Judgement

HEGDE J. :- These are appeals by certificate. They raise a common question of law of decision. The only contention arising for decision in these appeals is as to the vires of Section 3-D (1) of the U.P. Sales Tax Act 1948 (to be hereinafter referred to as the Act). The validity of that section has been assailed on two different grounds viz., (i) that the power delegated to the executive under Section 3-D (1) is excessive and as such bad in law and (2) Section 3-D infringes Article 14 of the Constitution inasmuch as it discriminates between the registered dealers who purchase through the agency of licensed dealers and the registered dealers who purchase through other dealers.

2. The appellant are dealers in Rab. In respect of their dealers in Rab, they have been levied purchased tax as per the notification issued by the Government under Section 3 (D) (1) of the Act. They are challenging the validity of the levy on the grounds mentioned above.

3. The High Court has repelled both the above contentions. The High Court has come to the conclusion that the power conferred on the State Government under Section 3-D is a valid power. It opined that the conferment of power on the executive to fix the rate of tax within the limits laid down in the section is not impermissible. Further it held that the section is not hit by Article 14 of the Constitution.

4. Before proceeding to consider the correctness of the contentions advanced on behalf of the appellant, it is necessary to read Section 3-D (1). It says :-

"Except as provided in sub-section (2), there shall be levied and paid, for each assessment year or part thereof, a tax on the turnover, to be determined in such manner as may be prescribed, of first purchases made by a dealer or through a dealer, acting as a purchasing agent in respect of such goods or class of goods, and at such rates, not exceeding two paisa per rupee in the case of foodgrains, including cereals and pulses, and five paisa per rupees in the case of other goods and with effect from such date, as may from time to time, be notified by the State Government in this behalf.

Explanation :- In the case of a purchase made by a registered dealer through the agency of a licensed dealer, the registered dealer shall be deemed to be the first purchaser, and in every other case of a first purchase, made through the agency of a dealer, the dealer who is the agent shall be deemed to be the first purchaser."

5. It is true that the power to fix the rate of a tax is a legislative power but if the legislature lays down the legislative policy and provides the necessary guidelines, that power can be delegated to the executive. Though a tax is levied primarily for the purpose of gathering revenue, in selecting the objects to be taxed and in determining the rates of tax, various economic and social aspects such as the availability of the goods, administrative convenience, the extent of evasion, the impact of tax levied on the various sections of the society etc. have to be considered. In a modern society taxation is an instrument of planning. It can be used to achieve the economic and social goals of the State. For that reason the power to tax must be a flexible power. It must be capable of being modulated to meet the exigencies of the situation. In a Cabinet form of Government the executive is expected to reflect the views of the legislatures. In fact in most matters it gives the lead to the legislature. However much one might deplore the New Despotism of the executive the very complexity of the modern society and the demand it makes on its Government have set in motion forces which have made it absolutely necessary for the legislatures to entrust more and more powers to the executive. Text book doctrines evolved in the 19th century have become out of date. Present position as regards delegation of legislative power may not be ideal, but in the absence of any better alternative, there is no escape from it. The legislatures have neither