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PETITIONER: AVINDER SINGH ETC.

       Vs.

RESPONDENT: STATE OF PUNJAB & ANR. ETC.

DATE OF JUDGMENT19/09/1978

BENCH: KRISHNAIYER, V.R. BENCH: KRISHNAIYER, V.R. DESAI, D.A.

CITATION:  1979 AIR  321            1979 SCR  (1) 845  1979 SCC  (1) 137  CITATOR INFO :  R          1979 SC1550  (13)  R          1979 SC1803  (12)  RF         1980 SC 738  (9)  F          1983 SC 762  (19)  R          1991 SC2096  (30)

ACT:      Constitution  of   India-Articles   14,   265-Vice   of excessive  delegation-Absence   of  guidelines-What  can  be delegated-Imposing   flat   rate   of   taxation-Choice   of classification in taxing statute.      Punjab  Municipalities   Act,   1976-Sec.   90   Punjab Municipal Act,  1911-Sec. 62A-Double  taxation if prohibited by Art. 265.

HEADNOTE:      The  Municipalities  of  Punjab  are  governed  by  two enactments. The  numerous little  ones are  statutory bodies created and controlled by the Punjab Municipal Act, 1911 and few large  ones by  the Punjab  Municipal  Corporation  Act, 1976.  For   the  purpose   of  the  present  petitions  the provisions run  on identical  terms. The  State of Punjab in April, 1977  required the  various municipal  bodies in  the State to  impose tax  on the  sale of  Indian  made  foreign liquor @  Re. 1/- per bottle w.e.f. 20-5-1977. The Municipal authorities having  failed to  take action  pursuant to  the directive the State of Punjab directly issued a notification under sec.  90(5) of  the Punjab  Municipal Corporation Act, 1976 and similar provision of the Municipal Act, 1911.      The petitioner  challenged the  constitutional validity of the said statutes and levy on the following grounds:      1. Section 90(2)(b) of the Act suffers from the vice of excessive delegation or legislative abdication.      2. There are no guidelines for the exercise of the wide fiscal power  of the Corporation or Government which make it too unreasonable  to be  salvaged  by  Art.  19(5)  and  too arbitrary to be equal under Art. 14.      3. The  order  imposing  the  tax  itself  is  vitiated because:           (a)   It seeks  to impose the tax which is already                imposed and,  therefore, violates  section 90                (4);

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         (b)  There is double taxation;           (c)  It levies too heavy taxation;           (d)  Picking out from the broad spectrum of luxury                goods or  intoxicants the Indian made foreign                liquor amounts to discrimination;           (e)  No opportunity of being heard was given;           (f)  Unequals  are   being  treated   equally   by                imposing Re.  1/- per  bottle irrespective of                the type of liquor taxed, price of the liquor                and alcoholic content. Dismissing the appeal. ^      HELD:  (1)   There  is  nothing  in  Art.  265  of  the Constitution prohibiting double taxation. [850 D] 846      Cantonment Board  Poona v. Western India Theatres Ltd., AIR 1954 Bom. 261 approved.           (b)  The plea that flat rate of Re. 1/- per bottle                be it on brandy or other stronger beverage or                be it Rs. 50/- or Rs. 500/- per bottle cannot                be  seriously   pressed.  In   the  field  of                taxation  many   complex  factors  enter  the                fixation and flexibility is necessary for the                taxing authority. [850E-F]      Moopil Nair (K.T.) v. State of Kerala, [1961] 3 SCR 77; East India Tobacco Co. v. State of A.P., [1963] 1 SCR 404 at 406; A. Hajee Abdul Shakoor & Co. v. State of Madras. [1964] 8 SCR 217 at 230 referred to.      (2) If  the Municipal  body proposed to impose a tax it is required  to offer  an opportunity  to the  residents  of area. No  such procedural  fetter is  to be found under sec. 90(5) if  the levy is imposed by the State Government. It is impossible for  the Court to imply invitation of objections. ’No taxation  without representation’ is not applicable to a Government controlled  by an  elected legislature exercising its power of taxation. [852B, C, D]      (3) Sec.  90(4) talks  of tax  not already imposed. The Sales Tax  imposed by the state legislature under the Punjab General Sales  Tax Act  1948 is  no bar to the present levy. Section 90  deals with  the  levy  of  taxes  for  Municipal Corporation. The injunction is confined to repetition of the taxes which  the Municipality  has already  imposed. If  the Corporation has  not already imposed the tax. the embargo is absent. It  is of  no moment that some other body, including the State  Legislature has  already entered  the field.  The question is has the Municipal Committee or Corporation under this Act already exacted a similar tax ? [852F, H, 853BC]      (4) The Founding Document of the nation has created the three  great   instrumentalities  and  entrusted  them  with certain basic  powers-legislative, judicative and executive. Abdication   of    these    powers    by    the    concerned instrumentalities, amounts  to betrayal  of the constitution and  it  is  intolerable  in  law.  The  legislature  cannot delegate   the    essential   legislative   functions.   The legislature  is   responsible  to   the   people   and   its representative, the  delegate may  not be  and this  is  why excessive   delegation    have   been    frowned   upon   by constitutional law.  However,  the  complexities  of  modern administration are  so bafflingly intricate and bristle with details, urgencies difficulties and the need for flexibility is such  that our  legislature may not get off to a start if they must  directly and  comprehensively handle  legislative business  in  all  their  plenitude  and  particularisation. Delegation of  some part  of  legislative  power  becomes  a compulsive  necessity   for  viability.   Of  course,  every

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delegate is  subject to  the authority  and control  of  the principal and  exercise of  delegated power  can  always  be directed or  cancelled by  the Principal. Therefore, even if there be  delegation, parliamentary  control over  delegated legislation   should   be   a   living   continuity   as   a constitutional necessity. [853GH, 854A, B, C, D, E]      Devi Das  Gopal Krishnan  & Ors.  v. State  of Punjab & Ors., [1967]  3 SCR  557 at  565; P.  N. Kaushal  etc. v. v. Union of  India & Ors. [1979] 1 SCR 122; Corp. of Calcutta & Anr. v. Liberty Cinema, [1963] 2 SCR 477 referred to.      The taxes levied under the Act can be utilised only for the purpose  of the  Act. There is a clear purpose contained in the  provisions about  the purpose  and limit of the tax. What is  needed for  the  purpose  of  the  Act  by  way  of financial resources may be levied by the Corporation. Beyond that not. Moreover the 847 items on which taxes may be imposed are also specified. Thus the legislature  has fixed  the  purpose  of  the  taxation, objects of the taxation and limits of the taxation. [856A-B]      It  is  too  late  in  the  day  to  contend  that  the jurisprudence of  delegation of  legislative power  does not sanction parting with the power to fix the rate of taxation, given indication  of the  legislative policy with sufficient clarity. [860 B]      When  the   Government  is   imposing  taxes   for  the Municipality the  Government is  bound to know what ought to have been  done by the Municipality. The whole scheme of the statute shows  that Government has an important role to play in the  running of the municipalities. The financial control over the corporation is with the State Government. [865E]      As between  the two interpretations that which sustains the validity of law must be preferred. [864E]      M. K. Papiah & Sons v. The Excise Commr. & Anr., [1975] 3 SCR  607; Sita  Ram Bishambhar  Dayal v.  State  of  U.P., [1972] 2 SCR 141 referred to.

JUDGMENT:      ORIGINAL JURISDICTION:  Writ Petitions Nos. 4038, 4147, 4148, 4149,  4150, 4202, 4204, 4207, 4213, 4215, 4222, 4224, 4227, 4232,  4236, 4246, 4249, 4251, 4259, 4311, 4343 & 4347 of 1978.      (Under Article 32 of the Constitution).      V. M.  Tarkunde, P.  H. Parekh,  C. B.  Singh and Mukul Mudgar for the Petitioners in W.P. Nos. 4038 and 4244/78.      Yogeshwar Prasad,  Mrs. Rani  Chhabra and  Miss M. Bali for the  Petitioners in  W.P. Nos. 4147-4150, 4207, 4232 and 4343/78.      B. R.  Kapur and S. K. Sabharwal for the Petitioners in W.P. Nos. 4213, 4215, 4246, 4249, 4311, 4224 and 4227/78.      O. P.  Sharma for  the Petitioners  in W.P.  Nos. 4222, 4259/78.      Pramod Swarup for the Petitioner in W.P. 4347/78.      Shreepal Singh for the Petitioner in W.P. 4236/78.      M. P. Jha for the Petitioner in W.P. 4251/78.      M. C.  Bhandare (In W.P. 4204 and 4227/78 only) Mrs. S. Bhandare, A.  N. Karkhanis  and Miss Malini Poduval for R. 3 (In W.P.  4204, 4227/78) and for R. 3 in 4215 and for R. 3-4 in 4249/78.      G. L.  Sanghi (In W.P. 4038/78 only) S. K. Mehta, K. R. Nagaraja, P.  N. Puri  and G.  Lal for  Municipality (rr) in W.P. 4038, 4207, 4215, 4249, 4227.      Hardev Singh and R. S. Sodhi for the State of Punjab in

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(W.P. 4038/78).      Bishamber Lal  for  the  State  of  Punjab  in  (W.  P. 4147/78). 848      Naunit Lal  for Municipal  Committee (R.6) in W.P. 4249 and for r. 4 in 4227/78.      The Judgment of the Court was delivered by      KRISHNA IYER,  J.-This heavy  bunch of  writ  petitions impeaching the  validity of a tax on foreign liquor raises a few familiar  legal riddles.  A rupee per bottle sold within every municipal  town or  city is  the impugned levy, meant, according to  the  Punjab  Government,  to  serve  the  twin purposes of  replenishing the  resources of municipal bodies reduced by house tax exemptions and of weaning drinkers from overly consuming foreign liquor as a prohibitionist gesture. To pick  the pocket of every spirituous bibber of the higher brackets by a tiny tax may be but a feeble homage to Art. 47 of the  Constitution, and  to finance  welfare projects with this tainted tax may be queer Gandhiana. The will to enforce ’dry’ sobriety  in society  and  to  abolish  massive  human squaller by  fleecing the fat few, is made of sterner stuff, maybe.  But  matters  of  means  and  ends,  of  police  and morality, are  largely for  the legislature  and validity is the province  of the court. We let slip the observation only because, from  a certain  angle, these dual grounds make odd companions and  add to  the credibility  gap,  although  our focus is solely on the legality of the levy.      It is  better to  begin with the story of the tax under challenge. The   petitioners  are all  licensees to trade in foreign liquor  including Indian  made foreign  liquor. They are either  wholesalers or retailers and pay excise duty and other fees  and taxes  including sales tax under the general sales tax  law which imposes a levy of 10 per cent, on sales of foreign  liquor. There  are also  octroi levies of 10 per cent, and educational tax of 2 per cent, and these add up to a considerable  burden; but  the commodity  taxed is foreign liquor, Indian made or other, whose consumer usually belongs to the well to do sectors.      The  municipalities  of  Punjab  are  governed  by  two enactments. The  numerous little  ones are  statutory bodies created and controlled by the Punjab Municipal Act, 1911 and the few  large ones by the Punjab Municipal Corporation Act, 1976 (the  Act, for  brevity, hereafter).  For our purposes, the provisions run on identical terms and so we will take up the latter  statute which  compresses  into  one  section  a plurality of  sections in the former, and set out the common scheme to  study the  critical issues raised. Arguments have been addressed only on this basis.      The immediate  facts which have launched the litigative rocket need  to be  narrated now  to get  a hang of the core questions in their correct perspective. The State of Punjab, in April 1977, under its statutory 849 power [s.  90(4)] required  the various  municipal bodies in the State  to impose  a tax  on the  sale et  al, of foreign liquor at  the rate  of Re.  1/- per bottle with effect from May 20,  1977. The  municipal authorities having tarried too long or  totally failed  to take  action  pursuant  to  this directive, the  State directly  entered the fiscal arena and issued a  Notification under  s. 90(5)  dated May  31, 1977, which reads thus:           "Whereas the  Government of Punjab, in exercise of      the powers  conferred by  sub-section (4) of section 90      of the  Punjab Municipal  Corporation Act, 1063-A-PSLG-      77/12170, dated  11th  April,  1977,  required  of  the

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    Municipal Corporation  of Ludhiana  in Punjab to impose      tax on  the sale of "Indian made Foreign Liquor" at the      rate of rupee one per bottle, by the 20th May, 1977.           2.  And  Whereas,  the  Municipal  Corporation  of      Ludhiana has failed to carry out the aforesaid order of      the Punjab Government within the stipulated period.           3. Now,  therefore,  in  exercise  of  the  powers      conferred by  sub-section (5)  of  section  90  of  the      Punjab Municipal  Corporation Act,  1976, the President      of India  is pleased  to impose/modify  the tax  on the      sale  of   "Indian  made  Foreign  Liquor"  within  the      Municipal Corporation  of Ludhiana at the rate of rupee      one per  bottle. The  tax shall  come into  force  with      effect from 1st June, 1977. L.S. BINDRA                              Joint Secretary to Govt. Punjab                                 Local Government Department"      This notification,  issued under  s. 90(5) read with s. 90(2)(b) of  the Act,  was  later  modified  marginally  but survives   substantially.    The   petitioners   (licensees) challenge its  vires  both  as  contrary  to  the  statutory provision (s.  90) and as violative of the Constitution. The triple shapes of the fatal constitutional pathology are that (a) s.  90 (2)(b)  of the  Act  suffers  from  the  vice  of excessive delegation  or legislative  abdication; (b)  there are no  guidelines for  the exercise of the vagariously wide fiscal power  of the corporation or Government which make it too unreasonable  to be  salvaged  by  Art.  19(5)  and  too arbitrary to  be ’equal’  under Art.  14; and  (c) the order itself is  vitiated by  multiple infirmities.  The principal invalidatory charge,  based on  the Act,  is that  s.  90(4) interdicts any  tax ’already imposed’. The present tax is on sales and there is, under the general sales tax law, already a like  levy on sales of foreign liquor in the State, and so the second  fiscal venture  is beyond Government’s power. We have to consider these grounds of attack on the notification which are the emphatic submissions of 850 Shri  Tarkunde   who  led  the  arguments.  There  are  more subsidiary submissions  urged by  other counsel  on a  lower key, though,  but we  have to  deal with  them  too  in  due course. Briefly,  they are  (a)  that  in  picking  out  for taxation,  from  the  broad  spectrum  of  luxury  goods  or intoxicants, foreign  liquor alone,  discrimination has been practised,  (b)  that  even  assuming  that  Government  can exercise the  power of  the municipal body, it may not do so without adhering  to the  procedural fairness implied in the Explanation to  s. 90(2)  applicable to municipal bodies and (c) that  unequals are being treated equally because the tax of  Re.  1/-  bottle  at  a  flat  rate  disregards  germane considerations like the price of the liquor or the degree of alcoholic content. A feeble plea that the tax is bad because of the  vice of  double taxation and is unreasonable because there are  heavy prior levies was also voiced. Some of these contentions  hardly   merit  consideration,  but  have  been mentioned out  of courtesy  to counsel.  The last  one,  for instance, deserves  the least attention. There is nothing in Art. 265 of the Constitution from which one can spin out the constitutional vice  called double  taxation. (Bad economics may be  good law  and vice  versa). Dealing  with a somewhat similar argument, the Bombay High Court gave short shrift to it  in   Western   India   Theatres(1).   Some   undeserving contentions die  hard, rather  survive after death. The only epitaph we  may inscribe  is: Rest in peace and don’t be re- born ! If on the same subject-matter the legislature chooses

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to levy  tax twice  over there  is no inherent invalidity in the fiscal adventure save where other prohibitions exist.      Likewise, the  plea that  a flat  rate of  Re. 1/-  per bottle, be it brandy or other stronger beverage or be it Rs. 50/- or  Rs. 500/-  per bottle, cannot be seriously pressed. In the  field of  taxation many  complex factors  enter  the fixation  and   flexibility  is  necessary  for  the  taxing authority to make a reasonably good job of it. Moopil Nair’s case(2) does  not discredit as unconstitutional anathema all flat rates  of taxation.  Maybe, in marginal cases where the virtual impact  of irrationally  uniform impost  on the same subject  is   glaringly  discriminatory,  expropriatory  and beyond legislative  competence, different considerations may arise; but  to condemn  into invalidity  a tax because it is levied at  a conveniently  flat rate  having regard  to  the commodity or  service which  has a  high range of prices and the minimal  effect on  the overall price, its easy means of collection and a variety of other pragmatic variables, is an absurdity,  especially   because  in  fiscal  matters  large liberality must  be extended to the Government having regard to the plurality of criteria 851 which have  to go into the fiscal success of the measure. Of course, despite this forensic generosity, if there is patent discrimination in  the sense  of treating  dissimilar things similarly or  vice-versa, the  court may  treat the  tax  as suspect and  scrutinise  its  vires  more  closely.  In  the present case, intoxicating liquids falling in the well-known category of  foreign liquors  form  one  class  and  a  flat minimal rate  of Re.  1/- per  bottle has  no constitutional stigma  of   inequality.  It  is  so  easy  to  conceive  of innumerable taxes  imposed  in  this  manner  in  the  daily governance   of   the   country   that   illustrations   are unnecessary. As  excisable articles  go, foreign liquor is a distinct category and absence of micro-classification within the broad genus does not attract the argument of inequality. Likewise, picking  and choosing  within limits is inevitable in taxation.  The correct law is found in East India Tobacco Co.(1)      "It is not in dispute that taxation laws must also pass      the test of Art 14. That has been laid down recently by      this Court  in Moopil  Nair v. The State of Kerala. But      in deciding whether a taxation law is discriminatory or      not it  is necessary to bear in mind that the State has      a wide  discretion in  selecting the persons or objects      it will  tax, and  that a statute is not open to attack      on the ground that it taxes some persons or objects and      not others.  It is  only when  within the  range of its      selection, the  law operates unequally, and that cannot      be justified  on the basis of any valid classification,      that it  would be  violative of  Art. 14. The following      statement of  the law in Willis on "Constitutional Law"      page 587,  would correctly  represent the position with      reference to taxing statutes under our Constitution:-           "A State  does not have to tax everything in order      to tax  something. It  is allowed  to pick  and  choose      districts, objects, persons, methods and even rates for      taxation if  it does  so reasonably........The  Supreme      Court has  been practical and has permitted a very wide      latitude in classification for taxation." (See also  Abdul Shakoor  & Co. case)(2). The foreign liquor levy does not fail on this score.      Shri Yogeshwar Prasad urged that s. 90(2) obligated the municipal body  to offer  an opportunity to the residents of the city to file objections to the tax proposed and consider

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them before finalising 852 the impost.  This fair procedure must attach to the exercise of the  power even  under s.  90(5); and  since that has not been done  the impugned  notification must fail. It is clear from s.  90  that  the  scheme  is  that  if  the  municipal corporation wishes to impose a tax under s. 90(2) it must go through the  due process indicated in the Proviso and secure Government’s approval.  But if Government is to exercise its power under  s. 90(5)  no such procedural fetter is found in the Section.  Maybe, that  power is different from procedure for its  exercise; but  unless the  statute insists,  it  is impossible for  the court  to imply invitation of objections and consideration  thereof  from  the  residents.  For  this simple reason,  there is no merit in the submission. Whether the failure  to hear before fixing a tax has a lethal effect upon the  fiscal power of the Government under s. 90(5) also is of  little moment although urged by the same counsel. May be, it is desirable that the State acquaints itself with the actual sentiments  of the  denizens of the local area before imposing tax  on  them.  But  it  is  not  inherent  in  the constitutional requirements  for the exercise of the State’s power of  taxation that  objections should be called for and considered. ’No taxation without representation’ is a slogan with a different dimension and has nothing to do with a levy by  a   government  controlled  by  an  elected  legislature exercising its power of taxation. We are unable to accede to the contention  that representations  from the residents not having been invited the taxation notification is bad in law. What is wholesome is different from what is imperative.      Indeed, we  are  left  with  the  two  major  arguments addressed by  Shri Tarkunde  and echoed or endorsed by other counsel. Even  here, we  may dispose of the submission based on the  wording in s. 90(4), namely, that taxing power under section can  be exercised  in respect of a particular impost only if that species of tax is "not already imposed".      The power under s. 90(4) is permissible only if the tax is new and not already imposed. The petitioner’s argument is that the  tax is  on sales and is clearly a sales tax. There is already  a sales  tax on foreign liquor at the rate of 10 per cent,  under the  Punjab General Sales Tax Act, 1948. So the present  rupee tax  is a  second round  in breach of the forbiddance in  s. 90(4).  Simple enough,  if the expression ’not already  imposed’ in  s. 90(4)  is a ban on further tax whatever the  statute; but  if  the  taboo  is  not  on  the topology of  the tax but limited to the specific statute the contention is  specious. And  it takes  little reflection to hold the  latter to  correct  view.  We  must  remember  the statutory setting  and the placement of the provision. S. 90 occurs in Chapter VIII headed ’Taxation’. That Section prim- 853 arily empowers  municipal corporations  to  levy  taxes.  S. 90(1) specifies  a number  of items  many of which are taxed also at  State level,  e.g. lands,  vehicles. S. 90(2) is so widely worded  that many  taxes covered  by it would already have been occupied field at the State or even Central level. The municipal  body may  not have any index of taxes already imposed by  other bodies and they are many. S. 90 would then be a  precarious power,  often an  exercise in  futility and frequently a litigative trap. No. That is not the meaning of the  prohibition   ‘not  already  imposed’.  The  Government exercises the  power of  the corporation  under s. 90(5) and cannot enter  what is  forbidden ground  for the latter. And what is  forbidden is  that the  municipal  body  shall  not repeat the  same tax,  if it  has imposed  that tax  earlier

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under that  Act. The  injunction is plain and is confined to repetition of those taxes which the municipality has already imposed. If  the Corporation has not already imposed the tax proposed, the  embargo is  absent. It  is of  no moment that some other body, including the State Legislature has already entered the  field. The  question is  :  has  the  municipal committee or  corporation, under this Act, already exacted a similar tax?  If it  has, the  second exercise  is anathema. Nobody has  a case  that the  corporation has  earlier taxed foreign liquor under this Act. Therefore, the submission has no substance and we reject it.      The sole  surviving ground  of invalidation  pressed by the petitioners  which deserves  serious examination is what we have outlined right at the outset, viz., that on the face of   s.   90(2),   (3),   (4)   and   (5)   read   together, unconstitutionality is writ large, in the sense of naked and uncanalised power  with every essential legislative function surrendered to the humour and hubris of the State Executive.      If this  charge be true the consequence is in no doubt. The  vice   of  unreasonableness   and   arbitrariness   are manifestations of  the same  vice as has been pointed out in P. N. Kaushal etc.(1).      An examination  of excessive  delegation of legislative power takes us to the scheme of the Act and insight into the dynamics of  municipal administration.  Certain fundamentals must be  remembered in this context and then the text of the provision understood  in the constitutional perspective. The Founding Document  of the nation has created the three great instrumentalities and  entrusted  them  with  certain  basic powers-legislative, judicative  and executive. Abdication of these powers  by  the  concerned  instrumentalities,  it  is axiomatic, amounts  to betrayal  of the  Constitution itself and  it   is  intolerable   in  law.  This  means  that  the legislature cannot self-efface its 854 personality and  make over,  in terms plenary, the essential legislative functions.  The legislature  is responsible  and responsive  to  the  people  and  its  representatives,  the delegate may not be and that is why excessive delegation and legislative  hara   kiri   have   been   frowned   upon   by constitutional law.  This is  a trite  proposition  but  the complexities of  modern  administration  are  so  bafflingly intricate and  bristle with details, urgencies, difficulties and need  for flexibility  that our massive legislatures may not  get   off  to   a  start  if  they  must  directly  and comprehensively handle  legislative business  in  all  their plenitude, proliferation  and particularisation.  Delegation of some  part of  legislative  power  becomes  a  compulsive necessity for viability. If the 500-odd parliamentarians are to focus  on every  minuscule of  legislative detail leaving nothing to  subordinate agencies  the annual  output may  be both unsatisfactory  and negligible.  The Lawmaking is not a turnkey project,  ready-made in  all detail  and  once  this situation is  grasped  the  dynamics  of  delegation  easily follow. Thus,  we reach  the second constitutional rule that the  essentials   of  legislative  functions  shall  not  be delegated  but   the  inessentials,   however  numerous  and significant they  be, may  well be  made over to appropriate agencies. Of  course,  every  delegate  is  subject  to  the authority and  control of  the  principal  and  exercise  of delegated  power   can  always  be  directed,  corrected  or cancelled by  the principal.  Therefore, the third principle that  emerges   is  that   even  if   there  be  delegation, parliamentary control over delegated legislation should be a living continuity  as  a  constitutional  necessity.  Within

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these triple  principles, Operation  Delegation is  at  once expedient, exigent  and even  essential if  the  legislative process is  not to  get stuck up or bogged down or come to a grinding halt  with a  few complicated  bills. It  is apt to excerpt  here   an  oft-quoted  observation  from  Vasantlal Maganbhai Sanjanwala  affirmed in  Devi Das Gopal Krishnan & Ors(1) :           "The Constitution  confers a  power and  imposes a      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 aspects of      a complex  situation. It  must necessarily delegate the      working out  of details  to the  executive or any other      agency. But  there is  a  danger  inherent  in  such  a      process of delegation. An over 855      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. But the said liberal      construction should not be carried by the Courts to the      extent of always trying to discover a dormant or latent      legislative  policy   to  sustain  an  arbitrary  power      conferred on  executive authorities.  It is the duty of      the Court  to strike  down without  any hesitation  any      arbitrary power  conferred  on  the  executive  by  the      legislature."      Such  being   the  basics,   accepted  by  presidential profusion of  this Court,  we have  to examine  whether  any essential legislative  function has  been transplanted  into the hands  of Government  or corporation by the Act, whether the delegation  itself is an entrustment of overboard power, so unguided  that the  delegate may  run amok and do what is arbitrary, unreasonable  and violative of Articles 14 and 19 of  the   Constitution.  Taxation   is  exaction   and  even expropriation and,  therefore, the  right to  property is in peril when  a fiscal measure is afoot. Article 10 comes into play when  law is made for purposes of taxation and that law must comply with Part III. Arbitrariness must be excluded in the  law,  for,  if  power  is  arbitrary  it  is  potential inequality and  Art. 14  is fatally  allergic to  inequality before the law.      These generalities  take us  to the  particularities of the  present   case.  Shri   Tarkunde  turned  the  forensic fusillade on  the total  absence of  guidance and regulation anywhere in  the statute,  expressly or implicitly, and on a true construction,  according to  him, a  blanket power  has been vested by s. 90 on the corporation and, indubitably, on the Government.      The jurisprudence  of delegation  of legislative power, as earlier  mentioned, has  been the  subject matter of this

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Court’s pronouncements.  In  the  absence  of  the  rate  of taxation being  indicated by  the Legislature, Shri Tarkunde and  other   counsel  appearing  on  either  side  drew  our attention to  Liberty Cinema,(1)  the land-mark  case on the point. The  later decisions  have affirmed  the principle in Liberty Cinema. But 856 before we  enter into  a fuller discussion we may concretize the  specific   contention  urged   by   counsel   for   the petitioners.  Section  90(1)  sets  out  certain  items  for taxation by  the corporation.  The taxes so levied are to be utilised for  the purposes of the Act. Therefore, there is a clear directive contained in the provision about the purpose and limit of the tax. What is needed for the purposes of the Act by  way of  financial resources  may be  levied  by  the corporation. Beyond that, no. If the corporation has a fancy for spending  money on purposes unconnected with the Act and seeks to  levy a  tax for  the fulfillment  of  such  extra- statutory objects the mis-adventure must fail. Moreover, the items on  which taxes  may be  imposed are  also  specified. Thus, the legislature has fixed the purpose of the taxation, the objects  of the taxation and the limits of the taxation. In short,  s. 90(1)  is a  textbook  illustration  of  valid delegation by the legislature.      The offending  area is  approached as  we move  down to sub-section (2)  (b) which  enables the corporation "to levy any other  tax which  the State  Legislature  has  power  to impose under the Constitution". The fiscal area is obviously specious and  so the  question directly  arises whether this over-broad provision  accords with or exceeds the principles of delegation.  Sub-section (3)  leaves the rates of levy to be specified  by the  Government and  the legislature, argue petitioners’ counsel,  has given no indication of the minima or the  maxima of  such rates.  Can such  non-fixation of at least the  maximum rate  of taxation  be upheld  or does  it enable the  delegate to usurp the essential functions of the legislature ?  When we  proceed further  to sub-section (5), the Government  is clothed  with the power to notify the tax which the  corporation shall  levy and,  in exercising  this power,  not  even  the  wholesome  obligation  of  receiving representations could  considering objections,  contained in the Proviso  to s.  90(2), is  present. Can such untrammeled power,  liberated   from  local   pressures   and   intimate appreciation of municipal needs, be sanctioned as within the deligible ambit  ? These  are  the  substantial  grounds  of attack which we have to consider presently.      Back to the Liberty Cinema case (supra), Sarkar, J. who spoke for  the majority  overruled the  contention that  the levy in  question was  a fee  and held that it was a tax and addressed himself to the question of excessive delegation of legislative functions  to the municipal corporation "because it left  it entirely  to the latter to fix the amount of the tax and provided no guidance for that purpose".      While what  constitutes an  essential feature cannot be delineated in detail it certainly cannot include a change of policy. The  legislature is the master of legislative policy and if  the delegate  is free  to switch  policy it  may  be usurpation of legislative power itself. So we have 857 to investigate  whether the  policy of  legislation has been indicated sufficiently  or even  change of  policy has  been left to  the sweet will and pleasure of the delegate in this case.      We are  clearly of  the view  that there is fixation of the policy  of the legislation in the matter of taxation, as

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a close  study of  s. 90  reveals; and exceeding that policy will invalidate  the action  of the  delegate. What  is that policy ?  The levy  of the  taxes  shall  be  only  for  the purposes  of  the  Act.  Diversion  for  other  purposes  is illegal.  Exactions   beyond  the   requirements   for   the fulfillment of  the purposes  of the  Act are  also invalid. Like in  s. 90(1),  s. 90(2)  also  contains  the  words  of limitation ‘for  the purposes of this Act’ and that limiting factor governs  sub-sections (3),  (4) and  (5). Sub-section (3) vests  nothing new beyond sub-sections (1) and (2). Sub- section (4)  does not authorise the government to direct the corporation to  impose any  tax falling  outside sub-section (1) or sub-section (2). Sub-section (5) also is subject to a similar circumscription  because the Government cannot issue an order  to impose  a tax  outside the  limitation of  sub- section (1) or sub-section (2). Thus, the impugned provision contains a  severe restriction that the taxation leviable by the  corporation,  or  by  the  Government  acting  for  the corporation, shall be geared wholly to the goals of the Act. The fiscal  policy of  s. 90 is manifest. No tax under guise of s. 90(2) (b) can be charged if the purposes of the Act do not require or sanction it. The expression "purposes of this Act" is  pregnant with  meaning. It  sets a  ceiling on  the total quantum  that  may  be  collected.  It  canalises  the objects for  which the fiscal levies may be spent. It brings into focus  the functions,  obligatory or  optional, of  the municipal bodies  and the raising of resources necessary for discharging those functions-nothing more, nothing else.      In Liberty  Cinema (supra)  it was  contended that  the rate of  tax was  an essential feature of legislation and if the power to fix it were abandoned it amounted to abdication of legislative power. After an exhaustive examination of the judgments of  this Court,  Sarkar, J. reached the conclusion that there was clear authority "that the fixing of rates may be left  to the  non-legislative body".  The matter does not end here, since the delegate may under guise of this freedom tyrannies and  exact exorbitant  sums which  the legislature would hardly  have intended.  If this possibility exists and there is  no guideline  given to the non-legislative body in the matter  of fixation  of  rates,  the  result  may  be  a frustration of  the  legislative  object  itself.  For  this reason,  the  Court  in  the  Liberty  Cinema  (supra)  case observed as axiomatic :           "No doubt  when the power to fix rates of taxes is      left to  another body,  the  legislature  must  provide      guidance for such 858      fixation. The  question  then  is,  was  such  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 depend on the object of the Act      giving power  to fix  the rate.  It is  said  that  the      delegation  of   power  to   fix  the  rates  of  taxes      authorised for  meeting the needs of the delegate to be      valid, must provide the maximum rate that can be fixed,      or lay  down rules  indicating  that  maximum.  We  are      unable to see how the specification of the maximum rate      supplies any  guidance as  to how the amount of the tax      which no  doubt has  to be  below the maximum, is to be      fixed. Provision for such maximum only sets out a limit      of the  rate to  be imposed and a limit is only a limit      and not a guidance.           It seems to us that there are various decisions of      this Court  which support  the proposition  that for  a      statutory  provision   for  raising   revenue  for  the

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    purposes of  the delegate,  as the  section  now  under      consideration is,  the needs  of the  taxing  body  for      carrying out  its functions under the statute for which      alone the  taxing power was conferred on it, may afford      sufficient guidance  to make  the power to fix the rate      of tax valid." (Pp. 493-494)      In the  Western India  Theatres case  (supra) the power given to  the corporation  (of the  city of Poona), in terms very wide,  to levy  "any other  tax" came  to be considered from  the   point  of  view  of  abdication  of  legislative function. The negation of this argument was based on the key words of  limitation contained  therein,  namely,  "for  the purposes of  the Act"  and it  was held  "that this  permits sufficient guidance for the imposition of the tax."      In Devi  Das Gopal  Krishnan &  Ors. (supra) this Court again considered  a similar  contention. The crucial passage in the  judgment of  Sarkar, J.  was  there  extracted  with approval by Subba Rao, C.J. :           "It (the  Municipal Corporation)  has  to  perform      various statutory functions. It is often given power to      decide when  and in  what manner  the functions  are to      performed. For  all this  it needs  money and its needs      will vary  from  time  to  time,  with  the  prevailing      exigencies. Its  power  to  collect  tax,  however,  is      necessarily  limited   by  the   expenses  required  to      discharge those  functions. It  has,  therefore,  where      rates have  not been  specified in  the statute, to fix      such rates as may be necessary to meet its needs. That,      we think,  would be  sufficient guidance  to  make  the      exercise of  its power  to fix the rates valid."#R#(Pp.      562-563) 859      In the  Municipal Corporation  of  Delhi(1)  case,  the proposition  that   where  the   power  conferred   on   the corporation was  not unguided,  although widely  worded,  it could not  be said  to amount  to excessive  delegation, was upheld. Delegation  coupled with a policy direction is good. Counsel emphasised  that the  court had  made a  significant distinction between  the local  body with  limited functions like a municipality and Government :           "The needs  of the  State are  unlimited  and  the      purposes for which the State exists are also unlimited.      The result of making delegation of a tax like sales tax      to the  State Government  means a  power to fix the tax      without any limit even if the needs and purposes of the      State are  to be taken into account. On the other hand,      in the case of a municipality, however large may be the      amount required  by it  for its  purposes it  cannot be      unlimited, for the amount that a municipality can spend      is limited  by the  purposes for which it is created. A      municipality cannot  spend anything  for  any  purposes      other than those specified in the Act which creates it.      Therefore in  the case  of a  municipal  body,  however      large may be its needs, there is a limit to those needs      in view  of the  provisions of  the Act creating it. In      such circumstances there is a clear distinction between      delegating a  power to fix rates of tax, like the sales      tax, to  the State Government and delegating a power to      fix certain  local taxes for local needs to a municipal      body.           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

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    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.      The legislature  must  retain  in  its  own  hands  the      essential  legislative   functions  and   what  can  be      delegated  is   the  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 parti- 860      cular Act  with which  the Court  has to deal including      its preamable. Further it appears to us 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."           "..........................      It  is  too  late  in  the  day  to  contend  that  the jurisprudence of  delegation of  legislative power  does not sanction parting with the power to fix the rate of taxation, given indication  of the  legislative policy with sufficient clarity. In  the case  of a  body like  a municipality  with functions which are limited and the requisite resources also limited, the  guideline contained in the expression "for the purposes of  the Act" is sufficient, although in the case of the State  or Central  Government  a  mere  indication  that taxation may  be raised for the purposes of the State may be giving a  carte blanche  containing no indicium of policy or purposeful  limitation.  In  a  welfare  State  allowing  in privations,  the  total  financial  needs  may  take  us  to astronomical figures.  Obviously that  will be  no guideline and so  must be  bad  in  law.  Something  more  precise  is necessary; some  policy orientation  must be  particularised Shri Tarkunde relied on this differentiation in attacking s. 90(6)  of   the  Act.  He  argued  that  had  the  municipal corporation done the job there would have been some guidance from the section. But when the Government did it, it did not have any  such restraint  and could, therefore, run berserk. We do not appreciate this contention as we will explain at a later stage.  Suffice it to say that flexibility in the form the legislative  guidance  may  take,  is  to  be  expected. Wanchoo, C.J. explained :           "It will  depend upon  the circumstances  of  each      statute under  consideration; in some cases guidance in      broad general  terms may be enough; in other cases more      detailed guidance may be necessary. As we are concerned      in the  present case with the field of taxation, let us      look at the nature of guidance necessary in this field.      The guidance  may take  the form  of providing  maximum      rate 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  area  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 watch-dog on the actions      of the  local body  in this  matter on  behalf  of  the      legislature. There  may be other ways in which guidance      may 861

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    be provided.  But the  purpose of  guidance, whatsoever      may be  the manner  thereof, is  to see  that the local      body fixes  a reasonable rate of taxation for the local      area concerned.  So long  as the  legislature has  made      provision to  achieve that reasonable rates of taxation      are fixed  by local  bodies, whatever may be the method      employed for  this purpose-provided it is effective, it      may be  said that  there is guidance for the purpose of      fixation of  rates of  taxation. The  reasonableness of      rates may  be ensured  by fixing a maximum beyond which      the local  bodies may  not go.  It may  be  ensured  by      providing safeguards  laying  down  the  procedure  for      consulting the  wishes of the local inhabitants. It may      consist in the supervision by Government of the rate of      taxation by  local bodies.  So  long  as  the  law  has      provided a  method by  which  the  local  body  can  be      controlled  and   there  is   provision  to   sec  that      reasonable rates  are fixed,  it can be said that there      is guidance  in the  matter of  fixing rates  for local      taxation.  As  we  have  already  said  there  is  pre-      eminently a  case for delegating, the fixation of rates      of tax to the local body and so long as the legislature      has provided  a method  for seeing that rates fixed are      reasonable, be  it in  one form  or another,  it may be      said  that  there  is  guidance  for  fixing  rates  of      taxation and  the power  assigned to the local body for      fixing the  rates is  not uncontrolled and uncanalised.      It is  on the basis of these principles that we have to      consider the Act with which we are concerned. (pp. 269-270)      In the  Municipal Corporation  of Delhi (supra) case it was significantly observed :           "According to  our history  also there  is a  wide      area of delegation in the matter of imposition of taxes      to local  bodies subject  to controls and safeguards of      various kinds  which partake  of the nature of guidance      in the matter of fixing rates for local taxation. It is      in this  historical background  that we have to examine      the provisions of the Act impugned before us." (p. 271) Both  the   sides  relied   on  certain  important  criteria contained in  the  judgment  of  Wanchoo,  C.J.,  especially because it  is a Bench of seven Judges and the ratio therein laid down  has considerable  authority and binds us. Dealing with municipal bodies and the nature and 862 content in  that Municipal  Act, the  court observed what is instructive for us in the present case :           "This is  in our  opinion a  great  check  on  the      elected  councillors  acting  unreasonably  and  fixing      unreasonable rates  of taxation.  This is  a democratic      method of  bringing to book the elected representatives      who act  unreasonably in  such matters.  It is  however      urged  that   s.  490  of  the  Act  provides  for  the      supersession of  the Corporation  in  case  it  is  not      competent to  perform or  persistently makes default in      the performance  of duties  imposed upon it by or under      the Act  or any  other law  or exceeds  or  abuses  its      power.  In   such  a  case  the  elected  body  may  be      superseded and  all powers  and  duties  conferred  and      imposed upon  the Corporation  shall be  exercised  and      performed by  such officer  or authority as the Central      Government may provide in this behalf. It is urged that      when this  happens the  power of  taxation goes  in the      hands  of   some  officer  or  authority  appointed  by

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    Government  who   is  not   accountable  to  the  local      electorate and  who may  exercise  all  the  powers  of      taxation conferred  on the  elected Corporation  by the      Act. . . ."           "Another guide or control on the limit or taxation      is to  be  found  in  the  purposes  of  the  Act.  The      Corporation  has   been  assigned   certain  obligatory      functions which  it must  perform and for which it must      find money  by taxation.  It  has  also  been  assigned      certain discretionary  functions. If  it undertakes any      of them  it must find money. Even though the money that      has to  be found  may be  large, it  is not, as we have      already indicated,  unlimited for  it must  be only for      the  discharge   of  functions  whether  obligatory  or      optional assigned  to the  Corporation.  The  limit  to      which   the    Corporation   can   tax   is   therefore      circumscribed by  the need  to finance  the  functions,      obligatory or optional which it has to or may undertake      to perform.  It will  not be open to the Corporation by      the use  of taxing  power to collect more than it needs      for the functions it performs...."           "Another limit  and guideline  is provided  by the      necessity of  adopting budget  estimates each  year  as      laid down  in s.  109 of the Act. That section provides      for division of the budget of the Corporation into four      parts  i.e.  general,  electricity  supply,  transport,      water and  sewage disposal.  The budget  will show  the      revenue and expenditure and those 863      must balance  so that  the  limit  of  taxation  cannot      exceed the  needs of  the Corporation  as shown  in the      budget to  be prepared under the provisions of the Act.      These  four  budgets  are  prepared  by  four  Standing      Committees of  the Corporation and are presented to the      Corporation where  they are adopted after debate by the      elected representatives  of the local area. Preparation      of  budget   estimates  and   their  approval   by  the      Corporation is  therefore another  limit and  guideline      within which the power of taxation has to be exercised.      Even though  the needs  may be  large, we  have already      indicated that  they cannot be unlimited in the case of      the Corporation,  for its functions both obligatory and      optional are  well defined  under the  Act. Here  again      there is  a limit  to which  the taxing  power  of  the      Corporation can  be exercised in the matter of optional      taxes as well, even though there is no maximum fixed as      such in the Act."                                                (Pp. 271-273)      In the  present case  it was  the State Government, not the municipal  corporation, which  fixed the  rate; but  the Government did only what the Corporation ought to have done. It acted  for the purposes of the corporation’s finances and functions and  not to  replenish its  own  coffers.  In  the Municipal Corporation  of Ahmedabad City,(1) a further point fell for  consideration which  has  some  relevance  to  the present set  of arguments. Shri Tarkunde submitted that even if the  provision requiring  the sanction  of the Government for the rate fixed by the corporation were a guideline and a control indicative  of a legislative policy, that was absent in the  impugned levy  since the  Government directly acted. Shelat, J. negatived a kindred submission:           ".......It  is  impossible  to  say  that  when  a      provision requiring  sanction of  the Government to the      maximum rate  fixed by  the Corporation  is absent, the      rest of  the factors  which exist in the Act lose their

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    efficacy and  cease to  be guidelines.  Furthermore, if      the Corporation  were to  misuse the flexibility of the      power given  to it  in  fixing  the  rates,  the  State      legislature can at any moment withdraw that flexibility      by fixing the maximum limit up to which the Corporation      can tax.  Indeed, the State Legislature has now done so      by s.  4 of  Gujarat Act,  8 of  1968. In  view of  the      decisions cited  above it  is not  possible for  us  to      agree with counsel’s contention 864      that the  Act confers on the Corporation such arbitrary      and uncontrolled  power as to render such conferment an      excessive delegation."(1)      We have  no hesitation in holding that the law is well- settled and  none of  the  canons  governing  delegation  of legislative power have been breached in the present case.      We will  explain a little more in detail, with specific reference to the scheme of the Act, why we hold that the tax is valid and does not suffer from the infirmity of excessive delegation.      The thrust of Shri Tarkunde’s argument is that even if, in the  light of  Liberty Cinema  (supra) and later rulings, guidelines are  found in  s. 90 (2) of the Act, the notified impost being  by the  State  Government  did  not  have  the benefit of  such guidelines.  The local  body knew precisely the local  needs and  the cost  of such local services. Like wise, the local councillors would be responsive and to local lobbies and be restrained from reckless taxes. None of these controls were operational when Government acted or directed. Moreover, the absence of the wholesome obligation to receive and pay  regard to  objections [Proviso to s. 90(2)] removed the procedural  check envisaged  by the  Legislature.  These criticisms highlight  the role  of Government in the setting of s.  90(5) and  its competence  to be  acquainted with the needs of  municipal denizens, the finances of the local body and the like.      It   must   be   remembered   that   as   between   two interpretations that  which sustains the validity of the law must be  preferred. A close look at the schematic provisions and  administrative   realities  is   very   revealing.   Is Government innocent  of the  total needs of municipal bodies and indifferent  to the legitimate pressures of its denizens ?      An  overview  of  local  self-government  may  set  the perspective. The  statutory pattern  of municipal government is substantially the same all over the country. The relevant legislation fabricates these local bodies, invests them with corporate personality, breathes life into them, charges them with welfare  functions,  some  obligatory,  some  optional, regulates their composition through elected representatives, provides for  their finances  by fees  and taxes and heavily controls their  self-government status  through a Department of the State Government in various ways, including direction and correction,  sanction and  supersession. Consequentially the law  clothes  the  State  Government  with  considerable powers over almost every aspect of municipal work- 865 ing Local  self-government,  realistically  speaking,  is  a simulacrum of  Art. 40  and democratically speaking, a half- hearted euphemism,  for in  substance, these elected species are talking  phantoms with  a hierarchy  of State  officials hobbling their  locomotion.  Their  exercises  are  strictly overseen  by  the  State  Government,  their  resources  are precariously dependent on the grace of the latter and their, functions are  fulfilled through a chief executive appointed

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by the State Government. Floor-level democracy in India is a devalued rupee,  Art. 40  and the evocative opening words of the Constitution,  notwithstanding. Grass roots never sprout until decentralisation becomes a fighting creed, not a pious chant. What happens to Panchayats applies to municipalities.      This description has critical relevance to the cases on hand because  one of  the propositions  underlying the major arguments advanced  before us is that while municipal bodies know their  needs and  respond to local pressures and tailor their taxes  accordingly, the  distant State  Government  is neither aware nor responsive and the impugned tax measure is bad because  the pragmatic  and policy guidelines of (a) the local  people’s  welfare  requirements  vis-a-vis  available municipal finances,  and (b) people’s pressurising proximacy and municipality’ correctional reaction to undue tax burdens are absent  when the  power is exercised by a remote control board niched in the State Secretariat. But if the picture is of a  powerless talking  shop of elected councillors passing resolutions but  all the  do’s  and  don’ts,  sanctions  and approvals, countermands and even supersession of the Council itself reside  in the State Government, the effective voice, the meaningful  responses,  the  appreciation  of  budgetary needs and  gaps and  need for  grants and  a host  of  other responsibilities can  be traced  to the  Government. Such is the backdrop to the discussion of the issues raised.      Now let  us scan  the Act from this angle. Corporations are created  for the purposes of carrying out the provisions of  the   Act  and   they   are   charged   with   municipal administration  (see  s.  4).  So,  corporations  cannot  do anything beyond  the  purposes  set  out  in  the  statutory provisions.  This  itself  is  a  statutory  restriction  on action.  The   composition  of  the  body  corporate  is  by periodically elected councillors (see s. 5) and this feature ensures  responsive   action.  The   powers  necessary   for municipal government  are spelt  out as  also the obligatory and discretionary functions (see Chapter III).      Now  come   certain  other   aspects  of   local  self- government. The  entire executive  power of  the corporation vests in  the Commissioner  who is  appointed by Government. This means that the Corporation Council takes a back seat in the municipal administration see ss. 47, 866 52  et  al.  Section  54  brings  the  Government  into  the expenditure picture.  The municipal staff also is, in a way, under Government control (s. 71).      Money shall be spent by the municipality only according to budget provisions and budget estimates shall be submitted to Government  for approval  which has  the power  to modify them. Thus,  the financial  control over  the corporation by Government is a statutory fact.      Now we  may consider  the mode  of raising tax revenue. Any non-traditional  tax (i.e. which falls under s. 90(2) of the Act)  has to  be with  the prior approval of Government. Indeed, affirmative  direction to impose taxes may be issued by the  Government to the local body and if the addressee is indifferent the Government itself may impose the tax and the corporation shall  levy such  tax. Sub-section  (6)  enables Government to  make other  tax payments to municipal bodies. Municipal borrowings  require government sanction, municipal accounts shall  be audited  by government  auditors. Chapter XXII provides  for  further  government  control  upto  even supersession of the corporation itself. Even the resolutions of corporations  may be  suspended  by  Government  and  its proceedings annulled  or modified.  There is a whole army of governmental  minions  in  the  department  of  local  self-

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government to sit upon, check, oversee and control municipal doings  that  the  elective  element  becomes  a  decorative parlour.      This conspectus  of provisions  brings into bold relief the anaemic nature of municipal autonomy. Full-blooded units of self-government,  reflecting full  faith in decentralised democracy uninhibited  by a  hierarchy of bureaucrats is the vision of  Art. 40.  While the Gandhian goal is of a shining crescent on  a starry  sky the  sorry reality  is  that  our municipalities vis-a-vis government are wan like a full moon at midday.      This study of the statutory scheme shows that, in large measure, municipal  councils reign,  municipal commissioners rule; local  self government  is an  experiment in  directed democracy by  the  bureaucracy,  Art.  40,  notwithstanding. State Governments  master-mind municipal  administration  in broad policies  and even  in smaller details and legally can suspend  resolutions   and  supersede   the  organ   itself. Municipal legislation  sanctions  this  Operation  Mask.  If pluralism  and   decentralisation  are   to  strengthen  our democracy   more    authority   and   autonomy,   at   least experimentally, must  be vested  in local  bodies.  To  day, prompt elections  when periods  expire are rare; councillors exist, debate,  resolve, but  power eludes  them.  Even  so, municipal maya also counts ceremonially and otherwise. 867      To set  the record  straight, we  must state  that many municipal bodies  do exercise  their limited powers properly and  serve   the  public  without  nagging  interference  by Government officials.  Municipalities are  realities,  often precarious, though.      This statutorily  sanctified comprehensive oversight by Government weaken the assumption of Shri Tarkunde that State Governments know little of the needs and respond remotely to the pressures  of  the  locality  and  that  the  guidelines stressed in  the rulings  cited above vanish when Government directly operates  under s.  90(5). The  finances, budgetary estimates and  many aspects of the affairs of each municipal body, reach  the Government, channelled through its minions, and, by force of statute, are approved, sanctioned, modified or reversed  by the State Secretariat. So, there is not much force in  the submission  that under  s. 90(5)  governmental action  may   be  a   blind  man’s   buff,  not  intelligent appreciation.      Secondly, under  s. 90(5)  Government acts  to  augment municipal  revenues  and  so  will,  understandably,  inform itself of  the needs  of  the  corporation  and,  on  fiscal economics, ’of  what the  traffic will  bear’. The statutory strategy also  ensures this.  First, a  directive is  given, obviously  after   considering  relevant  matters.  Only  if indifference or  intractability  is  displayed,  the  fiscal sword of s. 90(5) is unsheathed.      Moreover, there  is overall control by the legislature, sometimes, ineffective, sometimes meaningful. It is familiar knowledge that there are a number of institutionalised means by which  the legislature  exercises supervision and control over municipal  matters. Broadly  speaking,  they  are:  (a) through inter-relations, (b) by discussions and debates, (c) by approval  or otherwise  of rules  and orders,  and (d) by financial control  when the  budget is presented. A study of the legislative  proceedings in  the various  States of  the country brings  out many  of these  means  of  control  (see Indian Administrative  System, edited  by Ramesh  K. Arora & Co.  Chapter   17).  In   a  sense,  the  general  municipal administration  comes  under  fire  in  the  House  on  many

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occasions, including  during the  debate on  the  Governor’s Address.  Financial   control   and   supervision   by   the legislators come  up when  budget  proposals  which  contain allocation for municipal administration are presented to the House and  at the time of the Appropriations Bill. Moreover, the Public  Accounts Committee,  the Estimates Committee and like other bodies also make functional probes into municipal administration-fiscal and  other. There  may be  a  big  gap between the  power of control and its actual exercise but it is also  a fact that in a general way the political echelons in Government  and the bureaucracy in turn are influenced in their policies by the criticisms 868 of the  municipal administration  on the  floor of the House and through  other representations.  We  cannot,  therefore, dismiss the  legal position  that there  is control  by  the Legislature over  Government in its supervision of municipal administration therefore,  delegated legislation  cannot  be said to be uncontrolled or unchecked by the delegator.      This discussion  is of  critical importance  in view of the  argument   put  forward  by  Shri  Tarkunde  that  when Government exercises  power under  s. 90(6) it is a law unto itself, unbridled  and uncontrolled  by the  Legislature. We may now  refer to a few decisions which have been brought to our notice by counsel appearing for the municipal bodies and the  State   of  Punjab  to  make  out  that  the  needs  of municipalities and  the pressures of local people are within the ken  of the  State Government and they also respond like municipal  bodies   and  guide   themselves  in  the  manner corporations  do.  More  importantly,  excessive  delegation stands  negatived   because  of   legislative  control  over Government. Even  in the  Liberty Cinema  case, (supra)  the control by  Government over the municipal administration was relied upon  as a  policy guideline  and it is an a fortiori case if  the Government itself takes action, responsible and responsive as  it is  to the  elected representatives of the House.      Great stress  was laid  on Papiah’s case(1) which dealt with subordinate  legislation  elaborately  and  upheld  the validity of  a provision  where, superficially  viewed,  too wide a power had been delegated. Mathew, J. speaking for the court, gave  considerable latitude  to  the  Legislature  in delegating its  power and referred to many prior rulings. He quotes Subba Rao, C.J. to say:      "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."(2) 869      Nevertheless,  this   observation  was  neutralised  by another made by Hegde, J. in Bishar Dayal (1):           "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

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    doctrines evolved  in the  19th Century  be come out of      date."      Mathew, J. proceeded to cover English cases and reached the conclusion:           "The legislature  may also retain its control over      its delegate  by exercising  its power  of repeal. This      was the  basis on which the Privy Council in Cobb & Co.      v. Kropp(2)  upheld the  validity of  delegation of the      power to  fix rates  to the  Commissioner Transport  in      that case."                                                      (P.613)      The learned  Judge quoted  the Privy  Council(3)  which held that  the Legislature  was entitled to use any agent or machinery that it considered for carrying out the object and the purposes  of the  Acts 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  legislative  power  or  separate      legislative  body   armed  with   general   legislative      authority (see  R. v.  Burah, 1978)  A.C. 889). Nor did      the Queensland  Legislatare ’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. 945 at 946)." 870      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 inasmuch as it could at any time  repeal the legislation and with draw the authority and discretion  it had  vested in  him, and,  therefore, the legislature did not abdicate its functions.      The proposition so stated is very wide and sweeping. By that standard,  there is  nothing unconstitutional  about s. 90(5) of the Act.      In the  course of  the argument certain observations of this Court  were read  to the effect that there was always a check by  the courts on unconstitutional misuse of delegated power and  that, in itself with out more, was good enough to make the  delegation good. So stated, the proposition may be perhaps too  wide to  be valid; for any naked delegation may then be  sustained by stating that the court is there as the watch-dog. We do not have to go that far in the present case and so  we make  no final pronouncement on this extension of delegations jurisprudence.      We must  state, while  concluding that Punjab & Haryana High Court  has overruled  similar  contentions  on  grounds which have  our approval  [see AIR  1977 P&H  297 and 74 PLR (1972) P 149].      We are  conscious that  constitutional legitimation  of unlimited power  of  delegation  to  the  Executive  by  the Legislature may,  on critical  occasions, be  subversive  of responsible government and erosive of democratic order. That peril  prompts  us  to  hint  at  certain  portents  to  our parliamentary system,  not because  they are  likely new but

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because society may have to pay the price some day.      As  a  back-drop  to  this  train  of  thoughts  a  few statements from  a working  paper presented by Prof. Upendra Baxi of  the Delhi  University at  a recent  seminar may  be excerpted:           "...law  making   remains  the,   more  or   less,      exclusive  prerogative  of  a  small  cross-section  of      elites. This  necessarily affects  both the  quality of      the  law   made  as  well  its  special  communication,      acceptance and  effectivity.  It  also  reinforces  the      highly centralised  system of power. It is time that we      considered the desirability and feasibility of building      into the  law-making processes  a substantial amount of      public participation." 871           "People’s participation  in  the  enforcement  and      implementation of  the law is also not actively sought,      sponsored or  structured by the State....Equally now is      the idea that there should be a "social audit" of major      legislations by  the beneficiaries  or, more generally,      the consumers of legal justice."           "...The   situation   in   regard   to   delegated      legislation the  volume of  which is  immensely greater      than that  of usual legislation, is even more alarming.      The Indian  Parliament enacted  from the period 1973 to      1977 a  total of  302 laws;  as against  this the total      number of statutory orders and rules passed in the same      period was  approximately 25,414. Corresponding figures      for States and union territories are not just available      but the  number of  rules issued  under  the  delegated      legislation powers may well be astronomical......"      Plenary powers  of law-making  are entrusted to elected representatives. But  the political government instructed by the bureaucracy,  by and  large, gets bills through with the aid of  the three-line whip. Even otherwise, legislators are some  times   innocent  of   legal   skills;   and   complex legislations   call   for   considerable   information   and instruction.  The   law-making  sequence   leaves  much   to subordinate legislation  which, in  practical  terms,  means surrender to  the surrogate,  viz.,  the  bureaucracy  which occupies commanding  heights  within  the  Secretariat.  The technocracy  and   the  bureaucracy   which   mostly   draft subordinate legislation  are perhaps  well-meaning and well- informed but  insulated from  parliamentary audit,  isolated from popular pressure and paper-logged most of the time. And units of  local self-government  are reduced to a para-babel mechanisms, what  with a  pyramid of officialdom above them. The core  of Shri  Tarkunde’s argument, even though rejected in legal terms by force of precedents, has a realistic touch to the effect that municipal administration in the matter of taxation, if  taken over  by Government as under s. 90(5) of the  Act,  becomes  administration  by  the  barrel  of  the Secretariat pen.  The doctrine of delegation, in its extreme positions, is  fraught with democracy by proxy of a coterie, of which  the nation,  in its  naivete,  may  not  be  fully cognizant.      Therefore, the  system of  law-making  and  performance auditing needs  careful,  yet  radical,  re-structuring,  if participative, pluralist  Government by the People is not to be jettisoned.  We have  laid down  the law  and obeyed  the precedents but  felt it  necessary to  lay bare  briefly the political portents implicit in the extent law, for action by the national  leadership  betimes.  Who  owns  and  operates India,  that  is  Bharat  ?  That  disturbing  interrogation becomes deeply relevant

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872 as we  debate and  decide the jurisprudence of delegation of power and  vicarious exercise  and  so  we  have  pardonably ventured  to   make  heuristic  hints  and  to  project  new perspectives.      The journey’s  end is in sight. The discussion has come to a  close. The notification suffers from no infirmity. The writ petitions  stand dismissed.  Costs  one  set.  (to  the state) P.H.P.                                  Petitions dismissed. 873