Assignment dt.

25/02/2022- AAYUSH SHARMA

QUES. 1. What are the contours of Article 21A of the Constitution and the Right to Education Act as
discussed in both the majority view and the partial dissent in Society for Unaided Private Schools of
Rajasthan vs. Union of India & Anr., (2012) 6 SCC 1?

Answer

In the above-mentioned case, the Supreme Court of India upheld the constitutionality of section
12 of the Right of Children to Free and Compulsory Education Act (RTE Act), which requires all
schools, both state-funded and private, to accept 25% intake of children from disadvantaged
groups.

Contours of article 21A of constitution of India-

1. The Supreme court held that the article 21A of the constitution of India extends to the
non-state actors in the field of education as well.

The reasoning behind the same was given as the state can elect to impose statutory obligations
on private schools so long as the requirements are in the public interest.

2. The Supreme court held that the article 21A of the constitution of India doesn’t extend to the
private minority schools in the field of education as well.

3. The court also held that these are reasonable restrictions that are being imposed by the
policy makers and are not unconstitutional.

4. The Court held that the Article 21A contemplates the right to education flowing from the law
to be made which is the 2009 Act, which is child centric and not institution centric.

Contours of RRA

1. The objective of the act as interpreted in the present case is to provide “neighborhood
school facility”, wherein the Section 12 (1)(c) read with Section 2(n)(iii) and (iv) mandates
that every recognised school imparting elementary education, even if it is an unaided school,
not receiving any kind of aid or grant to meet its expenses from the appropriate government
or the local authority, is obliged to admit in Class I, to the extent of at least 25% of the
strength of that class, children belonging to weaker section and disadvantaged group in the
neighborhood and provide free and compulsory elementary education till its completion.

2. In case the school is imparting pre-school education, the same regime would apply.

3. Court held that Rights of children to free and compulsory education guaranteed under Article
21A and RTE Act can be enforced against the schools defined under Section 2(n) of the Act,
 except unaided minority and non-minority schools not receiving any kind of aid or grants to
meet their expenses from the appropriate governments or local authorities.

Question 2- Special Reference 1 of 2012, (2012) 10 SCC 1 was considered by the Supreme Court
though a review petition in the 2G case, i.e. Centre for Public Interest Litigation vs. Union of India, 2012 (2)
SCALE 180 was withdrawn. What is the impact of the Special Reference decision on the allocation of
natural resources and contracts by the government and the scope of judicial review of economic policy
and financial matters post the judgment.

Answer- In the Special reference 1 0f 2012, the President of India invoking article 143(1) of the Indian
Constitution asked for the opinion of the Supreme Court on the limited point of permissibility of methods
other than auction for alienation of natural resources other than spectrum.

In the specific reference, the supreme court clearly stated that the observations in 2G Case could not
apply beyond the specific case of spectrum, which according to the law declared in 2G Case, is to be
alienated only by auction and no other method - Precedents.

1. Impact of Special reference on the allocation of natural resources and contracts by the
government-
● Auction cannot be held as a constitutional requirement or limitation for alienation of
natural resources.
● Any other means adopted for the alienation has to be fair, reasonable, non-discriminatory,
transparent, non-capricious, unbiased, without favouritism or nepotism, in pursuit of
promotion of healthy competition and equitable treatment - It should conform to the
norms which are rational, informed with reasons and guided by public interest in
accordance with article 14 r/w article 299 of Constitution.
● Equality in allocation of natural resources and "common good" factor - Held: Auctions
may be the best way of maximizing revenue but revenue maximization may not always be
the best way to subserve public good - "Common good" is the sole guiding factor and a
norm under Art. 39(b) for distribution of natural resources - Where revenue maximization
is the object of a policy, being considered qua that resource at that point of time to be the
best way to subserve the common good, auction would be one of the preferable methods,
though not the only method.

2. Impact of Special reference on the scope of judicial review of economic policy and financial
matters-
● The court in this regard held that they cannot conduct a comparative study of various
methods of distribution of natural resources and suggest the most efficacious mode -
The methodology pertaining to disposal of natural resources is clearly an economic
policy - It cannot, and shall not, be the endeavour of the Court to evaluate the efficacy of
auction vis-à-vis other methods of disposal of natural resources - When questioned,
courts are entitled to analyse legal validity of different means of distribution and give a
constitutional answer as to which methods are ultra vires and intra vires the provisions of
the Constitution - If a policy or law is patently unfair to the extent that it falls foul of the
fairness requirement of Art. 14, Court would not hesitate in striking it down
Ques no. 3 Vodafone International Holdings BV vs. Union of India, (2012) 6 SCC 613 dealt with tax
demands on a foreign corporation. Is the utilization of corporate structures for tax avoidance
permissible? Please clarify the distinction between tax avoidance and tax evasion as explained in the
decision

Answer-

In the present case, The court observed that Section 195 of the Income-tax Act only applies to residents
and can’t have extraterritorial jurisdiction. The court observed that as the transaction took place between
two non-residents companies i.e.,CGP investments situated in Cayman Islands and Vodafone
International Holdings situated in Netherlands and that happened outside India thus having no direct
nexus with India. The Supreme Court observed that Section 9(1)(i) covers only income arising from a
transfer of a capital asset situated in India and it does not purport to cover income arising from the
indirect transfer of a capital asset in India.

Is the utilization of corporate structures for tax avoidance permissible?

The apex court in this view held that the transactions between corporate structures which are not
incorporated and situated in India are not transactions/transfer of a capital asset within the meaning of
Section 2(14) of the Indian Income Tax Act and the rights and entitlements flow from FWAs, SHAs, Term
Sheet, loan assignments, brand license etc. form integral part of CGP share attracting capital gains tax.

The supreme court thus held that through the transaction in the present case, CGP, it may be noted, was
already part of the HTIL's Corporate Structure and the decision taken to sell CGP (Share) so as to exit from
the Indian Telecom Sector was not the fall out of a tax exploitation scheme, but a genuine commercial
decision taking into consideration the best interest of the investors and the corporate entity.

However, the same is not anymore permissible as per the amendment of 2012 which is applied
prospectively from 2012 wherein as per section 195 the person who is responsible to pay a non-resident
or a foreign company shall deduct income tax rates thereon at the rates in force.

Insertion of Explanation 2 of Section 2(47) of the Income Tax Act, the provision, implied that any asset;
directly or indirectly; absolutely or conditionally; voluntarily or involuntarily; by way of an agreement
(entered in or outside India), or otherwise shall be considered as a transfer.

Difference between Tax Evasion and Tax avoidance

BASIS FOR
TAX AVOIDANCE TAX EVASION
COMPARISON
Meaning Minimization of tax liability, by taking Reducing tax liability by using
such means which do not violate the illegal ways is known as Tax
tax rules, is Tax Avoidance. Evasion.

What is it? Hedging of tax Concealment of tax

Attributes Immoral in nature, which involves Illegal and objectionable,

bending the law without breaking it. both in script and moral.

Concept Taking unfair advantage of the Deliberate manipulations in

shortcomings in the tax laws. accounts resulting in fraud.

Legal implication Use of Justified means Use of such means that are
forbidden by law

Happened when Before the occurrence of tax liability. After tax liability arises.

Type of act Legal Criminal

Consequences Deferment of tax liability Penalty or imprisonment

Objective To reduce tax liability by applying the To reduce tax liability by

script of law. exercising unfair means.
Question 4. In Maneka Gandhi vs. Union of India, (1978) 1 SCC 248, the Court changed the concept of
consideration of fundamental rights in Chapter III of the Constitution and took a different view than A.K.
Gopalan vs. The State of Madras, Union of India, AIR 1950 SC 27. Please discuss the salient features of
Maneka Gandhi's case in terms of its interpretation of Part III - Fundamental Rights and the concept of
procedure established by law vis-à-vis due process of law and the interplay of fundamental rights of the
citizens.

Answer-

Interpretation of Part III-

● The court gave the expression “personal liberty” in Article 21 a wide interpretation. Personal liberty
includes a variety of rights “which go to continue the personal liberty of man”. Personal liberty cannot be
read in a narrow restricted sense. The right to travel abroad is also included in Article 21 of the Indian
constitution.

● The court rejected the plea of the petitioner that Section 10(3)(c) of Passport act 1967 is the violation
of article 14, 19, 21 of the Indian constitution as impounding an individual’s passport on grounds of ”
interest of sovereignty and integrity of the state” is not at all vague and wrong.

● The court said that the “law” in Article 21 does not only mean enacted law but also refers to rules and
principles of natural justice.

Procedure established by Law vis-a-vis due process of Law-

● The court overruled its judgement in the Ak Gopalan case and reinterpreted the expression “procedure
established by law” used in Article 21. Any law prescribed under ” procedure established by law” should
be fair and reasonable. According to Justice Bhagwati ” The procedure cannot be arbitrary, unfair or
unreasonable”. Any procedure which is not right or fair and is arbitrary does not meet the requirements of
Article 21 of the constitution and is no procedure.

Due Process of Law

It is a doctrine that requires checking the efficiency of it as well as fairness and non-arbitrariness. Apex
court can declare any law null and void if it is not just, fair and arbitrary. This doctrine safeguards all kinds
of individual rights. The court held that every administrative action or any provision of law has to be just
fair, non-arbitrary and reasonable as it should satisfy due process of law.

Interplay of fundamental rights of citizens-

● The court stated that Article 14, 19 and 21 of the Indian constitution are not at all mutually exclusive.
There is a unique relation or nexus established between these articles. Any law prescribing a procedure to
deprive an individual’s liberty and life has to comply with all the requirements of Article 19. Similarly, any
procedure of law established in Article 19 has to meet up the requirements of Article 14. Justice Krishna
Iyer was said “No article in constitution pertaining to Fundamental right is an island” He gave an example
that “a man is not dissectible into separate limbs, cardinal rights in an organic constitution have a
synthesis”.

Assignment Dt. 03/03/2022

Question 1. Which major mining law governs the activity of Mining of major minerals like iron
ore? Does illegal mining, as happened in some states, impact ecology? If yes, then how? Can
courts impose damages for illegal mining? If yes, on what principle?

Answer-

Major mining law governing the activity of mining of major minerals like iron ore is Mines &
Minerals (Development & Regulation) Act, 1957 (As amended up to 27th March, 2015)

Impact on ecology because of illegal mining-

1. Air- surface mines may produce dust from blasting operations and haul roads. Many
coal mines release methane, a greenhouse gas, smelter operations with insufficient
safeguards in place have the potential to pollute air with heavy metals, sulphur dioxide,
and other pollutants.
2. Water- The mining sector uses large quantities of water, though some mines do rescue
much of their water intake. Mining throws sulphide-containing minerals into the air
where they oxidise and react with water to form sulphuric acid.
3. Land- The movement of rocks due to mining activities and overburden (material
overlying a mineral deposit that must be removed before mining) in the case of surface
mines impact land severely.
4. Health and safety- Mining operations range from extremely hazardous to being as safe
or as dangerous as any other large scale industrial activity. Underground mining is
generally more hazardous than surface mining because of poorer ventilation and
visibility and the danger of rockfalls.

Court imposing damages in illegal mining- Yes courts can impose damages in illegal mining
cases under the authority of section 4(1) r/w penalties for the same given under section 21 of
the Minerals (Development & Regulation) Act, 1957 which reads as follows-

No person shall undertake any reconnaissance, prospecting or mining operations in any area,
except under and in accordance with the terms and conditions of a reconnaissance permit or of a
prospecting licence or, as the case may be, a mining lease, granted under this Act and the rules
made thereunder.

The courts can do the same on the principle of environmental protection, and conservation of forests
and other natural resources.