Supreme Court On Article 14 & Tax Discrimination -I

Article 14 of the Constitution of India provides that State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India.
This led to challenge various levy of taxes , notifications , circulars , directions et al under the guise of tax discrimination .It has had been a matter of dispute and Courts has to carefully deal such issues as to whether judiciary can interfere and/or entertain such writs if there is lack of reasonableness is such levy of tax , directions, circulars etc .
The courts of law have always emphasised that Article 14 can be exercised where there is lack of reasonableness in any  levy of tax .
We are taking up certain observations of the courts on exercise of Article 14 on such  issues as below :
In Union of India & Anr. v. International Trading Co. & Anr- (2003) 5 SCC 437, Supreme Court of India held as under:
14. It is trite law that Article 14 of the Constitution applies also to matters of governmental policy and if the policy or any action of the Government, even in contractual matters, fails to satisfy the test of reasonableness, it would be unconstitutional.
15. While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily on by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the state, and non-arbitrariness in essence and substance is the heart beat of fair play.
Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness.”
In Satwant Singh Sawhney v. D. Ramarathnam, Asstt. Passport Officer- AIR 1967 SC 1836 ,Supreme Court of India held as under:
Article 14 says that the State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India. This doctrine of equality before the low is a necessary corollary to the high concept of the rule of law accepted by our Constitution. One of the aspects of rule of law is that every executive action, if it is to operate to the prejudice of any person, must be supported by some legislative authority.”
In Ram Prasad Narayan Sahi v. The State of Bihar- AIR 1953 SC 215 , Supreme Court of India held as under:
“There have been a number of decisions by this court where the question regarding the nature and scope of the guarantee implied in the equal protection clause of the Constitution came up for consideration and the general principles can be taken to be fairly well settled. What this clause aims at is to strike down hostile discrimination or oppression or inequality. As the guarantee applies to all persons similarly situated, it is certainly open to the legislature to classify persons and things to achieve particular legislative objects; but such selection or differentiation must not be arbitrary and should rest upon a rational basis, having regard to the object which the legislature has in view. It cannot be disputed that the legislation in the present case has singled out two individuals and one solitary transaction entered into between them and another private party, namely, the Bettiah Wards Estate and has declared the transaction to be a nullity on the ground that it is contrary to the provisions of law, although there has been no adjudication on this point by any judicial tribunal. It is not necessary for our present purpose to embark upon a discussion as to how far the doctrine of 'separation of powers has been recognised in our Constitution and whether the legislature can arrogate to itself the powers of the judiciary and proceed to decide disputes between private parties by making a declaration of the rights of one against the other. It is also unnecessary to attempt to specify the limits within which any legislation, dealing with private rights, is possible within the purview of our Constitution. On one point our Constitution is clear and explicit, namely, that no law is valid which takes away or abridges the fundamental rights guaranteed under Part III of the Constitution. There can be no question, therefore, that it the legislation in the present case comes within the mischief of article 14 of the Constitution, it has got to be declared invalid.”
In Maganbhai Ishwarbhai Patel v. Union of India- (1970) 3 SCC 400 wherein it was held as under:
If, in consequence of the exercise of executive power, rights of the citizens or others are restricted or infringed, or laws are modified, the exercise of power must be supported by legislation : where there, is no such restriction, infringement of the right or modification of the laws, the executive is competent to exercise the power.”

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