1996 Supreme(SC) 721

1996(3) Supreme 386
SUPREME COURT OF INDIA
A.M. Ahmadi, C.J.I., Sujata V. Manohar and B.N. Kirpal, JJ.
Mahe Beach Trading Co. & etc. -Appellants
versus
Union Territory of Pondicherry and Ors. -Respondents
Civil Appeal Nos. 1412-13 of 1975
Decided on 4-4-1996

IMPORTANT POINT
By virtue of Section 18 of (The) Government of Union Territories Act, 1963, the Parliament vested with the Pondicherry Legislature the plenary powers to legislate with respect to the matters in List II and List III of the Seventh Schedule of the Constitution and the said power has been validly exercised with the enactment of the Pondicherry Municipal Decree (Levy and Validation of Taxes, Duties, Cesses and Fees) Act, 1973.

Headnote:Constitution of India-Article 239A-Government of Union Territories Act, 1963-Section 18-Pondicherry Municipal Decree (Levy and Validation of Taxes, Duties, Cesses and Fees) Act, 1973-Validity of-Sections 3 and 4 not suffering from excessive delegation-Pondicherry Legislature empowered to legislate with respect to matters in List II and List III of Seventh Schedule-Said power validly exercised with enactment of Validation Act-Levy under Sections 3 and 4 of Validation Act cannot be said to be repugnant to Section 7 of Pondicherry Administration Act, 1962-Validation Act not repugnant to Section 21 of Government of Union Territories Act, 1963.

       Held : That if there is abdication of legislative power or there is excessive delegation or if there is a total surrender or transfer by the Legislature of its legislative functions to another body then that is not permissible. There is, however, no abdication, surrender of legislative functions or excessive delegation so long as the Legislature has expressed its will on a particular subject matter, indicated its policy and left the effectuation of the policy to subordinate or subsidiary or anciliary legislation, provided the Legislature has retained the control in its hand with reference to it so that it can act as a check or a standard and prevent or undo the mischief by subordinate legislation when it chooses to or thinks fit. (Para 13)

       Further held : Section 3 of the Validation Act has been enacted by the competent Legislature and it specifically empowers the levy of any tax, duty, cess or fee which the Legislature of a Union Territory had the power to levy. It further provides the tax to be assessed and collected for the purposes of the Municipal Decree in accordance with the provisions contained in the said municipal decree, and notwithstanding the provisions of Section 7 of the Pondicherry (Administration Act) 1962 or any other provision in that regard. This Section has to be read with Section 4 of the Validation Act which specifically validates the taxes which had already been levied, assessed or collected in the municipal communes, including the tax in question. At the time when the Valida tion Act was passed, all the essential ingredients of the levy and assessment of tax on petrol and diesel oil were known and available to the Legislature. The tax had been levied at the rate of 2% on the sale of diesel and petrol and the Legislative Assembly of the Pondicherry Union Territory in effect, levied this tax itself when it passed the Validation Act. As a result of this Validation Act, no further act of subordinate legislation had to be performed by any one. The effect of this Act, as already observed, clearly was that a specific levy which had been made in 1970, with the issuance of the "arrete" by the Mayor of Mahe, was re-enacted, with retrospective date, by the competent legislature. Therefore, the question of Sections 3 and 4 of the Validation Act suffering from excessive delegation does not really arise in this case. (Para 15)

       Reading Article 239A and Section 18 of [The] Government of Union Territories Act, 1963 together, it is clear that the Pondicherry Assembly had the power to make laws for the whole or part of Pondicherry with respect to any of the matters enumerated in the State List or Concurrent List. Levy of sales tax would undoubtedly be within its legislative competence by virtue of Entry 54 of List II of the Seventh Schedule. The effect of Validation Act being promulgated was that the lavy on diesel and petrol would no longer be regarded as one being made under Municipal decree of 1880 by the Municipal Council but, in law, will have to be regarded as being a levy made by a competent Legislature exercising its powers by virtue of Section 18 of [The] Government of Union Territories Act, 1963 read with Article 239A of the Constitution. (Para 18)

       Consequently held : That the State Legislature as well as the Parliament has the power to legislate with retrospective effect and also to pass a Validation Act. This being so, and the powers of the Legislature of Pondicherry being co-extensive with the powers of a State Assembly, by virtue of Section 18 of [The] Government of Union Territories Act, 1963, there is no reason for this Court to hold that the Pondicherry Legislature could not enact a law with retrospective effect. In other words, by virtue of Section 18 of [The] Government of Union Territories Act, 1963, the Parliament vested with the Pondicherry Legislature the plenary powers to legislate with respect to the matters in List II and List III of the Seventh Schedule and the said power has been validly exercised with the enactment of the Validation Act. (Para 19)