Judgment

MATHEW, J.: - The appellant, who was operating an iron mine within the State of Mysore on the basis of a lease granted by the State, filed a writ petition before the High Court of Mysore challenging 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 Art 14 of the Constitution in that it imposes a flat rate of excise duty on iron ore without reference to the actual content of iron in the ore and that there was excessive delegation of legislative power in that the power to fix the rate of excise duty was delegated to the government. 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 it affects the appellant.

2. The Act provides for the levy and collection of a cess on iron ore for financing the promotion of welfare of labour employed in the iron ore mining industry. So far as the Mysore State was concerned, the Act was brought into force from October 1, 1963. Sections 2 and 3 of the Act contain the crucial provisions thereof. As the arguments in this case centred round the said provisions, it is necessary to set them out:

"2. With effect from such date as the Central Government may, by notification in the official Gazette, appoint, there shall be levied and collected, as a cess for the purposes of this Act on all iron ore produced in any mine, a duty of excise at such rate not exceeding fifty naye paise per metric tonne of iron ore as the Central Government may, from time to time, fix by notification in the official Gazette.

"3. An amount equivalent to the proceeds of the duty levied under this Act, reduced by the cost of collection as determined by the Central Government, together with any income from investment of the said amount and any other moneys received by the Central Government for the purposes of this Act, shall, after due appropriation made by Parliament by law, be utilised by the Central Government to meet the expenditure incurred in connection with measures which, in the opinion of that Government, are necessary or expedient to promote the welfare of labour employed in the iron ore mining industry and in particular :-

(a) to defray the cost of measures for the benefit of labour employed in the Iron Ore Mining Industry directed towards -

(i) the improvement of public health and sanitation, the prevention of disease, and the provision and improvement of medical facilities,

(ii) the provision and improvement of water supplies and facilities for washing,

(iii) the provision and improvement of educational facilities

(iv) the improvement of standards of living including housing and nutrition, the amelioration of social conditions and the provisions of recreational facilities and

(v) the provision of transport to and from work;

(b) to make grants to a State Government, a local authority, the owner of an iron ore mine or any other person, of money in aid of any scheme approved by the Central Government for any purpose connected with the welfare of labour employed in the iron ore mining industry:

(c) to pay annually grants in aid to such of the owners of iron ore mines as provided to the satisfaction of the Central Government welfare facilities of the prescribed standard for the benefit of labour employed in their mines, so, however, that the amount payable as grant in aid to the owner of an iron ore mine shall not exceed -

(i) the amount spent by the owner of the mine in the provision of welfare facilities, as determined by the Central Government or any person specified by it in this behalf or

(ii) such amount as may be prescribed by rules made under this Ac