LexV. NAGAPPA versus IRON ORE MINES CESS COMMISSIONER & ANOTHER
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A Jl c V. NAGAPPA v. IRON ORE MINES CESS COMMISSIONER & ANOTHER April 10, 1973 [A. N. GROVER, K. K. MATHEW1AND A. K. MUKHERJEA, JJ.J Iron Ore Mines Labour Welfare Gess Act (58 of 1961), Ss. 2 and 3-Power delegated to Government to fix rate of exciJ:e duty-I/ suffers from vice of excessive delel(ation. Section 2 of the Iron Ore Mines Labour Welfare Cess Act, 1961, provides that the Central Government may levy as a cess for purposes of the Act, on all iron ore produced, an excise duty at such rate, not exceeding 50 P. per tonne of iron ore, as the Central Government may, from time to time, fix by notification. The appellant, a lessee of an iron mine, challenged the validity of the Act, but the High Court dismissed the petition, In appeal to this Court, it was contended that s. 2 of the Act suffers from the vice of excessive delegation in that, under the section, the Central Government has been given a blanket power to fix the rate of D excise duty from time to time, without any guidelines. E F G H Dismissing the appeal, HELD : The necessary guidance for fixing the rate can be found in the amount of expenditure .necessary for carrying out the purposes of the Act. The policy of the Act has beOlll' clearly stated, and s. 3 has specified the purposes for which the excise duty collected is to be utilised. The purposes mentioned are not vague, or indefinite, and the expenses to be incurf'ed for those purposes could be calculated with reasonable cer- tainty. The power to levy the duty must be taken to be limited by the expenses required to discbarge the statutory function to be performed by the delegate, and so, the rate that is to be fixed should be such as would bring in the amount necessary to meet the needs of the delegate for discharging the functions. That the amount collected will be expen· <led for the purposes enumerated in s. 3 is ensured ,first, by requiring the Governn1ent to make an appropriation by means of parliamentary legis- lation, and secondly, by requiring accounts and reports to be published in the offic'al Gazette [951 D-G] Further, the fact that s. 2 has fixed the maximum rate would indicate that the delegate is not given an uncontrolled discretion in the matter of fixing the rate. The area within which discretion n1ay be exercised is clearly demarcated, and hence, it cannot be said that a blanket po\\.·er hall been declared to the Governn1ent. [951 G-H] Corporation of Calcutta and Another v. Liberty Cine111a A.I.R. 1965 I !07, Banarsidas v. State of M.P., A.LR. 1958 S.C. 909, Municipal Board, llapur v. Raglmvendra Kripal A.J.R. 1966 S.C. 693, Devi Das Gopal Krishnan v. State of Punjab, A.J.R. 1967 S.C. 1895, Vasanrlal Maganbhai Scnjamvala v. Stat• of Bombay, A.I.R. 1961 S.C. 4, Municipal Corporation of Delhi v. Bir/a Cotton and Spinning and WeavinH Mills, A.LR. 1968 S.C. 1232 Kruse v. Johnson [1898] 2 Q.B. 91 and D. Ramaraju v. State of A.P .. A.J.R. 1972 S.C. 828. referred to. 9 43 944 SUPREME COURT REPORTS [1973] 3 s.c.R. CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1695 of 1969. Appeal by special leave from the judgment and order dated february 20, 21, 1967 of the Mysore High Court Bangalore in Writ Petition No. 347 of 1965. A V. M. Tarkunde andD. N. Mishra, for the appellant. B P. P. Rao, for the respondents. The Judgment of the Court was delivered by MATHEW, J. The appellant, who was operating an iron mine within the State of Mysore on the basis of a lease granted by the Stak, filed a writ petition before the High Court of Mysore chal- lenging the validity of the provisions of the Iron Ore Mines Labour Welfare Cess Act (Central Act 58 of 1961), hereinafter referred to as "the Act". _The contentions of the appellant in the writ petition were that the Act is violative of article 14 of the Constitution in that it imposes a fiat rate of excise duty on iron ere without reference to the actual content of iron in the ore and that there was excessive delegation of legislative power in that the po,wer to fix the rate of excise duty was delegated to the gov- ernment. The prayer in the petition was for a declaration of the invalidity of the Act with the consequential relief of quashing the demand made in pursuance to the Act. That petition was heard along with other similar petitions. The High Court dismissed the writ petitions by a common order and this appeal, by special leave, is against the order in so far as i
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