17th August 2023

“The lawyer should have the capacity on more than one points at a time- phone and
attendance”

In USA, the constitution is based on strict separation of powers. If the parliament formulates a
law regarding delegation of power, the court declares it unconstitutional on the basis of violating
separation of powers.

After the two discussed case, the court realized that without making delegated legislations, the
dream of achieving welfare government is not possible. Therefore, in many cases, the courts
have even allowed wide delegation.

Commissioner

In this case, the Commission act gave power to the government the power to delegate legislation.
The court held that it could be done in public interest only. Later on, the delegation was allowed.

Constitutional Normative Jurisprudence

It has been developed by the Supreme Court for determining the validity of delegation of taxing
power. It is also a legislative power and therefore there is a limit to which this power can be
delegated. Perhaps, the power to tax is an important power because imposing an arbitrary tax and
collecting it is a definition of totalitarian state. This was done when monarchy was at the height.
The king could impose and collect taxes arbitrarily.

Any government has three inherent powers:

i. Police Power

This power is to regulate the conduct of the other person in the public interest.
ii. Power of Eminent Domain

This power has been given under constitution article 31. It means taking private property for
public good. This power is inherent in the government.

iii. Power to Tax

This is also an inherent power.

Who can impose this tax?

In the beginning, in England, feudalism was prevalent. This meant that all land belonged to the
king who gave it to the tenants and in return collected tax. The power to tax belonged to the
government. The king would arbitrarily impose tax and forcibly collect it. The people were very
much annoyed by this power. In 1215, Magna Carta was passed which is known as the First
Document of Fundamental Rights. It was an agreement between the king and the people and
stated that no sutage or aid is to be levied without the consent of the commune concilium
accepting the three customary feudal aids. Thus, the king could not impose and collect tax
without the consent. Suatge meant compulsory military service. Those who did not involve in
this compulsory service, were supposed to pay the taxes. Secondly, aid meant for the benefit of
the church. If somebody did not do anything for the benefit of the church, they will be taxed
heavily. Both of these cannot be laid without concilium. Although, the taxes that king collected
usually- customarily could be cololected. Eg: Land tax, tax for church, etc. Sutage and aid taxes
had to be consented by the public.

The same was reaffirmed by the Act of Settlement in 1688. Later on, this was also included in
the Bill of Rights. It stated that levy of tax for the use of crown by any pretence of prerogative
rights without grant of parliament is illegal. This means that the king cannot impose tax suo
moto. They will have to take permission from the government.

Will United Dairy Company v Attorney General, 1922

Even if the person on whom the tax is imposed is willing to pay the tax, even that tax cannot be
collected. No tax can be imposed and collected without the express and implied consent of the
Parliament.

Indian Position
Article 265 lays down that no tax shall be levied or collected except with the authority of the
law. Here, law means statutory law and not delegated legislation. This implies that taxing power
is an essential legislative power and cannot be delegated. This also means that no tax can be
levied by administrative rules unless specifically authorized by the judiciary. Thirdly, implied
power by delegation through the administrative power cannot be inferred. There must be express
words. Therefore, all taxing statute must be strictly construed and not liberally construed.

What taxing power may include?

Tax may be imposed on the use and occupation of land. It also means the power to exempt any
personal property over tax. Wide discretion in delegation of taxing power is not accepted. There
can be different rates tax for different properties but the same must be reasonable. No private
person can be given the power to impose tax, but his services can be taken to collect tax. The
power to extend the tax law cannot be given. However, generally when the taxing power is
given, the court must lay down the guidelines and must lay down the maximum and minimum
rate of tax. However, it is most important to determine to whom this power is delegated. If that
power is delegated to an administrative authority which is representative and responsible, then
wide power of taxing can be delegated. The authority should be a public authority which is
elected and responsible. Eg: Municipal Corporation.

Aminder Singh v State of Punjab 1979

In this case, the act did not lay down the maximum and minimum rates. They laid down that tax
can be imposed by the municipal corporation for the purpose of this act. This is a very wide
delegation. The Court said that since the municipal corporation is a public body which is elected
by the people and is responsible to them, it would not misuse it and the delegation was valid. The
policy is – ‘for the purpose of this act’, which is sufficient. The policy is for the purpose of the
budget of the corporation, they can levy taxes which are necessary for their expenditure.

Darshan Lal v Union of India, 1992

The words in the act were; the municipal corporation can impose any other tax which
corporation may deem to impose. It was argued that any other tax was a wide power. The court
said that the municipal corporation is a representative body elected by the people. So, they will
not misuse.