LexAVINDER SINGH ETC versus STATE OF PUNJAB & ANR. ETC.
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845 A VINDER SINGH ETC. v. STATE OF PUNJAB & ANR. ETC. September 19, 1978 [V. R. KRISHNA IYER AND D. A. DESAI, JJ.] Constitution of India-Articles 14, 265-Vice of excessive delegati'on- .Absence of guidelines-What can be delegated-lnipo,sing flat rate of taxation- Choice of classification in taxing statute. Punjab Municipalities Act, I976-Sec. 90 Punjab Municipal Act, 1911- Sec. 62A-Double taxation if proltibited by Art. 265. The Municipalities of Punjab are governed by two enactments. The nume- rous little ones are statutory bodies created and controlled by the Ptlnjab htuni- cipal 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 PlQljab directly issued a notification under sec. 90(5) of the Punjab Municipal Corporation Act, 1976 and similae provi5ion 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 Q:>rporation 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) ; (b) There is double taxation; (c) It levies too heavy taxation; A c D E F ( d) Picking out from the broad spectrum of luxury goods or intoxicants G the Indian made foreign liquor amounts to discriµiination; (e) No opportunity of being heard was given; (f) U<tequals are being treated equally by imposing Re. 11- per bottle irres11ective of the type of liquer taxed, price of the liquor and alcoholic content. Dismissing the appeal. H HELD : (I) There is nothing in Art. 265 of the Constitution prohibiting double taxation. [850 Dl A B D • F G 846 SUPREME COURT 11.EPORTS (1979] l s.c.R:. Cantonment Board Poona, v. We.stern India Theatres Ltd., AIR 1954 Bom. 261 approved. (b) The plea that flat rate of Re. II- 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 at1tbority. [850E-F] Moopil Nair (K.T.) v. Stale of Kera/a, [1961] 3 SCR 77; East India Tobacco Co. v. State of A.P., [1963] I ~CR 404 at 406; A. Haja Abdul Shakoor & Co. v. State of MadraJ, [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 represen- tation' is n9t 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 ~1unicipal Corpora- tion. 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 Munici- pal Committee or Corporation under this Act already exlacted a similar tax ? [852F, H, 853BC] ( 4) The Founding Document of the nation has created the three great instru- n1entalities and entrusted them with certain basic powers-legislative, judicative and executive. Abdication of these po\\.·ers by the concerned instrumentalities, amounts to.betrayal of the constitution and it is intolerable in law. The legisla- ture cannot delegate the essential legislative functions. The legislatur
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