pradesh under article 133 (1) (c) of the Constitution from a  common judgment  of that Court holding that the provisions of s.  8 (2)  (b)  of the Central Sales Tax  Act,  1956  (hereinafter referred  to  as  the Act) do not suffer from  the  vice  of excessive delegation and are therefore immune from attack on the  ground  that  Parliament has  abdicated  its  essential legislative function in enacting them. Mr.  A. K. Sen appearing for the appellants  submitted  that Parliament,  by  enacting  s.  8(2)(b)  has  delegated   its legislative function to fix the rate of tax leviable on  the turnover  of  sales of goods in the  course  of  inter-State trade  coming within the purview of the sub-clause  and  has abdicated  its legislative function in so far as it  adopted the  rate that might be. fixed in the sales tax law  of  the appropriate  State  from time to time for taxing  the  local sales.  Counsel submitted that fixing the rate of tax is  an essential legislative function and that this function cannot

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be delegated without laying down the legislative policy  for the guidance of the delegate.  In support of this contention council  referred  to  the decisions of this  Court  on  the subject. In Corporation of Calcutta and Another v. Liberty Cinema,(1) the  validity  of s. 548(2) of the Calcutta  Municipal  Act, 1951, which empowered the Corporation to levy fees "at  such rates as may from time to time be fixed by the  Corporation" was  challenged on the ground of excessive delegation as  it provided  no guidance for the fixation of the  amount.   The majority  upheld the provision relaying on the  decision  in Banarsidas v. State of Madhya Pradesh ( 2 ) holding that the fixation of rates of tax not being an essential  legislative function,  could be validly delegated to  a  non-legislative body, but observed that when it was left to such a body, the legislature  must provide guidance for such  fixation.   The Court  found  the  guidance in the  monetary  needs  of  the Corporation for carrying out the functions entrusted to it under the Act. (1)[1965] 2 I. C. R. 477. (2) [1959] S.C.R. 427. 898 In  Municipal  Board, Hapur v. Raghuvendra  Kripal(1),  ’the validity of the U.P. Municipalities Act, 1916, was involved. The Act had empowered the municipalities to fix the rate  of tax  and  after having enumerated the kinds of taxes  to  be levied,  prescribed an elaborate procedure for such  a  levy and  also  provided  for the  sanction  of  the  Government. Section  135(3) of the Act raised a  conclusive  presumption that  the  procedure prescribed had been gone through  on  a certain notification being issued by the Government in  that regard.   This provision, it was contended, was ultra  vires because  there  was an abdication of  essential  legislative functions by the legislature with respect to the  imposition of tax inasmuch, as the State Government was given the power to condone the breaches of the Act and to set at naught  the Act  itself.   This,  it  was  contended,  was  an  indirect exempting  or dispensing power.  Hidayatullah, J.,  speaking for  the  majority,  said  that  regard  being  had  to  the democratic  set-up  of  the municipalities  which  need  the proceeds of these taxes for their own administration, ;at is proper to leave to these municipalities the power to  impose and  collect these taxes.  He further said that  apart  from the  fact that the Board was- a representative body  of  the local  population  on whom the tax was  levied,  there  were other safeguards by way of checks and controls by Government which could veto the action of the Board in case it did  not carry out the mandate of the legislature. In  Devi  Das  Gopalkrishnan  v.  State  of  Punjab(2),  the question  was whether s. 5 of the East Punjab General  Sales Tax  Act, 1948, which empowered the State Government to  fix sales  tax  at such rates as it thought fit  was  bad.   The Court  struck  down  the  section on  the  ground  that  the legislature  did not lay down any policy or guidance to  the executive  in  the matter of fixation of rates.   Subba  Rao C.J., speaking for the Court, pointed out that the needs  of the  State  and the purposes of the Act  would  not  provide sufficient  guidance for the fixation of rates of  tax.   He pointed out the danger inherent in the process of delegation               "Art    overburdened   legislature   or    one               controlled by a powerful executive may  unduly               overstep the limits of delegation.  It may not               lay  down  any policy at all; it may  not  set               down  any  standard for the  guidance  of  the               executive; it may confer an arbitrary power on

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             the  executive to change or modify the  policy               laid  down by it without reserving for  itself               any  control  over  subordinate   legislation.               This  self-effacement of legislative power  in               favour of another agency either in whole or in               part is beyond the permissible limits of dele-               gation." In  Municipal  Corporation  of Delhi  v.  Birla  Cotton  and Spinning  and Weaving Mills(3), the main question was  about the  constitutionality  of delegation of  taxing  powers  to Municipal Corporations.  The Delhi Municipal Corporation Act (66 of 1957), by S. 113(2) had empowered the Corporation  to levy certain optional taxes.  Under s. 150, (1) [1966] 1 S.C.R. 950.    (2) [1967] 3 S.C.R. 557. (3)  [1968] 3 S.C.R. 251. 899      power  was  given  to the  Corporation  to  define  the maximum rate of tax to-be levied, the classes of persons and the  description of articles and property to be  taxed,  the system  of assessment to be adopted and the  exemptions,  if any,  to  be granted.  The majority of the  Court  held  the delegation  to be valid.  Wanchoo C.J. observed  that  there were  sufficient guidance, checks and safeguards in the  Act which  prevented  excessive delegation.  The  learned  Chief Justice  observed that state merits in certain cases to  the effect  that  the  power to fix rates of  taxes  is  not  an essential legislative function were too broad and that  "the nature  of  the body to which delegation is made is  also  a factor to be taken into consideration in determining whether there  is sufficient guidance in the matter of  delegation". According  to  the  learned Chief  Justice,  the  fact  that delegation  was made to an elected. body responsible to  the people including those who paid taxes provided a great check on  the elected councillors imposing unreasonable  rates  of tax.  He then said :               "The  guidance may take the form of  providing               maximum  rates of tax upto which a local  body               may  be  given  the  discretion  to  make  its               choice,  or it may take the form of  providing               for consultation with the people of the  local               areas  and  then fixing the rates  after  such               consultation.   It may also take the  form  of               ’subjecting the rate to be fixed by the  local               body to the approval of Government which  acts               as a watchdog on the actions of the local body               in  this matter on behalf of the  legislature.               There may be other ways in which guidance  may               be provided".               In  Sita  Ram  Bishambher Dayal  v.  State  of               U.P.(1), s..3-D(1) of the U.P. Sales Tax  Act,               1948,  had provided for levying taxes at  such               rates  as  may  be  prescribed  by  the  State               Government    not   exceeding   the    maximum               prescribed  therein.  Hegde, J.  speaking  for               the Court, observed :               "However  much  one  might  deplore  the  "New               Despotism"   of   the  executive,   the   very               complexity  of  the  modern  society  and  the               demand it makes on its Government have set  in               motion  forces which have made  it  absolutely               necessary for the legislatures to entrust more               and  more powers to the executive.  Text  book               doctrines  evolved  in the 19th  Century  have               become out of date". In this context it is necessary to have a clear idea of  the

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concept  of  delegation.   Delegation is  not  the  complete handing  over or transference of a power from one person  or body  of persons to another.  Delegation may be  defined  as the  entrusting,  by  a person or body of  persons,  of  the exercise  of  a  power residing in that person  or  body  of persons, to another person or body of persons, with complete power of revocation or amendment remaining in the grantor or delegator.    It is important to grasp the  implications  of this,  for,  much  confusion of  thought  had  unfortunately resulted from assuming that, (1) [1972] 2 S.C.R. 141, 900 delegation involves, or may involve the complete  abdication or  abrogation  of  a  power.   This  is  precluded  by  the definition,.   Delegation  often involves  the  granting  of discretionary  authority to another, but inch  authority  is purely  derivative.  The, ultimate power always  remains  in the delegator and is never renounced. Willis, J. said in Huth v. Clarke,(1)               Delegation,  as  the word is  generally  used,               does  not imply a parting with powers  by  the               person  who grants the delegation, but  points               rather to the conferring of an authority to do               things which otherwise that person would  have               to  do  himself.  It is never  used  by  legal               writers,  so  far as I am aware,  as  implying               that  the  delegating person  parts  with  his               power in such a manner as to denude himself of               his rights". See also John Willis, "Delegates non protest delegate" (2) If  this  essential nature of the concept of  delegation  is kept  in  mind,  it  is  not  difficult  to  understand  the principle  of  the  leading decisions  on  the  question  of delegation   of   legislative  power  and  the   theory   of abdication. In Hedge v. The Queen(3), the Privy Council said that s.  92 of the British North America Act conferred powers not in any sense to be exercised by delegation from or as agents of the Imperial  Parliament, but authority as plenary and as  ample within  the  limits  prescribed by s.  92  as  the  Imperial Parliament in the plenitude of its power possessed and could bestow  and that, within these limits of subjects  and  area the local legislature is supreme, and has the same authority as  the  Imperial  Parliament,  or  the  Parliament  of  the Dominion would have had under like circumstances to  confide to  a  municipal  institution or body of  its  own  creation authority  to  make by-laws or resolutions  as  to  subjects specified in the enactment, and with the object of  carrying the enactment into operation and effect. The  main argument in the case was that the delegation of  a power  to make regulation ancillary to legislation might  be intra  vires  but  for  a legislature  to  pass  a  skeleton legislation and to empower the Government to clothe the bare bones  was  not  delegation but abdication,  as  that  would create  and  endow with its own capacity a  new  legislative power not created by the British North America Act to  which it owes its existence. In 1918, nearly forty years after Hedge v. The Queen(3), "he theory of "abdication" was raised in In re Gray(4) where the Supreme Court of Kanada upheld an Act but the judges did not agree in heir reasoning for so holding.  The Act was  called the  "Dominion  War  Measures  Act"  which,  empowered   the Governor-General  to  make "such regulations as  he  may  by reason of the existence of real or (1)  [1890] 25Q.B.D.391,395.

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(2)  21 Canadian Bar Review 257. (3)  [1883] 9 A.C.117. (4)  57 S.R.C. 150. 901      apprehended  war  deem necessary or advisable  for  the security, defence, peace, order add welfare of Canada".  The argument  was that the legislation  transferred  legislative power  of  Dominion Parliament to the  executive  authority. Anglin,  J.  thought  that the  British  North  America  Act forbade  "complete"  abdication but obviously gave  to  that phrase a very narrow meaning; for he went on to describe  it as "something so inconceivable that the constitutionality of an  attempt  to  do  anything  of  the  kind  need  not   be considered" and expressly said that the Dominion  Parliament had   as  much  authority  to  delegate  as   the   Imperial Parliament.    Duff,,  J.  also  thought  that  an   implied prohibition against "abandonment" must be read into the Act; but  for  him no delegation of  legislative  power,  however extensive,   would  amount  to  "abandonment",   since   the executive in making the regulations is no more than an agent of  the legislature which can always recall  its  authority. For him the forbidden point of "abandonment" is not  reached until there is, on the part of the legislature, an intention to  abandon control over the executive or an abandonment  of control in fact.  Despite these differences of opinion, the, judges  agreed in holding that there was  no  constitutional objection to the extremely extensive delegation contemplated by the Act, and in giving a very narrow meaning to the  word "abdication". Unfortunately,  In  re  Gray  was a  wartime  case  and  the profession tends to regard wartime cases with a cynical  but natural suspicion. In re initiative and Referendum Act(1) Viscount Haldane said that by s. 92 of the British North America Act,  legislative power  in a province is conferred only upon its  legislature and went on to make a statement which has often been quoted               "No doubt a body, with a power of  legislation               on  the subjects entrusted to it so  ample  as               that  enjoyed by a Provincial  Legislature  in               Canada   could,  while  preserving   its   own               capacity  intact’,  seek  the  assistance   of               subordinate agencies as in Hodde v. The  Queen               (supra)  (but) it does not follow that it  can               create  and endow with its own capacity a  new               legislative  power not created by the  Act  to               which it owes its own existence."               In  Shannon v. Lower Mainland  Dairy  Products               Board(2),  the usual objection was  made  that               "in  the present case there is  practically  a               surrender by the provincial Legislature of its               legislative  responsibility to  another  body"               and as usual Lord Haldane’s dictum was  cited.               The  Privy  Council did not even call  on  the               Attorney  General for British Columbia for  an               answer  and  dealt with the objection  in  the               following pithy sentences of Lord Atkin               "Within  its appointed sphere  the  Provincial               Legislature   is  as  supreme  as  any   other               Parliament;  and it is unnecessary to  try  to               enumerate  the innumerable occasions on  which               Legislatures,    Provincial,   Dominion    and               imperial, have               (1)  [1919] A.C. 935.       (2)   [1938]  A.C.               P.C. 708               902

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             entrusted  various  persons  and  bodies  with               similar  powers to A those contained  in  this               Act. Now  it  is well known that the English Parliament  may,  by legislation, give to anybody of its own, choosing, the power to modify or add to a given Act of Parliament (the  legality of  all  English  statutory rules and  orders  derives  from this). In  R. v. Burah(1), the Privy Council held that  the  Indian Legislature  was  in no sense an agent or  delegate  of  the British  Parliament, that within the limits of  its  powers, the Indian legislature had plenary powers of legislation  as wide  and  of  the  same nature  as  those  of  the  British Parliament,  and  that  the plenary  powers  of  legislation carried  with  them the power to’  legislate  absolutely  or conditionally.   The  Privy  Council did not  require  as  a prerequisite to a valid delegation of legislative power that the  law must lay down a policy or standard; nor did it’  do so,  in  any other case of delegated  legislation.   Indeed, such  a requirement is opposed to the principle affirmed  by it   that  within  the  limits  of  their   powers,   Indian legislatures  had, and were intended to have plenary  powers of  legislation  as large, and of the same  nature,  as  the British  Parliament itself.  And as already stated,  it  has never been doubted that the British Parliament can  delegate legislative  powers  without  laying  down  any  policy   or standard for guidance. In In re the Delhi Laws Act, 1912, etc.(2), the question was elaborately  dealt  with and all the  relevant  ruling  were considered  but  it  is difficult  to  extract  any  binding principle  from  that  decision.  While  dealing  with  this decision  in Kathi Ranging Ravat v. State  of  Saurashtra(3) Patanjali Sastri, C.J. said               "While     undoubtedly    certain     definite               conclusions  were reached by the  majority  of               the  judges who took part in the  decision  in               this   regard  to  the  constitutionality   of               certain specified enactments, the reasoning in               each case was different and it is difficult to               say  that  any particular principle  has  been               laid  down  by the majority which  can  be  of               assistance  in  the  determination  of   other               cases."               But  that decision is generally held  to  have               laid  down the principle that the  legislature               should not abdicate its essential  legislative               function  by transferring it and  thus  efface               itself.               In  Municipal  Corporation of Delhi  v.  Birla               Cotton and Spinning and Weaving Mills  (supra)               already  referred  to, Sikri, J. (as  he  then               was), in his concurring judgment took the view               that  there was "adequate guide or  policy  in               the  expression  ’purposes of the Act’  in  s.               113" but that it was not necessary to rely  on               the safeguards mentioned by Wanchoo, C. J.  in               his  judgment to sustain the  delegation.   He               said               "Apart from authority, in MY view,  Parliament               has   full  power  to   delegate   legislative               authority to subordinate bodies.               (1)  [1878]  5 I.A. 178.   (2)  [1951]  S.C.R.               747.               (3)   [1952] S.C.R, 435,444.               903

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             This power flows, in my judgment, from article               246 of the Constitution.  The word ’exclusive’               means exclusive of any other subordinate body.               There  is,  however, one restriction  in  this               respect  and  that is also contained  in  Art.               246.   Parliament must pass a law. in  respect               of  an  item or items of  the  relevant  list.               Negatively, this means that Parliament can not               abdicate  its functions.  It seems to me  that               this  was  the  position  under  the   various               Government of India Acts and the  Constitution               has  made  no difference in this  respect.   I               read (1883) 9 A.C. 117 and (1885) 10 A.C.  282               as  laying down that legislatures like  Indian               legislatures   had  full  power  to   delegate               legislative  authority to subordinate  bodies.               In the judgments in these cases no such  words               as   ’policy’,  standard’  or   ’guidance   is               mentioned."               In  Lichter v. United States(1),  the  Supreme               Court upheld the validity of the Renegotiation               Act.  That Act provided for the  renegotiation               of war contracts and authorised administrative               officers   to  recover  profits   which   they               determined to be excessive; such profits being               defined to mean "any amount of a contract or a               sub-contract price which is found as a  result               of   renegotiation  to   represent   excessive               profits"  which  means, in  other  words  that               excessive profits mean excessive profits.  The               Court repelled the challenge on the ground  of               delegated legislation by saying               "It  is  not necessary  that  Congress  supply               administrative   officials  with  a   specific               formula  for their guidance in a  field  where               flexibility   and   the  adaptation   of   the               congressional  policy to  infinitely  variable               conditions  constitute  the  essence  of   the               program.    The  statutory  terms   "excessive               profits"  in  the  context  Was  a  sufficient               expression of legislative policy and standards               to render it constitutional".               The position so far as U.S.A. is concerned has               been summarized by Schwartz(2) :               ". . . . If standards such as those  contained               in  the Renegotiation and Communications  Acts               are  upheld as adequate, it  becomes  apparent               that  the requirement of standards has  become               more   a  matter  of  form   than   substance.               Provided  that there is no abdication  of  the               Congressional  function, as there was  in  the               Schechter  Case,  the  enabling  law  will  be               upheld,  even though the only  standard  which               the Court can find is so broad as to be almost               illusory". The position in Australia is also practically the same.   In Victorian Srevedoring and General Contracting Co. Pvt.  Ltd. v.  Dignan(3)  :  Dixon,  J.  said  that  the  objection  to delegation of legislative power was not based on the  ground that  the  doctrine  of separation of  powers  forbade  such delegation.  He said that when in Huddart Parker Ltd. v (1) 334 U.S. 742.  (2) "American Administrative Law", 2nd ed., pp. 41-42. (3) [1931] 46 C.L.R. 73. 904

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Commonwealth(1)  the judges answered the  objection  against delegation  of legislative power by observing that Roche  v. Kronheimer (2) upheld the validity of such a delegation,  it really meant that the time had gone by for assigning to  the separation  of  powers in the Australian  Constitution,  the effect   of  restraining  Parliament  from  making   a   law conferring the power of an essentially legislative character on   the   executive  While  logically   or   theoretically, legislative  power exclusively to Parliament, the  power  of Parliament  to authorise subordinate legislation  was  based more  upon  the  usages of British legislation  and  to  the theory of English Law and whatever may be the rationale, the decision  in  Roche  v.  Kronheimer  (2)  must  be  to.  And according   to  that  judgment  "the  true  view   is   that legislative   power   in  itself  includes  the   power   of delegation"  (see  also  Wynes,  Legislative,  Judicial  and Executive Powers". 4th ed. 118). In  the ultimate analysis, what is prohibited, according  to Chief Justice Subba Rao in Devi Das Gopal Krishnan v.  State of,  Punjab (supra) is the conferment of arbitrary power  by the legislature upon a subordinate body without reserving to itself  control  over that body and the  self-effacement  of legislative  power  in favour of another  agency  either  in whole  or in part.  In other words, the  legislature  should not  abdicate  its essential function.  The question  to  be asked and answered then is. when does a legislature abdicate its legislative function The concept of ’abdication seems no less vague,  fluctuating and  uncertain  than  the  "transfer  to  others  (of)   the essential legislative functions" banned by the Supreme Court of the United States In the Panama Refining Co. v.  Ryan(3). To Lord Haldane, a legislature does not ’abdicate’ unless it withdraws  from the field and surrenders its  responsibility therefore.   But  in the eyes of some  other  judges,  there seems  to  be  ’abdication’ whenever  a  legislature,  while remaining  in  the field and  retaining  its  responsibility therefore  entrusts  to  others the  formulation  of  policy otherwise than with a definite standard or purpose laid down by it. In  In re the Delhi Laws Act, 1912 etc. (supra) Kania,  C.J. said  that  if  full  powers  to  do  everything  that   the legislature can do are conferred on a subordinate authority, although  the legislature retains the power to  control  the action  of subordinate authority by recalling such power  or repealing  the  Acts passed by  the  subordinate  authority, there  is  no abdication or effacement  of  the  legislature conferring such power.  Fazl Ali, J. observed that there are only  two  main checks in this country on the power  of  the legislature to delegate, these being its good sense and, the principle  that  it should not cross the line  beyond  which delegation  amounts  to  "abdication  and  self-effacement". Patanjali  Sastri,  J. was of the view  that  delegation  of legislative  authority is different from the creation) of  a new  legislative power.  In the former, the delegating  body does  not  efface itself but retains its  legislative  power intact and (1)  [1931] 44 C.L.R. 49). (2) [1921] 29 C.L.R. 329. (3) 293 U.S. 388, 421. 905 merely  elects to exercise such power through an  agency  or instrumentality  of its choice.  In the latter there is  ’no delegation  of  power to subordinate units but  a  grant  of power  to  an independent and coordinate body to  make  laws operative  of  their own force.  For the  first  no  express

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provision authorities delegation is required. in the absence of  a constitutional inhibition, delegation  of  legislative power,  however  extensive,  could be made so  long  as  the delegating  body retains its own legislative  power  intact. Mahajan,  J. was of the opinion that the legislature  cannot substitute the judgment, wisdom and patriotism of any  other body,  for those to which alone the people have seen fit  to confide  this sovereign trust and that the view that  unless expressly  prohibited a legislature has a general  power  to delegate   its  legislative  functions  to   a   subordinate authority  is  not  supported  by  authority  or  principle. Mukherjea,  J. took the view that it cannot be said that  an unlimited right of delegation is inherent in the legislative power  itself  and the legislature must retain  in  its  own hands  the essential legislative functions which consist  in declaring  the  legislative  policy  and  laying  down   the standard  which is to be enacted into a rule of  law.   Das, said  that  the power of delegation is  necessary  for,  and ancillary  to,  the exercise of legislative power and  is  a component  part  of it.  The only  qualification  upon  the, power  to delegate is that the legislature may not,  without reserving its own capacity intact, create and endow with its own  capacity  a  new  legislative  power  not  created   or authorise by the Act to which it owes its existence.   Bose, J.  said that the Indian Parliament can legislate along  the lines Queen v.  Burah (supra), that is to say, it can  leave to another person or body the introduction or application of laws  which are or may be in existence at that time  in  any part of India which is subject to the legislative control of Parliament. In Cobb & Co. Ltd. v, Kroop(1), the question was whether the Queensland  legislature had legislative authority under  the impugned Acts to invest the Commissioner for Transport  with power  to impose and levy licence and permit fees.   It  was not disputed before their Lordships that fees imposed are to be  regarded as constituting taxation.  Accordingly, it  was contended  that the legislature had abdicated its  exclusive power  of  levying taxation.  The Privy  Council  held  that Queensland  Legislature  was entitled to use  any  agent  or subordinate  agency  and any machinery  that  it  considered appropriate  for  carrying out the object and  the  purposes that they had in mind and which they designated, and to  use the Commissioner for Transport as its instrument to fix  and recover  the licence and permit fees, provided it  preserved its  own capacity intact and retained perfect  control  over him; that as it could at any time repeal the legislation and withdraw  such authority and discretion as it had vested  in him,  it  had  not assigned, transferred  or  abrogated  its sovereign  power  to  levy taxes, nor had  it  renounced  or abdicated its responsibilities in favour of a newly  created legislative  authority and, that, accordingly, the two  Acts were valid.  Lord Morris of Borth-y-Gest said :               "What  they (the legislature) created by  the,               passing  of  the  Transport  Acts  could   not               reasonably be described as a new               (1)   [1967] 1 A.C. 141.               906               legislative power or separate legislative body               armed with general legislative authority  (see               R  V.  Burah,  3  A.C.  889).   Nor  did  the.               Queensland legislature "create and endow  with               its  own capacity a new legislative power  not               created  by the Act to which it owes  its  own               existence"  (see  In  re  the  Initiative  and               Referendum Act, 1919 A.C. 935, 945)

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             The point to be emphasised and this is  rather               crucial-is  the statement of  their  Lordships               that  the legislature preserved its  capacity’               intact  and retained perfect control over  the               Commissioner  for Transport in as much  as  it               could  at any time repeal the legislation  and               withdraw  the authority and discretion it  had               vested in him and, therefore, the  legislature               did not abdicate its functions.               Duff, J. $aid In re Gray (supra)               "There   is  no  attempt  to  substitute   the               executive  for  Parliament  in  the  sense  of               disturbing    the    existing    balance    of               constitutional authority.  The powers  granted               could at any time be revoked and anything done               under  them  nullified by  Parliament,,  which               Parliament did not, and for that matter  could               not,  abandon  any  of  its  own   legislative               jurisdiction". Delegation  of ’law making’ power, it has been said, is  the dynamo of modern Government.  Delegation by the  legislature is necessary in order that the exertion of legislative power does  not  become  a futility.  Today,  while  theory  still affirms  legislative  supremacy, we see power  flowing  back increasingly  to the executive.  Departure from  the  tradi- tional  rationalization of the status quo arouses  distrust. The   legislature  comprises  a  broader  cross-section   of interests  than  any one administrative organ;  it  is  less likely to be captured by particular interests.  We must not, therefore, lightly say that here can be a transfer of legis- lative  power  under the guise of  di-legation  which  would tantamount  to  abdication.  At the same time,  we  must  be aware of the practical reality, and that is, that Parliament cannot  go  into all legislative matters.  The  doctrine  of abdication expresses a fundamental democratic concept but at the  same time we should not insist that law-making as  such is  the exclusive province of the legislature.  The  aim  of government is to gain acceptance for objectives demonstrated as desirable and to realize them as fully as possible.   The making  of law is only a means to achieve a purpose.  It  is not  an  end  in itself.  That end can be  attained  by  the legislature making the law.  But many topics or subjects  of legislation pre such that they require expertise,  technical knowledge   and  a  degree  of  adaptability   to   changing situations   which   parliament  might  not   possess   and, therefore,   this  end  is  better  secured   by   extensive delegation  of legislative power.  The  legislative  process would frequently bog down if a legislature were required  to appraise  before  hand  the myriad situations  to  which  it wishes  a particular policy to be applied and  to  formulate specific  rules for each situation.  The presence  of  Henry VIII  clause  in many of the statutes is a  pointer  to  the necessity  of extensive delegation.  The hunt by  court  for legislative policy or guidance in the crevices of a statute, or  the nook and cranny of its preamble is not  an  edifying spectacle.  It is not                             907 clear  what difference does it make in principle  by  saying that  since the delegation is to a representative body  that Would be a guarantee that the delegate will not exercise the power  unreasonably,  for, if ex hypothesi  the  legislature must  perform  the  essential legislative  function,  it  is certainly no consolation, it the body to which the  function has been delegated has a representative character.  In other words,  if no guidance is provided or policy laid down,  the

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fact that the delegate has a representative character  could make no difference in principle. Seeing  that  by s. 8(2) (b) of the Act Parliament  has  not delegated any power to the State legislatures ’the  question is: ’Has Parliament abdicated its legislative function, when it’  chose  to  adopt the rate to, be  fixed  by  the  State legislatures for taxing local sales ? Counsel said that when the State legislature makes its sales tax law or amends or alters it from time to time it does not act  as  delegate  of Parliament.  It acts  as  a  sovereign legislature  with plenary powers of legislation  within  its sphere  and  while  legislating in that sphere,  it  is  not subject to any guidance or control, from any outside  agency including the Parliament, and, the rates of tax which may be fixed  by  the State Legislature from time  to  time  would, therefore,  be,  rates  for taxing the  local  sales  having nothing  to  do  with  the  formulation  of  any  policy  by Parliament and, Parliament would be adopting those rates for the Central tax even without being aware of what those rates might  be when fixed in future.  Counsel relied  heavily  on Shama Rao v. Pondicherry(1) in support of this submission. In  that  case,  the  legislative  assembly  for  the  Union Territory  of  Pondicherry passed  the  Pondicherry  General Sales  Tax Act (10 of 1965) which was published on June  30, 1965  Section  1(2) of the Act provided that it  would  come into  force on such date as the PondiCherry Government  may, by  notification,  appoint, and s. 2(1)  provided  that  the Madras General Sales Tax Act, 1959, as in force in the State of Madras immediately before the commencement of the  Pondi- cherry  Act,  shall be extended to  Pondicherry  subject  to certain   modifications,  one  of  which  related   to   the constitution  of  the  Appellate  Tribunal.   The  Act  also enacted  a  Schedule, giving the description of  goods,  the point  of levy and the rates of tax.  The  Pondicherry  Gov- ernment  issued a notification on March 1, 1966,  appointing April  1, 1966, as the date of commencement.  Prior  to  the issue  of  the  notification,  the  Madras  legislature  had amended  the Madras Act and consequently it was  the  Madras Act  as amended upto April 1, 1966, which was  brought  into force in Pondicherry.  When the Act had come into force, the petitioner was served with a notice to register himself as a dealer  and he thereupon filed a writ  petition  challenging the validity of the Act.  After the petition was filed,  the Pondicherry Legislature passed the Pondicherry General Sales Tax  (Amendment)  Act (13 of 1966) whereby s.  1(2)  of  the principal Act was amended to read that the latter Act "shalt come into force on the 1st day of April, 1966"; it was  also provided  that  all  taxes  levied  or  collected  and   all proceedings (1)  [1967] 2 S.C.R. 650. 908 taken  and  things done were to be, deemed valid as  if  the principal  Act as amended had been in force at all  material times. The  Court,  by  a  majority,  held  that  the   Pondicherry legislature  not only adopted the Madras Act as it stood  at the  date  when it passed the principal Act, but  in  effect also  enacted that if the Madras Legislature were  to  amend its  Act  prior  to the notification  of  its  extension  to Pondicherry,  it would be the amended Act that would  apply; that  the  legislature at that stage, could  not  anticipate that  the  Madras  Act would not be  amended  nor  could  it predicate  what amendments would be carried out  or  whether they would be of a sweeping character or whether they  would be suitable in Pondicherry and that, the result was that the

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Pondicherry  Legislature accepted the amended Act though  it was  not and could not be aware what the provisions  of  the amended  Act would be.  There was, in  these  circumstances, the Court said, I total surrender in the matter of sales tax legislation  by  the Pondicherry Assembly in favour  of  the Madras Legislature.  The Court referred with approval the of quoted  dictum  of  Lord Haldane in  In  re  Initiative  and Referendum  Act  (supra)  that      the  legislature  of   a province  in Canada could not create and endow with its  own capacity  a new legislative power not created by the Act  to which it owed its own existence and the passage from  Cooley on "Constitutional Law", 4th ed. 138, to the effect :               "This high prerogative have been entrusted  to               its  own wisdom, judgment and  patriotism  and               not to those of other persons and it will  act               ultra  vires if it undertakes to delegate  the               trust instead of executing it."               It  is  pertinent to note that in  almost  all               cases  the  argument  against  delegation  was               built upon the dictum of Lord Haldane but that               has  never  stood  in the way  of  the  Courts               upholding the most extensive delegation.  Bora               Laskin, after referring to the dictum of  Lord               Haldane, said(1)               "This   oft-quoted  passage  remains  more   a               counsel  of  caution  than  a   constitutional               limitation.  This  proposition has in  no  way               affected  the  widest kind  of  delegation  by                             Parliament  and by a provincial legisl ature  to               agencies of their own creation or under  their               control;   see   Reference   re    Regulations               (Chemicals,  (1943)1  D.L.R. 248;  Shannon  v.               Lower  Mainland Dairy Product., Board,  (1938)               A.C. 708." And,  as regards the observations of Cooley, we  think  that they   were  based  on  the  American  doctrine   that   the legislature being the delegate of the people cannot  further delegate the trust but execute it themselves. We  think that the principle of the ruling in Shama  Rao  v. Pondicherry  (supra)  must be confined to the facts  of  the case.  It is doubtful (1) See Canadian Bar Review, vol. 34 (1956), footnote on  p. 919. 909 whether  there  is  any general  principle  which  precludes either Parliament or a State legislature from adopting a law and the future amendments to the law passed respectively  by a State legislature or Parliament and incorporating them  in its  legislation.   At  any  rate,  there  can  be  no  such prohibition when the adoption is not of the entire corpus of law  on  a subject but only of a provision  and  its  future amendments and that for a special reason or purpose.. In A-G N.S.  v. A.G. Can. (Nova Scotia Inter-delegation Case)  (1), the   Supreme  Courts  of  Canada  said  that  neither   the Parliament of Canada nor the legislature of any province can delegate one to the other (to be exercised by that other  as a Parliament or Legislature, as the case may be) any of  the legislative  authority respectively conferred upon  them  by the British North America Act and especially by sections  91 and 92 thereof.  The Court was of the view that  legislative authority  conferred upon Parliament and upon  a  provincial legislature  is exclusive and, in consequence,  neither  can bestow  upon or accept power from the other,  although  each way delegate to subordinate agencies : and to permit through

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delegation  alteration  of the distribution  of  legislative power established by the British North America Act (save  as permitted by s. 94) would mean that matters within  Dominion competence would be incorporated in legislation assented  to by  the  Lieutenant-Governor  instead of  by  the  Governor- General,  and vice versa; and, moreover, it would mean  that the  debate  and judgment of one legislative body  would  be addressed to matters which were not its concern but that  of another  legislative body as provided in a constituent  Act. The Court said that delegation of this kind is  incompatible with a federal State. In  his book "Canadian Constitutional Law," 3rd.  ed.,  Bora Laskin has this much to say on the case : "It  is  important however, to appeciate the limits  of  the doctrine affirmed by the Nova Scotia Inter-delegation  case. Property  understood  the  case  does  not  prohibit  either Parliament  or a provincial legislature  from  incorporating referentially  into the valid legislation of one the  future valid  enactments of the other.  Illustrations of this  kind of  anticipatory incorporation by reference may be  seen  in the  Cr.  Code,, S.534 (fixing the qualifications of  jurors in criminal proceedings as those prescribed by ’the laws  in force for the time being in a province’), and in the Summary Convictions   Act,  R.S.O.  1960,  c.  387,  s.  3   (making applicable  to  provincial  summary  conviction  proceedings certain  provisions  of  the Cr.  Code ’as  amended  or  re- enacted from time to time’).  There is no,  unconstitutional delegation  involved  where there is no enlargement  of  the legislative  authority  of  the  referred  legislature,  but rather  a  borrowing  of provisions  which  are  within  its competence and which were enacted for its own purposes,  and which  the referring legislature could have validly  spelled out  for its own purposes.  This was appreciated by  Judson, J.  in  Re Brinklow, (1953) O.W.N. 325, 105 Can.   C.C.  203 (aff’d  on appeal on other grounds).  However, in Regina  v. Pialka (1953) 4 D.L.R. 440, (1953) O.W.N. 596, 106 Can.  CC. 197 (C.A.), Laidlaw, J.A. reserved the question of- the- (1)  (1950) 4 D.L.R. 369. 910 validity  of  the Provincial Summary Convictions Act  if  it were construed to incorporate not only provisions of the Cr. Code  in  existence when the provincial  statute  was  last. enacted but also provisions subsequently introduced.  "This  is,  with  respect, an unnecessary  as  well  as  an unwarranted  acceptance  of  a  limitation  on   legislative competence, and justifiable only as a matter of  legislative policy of the referring legislature; see Laskin, Note (1956) 34  Can.  Bar.  Rav. 215; but cf.  Bourne, Note,  (1956)  34 Can.Bar.  Rav. 500.  Once it is determined that a  referring legislature  is legislating in relation to a  matter  within its   competence  and  that  the  referred  legislature   is similarly legislating within its competence and for its  own purposes,  a borrowing by the one from the other  of  future enactments does not involve the latter in exercise of  power which  it does not otherwise possess.. This view  is  simply supported  by  Regina  v. Glibbery, (1963) 1  O.R.  232,  36 D.L.R. (2d) 548". (see Bora Laskin, "Canadian Constitutional Law", 3rd ed., pp. 40-41 ). The decision in A-G Ont. v. Scott(1) was in an appeal  front a  Judgment  reversing  an order  dismissing  a  motion  for prohibition directed to a Magistrate purporting to act under the  Ontario  Reciprocal Enforcement of  Maintenance  Orders Act, R.S.O. 1950, c.334. The Act carried out an arrangement, to which certain other provinces and England became parties, for  enforcement in Ontario, against resident  husbands,  of

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provisional  maintenance  orders for which  proceedings  had been  initiated  in a reciprocating  jurisdiction  by  wives resident  there.  By.s.5 (2) of the Act, a resident  husband against whom confirmation’ of a foreign order was sought was entitled ’to raise any defence that he might have raised  in the original proceedings had he been a party thereto but  no other defence". Among the objections to the validity of  the Act was one directed to s.5(2) as being an  unconstitutional delegation or abdication of legislative authority. Rand,  J. with whom Kerwin, C.J.C., Kellock  and  Cartwright JJ.  agreed,  held that the action of each  legislature  was wholly  discrete  and independent of the other,  a  relation incompatible  with  delegation; and that it was  a  case  of adoption  of  a circumscribed nature in that only  a  single right was involved, namely, the private right of maintenance between husband and wife; that the right touched a  resident of  each  country;  that  the  obligation  of  support   was recognized  by  both;  and  that  the  material  matters  of adoption went to the grounds of defence.  He was of the view that  there was no attempt to permit another legislature  to enact generally laws for a Province which would obviously be an  abdication.   He  said that the adoption  of  rules  and procedure from time to time in force in another jurisdiction was  exemplified  by  R.2 of the Exchequer  Court;  and  the adoption  of  various  provisions of the  Criminal  Code  by Provincial statutes was seen in the Summary Convictions Act, R.S.O.  1950,  c.379, s.3. According to the  learned  judge, from the standpoint of legislative competency, there was  no difference  between the adoption of  procedure and  that  of substantive (1) [1956] S.C.R. 137. 911 law, that in each case legislation was enacted by  reference to  the legislation as it may from time to time be  made  by another legislature, that no challenge could be made to  the complementary  enactment  ’there and that  if  the  Province cannot  exercise the same power in relation to a subject  of such  a local and civil rights nature, then the  oft-.quoted words  of  Lord Fitzgerald in Hedge v. The  Queen  that  its power  is  "as  plenary  and  as  ample  within  the  limits prescribed  by  s.  92 as the  Imperial  Parliament  in  the plenitude  of  its power possessed and could  bestow"  would seem to be somewhat rhetorical". Locke, J. said that the validity of the statute was directed to s.5(2) which limited the available defences to those that might  have  been  raised in  the  original  proceedings  in England.   The defences permitted under the law of  England, as the date of Reciprocal Enforcement of Maintenance  Orders Act  came into force in Ontario, may have been  extended  or limited  by  legislation passed thereafter in  England,  and this,  it  was contended, amounted to a  delegation  of  the authority  of the legislature of its power to deal with  the civil rights of residents in Ontario and that this could not be done was made clear by the judgment of the Supreme  Court of  Canada in A-G N.S. v. A-G Can. (supra) but  the  learned judge came to the conclusion that this objection should  not prevail  as  it was a valid exercise  of  provincial  powers under head (13) of s. 92 of the British North America Act to declare  that  the  defences which may  be  relied  upon  in proceedings of this nature shall be those from time to  time permissible  under  the  laws  of  England,  those  laws  in substance  being adopted and declared to be the law  in  the Province. As regards the correctness of the reasoning of Locke; J. see Bora Laskin, comments in (1956) 34 Can.  Bar.  Review,  215,

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227. We  think  that Parliament fixed the rate of tax  on  inter- State sales of the description specified in s. 8 (2) (b)  of the  Act  at  the  rate  fixed  by  the  appropriate   State legislature in respect of intra-State sales with a  purpose, namely, to check evasion of tax on inter-State sales and  to prevent  discrimination between residents in one  State  and those  in other States.  Parliament thought that unless  the rate fixed by the States from time to time is adopted as the rate  of tax for inter-State sales of the kind specified  in the sub-clause, there will be evasion of tax in  inter-State sales  as well as discrimination.  We have  already  pointed out  in our judgment in Civil Appeals No. 2547-2549 of  1969 and 105106 of 1970 the objectives which Parliament wanted to achieve by adopting the rate of tax in the appropriate State for  taxing  the  local  sales.   And  for  attaining  these objectives   Parliament  could  not  have  fixed  the   rate otherwise  than by incorporating the rate to be  fixed  from time  to  time  by  the  appropriate  State  legislature  in respect, of local sales.  It may be noted that in so far  as inter-State sales are concerned, the Central Sales Tax  Act, by s. 9 (2) has adopted the law of the appropriate State  as regards the procedure for levy and collection of the tax  as also for imposition of penalties. There  can  be  no  doubt that  Parliament  can  repeal  the provisions  of  s.8(2)(b) adopting the higher  rate  of  tax fixed by the appropriate 912 State  legislature  in  respect of  intra-state  sales.   If Parliament  can  rePeal  the  provision,  there  can  be  no objection  on  the score that Parliament has  abdicated  its legislative  function.   It  retains its  control  over  the fixation  of  the rate intact.  In other words, so  long  as Parliament can repeal the provisions of s.8 (2) (b) adopting the  higher rate of tax fixed by the State legislatures,  it has  not  abdicated its legislative  function.   As  already stated,  this point has been expressly decided by the  Privy Council  in Cobb & Co Ltd. v. Kropp (supra). We are glad  to find  that our conclusion that Parliament has not  abdicated its legislative function by enacting S. 8 (2) (b) of the Act is  in  agreement  with that reached by the  High  Court  of Gujarat  in  Rallis  India Ltd. v. R.  S.  Joshi  Sales  Tax Officer(1) and the High Court of Punjab in Tek Chand  Daulat Rai  v.  The  Excise and Taxation  Officer,  Ferozepore  and Others(2). In the result these appeals are dismissed with costs. S.C. Appeals dismissed. (1) 31 S.T.C. 261.        (2) 29 S.T.C. 585. L748 Sup.  CI/74-2500-12-6-75-GIPF, 1