K.K. Desai, J.
1. [His Lordship after stating the facts and the contentions of the parties, proceeded.] Now, it appears to us that the direct result of the findings made by the Supreme Court in the Orient Weaving Mills v. Union of India : 1SCR1 , is that even in the matter of impost of excise duty as between two or more manufacturers the law permits preference in favour of groups validly classified for levying different rates of duty. The principle, if any, that indirect taxes must be uniform in respect of assessees and particularly in respect of impost of excise duty was not accepted or followed by the Supreme Court. On the contrary, the observations of the Supreme Court show that it was permissible for the Central Government in connection with levy of excise duty by preference to protect petty producers from unreasonable competition and to classify differently goods produced by big establishments and similar goods produced by small establishments.
2. The further principles which emerge from these two decisions [Orient Weaving Mills case and British India Corporation v. Collector, Central Excise : 1978(2)ELT307(SC) ] may be conveniently stated as follows :
3. Matters like (i) not sacrificing the legitimate interests of persons and groups who deserve special treatment, (ii) protection of petty producers from unreasonable competition by big producers, (Hi) difference between manufacturers as regards the process adopted by them in manufacture and that the big manufacturers are able to effect economies in their manufacturing process, that their out-turn can be both large and rapid and that they can undersell small manufacturers are all relevant in connection with the policy of enforcement of fiscal statutes. These are matters of intelligible differentia in connection with grouping and/or classification which can be made by the tax authorities for enforcement of duties imposed under fiscal statutes. These matters directly relate to questions of national economy and are, therefore, relevant in connection with fiscal policies to be enforced under taxing statutes like the present statute dealing with excise. There can be reasonable and intelligible differentia between variety of groups of manufacturers of similar goods in connection with achievement of objects of fiscal statutes. We will accordingly proceed to decide the contentions made on behalf of the petitioners in connection with the impugned classification on the footing of the principles enunciated by the Supreme Court in the above quoted passages from the above two decisions.
4. Before dealing with contentions developed on behalf of the petitioners, it requires to be stated that in the arguments advanced sufficient attention has not been paid to the case made on behalf of the respondents and the facts as ascertained by the Committee of Secretaries in connection with conditions which in fact existed in the Mills and/or factories of the eight manufacturers concerned. The arguments advanced are all theoretical and general and appear in the first blush to be correct, because they do not take notice of the case of the respondents and the facts ascertained and existing at relevant time in the Mills of these eight manufacturers.
5. The case of the respondents as already mentioned in that decision had been taken to increase the duty of excise on the goods mentioned in item 18, viz. rayon yarn etc, as from May 25,1967. At the same time, as a matter of policy, it had been decided that the increase of duty should be such as could be absorbed without any rise in price level. The result of the investigations made by the Committee of Secretaries with the assistance of the representatives of the manufacturers was that the additional increase originally fixed was such as could not be absorbed and the price level was bound to rise if that increase was imposed. The findings made in that connection were that four manufacturers were fairly well established and making reasonable profits. The other four manufacturers were making marginal returns and were not in a position to absorb anything but a token increase. The objective in connection with these deliberations was to arrive at a scheme of increase of duty which could be absorbed without rise in the price level. The definite finding in that connection was that having regard to all the circumstances as existing in the production of this item of excisable goods in the Mills and/or factories of the four large manufacturers, a certain higher rate of duty imposed would be absorbed without rise in the price level. Conversely, the smaller manufacturers would be only able to bear much lesser burden of duty increased and then only the pre-budget price level could be maintained. These findings were made with reference to the objective of increasing the excise duty with the parallel object of not having any consequent rise in the pre-budget price level. Prima facie, this objective directly related to the questions which arose under the Central Excises and Salt Act. The findings made were in connection with matters which had a direct bearing on the question of maintenance of price level in spite of increase in duty. It is quite apparent that having regard to the lesser and larger capacities in these two groups of manufacturers for bearing the burden of the increased duty without rise in the price level, there was intelligible differentia between these two groups of manufacturers. In connection with that question, the facts about the one group being fairly well established and making reasonable profits and the other group making only marginal profits and not being in a position to absorb any increase in duty must be held to be intelligible differentia which differentiated the two groups into two specific divisions in connection with the object of increase in duty without rise in the pre-budget price level. The facts and conditions existing in these two groups of Mills and factories were all relevant facts and must be borne in mind in connection with the questions raised on behalf of the petitioners.
6. Having decided that the two groups of manufacturers could be treated with a difference, the question which appears to have arisen in connection with the notifications which were to be issued was about the manner in which most conveniently these groups could be described for the purposes of enforcement of increased duty. The description that was most convenient and was adopted to classify the two groups was (the phrase) ''manufacturers whose clearance...during the financial year 1966-67 did not exceed 36.5 lakh kilograms.' All arguments advanced on behalf of the petitioners appear to be founded merely on this description being not appropriate for classifying the two groups for the purposes which we have already mentioned above. The contentions appear to be not of substance, but merely arising from the manner in which the two groups were by description classified. It is, therefore, that with great emphasis it was contended that clearance for the financial year 1966-67, in so far as it mentions the year, does not make any intelligible differentia between the two groups. The contention was that the clearance for that particular year cannot be any basis for differentiating between the two groups of manufacturers. The clearance made in 1966-67 cannot represent in any manner the correct background as regards the financial and production capacity of the big manufacturers or the small manufacturers. A big manufacturer might have small clearance for a particular year and a small manufacturer may have a large clearance for a particular year. The clearance for home consumption may be small and the clearance for export consumption may be large. The contention was that the clearance of goods in a particular year could never be the basis of any classification. Reliance was placed in that connection on the observations in the case of Balabhau Manaji v. Bapuji Satwaji  60 Bom. L.R. 18 where it was observed that if the Legislature brought about a classification on the basis of time, the point of time selected must be for some rational and intelligible consideration, A purely arbitrary or capricious selection of time could not possibly form the basis of a rational classification. The contention was that the classification on the basis of clearance for home consumption and particularly for the year 1966-67, prima facie, proved that the classification was arbitrary and capricious. Now, as already stated, the argument in theory appears to be attractive and acceptable. In this connection, the following facts which are brought out on the record by annexure exh. A to the above affidavit in reply are relevant: That exhibit may be treated as part of this judgment and it is not appropriate to bring all the figures appearing in the exhibit in this judgment. It is abundantly clear by a mere glance at the figures mentioned in the exhibit that almost 100 per cent of the production made in the years 1966 and 1967 by all the manufacturers was in equal quantity (100%) cleared for home consumption. For illustration, the Century Spinning and Weaving Mills Ltd. had produced in 1966 and 1967, 1,47,82,160 kilogram's and 1,59,86,202 kilogram's and cleared for home consumption during the same years 1,43,63,828 kilogram's and 1,60,82,448 kilogrammes. None of the manufacturers had cleared any yarn for export consumption at any time. What was cleared for export consumption was rayon waste and nothing more. The figures of production and clearance for home consumption compared as between the four large manufacturers on the one hand and four small manufacturers on the other go to show that the production and clearance for home consumption of small manufacturers varied between 23 lakhs and 18 lakhs kilogrammes, whilst the production and clearance for home consumption of the large manufacturers varied between 1,47,000 and odd kilogram's and 48,35,000 and odd kilogrammes. That the two groups were altogether differently situate though they were producing the same goods is much too apparent having regard to all the relevant figures which appear in the annexure exh. A to the above affidavit in reply. The increase in duty was to be made from May 26, 1967. In that connection, whilst classifying the two groups of manufacturers differently, why it was not permissible for the department to rely upon the figures of clearance for home consumption for 1966-67 is difficult to understand. The question had for the first time arisen after expiry of the year 1966-67 in connection with increase to be made from about the end of May 1967, The classification of the manufacturers in two groups had become necessary thus in the middle of 1967. Why the quantity of goods cleared for home consumption did not reflect also upon the quantity of goods produced having regard to the facts ascertained is impossible to understand. Why the year 1966-67 is not relevant is difficult to understand. We are unable to accept the contention that the fixation of the financial year 1966-67 and the clearance for home consumption made in that year is arbitrary and capricious. It appears to us that the classification of the bigger manufacturers as against the smaller manufacturers on the basis of clearance for home consumption for 1966-67 clearly reflects on the matter of their ability to produce larger quantity of goods to make larger profits and to bear the increase of duty and absorb it so that the pre-budget price level could be maintained.
7. There is no substance in the argument that comparative profitability cannot be a valid basis of differentiation because profitability depended on the capital structure of an assessee and can depend on various factors as the quality of goods produced, efficiency in selling and such other matters. This question can be disposed of by stating that they are effectively dealt with by the observations of the Supreme Court as quoted above from the case of British India Corporation v. Collector, Central Excise,
8. The facts about the profits made by the large manufacturers and the small manufacturers during the years 1964, 1965 and 1966 are mentioned in para. 15 of the above affidavit in reply on the basis of the balance sheets of these eight manufacturers. The profits made by the large manufacturers in 1966 varied without deduction of tax between the figures of Rs. 718.40 lakhs and Rs. 116.70 lakhs. On the other hand, the profits of the small manufacturers during those years varied between Rs. 71.45 lakhs and Rs. 11.6 lakhs. Two of these manufacturers hardly made any net profits. These two could not even provide for depreciation for the current year. As the object to be achieved was maintenance of price level in spite of increase in duty, it was permissible for the department to look into the profits made by the eight manufacturers in the previous year and also to look into all other details commencing with their coming into existence as industrial concerns. For these reasons, we are unable to accept the first contention made on behalf of the petitioners that the classification of these two groups of manufacturers in the above manner by relying upon their clearance for home consumption for the financial year 1966-67 is unreasonable and arbitrary and/or violative of the provisions in Article 14 of the Constitution.
9. It requires to be noticed that an argument was made that apart from making arbitrary classification in favour of the four small manufacturers, the Government had not taken any steps whatsoever towards maintenance of price level. Nothing was mentioned in the affidavit in reply as being steps taken in that connection. The argument was that in the absence of the Government having not taken any such steps, the classification made in the above manner must be held to be arbitrary and unreasonable. We have failed to appreciate this contention.
10. Another argument advanced was that the profits shown in the balance sheets of the different companies could be the result of their activities of production and/or otherwise in respect of goods which were not rayon and synthetic fibres and yarn. The profits, therefore, might not be held to have been made in the manufacture of this item of excisable goods. The profits made by the different companies could, therefore, not be relied upon as a relevant matter for classification of the eight manufacturers in two different groups. It is sufficient to state that all relevant facts had come to be noticed by the Committees of Secretaries who had continuous contact with the trade in connection with the question and problem with which the Committees were dealing. It appears to have come to the notice of the Committees that in the manufacture of these excisable goods the large manufacturers made large profits whilst the small manufacturers were making marginal profits. This contention, therefore, does not make any difference to the question of classification of the manufacturers into two groups.
11. The notifications were challenged as violative of Article 19(1)(i) and (g) and Article 31 of the Constitution on the ground that they imposed excise duty on the rayon industry in general and the so-called large manufacturers in particular to an unreasonable and excessive extent. This contention was made only to be stated and arguments were not advanced towards establishing this contention.
12. The second and the third contentions relating to the provisions in Section 37(2)(xvii) and Rule 8 being ultra vires as involving excessive delegation of legislative functions can be disposed of conveniently under one single head. In connection with this question, it is necessary to notice the following provisions :
Section 37. Power of Central Government to make rules.- (1) The Central Government may make rules to carry into effect the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may-
(x) impose..., the duty of furnishing information, keeping records...;
(xvii) exempt any goods from the whole or any part of the duty imposed by this Act;...
Section '38. Publication of rules and notifications.-All rules made and notifications issued under this Act shall be made and issued by publication in the official Gazette. All such rules and notifications shall thereupon have effect as if enacted in this Act :
Provided that every such rula shall be laid as soon as may be after it is made before Parliament while it is in session, for a total period of..., and if before the expiry of that period, Parliament makes any modification in the rule or directs that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be.'
Rule '8. Power to authorise exemption from duty in special cases.-(1) The Central Government may from time to time, by notification in the Official Gazette, exempt subject to such conditions as may be specified in the notification any excisable goods from the whole or any part of duty leviable on such goods.
The first contention was that by the very language of ci. (xvii) of Section 87(2) the legislative function of exempting goods from the duty imposed under the Act was authorised to be transferred to the executive by making a rule in that connection. There was no control left by Parliament in itself in connection with that legislative function. By Clause (xvii) Parliament deprived itself of essential legislative function and the provision in Clause (xvii) suffered from the vice of unguided delegation of legislative function to the executive authority and must be held to be invalid. The second contention was that under Rule 8, the legislative function of exempting goods from duty of excise was wholly delegated to the Central Government, The granting of exemption was essentially a legislative function and power in that connection could not be validly delegated to the Central Government. The contention was that the true effect of the language in Clause (xvii) of Section 87 (2) when read with the proviso to Section 38 was that rules must be made to exempt goods from excise duty and those rules would be laid on the table of Parliament for a period of 30 days and then would become enforceable as being part of the Act itself. The true effect of these two provisions was that rules providing for specific exemption of specific duties in respect of certain excisable goods were required under Clause (xvii) of Section 37(2) to be put on the table of Parliament so that in connection with the exemption granted, Parliament retained complete control. That provision was avoided when Parliament accepted provision in Rule 8 enabling the Central Government by mere notifications to provide for exemptions of excisable goods from levy of duty. The contention was that by the provisions in Rule 8 the power of exemption reserved to Parliament alone under Clause (xvii) of Section 87(2) was sought to be taken away. When authorising that Rule Parliament abdicated its function as Legislature. For that reason also, the Rule 8 is contradictory of the provision in Clause (xvii) of Section 87 (2) and, therefore, invalid.
13. Apart from the language of the above provisions, the main background of these arguments was that power to exempt is by itself an essential legislative function which can be only undertaken by the Legislature itself and delegation of such function to the executive authority must be held to be not permissible and, therefore, invalid.
14. It is convenient at this stage to consider the true construction and effect of the provisions quoted above. It is of importance to notice that in Rule 8 and Clause (xvii) of Section 87 (2) the following appear, though in a slightly different manner :. exempt... any ... goods from the whole or any part of duty leviable on such goods.
In that connection, in Rule 8, the additional words are : (1) 'The Central Government may from time to time, by notification in the Official Gazette,' and (2) 'subject to such conditions as may be specified in the notification.' The above first quoted provision authorising the Central Government appears in Sub-section (1) of Section 37 which also provides : 'The Central Government may make rules to carry into effect the purposes of this Act.' Now, this Sub-section (1) is general authority conferred on the Central Government to make rules to carry into effect the purposes of the Act. Sub-section. (2) of Section 37 is enacted after providing that 'in particular, and without prejudice to the generality of the foregoing power, such rules may' provide etc. for the matters appearing in Clauses (i) to (osx). It is abundantly clear that the rules which the Central Government was authorised to make under Sub-section (1) of Section 37 could provide for any matter, which, according to the Central Government, was necessary to carry into effect the purposes of the Act. One of such matters mentioned in Clause (mvii) was 'exempt any goods from the whole or any part of the duty imposed by this Act.' Apparently, there was no limitation on the power of the Central Government to make rules for exempting any goods from duty under the provisions of Clause (xvii). It is, therefore, clear that general power was delegated to the Central Government for exemption of goods from duty by making rules in that connection from time to time. The provision in Clause (mvii) had not the effect of providing that every time when any particular item of excisable goods was required to be exempted from payment of duty a separate rule should be enacted. Ordinary legislative practice well known to Parliament was that rules enacted would operate continuously. Having regard to that legislative practice, it was permissible to hold that Clause (xvii) had not the meaning of bringing before Parliament by way of a rule matter of exemption of each excisable item from payment of duty from time to time. On the contrary, in spite of the language in Clause (xvii), it must be held that the true meaning and effect of the provision in that clause was that the Central Government should propose to Parliament a rule providing a scheme and/or machinery enabling the Central Government to grant exemption as occasion arose from time to time in connection with each and all excisable items. We, therefore, do not accept the contention that the true effect of the provision in Clause (xvii) was that under the powers reserved to it under Sub-section (1) of Section 37, the Central Government was required to bring the matter of providing exemption from payment of duty in respect of each different excisable item .from time to time as occasion arose on the table of Parliament under the proviso to Section 38 of the Act. Rule 8 was made by the Central Government under Sub-section (1) of Section 37 and the same was put on the table of Parliament in accordance with the proviso to Section 38. That Rule was accepted by Parliament as a correct scheme and machinery for granting exemption from duty in special cases. We are, therefore, unable to accept the submission made that the provisions in Rule 8 are contradictory of the provision in Clause (xvii) of Section 37(2). On the contrary, in our view, the provision similar to and like what is in Rule 8 was authorised to be made under Sub-section (1) of Section 37 and the rule is, therefore, in no manner in contravention of the provision in Clause (xvii).
15. It requires to be stated that all rules made under the powers reserved to the Central Government under Sub-section (1) of Section 37 were required under the proviso to Section 38 to be laid on the table of Parliament and under the main part of the section, have effect as if enacted under the Act. The main part of the section also provides that all notifications issued under the Act shall have effect as if enacted under the Act. The scheme for exemption as enacted in Rule 8 also provides that exemption must be granted by notifications published in the Official Gazette. The notifications issued under Rule 8, therefore, must be held to have effect as if enacted in the Act itself. For this reason, (it appears to us that) in the case of Orient 'Weaving Mills v. Union of India it was held in connection with a notification under Rule 8 that: 'Thus, it is manifest that the notifications and the rule impugned in this case have been incorporated into the Act itself, and have become part of the taxing statute.' Having made the above finding, the Supreme Court further observed: 'That being so, it is a little difficult to appreciate the first prayer of the petitioners, asking for a declaration that the levy of excise duty on the piece-goods produced by the petitioners be declared to be unconstitutional.' It is abundantly clear that the Supreme Court held that since Rule 8 was enacted under the powers reserved to the Central Government under Sub-section (1) of Section 87, it had become part of the statute itself. The Supreme Court, therefore, further held that notifications issued under the powers reserved to the Central Government under Rule 8 were notifications issued under the statute itself. These notifications became part of the statute itself. The Supreme Court, therefore, observed that it failed to appreciate the declaration claimed in the petition. Now, the matter of the validity of the Rule 8 was not discussed before the Supreme Court on the footing of the effect and construction of Clause (xvii); but the finding of the Supreme Court that Rule 8 was valid must be held to have been arrived at after correct appreciation of the above relevant provisions of the Act. It is impossible for us, therefore, to accept the contention made that the Rule 8 is ultra vires because it suffers from delegation of essential legislative functions to the administrative authorities. The rule was laid on the table of Parliament and for good or bad reasons was not modified by Parliament. Under the proviso to Section 38, the rule became part of the statute and has the effect as if it was enacted in the Act, The contention that the rule is not part of the Act and was not enactment of Parliament is, therefore, prima facie, misconceived and untenable.
16. The question is whether the power of exemption delegated to the Central Government and the executive authority is delegation of essential legislative functions and abdication of such functions by Parliament.
17. In this connection, the contention on behalf of the respondents is that no doubt the Legislature must retain in its hands essential legislative function; but that function mainly consists of determination of the legislative policy. After such policy is determined, the executive authority can be authorised to modify the existing or future laws but not any of its essential features. In developing this submission, reliance was strongly placed on behalf of the respondents on the fact that Parliament had from time to time fixed the higher limit of both the basic as well as the special duty of excise in respect of this item of excisable goods. Having regard to that fact, the submission was that it was not permissible for this Court to hold, when authority to exempt was given to the Central Government, that Parliament had abdicated its function as Legislature. The higher limit was control and guidance which was decided by Parliament. The executive had never thought it appropriate to collect duty on the higher basis fixed by Parliament. The Central Government as executive authority had granted by notifications of exemptions relief in respect of diverse duties enacted and specified in the schedule to the Act. Under those circumstances, the argument that Parliament had not controlled and not guided the Central Government in connection with the matter of exemption should be negatived. The further submission with certain emphasis was that granting of exemptions in the matter of taxing statutes was not at all an essential legislative function. It was not a legislative function in any sense and could be delegated as a mere matter of administrative facility and convenience to the executive authority. Reliance was placed in that connection on certain decisions of the Supreme Court which are all cited in the case of Delhi Municipality v. B. C. S. & W. Mills : 3SCR251 , which was strongly relied upon on behalf of the petitioners. The question before the Supreme Court in that case related to the provisions in Section 150(1) of the Delhi Municipal Corporation Act. The scheme of that section authorised the Corporation to pass a resolution for levy of taxes defining the maximum rate of the tax to be levied. The resolution passed under that section was required to be submitted to the Central Government for its sanction and came into force after such sanction was given by the Government. The scheme was that thereafter the Corporation was required to pass a second resolution determining the actual rates at which the tax should be leviable and thereafter the tax became payable. The contention on behalf of the respondent in that case was that the provision in Sub-section (1) of Section 150 entitling the Corporation to fix the maximum rate of tax by the first resolution delegated completely unguided power to the Corporation and suffered from the vice of excessive delegation and was unconstitutional. In connection with that question, three separate judgments were delivered by a Bench of seven Judges of the Supreme Court. Reference was made to the observations contained in the case of Pandit Banarsi Das v. The State of Madhya Pradesh : 1SCR427 , where it was observed (p. 435) :.Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like.
Wanchoo C. J. and Shelat J. observed that the statement of law as contained in the case of Pandit Banarsi Das v. The State of Madhya Pradesh if it meant 'that it is open to the legislature to delegate the power to fix the rate of tax to another authority without any qualification, guidance, control or safeguard, it is too widely stated...' At para. (27), referring to the case of Devi Das v. State of Punjab : 3SCR557 this Bench observed (p. 1248):.This was not a case of municipal taxation. In this case the legislature gave power to the State Government to fix sales tax at such rates as the State Government thought fit. The case of Calcutta Corporation v. Liberty Cinema : 2SCR477 was distinguished in this case and it was pointed out that the needs of the State and the purposes of the Act could not give sufficient guidance for the purpose of fixing rates of sales tax by the State Government. There is in our opinion a clear distinction between delegation of fixing the rate of tax like sales tax to the State Government and delegation of fixing rates of certain taxes for purposes of local taxation. The needs of the State are unlimited and the purposes for which the state exists are also unlimited. The result of making delegation of a tax like sales tax to the State Government means a power to fix the tax without any limit even if the needs and purposes of the State are to be taken into account.
Upon reviewing the previous authorities, this Bench came to the conclusion (p. 1244) :.the principle is well established that essential legislative function consists of the determination of the legislative policy and its formulation as a binding rule of conduct and cannot be delegated by the legislature.... The legislature must retain in its oven hands the essential legislative functions and what can be delegated is the task of subordinate leg isolation necessary for implementing the purposes and objects of the Act. Where the legislative policy is enunciated with sufficient clearness or a standard is laid down, the courts should not interfere. What guidance should be given and to what extent and whether guidance has been given in a particular case at all depends on a consideration of the provisions of the particular Act with which the Court has to deal including its preamble.
The Bench consisting of Hidayatullah and Ramaswami JJ. was not agreeable to accept the criticism of the observations made in the case of Pandit Banarsi Das v. The State of Madhya Pradesh by Wanchoo C. J. and Shelat J. They observed (p. 1252) :.The principle now advocated that the legislature must itself impose the tax by laying down the rate, the persons to be affected and the manner of levy and collection when it concedes power to Municipal Corporation appears to be a novel doctrine which has not been accepted even in the land where the doctrine about delegated legislation took its birth.
At para. (56) it was observed (p. 1258) :.The doctrine that Parliament cannot delegate its powers, therefore, must be understood in a limited way. It only means that the legislature must not efface itself but must give the legislative sanction to the imposition of the tax and must keep the control in its own hands. There is no specific provision in the Constitution which says that the Parliament cannot delegate to certain specified instrumentalities the power to effectuate its own will. The question always is whether the legislative will has been exercised or not. Once it is established that the legislature itself has willed that a particular thing be done and has merely left the execution of it to a chosen instrumentality (provided that it has not parted with its control) there can be no question of excessive delegation. If the delegate acts contrary to the -wishes of the legislature the legislature can undo what the delegate has done. Even the courts, as we shall show presently, may be asked to intervene when the delegate exceeds its powers and functions. The observations and theories culled from American cases cannot be applied in our country without reflection...Parliament, when it confers such powers, cannot be said to abdicate or efface itself unless it can be said that it has lost its control over the action of the delegate. In the present case, in addition to prescribing the mode, it keeps a check by making Government, answerable to itself, the supervising authority. This is not a safeguard in the sense in which the matter has been accepted in the opinion of the learned Chief Justice, but is indicative of the exercise of the legislative will by the legislature itself. The details of the tax are to be considered by the supervising authority and if the tax is not what the legislature intended should be imposed, the tax cannot be imposed.
Sikri J. in the last judgment of the Court at para. (108) observed (p. 1266) :
Apart from authority, in my view Parliament has full power to delegate legislative authority to subordinate bodies. This power flows, in my judgment, from Article 246 of the Constitution.
Now, having regard to the observations of Wanchoo C. J. and Hidayatullah J. which we have quoted above, the question which requires to be decided in the present petition is as to whether on the facts on which reliance is placed on behalf of the respondents it can be held that Parliament abdicated its legislative functions. It is apparent that rules made under all fiscal statutes provide for granting of exemptions by executive authorities in respect of tax levied by the provisions in the statute. The Rule 8 is a similar provision and does not depart from the usual legislative practice adopted in connection with granting of exemptions under all fiscal statutes. In our view, the granting of exemption is not any essential feature of any particular legislation. It is an incidental matter arising in administration for the convenience of the assessees liable to pay tax on the one hand and administration on the other. The higher limit of duty having been fixed in respect of item 18 of excisable goods by Parliament both in connection with the basic duty and the special duty for the convenience of administration and otherwise, it was necessary for Parliament to delegate to the Central Government powers to modify the provision made by granting of exemptions and such delegation cannot be held to be abdication of legislative function by Parliament. When Parliament fixed the basic duty at Rs. 45 per kilogramme and 33| per cent, as special duty, Parliament had sufficiently indicated its legislative will and also provided for complete control on the executive authority in connection with carrying into effect the provisions relating to the imposition of those duties. Having regard to what has been stated in diverse authorities in connection with taxing statutes and the objects of those statutes including the two cases to which we have referred, viz. Orient Weaving Mills v. Union of India and British India Corporation v. Collector, Central Excise, it is clear that the purpose of taxing statutes is not only to recover taxes but in that very connection to look after and protect small manufacturers by granting exemptions in their favour. In that connection, it is unnecessary to refer to diverse text books and authorities. It is well established that economy of the country must be controlled by enforcement of customs and excise duty in a manner which is beneficial to the country. In that connection, it is permissible for Parliament to delegate to the executive authority powers to modify by way of exemption the duties imposed and declared by Parliament under several fiscal statutes. We are, therefore, unable to accept the contention made on behalf of the petitioners that the provisions in Section 37(2)(ocvii) suffer from the vice of excessive delegation and by enactment of Rule 8 Parliament has abdicated its function as Legislature. We are also unable to accept the contention that the provisions in Rule 8 suffer from the vice of excessive delegation of legislative function by Parliament. These contentions, therefore, fail.
18. In this matter, Mr. Mody for the petitioners submits that the hearing of this petition was required to be adjourned on two previous occasions after it had lasted for some time, because the affidavit as required by law had not been filed on behalf of the Union of India. He, therefore, submits that the appropriate order for costs is no order as to costs. Mr. Advani has submitted that the hearing of the petition has lasted for 3 1/2 days and such order for costs as appears appropriate should be made.
19. The petition is dismissed. Rule discharged with costs fixed at Rs. 500.