Author: Mahak Jain, UPES
Linkedin Profile: https://www.linkedin.com/in/mahak-jain-26b874249/
INTRODUCTION
Delegated legislation refers to the laws issued by government agencies and the governor-general with the support of administrative acts that grant them this authority. Delegated legislation is legislation that’s passed by a government minister, a delegated person, or an association rather than by an Act of Parliament. Sir John Salmond stated that” inferior legislation is that which proceeds from any authority other than the autonomous power and is, thus, dependent for its continuance and validity on some superior or supreme authority.” The doctrine of inordinate delegation holds that any delegation of the council’s legislative power to another authority would be considered illegal. The law will be terrible due to” inordinate DELEGATION” if the council doesn’t state the purpose of the law, establish legal principles, and set norms for the delegate to follow when issuing delegated legislation. This is one of the traits of delegated legislation; it’s viewed as inordinate delegation when abecedarian laws are delegated. Below is the case of Darshan Lal Mehra v. Union of India, it’s discusses to what extent the power to make laws can be delegated. The court considered the Constitution’s permissible boundaries for delegation in this decision. The ruling reaffirmed that although delegated legislation i needed for executive reasons, it mustn’t be seen as a handover of abecedarian legislative duties. The policy, things, conditions, and boundaries that the delegate can use to produce rules or regulations must be established by the council. The Supreme Court ruled that the delegated authority must operate within the parameters set forth by the enabling laws. The attendant delegated legislation may be exorbitantly delegated and capsized if the enabling law doesn’t offer clear direction. Delegated legislation is essential to government, particularly in specialized or complex fields where legislative bodies are unfit to directly legislate laws governing every aspect. The constitutionality of delegated legislation is guaranteed by the council’s constant provision of non-equivocal principles, morals, and regulations. When these factors are absent, the delegate’s authority to make rules is vulnerable to judicial examination and review.
FACTS
In this case, Section 172(2) of the Uttar Pradesh Mahanagar Palika Act authorized the Mahapalika to impose the taxes mentioned therein.
Section 172(2) of the act states that in addition to the taxes specified in sub-section (1) the Corporation may for this Act and subject to the provisions thereof impose any of the following taxes, namely a tax on callings and on holding a public or private appointment; a betterment tax; a tax on advertisements not being advertisements published in newspapers; a theatre tax; a tax on dogs kept within the City;
For this act “using the above-mentioned power”, the Nagarpalika of Lucknow proposed to levy tax at:
Rs 5/show for theatres having an annual rental value of Rs. 10000 and above
Rs 3/show for theatres having an annual rental value of less than Rs. 10000.
This provision was accepted by the UP Government and came into force on June 1st, 1967. This rate was increased from time to time, and finally, by a notification in 1979 in the Uttar Pradesh Gazette, the theatre tax was enhanced to
Rs. 25/show on all classes/cinemas having an annual rental value of Rs 10000 and above
Rs 20/show on all classes/cinemas having an annual rental value of less than Rs 10000.
The above notification was challenged before the court on the grounds of excessive delegation, and since tax is arbitrary, it violates Article 14 of the Constitution of India, Section 172 states that nothing in this provision shall authorize the imposition of any tax that the State Legislature is not authorized by the Constitution of India to levy in the State. The Nagar Mahapalika was required by Section 199(1) of the Act to submit a preliminary proposal outlining the tax it intended to impose under Section 172(2) of the Act, the individuals or class of individuals to be held accountable, the amount or rate leviable for each individual or class of individuals, and any additional information the Government required.
Additionally, the rules in that regard have to be drafted by the Nagar Mahapalika executive committee before being finalized by the State Government. The proposed regulations were to be released in the prescribed manner.
The Nagar Mahapalika was required by Section 200 of the Act to take into account the objections that were received and to republish the draft regulations if any changes were made as a result of such consideration. The Nagar Mahapalika revised the proposed regulations after taking all of the complaints into account and sent them, together with the objections, to the State Government.
The State Government was given the authority to adopt, alter, or reject the proposed rules under Section 201 of the Act. According to Section 202 of the Act, the Nagar Mahapalika may only enact a special resolution imposing the tax as of the stated date after the State Government has finalized the rules. According to Section 203, the special resolution had to be submitted to the government, and a tax had to be paid when it was published in the government gazette.
LEGAL ISSUE
Is it amounting to the excessive delegation that the Nagar Mahapalika, Lucknow, imposed a theatre tax while claiming that Section 172(2) of the Act was unconstitutional because the legislature abdicated its responsibility by giving the Nagar panchayats the necessary legislative authority to levy all or any of the taxes listed in the Section?
DECISION
The court’s ruling on Section 172(2) of the Act focused on interpreting the scope and legality of the provision that authorizes the Mahapalika (municipal corporation) to impose taxes. A key element of the court’s analysis was the purpose of taxation under this section. It emphasized that any taxes levied by the Mahapalika must be strictly confined to the specific, statutory purposes outlined in the legislation. These purposes typically relate to local governance, such as the maintenance of infrastructure, sanitation, public health, and other civic amenities. The court made it clear that using tax revenue for purposes outside this defined scope would be ultra vires, meaning beyond the legal powers granted to the municipal body. This restriction ensures fiscal discipline and legal accountability in the use of public funds.
In examining the delegation of taxing power, the court acknowledged that the Mahapalika is authorized to implement tax levies, but the foundational structure, such as the taxable value or the basis on which tax is calculated, is determined by the State Government. The valuation is established through rules framed by the state, and these rules are not made in isolation. They are subject to a process of legislative scrutiny, as they must be laid before both Houses of the state legislature and can be modified if necessary. This framework creates a system of democratic oversight, ensuring that tax policy remains transparent and is not left to the unchecked discretion of local authorities or the executive branch.
A significant part of the ruling dealt with the concern of excessive delegation. The court addressed whether the legislative body had improperly abdicated its law-making powers by giving too much authority to the Mahapalika or the executive branch. It concluded that no such excessive delegation had occurred. The court found this arrangement to be constitutionally sound, as it maintains a clear separation of powers and ensures that the delegation of authority remains within acceptable limits.
Further, the court evaluated the classification method employed by the Mahapalika for taxing cinema houses, which was based on annual rental value. It upheld this classification as reasonable and non-discriminatory. The rationale behind this approach is that rental value serves as a practical and economically relevant indicator of a property’s capacity to bear tax. The court found no arbitrariness in this method, reinforcing that such classifications are legally permissible as long as they are based on intelligible differentia and have a rational nexus with the objective of taxation.
In conclusion, the court affirmed the validity of Section 172(2) of the Act. It ruled that the provision is constitutionally compliant and does not suffer from any legal infirmity. Thus, the provision stands as a legitimate example of structured delegation and lawful municipal taxation.
REASONING
In Darshan Lal Mehra v. Union of India, the Supreme Court examined the constitutional validity of Section 172(2) of the Uttar Pradesh Mahapalika Act, which empowered municipal bodies to impose specific taxes, including a theatre tax. The central argument raised by the petitioner was that such delegation of power amounted to excessive delegation, as it lacked a clear legislative policy or framework and violated Article 14 of the Constitution due to arbitrary tax classification.
The Court, however, upheld the provision, emphasizing that the legislature had not abdicated its essential functions. Instead, it had set forth a well-defined statutory process that governed how municipal authorities could exercise the delegated power. This process included the drafting of proposed regulations by the Nagar Mahapalika, consideration of public objections, modifications where necessary, approval by the State Government, and eventual publication in the official gazette. Such a framework, the Court held, offered sufficient legislative control and procedural safeguards to ensure accountability and legal compliance.
Further, the Court found that the power conferred under Section 172(2) was not absolute or discretionary. The delegation was confined to a list of specific taxes, and the execution of that power was tightly regulated by provisions within the Act itself. On the issue of Article 14, the Court rejected the claim of arbitrary classification. It reasoned that the classification based on the annual rental value of cinema houses was reasonable and had a clear connection to the objective of taxation. Rental value was seen as a reliable economic indicator of a theatre’s financial capacity, and therefore, a valid basis for differentiated tax rates.
The Court concluded that the structure and limits imposed by the legislature ensured that the delegation of power remained within constitutional bounds. It reaffirmed that while delegation is necessary for effective governance, it must be accompanied by clear guidelines and subject to oversight. Thus, the provision was neither excessively delegated nor violative of fundamental rights, and the theatre tax imposed under it was upheld as constitutionally valid.
ANALYSIS
Delegated legislation has become essential in modern governance, enabling the executive to detail and implement laws effectively. While practical and often necessary, it raises constitutional concerns about the permissible limits of such delegation. In India, the Constitution vests primary legislative power in the legislature, and any transfer of this power to the executive must be carefully regulated to avoid misuse.
The landmark case of In Re Delhi Laws Act established that while delegation is constitutionally valid, the legislature must not relinquish its essential law-making function. It must clearly define the policy, objectives, and framework within which the executive is to operate. While this approach aids efficiency, it risks diluting legislative accountability and blurring the separation between law-making and execution. The executive, if left unguided, could assume roles beyond its constitutional limits. Another concern is that legislative oversight mechanisms, like placing rules before legislatures, are often superficial, leading to inadequate scrutiny of delegated laws. This weakens institutional checks and may result in executive overreach.
Therefore, the doctrine of excessive delegation must be actively enforced. Courts must go beyond formalities and assess whether the legislature has provided a clear and narrow framework for the delegated powers. Questions regarding guidelines, limitations, and oversight must be rigorously examined.
In conclusion, while limited delegation is necessary for effective administration, it must not compromise democratic accountability or the rule of law. The doctrine of excessive delegation remains a vital constitutional safeguard to maintain the integrity of legislative power and uphold the separation of powers.
CONCLUSION
The landmark case of Darshan Lal Mehra v. Union of India marks a significant judicial pronouncement in defining the scope and constitutional validity of delegated legislation in India. The dispute centered around Section 172(2) of the Uttar Pradesh Mahapalika Act, which empowered municipal authorities to impose various taxes, including a theatre tax. The petitioner contended that this amounted to an unconstitutional surrender of legislative responsibility, breaching the doctrine of separation of powers and the equality mandate under Article 14 of the Constitution.
However, the Supreme Court upheld the validity of the provision, asserting that while the legislature may delegate authority for effective administration, such delegation must operate within a well-defined statutory framework. The Court emphasized that the legislative intent was preserved through the presence of essential safeguards. The Court also addressed the issue of classification, particularly the use of annual rental value as the basis for levying the theatre tax. It found this method reasonable and constitutionally permissible, noting that rental value is a practical economic indicator reflecting the taxpayer’s capacity to contribute. Hence, the classification was not only intelligible but also had a rational nexus with the objective of municipal revenue generation, satisfying the test of Article 14.
More broadly, the judgment underscores the increasing reliance on delegated legislation in the administration of complex and localized policy matters. The judiciary, therefore, has a crucial role in acting as a constitutional gatekeeper by ensuring accountability and transparency.
In conclusion, the ruling in Darshan Lal Mehra not only reaffirmed the constitutionality of Section 172(2) but also elaborated the constitutional framework within which legislative powers may be delegated. It serves as a reminder that while modern governance requires flexibility, such flexibility must be anchored in legal discipline, democratic oversight, and constitutional values. This case thus stands as a robust defense of both administrative efficiency and the foundational principles of constitutional governance.
FAQS
Q1: What is excessive delegation?
A: It refers to a situation where the legislature gives away its core law-making powers without setting clear guidelines, violating the separation of powers.
Q2: Why was the theatre tax challenged?
A: It was challenged on the grounds of arbitrary imposition and lack of clear legislative direction under Section 172(2).
Q3: What did the Court say about the tax classification?
A: It held the classification (based on rental value) was reasonable and did not violate Article 14.
Q4: Was there any violation of Article 14?
A: No, the Court found the classification justified and the delegation properly limited.
Q5: Why is this case significant?
A: It clarifies the constitutional boundaries of delegated legislation and reaffirms the importance of legislative control over tax policy.
REFERENCES
[1] Amanat Raza, ‘IPleaders’ (Delegated legislation in India, August 2) accessed 6 April 2023.
https://blog.ipleaders.in/delegated-legislation-in-india/
[2] John Salmond: Jurisprudence, 9th edition, London, Sweet & Masewell Limited, 1937, p. 210.
[3] Darshan Lal Mehra v. Union of India, AIR 1992 SC 1848.
https://lawsforum.com/du-llb/semester-4/administrative-law/darshan-lal-mehra-v-union-of-india-1992-4-scc-28-air-1992-sc-714/#:~:text=So%20long%20as%20the%20tax,decided%20by%20the%20State%20Government.
[4] Article 14 of The Indian Constitution
[5] U.P. Nagar Mahapalika Adhiniyam 1959
https://www.indiacode.nic.in/handle/123456789/19964?view_type=browse
[6] Re Delhi Laws Act AIR 1951 SC 332
https://www.manupatra.com/roundup/333/Articles/In%20re%20Delhi%20Laws%20Act%20Case.pdf
[7] Kunj Behari Lal Butail v. State of Himachal Pradesh 2000 (3) SCC 40
https://indiankanoon.org/doc/1598183/
[8] EP Royappa v. State of Tamil Nadu 1974 SC 555
https://blog.ipleaders.in/e-p-royappa-v-state-tamil-nadu-mala-fide-abuse-discretion/
[9] State of West Bengal v. Anwar Ali Sarkar AIR 1952 SC 75
https://indiankanoon.org/doc/1270239/