BABU RAM JAGDISH KUMAR & CO., ETC., ETC versus STATE OF PUNJAB & ORS., ETC., ETC.

Citation: [1979] 3 S.C.R. 952 · Decided: 04-05-1979 · Supreme Court of India · Bench: N.L. UNTWALIA · Disposal: Dismissed

Cited by 2 judgment(s) · cites 6 · see the full citation network in Lexace

Judgment (excerpt)

952 
A 
BABU RAM JAGDISH KUMAR & CO., ETC., ETC. 
v. 
STATE OF PUNJAB & ORS., ETC., ETC. 
May 4, 1979 
B 
[N. L. UNTWALIA, R. S. PATHAK AND E. S. VENKATARAMIAH, JJ.J 
c 
D 
E 
F 
G 
Puttjab 
Sales 
Tax 
Act, 
Legislatutc. If could delegate 
in Schedules to the A.ct. 
1948-S. 
31-Constitutional 
validity 
of-. 
po1ver to executire to add or delete anything 
Words &: Phrases "Taxable e~e1u" 1uui "taxablt· person''- ,\leaning of. 
S<ction 5(1) of the Punjab Sales Tax Act, 
1948 
authorises 
the Stato 
Government to deternline the rates of tax payable on ihe taxable .turnover of 
a dealer not exceeding the limit prescribed 
therein. 
Sub-section (2) 
lays 
down the principles governing the Jetermination of 
the 
taxable 
turnover. 
Schedule 'C' -of the r\ct refers to goods, the tun1over of which is subject to 
purchase tax. Section 31 of the Act \Vhich gives specific power to the State 
Government to amend Schedule '(:' provides that afler giving by notification, 
not less than three months' notice of its intention so to d•J the State Govern· 
ment may add to or delete from Schedule 'C' any 
goods 
and 
thereupon 
Schedule 'C' shall be deemed to be an1ended accordingly. 
By a notification dated January 15. 1968 the- State Government added in 
Schedule 'C', "paddy" and "rice" as items on which purchase tax could' be 
levied. 
.As a result of thi.:; notification turnover relating to the purchase of 
paddy and rice became exigible to purchase tax in the hands of the purchasers 
with effect from that date. 
Tn.e appellants who are dealers in paddy, buy paddy ln the first 
instance 
and sell rice after converting paddy into rice. 
They filed writ petitions in 
the High Court questioning the validity of s. 31 of the i\ct and the notifica· 
tion issued thereunder and their liability to payment of purchase tax. 
T-be 
High Court dismissed the writ petitions. 
In appeal to this Court it was contended that s. 31 
of the Act which 
authorised the State Government to vary Schedule 'C' by adding certain goods 
\Vh06e turnover was not liable to payment of sales tax earlier, suffered from 
the vice of excessive delegation of legistatiYe power. 
Dismissing the appeals, 
HELD: l(a) The delegation of po-wer to the State (iovernment to deter-
mine whether any class of goods should be included or excluded from Sche-
dule 'C: to the Act cannot be considered as unconstitutio:aal. [967 G]. 
H 
(b) The case in so far as s. 31 of the Act which is an integral part of 
a single enactment and which authorises the Stat~ Government to . amend 
Schedu1e 'C' to the Act cannot be different from the case which was dealt 
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BABU RAM JAGDISH & co. v. PUNJAB (Venkataramiah, J.) J53 
with by the Constitution Bench, in Pt. Banarsi Das Bhanot v. State of M.P., 
.\ 
[1959] SCR 427. If 
it is 
permissible 
for 
the 
Legislature to authorise 
the State Government to convert tax free goods into taxable 
ones, 
there 
is 
hardly any justification for holding that the 
State 
Government cannot 
be 
entrusted with the power to include goods in Schedule 'C' n1aking their pur-
chase turnover taxable. 
[968 D-Fl. 
(c) It is well established that the delegation of power by the legislature hl 
a local authority or to the executive Government to vary or modify an exist-
ing 
Jaw 
would 
not 
be 
unconstitutional so long as such delegation does 
not involve the abdication of essential legislative power by 
the 'legislature. 
Such delegations of legislative powers have been upheld by this 
Court 
on 
several varied and diverse grounds such as the scheme and 
policy 
of the 
statute under which the power is delegated, the presence of guidelines in the 
statute regarding the exercise of delegated power, the lack of time for the 
legislature to make provision with regard to all the details involved in the 
adm:nistration of law, the incapacity of the legislature to foresee future events, 
the nature of the subject matter of the legislation and the nature of the:. donee 
of power etc. 
Even in matters relhting to taxation laws, it has been consistent-
ly held that the legislature can. delegate the power to fix rates of tax provided 
there are necessary guidelines regarding such fixation on the ground that in a 
ntodern society, taxation is one of the methods by which economic and social 
goals of State can be achieved and the power to tax should be flexible and 
capable of being easily altered to meet

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