INDIAN SUGARS AND REFINERIES LTD Vs. STATE OF MYSORE AND

JUDGEMENT

(1.) The petitioner before us is the India Sugars and Refineries, Ltd., Hospet. In this petition the petitioner is challenging the validity of Section 14 of the Madras Sugar Factories Control (Mysore Amendment) Act and the rules framed thereunder. The facts leading up to this petition may be shortly stated as follows: The Government of Madras had passed an enactment known as the Madras Sugar Factories Control Act no. XX of 1949 dated 13-7-1949. The object of the said Act, as it appears from the preamble thereof, was to provide for the licensing of sugar factories and regulating the supply and the prices of sugarcane used in such factories and for other incidental matters. Sub-section (1) of Section 14 of the said Act authorised the Government, after consulting the Advisory Committee to be set up under the said Act, to levy a cess not exceeding four annas per standard maund as defined in the Standards of Weight Act, 1939, on sugarcane brought into any area specified in such notification, for consumption, use or sale therein. Sub-section (4) of Section 14 empowered the Government, after consulting the said Advisory Committee, to make rules specifying the authorities by which, the persons from whom, and the manner in which, the cess levied under the said section shall be collected. In exercise of the powers conferred by Section 14(1) of the said Act, the Government of Madras, on 23-11-1950, issued a notification whereby it directed that a cess of annas eight per ton shall be levied on sugarcane brought into any factory within the State of Madras for consumption, use or sale therein. The said rate of cess was subsequently enhanced to rupee one Per ton by a notification dated 13-8-51. Thereafter, on the lerger of the District of Bellary, which was originally a district of the State of Madras, into Mysore, the Government of Mysore passed the Mysore Adaptation of Laws Order, 1953, bringing into force as from 1-10-1953 the Madras Sugar Factories Control Act (XX of 1949) without any modification. Thereafter, the Rajpramukh promulgated an ordinance, being Ordinance No. III of 1953 amending Section 14 of the Madras Act XX of 1949 by removing the clause enjoining the State Government to consult the Advisory Committee before issuing a notification under Section 14(1) of the Act. This Ordinance was replaced by the Mysore Act VII of 1954. Thereafter, the Government of Mysore issued from time to time notifications, the first of such notifications being published on 8-1-1954, in exercise of its powers under the said Act. The notification with which we are concerned in this application was published by the Government on 9-4-1956. It reads as follows:

(2.) The learned Advocate appearing in support of this petition urged several grounds before us. The principal ground urged by him was that in enacting Section 14 of the Act the legislature has delegated essential matters, e.g. the power to determine the persons to be taxed, to an executive body without laying down any discernible policy or principle on which the said body is to act. The learned Advocate contended before us that the Government, by the said section, was given unfettered discretion to determine the persons who are to be taxed under the said section. This, he contended, would appear from the provisions of Sub-section (4) of the said section which has empowered the Government to make rules inter alia specifying the persons from whom the cess levied under this section shall be collected. In all cases of taxation, the determination of a question as to the persons to be taxed is, according to him, an essential function of the legislature and cannot be delegated to an executive body, It is a matter of policy which the legislature alone can determine.

(3.) The learned Advocate-General appearing for the State of Mysore did not dispute before us the proposition that essential legislative functions must be discharged by the legislature and cannot be delegated to an executive body, although ancillary things may be left to such body or to others. What he, however, contended was that the levy of taxation, i.e. the basis on which tax is to be levied, is a matter for the legislature to determine and forms part of its essential function; but the Person from whom such tax is to be collected, the time, manner and the instrumentality of such collection are ancillary matters which can be left to an executive body. The learned Advocate-General further contended that if a tax has to be levied upon a person (e.g. under the Income-tax Act), then the legislature must determine the persons to be taxed and cannot delegate this matter to any other body; but if, on the other hand, the tax is to be levied on articles, then the persons from whom such tax is to be realised can be left to a subsidiary body. In support of this last proposition he referred us to the material sections in the Cotton Cess Act, Indain Lac Cess Act, Central Excise and Salt Act and to the rules made thereunder. The learned Advocate-General's contention was that, in the present case, tax is to be levied on the entry of certain goods to certain specified areas and that being so the question as to the person from whom such tax is to be realised relates to the mode of realization thereof appertaining to administrative convenience and can be left to an executive body. In support of his contention the learned Advocate-General relied on B. L. Chaudhury v. State of Bihar, AIR1957 Pat 40 (A) and Murli Manohar v. State of U. P., (S) AIR1957 All 159 (B).