Nathala Maganlal Chauhan v. State of Gujarat
[Citation -2020-LL-0204-75]

Citation 2020-LL-0204-75
Appellant Name Nathala Maganlal Chauhan
Respondent Name State of Gujarat
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act CGST
Date of Order 04/02/2020
Judgment View Judgment
Keyword Tags sale of immovable property • attachment of bank account • provisional attachment • delegation of power • discretionary power • issuance of notice • search and seizure • legislative intent • service of notice • sufficient cause • input tax credit • recovery of tax • non-compliance • seized goods • ultra vires • evade tax • job work • penalty


C/SCA/513/2020 JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 513 of 2020 With R/SPECIAL CIVIL APPLICATION NO. 2741 of 2020 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/ and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Sd/ 1 Whether Reporters of Local Papers may be allowed YES to see judgment ? 2 To be referred to Reporter or not ? YES 3 Whether their Lordships wish to see fair copy NO of judgment ? 4 Whether this case involves substantial question NO of law as to interpretation of Constitution of India or any order made thereunder ? NATHALAL MAGANLAL CHAUHAN Versus STATE OF GUJARAT Appearance: MR CHETAN K PANDYA for Petitioner(s) No. 1 MR KAMAL B.TRIVEDI, ADVOCATE GENERAL with MR VINAY VISHEN AND MR CHINTAN DAVE, AGP for Respondent(s) No. 1,2,3,4 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 04/02/2020 COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) Page 1 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 1. RULE returnable forthwith. Mr.Vinay Vishen and Mr.Chintan Dave, learned AGP waive service of notice of rule for and on behalf of State respondents. 2. Since issues raised in both writ-applications are same, those were heard analogously and are being disposed of by this common judgment and order. 3. For sake of convenience, Special Civil Application No.513 of 2020 is treated as lead matter. By this writ-application under Article 226 of Constitution of India, writ-applicant has prayed for following reliefs : (a) To issue writ of mandamus and/or any other writ, order or direction, directing to quash and set aside Notification No.EST/1/Jurisdiction/B.2168 dated 05.07.2017 issued by Commissioner of State Tax, Gujarat State at Annexure-A to petition. (b) Pending admission, final hearing and disposal of this petition, to stay implementation and operation of Notification No.EST/1/Jurisdiction/B.2168 dated 05.07.2017 issued by Commissioner of State Tax, Gujarat State at Annexure-A to petition. (c) Pending admission, final hearing and disposal of this petition to release petitioner's son Paresh Nathalal Chauhan as he has been arrested under authorization issued by Additional Commissioner of State Tax exercising Page 2 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT powers under Section 69 of Gujarat Goods and Services Tax Act, 2017 relying on Notification dated 05.07.2017 at Annexure-A to this petition. (d) Pass such other and further orders as Hon'ble Court deems just and expedient. (e) To provide for cost of this petition to petitioner. 4. facts giving rise to present writ-application may be summarised as under : 5. It is case of writ-applicant that his son, namely Paresh Nathalal Chauhan, is proprietor of proprietary concern running in name of Lancer Enterprise. proprietary firm is situated at Vrundavan Estate, Ramol, Ahmedabad. 6. According to writ-applicant, his son had rented factory premises including machines of proprietary concern to one Mr.Nipun Patel for purpose of manufacturing miscellaneous articles of plastics on job work basis. Few officers from office of Commissioner of State Tax visited residential premises of writ-applicant on 11 th October 2019 and inquired about whereabouts of his son. It is alleged that officers harassed family by their presence in flat for almost period of one week. In view of aforesaid, Special Civil Application No.18463 of 2019 came to be filed in this High Court with following prayers : Page 3 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (A) To issue writ of mandamus and/or writ of prohibition and/or any other appropriate writ, order or direction, directing respondents not to take any actions against petitioner being proprietor of Lancer Enterprise exercising powers under Section 69 read with Section 132 without following due process of law of assessment and adjudication of alleged evasion of GST as contemplated under Section 61, Section 73 or under Section 74 of Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 i.e. before following provisions of Chapter XII of Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 and Chapter VIII of Central Goods and Services Tax Rules, 2017 and Gujarat Goods and Services Tax Rules, 2017 in connection with investigation initiated by State Tax, Unit-22, Ahmedabad i.e. by respondents. (B) To issue writ of mandamus and/or writ of prohibition and/or any other appropriate writ, order or direction, directing to quash and set-aside order dated 23.06.2017 bearing No.GSL/S.5(1)/B.1 passed by Commissioner of State Tax, Gujarat in exercise of powers under sub-section (1) of Section 5 read with clause (91) of Section 2 of GGST and rules framed thereunder assigning functions to proper officers to be performed by higher officer under GGST at Annexure-A. (C) Pending admission, final hearing and disposal of this petition, to restrain respondents from exercising powers under Section 69 read with Section 132 of CGST or GGST Page 4 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT without following due process of law of assessment and adjudication of alleged evasion of GST as contemplated under Section 61, Section 73 or under Section 74 of Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 i.e. before following provisions of Chapter XII of Central Goods and Services Tax Act, 2017 and Gujarat Goods and Services Tax Act, 2017 and Chapter VIII of Central Goods and Services Tax Rules, 2017 and Gujarat Goods and Services Tax Rules, 2017 in connection with investigation initiated by State Tax, Unit-22, Ahmedabad on such terms and conditions which may be deemed fit and proper to this Hon'ble Court and in interest of petitioner. (D) Pending admission, final hearing and disposal of this petition, to direct respondents to release petitioner's family members from house arrest and/or to remove officials of respondents from petitioner's residential premises being Flat No.104, Aryavrat Heights, Prernatirth Derasar Road, Satellite, Ahmedabad. (E) To pass any other and further orders in interest of petitioner and in interest of justice on such terms and conditions as may be deemed fit and proper to this Hon'ble Court. (F) To provide for costs of this petition. 7. In aforesaid writ-application, Coordinate Bench of this Court passed following order, dated 25 th October 2019 : Page 5 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 1. Mr. Chetan Pandya, learned advocate for petitioner has tendered affidavit of Nathalal Maganlal Chauhan, father of petitioner. same is taken on record. 2. learned Assistant Government Pleader has submitted confidential report of proceedings carried out by respondents at premises of petitioner pursuant to authorisation issued in favour of second respondent under sub-section (2) of section 67 of Central Goods and Services Tax Act, 2017 (hereinafter referred to as CGST Act ). 3. This court has perused report in its entirety. perusal of report reveals that concerned officers authorised to carry out search at residential premises of petitioner had stayed there from 11.10.2019 to 18.10.2019. perusal of record of proceedings of case reveals that on 11.10.2019 at 2:15, it has been recorded that after searching of rooms in premises, records of accounts were brought to main room and gathered there which included bank passbooks of family members as well as cheque books and that verification thereof is continuing. proceedings thereafter do not reveal any further search carried out at premises but reveal that officers had stayed at premises and had examined phone calls that were received by family members and had recorded their phone calls. They had also recorded statements of family members of Page 6 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT petitioner on 11.10.2019. record further reveals that officers who had arrived on previous day as well as panchas were relieved by new set of officers and panchas and this cycle continued till 18.10.2019. It appears that thereafter they have been questioning family members of petitioner on day to day basis till 18.10.2019. 4. Section 67 of CGST Act, reads thus:- 67. Power of Inspection, search and seizure. (1) Where proper officer, not below rank of Joint Commissioner, has reasons to believe that (a) taxable person has suppressed any transaction relating to supply of goods or services or both or stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of provisions of this Act or rules made thereunder to evade tax under this Act; or (b) any person engaged in business of transporting goods or owner or operator of warehouse or godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such manner as is likely to cause evasion of tax payable under this Act, he may authorise in writing any other officer of central tax to inspect Page 7 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT any places of business of taxable person or persons engaged in business of transporting goods or owner or operator of warehouse or godown or any other place. (2) Where proper officer, not below rank of Joint Commissioner, either pursuant to inspection carried out under sub-section (1) or otherwise, has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he may authorise in writing any other officer of central tax to search and seize or may himself search and seize such goods, documents or books or things: Provided that where it is not practicable to seize any such goods, proper officer, or any officer authorised by him, may serve on owner or custodian of goods order that he shall not remove, part with, or otherwise deal with goods except with previous permission of such officer: Provided further that documents or books or things so seized shall be retained by such officer only for so long as may be necessary for their examination and for any inquiry or proceedings under this Act. (3) documents, books or things referred to in sub- section (2) or any other documents, books or things Page 8 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT produced by taxable person or any other person, which have not been relied upon for issue of notice under this Act or rules made thereunder, shall be returned to such person within period not exceeding thirty days of issue of said notice. (4) officer authorised under sub-section (2) shall have power to seal or break open door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. (5) person from whose custody any documents are seized under sub-section (2) shall be entitled to make copies thereof or take extracts therefrom in presence of authorised officer at such place and time as such officer may indicate in this behalf except where making such copies or taking such extracts may, in opinion of proper officer, prejudicially affect investigation. (6) goods so seized under sub-section (2) shall be released, on provisional basis, upon execution of bond and furnishing of security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as case may be. Page 9 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of seizure of goods, goods shall be returned to person from whose possession they were seized: Provided that period of six months may, on sufficient cause being shown, be extended by proper officer for further period not exceeding six months. (8) Government may, having regard to perishable or hazardous nature of any goods, depreciation in value of goods with passage of time, constraints of storage space for goods or any other relevant considerations, by notification, specify goods or class of goods which shall, as soon as may be after its seizure under sub-section (2), be disposed of by proper officer in such manner as may be prescribed. (9) Where any goods, being goods specified under sub- section (8), have been seized by proper officer, or any officer authorised by him under sub-section (2), he shall prepare inventory of such goods in such manner as may be prescribed. (10) provisions of Code of Criminal Procedure, 1973, relating to search and seizure, shall, so far as may be, apply to search and seizure under this section Page 10 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT subject to modification that sub-section (5) of section 165 of said Code shall have effect as if for word Magistrate , wherever it occurs, word Commissioner were substituted. (11) Where proper officer has reasons to believe that any person has evaded or is attempting to evade payment of any tax, he may, for reasons to be recorded in writing, seize accounts, registers or documents of such person produced before him and shall grant receipt for same, and shall retain same for so long as may be necessary in connection with any proceedings under this Act or rules made thereunder for prosecution. (12) Commissioner or officer authorised by him may cause purchase of any goods or services or both by any person authorised by him from business premises of any taxable person, to check issue of tax invoices or bills of supply by such taxable person, and on return of goods so purchased by such officer, such taxable person or any person in charge of business premises shall refund amount so paid towards goods after cancelling any tax invoice or bill of supply issued earlier. 5. Thus, sub-section (2) of section 67 of CGST Act empowers authorised officer to search and seize goods, documents or books or things. Sub-section (4) of section 67 empowers officer authorised under sub-section (2) to Page 11 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT seal or break open door of any premises or to break open any almirah, electronic devices, box, receptacle in which any goods, accounts, registers or documents of person are suspected to be concealed, where access to such premises, almirah, electronic devices, box or receptacle is denied. Thus, officers concerned were authorised to seize such books, goods, documents, or things which were found at premises. Sub-section (2) of section 67 does not empower officer concerned to record statements of family members through force or coercion or to record their conversations in their mobile phones. In exercise of powers under sub-section (2) of section 67 of CGST Act, it is not permissible for authorised officer to use coercive measures against family members to find out whereabouts of taxable person. It is shocking to see that in premises where there are three ladies, namely, petitioner s mother, wife and young daughter, male officers together with CRPF Officer have stayed throughout day and night despite fact that goods, articles and things were already seized on 11.10.2019. entire exercise carried out by concerned officers from 12.10.2019 to 18.10.2019 was totally without any authority of law and in flagrant disregard of provisions of Act and rules and in total abuse of powers vested in them under Act. manner in which officers have conducted themselves by overreaching process of law and acting beyond powers vested in them under sub-section (2) of section 67 of CGST Act needs to be deprecated in strictest terms. Therefore, proper inquiry needs to be made in respect of action of respondent officers of staying Page 12 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT day and night at premises of petitioner without any authority of law. 6. In aforesaid premises, first respondent Commissioner of State Tax, Ahmedabad shall carry out proper inquiry in matter and submit report before this court on or before 13th November, 2019. 7. Stand over to 13th November, 2019. 8. Registry to forthwith forward copy of this order to Commissioner of State Tax as well as Chief Secretary of State to look into matter and do needful to ensure that such incidents are not repeated. 8. Ultimately, on 30th December 2019, son of writ-applicant came to be arrested by respondent no.4 in exercise of power under Section 69 of Central Goods and Services Tax Act, 2017 (for short, 'the Act 2017'). arrest was on reasonable belief that son of writ-applicant has committed offence under Section 132 of Act 2017. 9. son of writ-applicant came to be produced before Chief Metropolitan Magistrate at Ahmedabad who, in turn, remanded son of writ-applicant to judicial custody. 10. writ-applicant being father, whose son has been arrested by respondent no.4, is here before this Court questioning legality and validity of Notification No.EST/1/Jurisdiction/B.2168 dated 5 th July 2017, by which Page 13 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT Commissioner of State Tax has delegated all his powers to Special Commissioner of State Tax and Additional Commissioners of State Tax. SUBMISSIONS ON BEHALF OF WRIT-APPLICANT : 11. principal argument of Mr.Chetan Pandya, learned counsel appearing for writ-applicant, is that Commissioner of State Tax could not have delegated all his powers under Act 2017 in favour of Special Commissioner of State Tax and Additional Commissioners of State Tax by virtue of power conferred under sub-section (3) of Section 5 of Act 2017. Mr.Pandya would submit that plain language of Section 69 of Act would indicate that reasonable belief should be of Commissioner and not of delegated authority. argument is that Parliament has chosen and thought fit to repose confidence in Commissioner and that is reason why in Section 69 phrase 'Commissioner has reasons to believe' has been stated. 12. Mr.Pandya would submit that words 'reason to believe' contemplates objective determination based on intelligent care and deliberation as distinguished from purely subjective consideration. If such is mandate of Legislature, then such power can never be delegated. Mr.Pandya would submit that impugned Notification is contrary to mandate of Section 6 of Gujarat Goods and Services Tax Act, 2017. According to Mr.Pandya, while passing order under Section 69 of GGST Act, 2017, simultaneous order under CGST Act, 2017 shall also have to be passed. Under CGST Act, Page 14 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 2017, Commissioner or Additional Director General of Central Tax would exercise power under Section 69 of Act, 2017. Additional Commissioner of State Tax is subordinate in rank compared to Commissioner of Central Tax. He pointed out that for GGST Act, 2017, it is Additional Commissioner of State Tax who would be exercising power under Section 69 of Act on strength of impugned Notification whereas, under CGST Act, 2017, it is Commissioner or Additional Director General who would be exercising powers. 13. Mr.Pandya, learned counsel would vehemently submit that assuming for moment that Commissioner of Tax has been empowered by statute to delegate his powers, statute at same time has also deemed it fit to say in so many words in Section 69 of Act that reasonable belief should be that of Commissioner. contention raised is on footing that wherever power is to be exercised based on reasonable belief of authority, then such power cannot be delegated though statute empowers authority to do so. In other words, Mr.Pandya drew distinction between particular power to be exercised and power to be exercised based on reasonable belief of authority. 14. Mr.Pandya further pointed out that impugned Notification is in direct conflict with Circular : 49 dated (Flyer No.) dated 1st January 2018 issued by department. Mr.Pandya, in support of his submissions, has placed reliance on following case-law : Page 15 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (1) Valerius Industries v. Union of India (Special Civil Application No.13132 of 2019, decided on 28 th August 2019) (2) Deep Suresh Gadhecha v. State of Gujarat and others (Special Civil Application No.10436 of 2019, decided on 16th December 2019) 15. In such circumstances referred to above, Mr.Pandya prays that there being merit in his writ-application, same be allowed and impugned Notification be quashed. 16. On other hand, this writ-application has been vehemently opposed by Mr.Kamal B.Trivedi, learned Advocate General, appearing for State respondents. Mr.Trivedi would submit that challenge to legality and validity of impugned Notification is without any basis and devoid of any merit. Mr.Trivedi would submit that Section 5(3) of GGST Act, 2017, confers specific power upon Commissioner to delegate his powers to any other officer who is subordinate to him. According to Mr.Trivedi, there is no challenge to constitutional validity of Section 5(3) of Act, 2017. Once source of power is traced, then it is open for Commissioner to delegate his powers to any other officer. 17. Mr.Trivedi would submit that there are similar provisions under Customs Act, 1962, Central Excise Act, 1944, and Income Tax Act as amended by Finance (No.2) Act, 2019, as well. Mr.Trivedi would submit that if Legislature in its wisdom thought fit to confer power upon particular authority, then ordinarily it is that authority itself who has to exercise such Page 16 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT power. In other words, it is essential that delegated power should be exercised by authority upon whom it is conferred and by no one else. However, according to Mr.Trivedi, in present administrative setup, such principle cannot be carried to extreme. According to Mr.Trivedi, there is only one Commissioner of State Tax and it is virtually impossible for one person to singlehandedly discharge all duties and functions under Act. 18. Mr.Trivedi further pointed out that prosecution has also been instituted against son of writ-applicant for offence punishable under Section 174 of Indian Penal Code read with Section 70(1) of GGST Act, 2017, and CGST Act, 2017. Criminal Case No.104117 of 2019 is pending as on date in court of Additional Chief Metropolitan Magistrate, Ahmedabad. 19. Mr.Trivedi further seeks to rely on following averments made in affidavit-in-reply filed on behalf of respondents : In this regard, before adverting to contents of averments as canvassed by Petitioner before this Hon'ble Court, Respondent authorities crave leave of this Hon'ble Court to submit on history attached to son of present Petitioner. son of present Petitioner is involved in multi-crore scam wherein on premise of billing transactions, son of present Petitioner has operated numbers of fake entities and illegally claimed huge input tax credit running in crores of rupees and also illegally transferred Input Tax Credit to various entities, through Page 17 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT such fake entities. In this regard, complaint came to be registered under Section 174 of Indian Penal Code for non-compliance of summons, with Additional Chief Metropolitan Magistrate, Ahmedabad being Criminal Case No.104117 of 2019 by respondent authorities. In this regard, competent Court was pleased to issue bailable warrant upon son of present Petitioner and accordingly, son of present Petitioner reported before competent Court on 30.12.2019. Thereafter, son of present Petitioner came to be arrested by respondent authorities. 6. Thereafter, present Petitioner preferred present writ petition before this Hon'ble Court on ground that son of present Petitioner could not be arrested as authorization was issued by Additional Commissioner of State Tax in exercise of powers as conferred under Section 69 of GGST Act. According to Petitioner, said powers are required to be exercised only by Commissioner. In this regard, attention of this Hon'ble Court is drawn to provisions as contained in sub-section 3 of section 5 of GGST Act, that categorically empowers Commissioner to delegate his powers to Subordinate officers with conditions and limitations as deemed fit in facts of present case, Commissioner has delegated powers to Special Commissioner and Additional Commissioner under overall supervision of Commissioner himself. If provisions of sub-section 3 of section 5 of GGST Act are perused, it is clear that Commissioner is duly empowered to delegate any of Page 18 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT powers that are available with Commissioner under GGST Act. If legislature wanted to prescribe that only some of powers of Commissioner can be delegated, then legislature in its wisdom, would have inserted proviso or explanation restricting Commissioner from delegation of certain powers. However, as legislature has not kept any restrictions in so far as delegation of powers is concerned, argument as canvassed by Petitioner that said delegation is ipso facto illegal is without any basis and contrary to intention of GGST Act. 7. It is further submitted before this Hon'ble Court that notification under challenge is dated 05.07.2017. GGST Act was enacted on 01.07.2017. concerned Commissioner of State Tax at relevant point of time was also part of various committees viz. law committee, fitment committee, etc. at New Delhi, and therefore, was required to travel frequently. Moreover, as Government of India had come out with entirely new tax regime, Commissioner was also called upon by various institutions and chambers for explaining modalities and complexities attached with new tax regime. Therefore, for effective and appropriate administration of new tax regime, at relevant point of time i.e. on 05.07.2017, concerned Commissioner in its wisdom decided to delegate powers to senior officers of cadre so that administration is not disturbed. Moreover, Commissioner of State Tax is Head of entire department is required to look after administration of entire department. Therefore, considering administrative Page 19 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT flexibilities and practical difficulty, notification under challenge was published by then Commissioner of State Tax. 8. It is respectfully submitted that it could have never been intention of legislature/object of Act not to empower Commissioner to delegate his powers, inasmuch as, in absence thereof, same would lead to situation, where irrespective of circumstances prevailing, it would only Commissioner to do all acts contemplated under Act. In this regard, it is submitted that as far as GGST Act is concerned, there is only one post of Chief Commissioner for entire State of Gujarat. Thus, it is virtually impossible for one person to do all acts contemplated under Act by single person. Thus, with view to safeguard revenue, as well as, to take quick action and without taking any time for undertaking procedural approvals, legislature has consciously empowered Commissioner to delegate his powers to any other subordinate to him, which will allow department to take quick necessary actions, depending upon prevailing circumstances. 9. It is further submitted in State of Gujarat, there is only one position of Special Commissioner for entire State, which is generally held by officer from Indian Administrative Service (IAS) cadre or Indian Revenue Service (IRS) cadre. Moreover, position of Additional Commissioner is held by person from Gujarat Administrative Service (GAS). Hence, powers as available with Commissioner under GGST Act, are Page 20 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT delegated to officers from senior cadre and they are obligated to carry out functions as provided under GGST Act. It is further submitted before this Hon'ble Court that as provided under 69 of GGST Act, Additional Commissioner had reason to believe for exercising powers as conferred under section 69 of GGST Act as son of Petitioner was admittedly involved in offences as committed under section 132 of GGST Act. Therefore, requirement of reason to believe has been fulfilled before exercising powers of arrest as conferred under section 69 of GGST Act. 10. It is further submitted before this Hon'ble Court that even during earlier tax regime, as per section 45 of Gujarat Value Added Tax Act, 2003 Commissioner was empowered to initiate proceedings of attachment of bank account of dealer in order to protect interest of Government revenue. said powers were delegated by Commissioner under section 16 of Gujarat Value Added Tax Act, 2003. 11. In addition to above, even under other similar direct/indirect tax legislations referred hereunder, it is permissible to concerned Commissioner to delegate its powers, including powers relating to search, detention and seizure to any other officer subordinate to him. This position has been in vogue right from inception of said legislations and that, therefore, similar delegation under provisions of GGST Act by Commissioner in favour of his subordinate, in relatively at lower rank, Page 21 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT would not become bad in law, merely because what is been delegated is likely to entail drastic consequences: (a) Section 152 of Customs Act; (b) Section 37A of Excise Act; (c) Other State GST Acts. 12. Now, as far as contention of Petitioner with regard to arrest memorandum dated 31.12.2019 not having Document Identification Number is concerned, it is submitted that said contention is also not tenable under law, inasmuch as, till date, State of Gujarat has not issued any notification under GGST Act making it mandatory for generation and quoting of Document Identification Number on any of its document. In absence of such notification, arrest memorandum issued under GGST Act, without having Document Identification Number, could not be said to be invalid or in contravention to any of notifications issued under GGST Act. 20. Mr.Trivedi, in support of his aforesaid submissions, has placed reliance on following decisions : (1) Sidhartha Sarawgi v. Board of Trustees for Port of Kolkata and others, reported in (2014)16 SCC 248; (2) State of Bihar and others v. Anil Kumar and others, reported in (2017)14 SCC 304; (3) Sahni Silk Mills (P) Ltd. and another v. Employees' State Insurance Corporation, reported in (1994)5 Page 22 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT SCC 346. ANALYSIS : 21. Having heard learned counsel appearing for parties and having gone through materials on record, only question that falls for our consideration is, whether impugned Notification is liable to be quashed and set-aside. 22. Before adverting to rival submissions canvassed on either side, we must look into few relevant provisions of law. 23. Section 2(24) of GGST Act, 2017, defines term 'Commissioner'. It reads thus : (24) Commissioner means Commissioner of State tax appointed under section 3 and includes Chief Commissioner or Principal Commissioner of State tax appointed under section 3. 24. Section 3 is with regard to officers under GGST Act, 2017. Section 3 reads thus : 3. Officers under this Act.- Government shall, by notification, appoint following classes of officers for purposes of this Act, namely: (a) Chief Commissioner/Principal Commissioner/ Commissioner of State tax, (b) Special Commissioner of State tax, (c) Additional Commissioners of State tax, Page 23 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (d) Joint Commissioners of State tax, (e) Deputy Commissioners of State tax, (f) Assistant Commissioners of State tax, and (g) any other class of officers as it may deem fit: Provided that, officers appointed under Gujarat Value Added Tax Act, 2003 (Guj.1 of 2005) shall be deemed to be officers appointed under provisions of this Act. 25. Section 5 of Act, 2017, is with regard to officers. Section 5 reads thus : 5. Powers of Officers. (1) Subject to such conditions and limitations as Commissioner may impose, officer of State tax may exercise powers and discharge duties conferred or imposed on him under this Act and discharge duties conferred or imposed on him under this Act. (2) officer of State tax may exercise powers and discharge duties conferred or imposed under this Act on any other officer of State tax who is subordinate to him. (3) Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him. (4) Notwithstanding anything contained in this section, Appellate Authority shall not exercise powers and Page 24 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT discharge duties conferred or imposed on any other officer of State tax. 26. Section 69 is with regard to power to arrest. Section 69 reads thus : 69. Power to arrest. (1) Where Commissioner has reasons to believe that person has committed any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of said section, he may, by order, authorise any officer of State tax to arrest such person. (2) Where person is arrested under sub-section (1) for offence specified under sub-section (5) of section 132, officer authorised to arrest person shall inform such person of grounds of arrest and produce him before Magistrate within twenty four hours. (3) Subject to provisions of Code of Criminal Procedure, 1973 (2 of 1974),-- (a) where person is arrested under sub-section (1) for any offence specified under sub-section (4) of section 132, he shall be admitted to bail or in default of bail, forwarded to custody of Magistrate; (b) in case of non-cognizable and bailable offence, Page 25 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT Deputy Commissioner or Assistant Commissioner shall, for purpose of releasing arrested person on bail or otherwise, have same powers and be subject to same provisions as officer-in-charge of police station. 27. Section 167 is with regard to delegation of powers. It reads thus : 167. Delegation of powers. Commissioner may, by notification, direct that subject to such conditions, if any, as may be specified in notification, any power exercisable by any authority or officer under this Act may be exercisable also by another authority or officer as may be specified in such notification. 28. We may also look into Circular : 49 (Flyer No.) dated 1 st January 2018. Circular reads thus : Circular: 49 (Flyer No.) dated 01-Jan-2018 Inspection, Search, Seizure and Arrest C.B.E. & C. Flyer No.49, dated 1-1-2018 In any tax administration provisions for Inspection, Search, Seizure and Arrest are provided to protect interest of genuine taxpayers (as Tax evaders, by evading tax, get unfair advantage over genuine taxpayers) and as deterrent for tax evasion. These provisions are also required to safeguard Government's Page 26 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT legitimate dues. Thus, these provisions acts as deterrent and by checking evasion provide level playing field to genuine taxpayers. 2. It may be mentioned that options of Inspection, Search, Seizure and Arrest are exercised, only in exceptional circumstances and as last resort, to protect Government Revenue. Therefore, to ensure that these provisions are used properly, effectively and rights of taxpayers are also protected, it is stipulated that Inspection, Search or Seizure can only be carried out when officer, of rank of Joint Commissioner or above, has reason to believe existence of such exceptional circumstances. In such cases, Joint Commissioner may authorise, in writing, any other officer to cause inspection, search and seizure. However, in case of arrests same can be carried out only where person is accused of offences specified for this purpose and tax amount involved is more than specified limit. Further, arrests under GST Act can be made only under authorisation from Commissioner. 3. circumstances which may warrant exercise of these options are as follows : (i) Inspection 'Inspection' is softer provision than search which enables officers to access any place of business or of person Page 27 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT engaged in transporting goods or who is owner or operator of warehouse or godown. As discussed above inspection can be carried out by officer of CGST/SGST only upon written authorization given by officer of rank of Joint Commissioner or above Joint Commissioner or officer higher in rank can give such authorization only if he has reasons to believe that person concerned has done one of following actions : (a) Suppression of any transaction relating to supply of goods or services or stock in hand; (b) Claimed excess input tax credit; (c) Contravention of any provisions of Act or Rules to evade tax; (d) Transporting or keeping goods which escaped payment of tax or manipulating accounts or stocks which may cause evasion of tax; Inspection can also be done of conveyance. carrying consignment of value exceeding specified limit. person in charge of conveyance has to produce documents/devices for verification and allow inspection. Inspection during transit can be done even without authorisation of Joint Commissioner. (ii) Inspection in movement Page 28 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (a) Any consignment, value of which is exceeding Rs.50,000/-, may be stopped at any place for verification of documents/devices prescribed for movement of such consignments. (b) If on verification of consignment, during transit, it is found that goods were removed without prescribed document or same are being supplied in contravention of any provisions of Act, then same can be detained or seized and may be subjected to penalties as prescribed. (c) To ensure transparency and minimise hardships to trade law provides that if during verification, in transit, consignment is held up beyond 30 minutes transporter can feed details on portal. This will ensure accountability and transparency for all such verifications. Moreover, for verification during movement of consignment will also be done through Digital Interface and therefore physical intervention will be minimum and as has already been mentioned that in case of delay beyond 30 minutes transporter can feed details on portal. (iii) Search & Seizure provisions of search and seizure also provides enough safeguards and GST Law stipulates that search of any place of business etc. can be carried out only under Page 29 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT authorisation from officer of rank of Joint Commissioner and if he has reason to believe that person concerned has done at least one of following :- (a) Goods liable to confiscation or any documents/ books/record/things, which may be useful for or relevant to any proceedings, are secreted in any place then all such places can be searched; (b) All such goods/documents/books/record/things may be seized, however, if it is not practicable to seize any such goods then same may be detained. person from whom these are seized shall be entitled to take copies/extracts of seized records; (c) seized documents/books/things shall be retained only till time same are required for examination/enquiry/proceedings and if these are not relied on for case then same shall be returned within 30 days from issuance of show cause notice; (d) seized goods shall be provisionally released on execution of bond and furnishing security or on payment of applicable tax, interest and penalty; Recovery of tax (e) In case of seizure of goods, notice has to be issued within six months, if no notice is issued within period of six months then all such goods shall be Page 30 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT returned. However, this period of six months can be extended by Commissioner for another six months on sufficient cause; (f) inventory of seized goods/documents/ records is required to be made by officer and person, from whom same are seized, shall be given copy of same. (g) To ensure that provisions for search and seizure are implemented in proper and transparent manner, Act stipulates that searches and seizures shall be carried out in accordance with provisions of Criminal Procedure Code, 1973. It ensures that any search or seizure should be made in presence of two or more independent witnesses, record of entire proceedings is made and forwarded to Commissioner forthwith. (iv) Arrests In administration of taxation provisions for arrests are created to tackle situations created by some unscrupulous tax evaders. To some these may appear very harsh but these are necessary for efficient tax administration and also act as deterrent and instill sense of discipline. provisions for arrests under GST Law have sufficient inbuilt safeguards to ensure that these are used only under authorisation from Commissioner. Besides this, GST Law also stipulates that arrests can Page 31 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT be made only in those cases where person is involved in offences specified for purposes of arrest and tax amount involved in such offence is more than specified limit. salient points at these provisions are :- (a) Provisions for arrests are used in exceptional circumstance and only with prior authorisation from Commissioner. (b) law lays down stringent criteria and procedure to be followed for arresting person. person can be arrested only if criteria stipulated under law for this purpose is satisfied i.e. if he has committed specified offences (not any offence) and tax amount is exceeding rupees 200 lakhs. However, monetary limit shall not be applicable if offences are committed again even after being convicted earlier i.e. repeat offender of specified offence can be arrested irrespective of tax amount involved in case. (c) Further, even though person can be arrested for specified offences involving tax amount exceeding Rs.200 lakhs, however, where tax involved is less than Rs.500 lakhs, offences are classified as non-cognizable and bailable and all such arrested persons shall be released on Bail by Deputy/Assistant Commissioner. But in case of arrests for specified offences where tax amount involved is more than Rs.500 lakhs, offence is classified as cognizable Page 32 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT and non-bailable and in such cases bail can be considered by Magistrate only. 29. We shall now look into impugned Notification. impugned Notification reads thus : NOTIFICATION Commissioner of State Tax Gujarat State, Ahmedabad Dated 5th July 2017 No.EST/1/Jurisdiction/B.2168 In exercise of power conferred under sub-section (3) of section 5 of Gujarat goods and Services Tax Act, 2017 (Guj.25 of 2017), Commissioner of State Tax hereby delegates all functions under said Act to Special Commissioner of State Tax and Additional Commissioners of State Tax for carrying out purposes of said Act. said functions delegated as above shall be under overall supervision of Commissioner. 30. delegation is act of making or commissioning delegate. It generally means parting of powers by person who grants delegation and conferring of authority to do things which otherwise that person would have to do himself. Delegation is defined in Black s Law Dictionary as act of entrusting another with authority by empowering another to act as agent or representative . In P.Ramanatha Aiyar s, Law Lexicon, delegation is act of making or commissioning delegate. Delegation generally means parting of Page 33 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT powers by person who grants delegation, but it also means conferring of authority to do things which otherwise that person would have to do himself . Justice Mathew in Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. v. Assistant Commissioner of Sales Tax and Others [1974 (4) SCC 98], has succinctly discussed concept of delegation. Paragraph 37 reads as follows: 37. ... Delegation is not complete handing over or transference of power from one person or body of persons to another. Delegation may be defined as entrusting, by person or body of persons, of exercise of power residing in that person or body of persons, to another person or body of persons, with complete power of revocation or amendment remaining in grantor or delegator. It is important to grasp implications of this, for, much confusion of thought has unfortunately resulted from assuming that delegation involves or may involve, complete abdication or abrogation of power. This is precluded by definition. Delegation often involves granting of discretionary authority to another, but such authority is purely derivative. ultimate power always remains in delegator and is never renounced. 31. As general rule, whatever person has power to do himself, he may do by means of agent. This broad rule is limited by operation of principle that delegated authority cannot be re-delegated, delegatus non-potest delegare. naming of delegate to do act involving discretion indicates that delegate was selected because of his peculiar Page 34 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT skill and confidence reposed in him and there is presumption that he is required to do act himself and cannot re-delegate his authority. As general rule, "if statute directs that certain acts shall be done in specified manner or by certain persons, their performance in any other manner than that specified or by any other person than one of those named is impliedly prohibited. Normally, discretion entrusted by Parliament to administrative organ must be exercised by that organ itself. At same time, it is settled position of law that maxim delegatus non-potest delegare" must not be pushed too far. maxim does not embody rule of law. It indicates rule of construction of statute or other instrument conferring authority. Prima facie, discretion conferred by statute on any authority is intended to be exercised by that authority and by no other. However, intention may be negatived by any contrary indications in language, scope or object of statute. construction that would best achieve purpose and object of statute should be adopted. 32. Supreme Court, in case of Sahni Silk Mills (P) Ltd. and another v. Employees' State Insurance Corporation, reported in (1994)5 SCC 346, considered question, whether power under Section 85B of Employees' State Insurance Act, 1948, could have been exercised by Regional Directors of Corporation. argument before Supreme Court was that power could have been exercised either by Corporation or by Director General of said Corporation. Supreme Court noticed that power of Corporation to recover damages under Section 85B had not been questioned. Page 35 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT controversy was, whether such power could have been delegated under Section 94A to Regional Directors. Supreme Court, while dismissing SLPs, observed as under : 5. Courts are normally rigorous in requiring power to be exercised by persons or bodies authorised by statutes. It is essential that delegated power should be exercised by authority upon whom it is conferred and by no one else. At same time, in present administrative set up extreme judicial aversion to delegation cannot be carried on extreme. public authority is at liberty to employ agents to exercise its powers. That is why in many statutes, delegation is authorised either expressly or impliedly. Due to enormous rise in nature of activities to be handled by statutory authorities, maxim delegat us non potest delegare is not being applied specially when there is question of exercise of administrative discretionary power. 6. By now it is almost settled that legislature can permit any statutory authority to delegate its power to any other authority, of course, after policy has been indicated in statute itself within framework of which such delegatee is to exercise power. real problem or controversy arises when there is sub-delegation. It is said that when Parliament has specifically appointed authority to discharge function, it cannot be readily presumed that it had intended that its delegate should be free to empower another person or body to act in its place. In Barium Chemicals Ltd. v. Company Law Board, AIR 1967 SC 295 : Page 36 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (1966) Supp SCR 311 this Court said in respect of sub-delegation (at p. 306 of AIR): Bearing in mind that maxim delegatus non potest delegare sets out what is merely rule of construction, sub-delegation can be sustained if permitted by express provision or by necessary implication. 7. Again in Mangulal Chunilal v. Manilal Maganlal, AIR 1968 SC 822 (1968) 2 SCR 401 while considering scope of S.481(1)(a) of Bombay Provincial Municipal Corporation Act (59 of 1949) this Court said that Commissioner of Ahmedabad Municipal Corporation had delegated his power and function under aforesaid section to Municipal Officer to launch proceedings against person charged with offences under Act or Rules and that officer to whom such functions were delegated could not further delegate same to another. 8. In Halsbury's Laws of England, 4th Edition, Volume I in respect of sub-delegation of powers it has been said : In accordance with maxim delegatus non potest delegare , statutory power must be exercised only by body or officer in whom it has been confided, (H. Lavender and Sons Ltd. v. Minister of Housing and Local Government, 1970 (3) All ER 871) unless sub-delegation of power is authorised by express words or necessary implication (Customs and Excise Commrs. v. Cure and Deeley Ltd., 1962 (1) QB 340 K, 1961 (3) All ER 641 and Mungoni v. A. S. G. of Page 37 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT Northern Rhodesia, 1960(1) All ER 446 PC etc.). There is strong presumption against construing grant of legislative, judicial, or disciplinary power as impliedly authorising sub-delegation; and same may be said of any power to exercise of which designated body should address its own mind. Allam and Co. v. Europa Poster Services Ltd., 1968 (1) All ER 826....... 9. In case of Harishankar Bagla v. State of Madhya Pradesh, AIR 1954 SC 465 at 468, while examining scope of S.4 of Essential Supplies (Temporary Powers) Act, 1946 it was said : S.4 of Act was attacked on ground that it empowers Central Government to delegate its own power to make orders under S.3 to any officer or authority subordinate to it or Provincial Government or to any officer or authority subordinate to Provincial Government as specified in direction given by Central Government. In other words, delegate has been authorised to further delegate its power in respect of exercise of powers of S.3. Mr. Umrigar contended that it was for legislature itself to specify particular authorities or officers who could exercise power under S.3 and it was not open to legislature to empower Central Government to say what officer or authority could exercise power. Reference in this connection was made to two Page 38 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT decisions of Supreme Court of United States of America - 'Panama Refining Co. v. Ryan,' (1934) 293 US 388 (F) and 'Schechter v. United States,' (1934) 295 US 495 (G). In both these cases it was held that so long as policy is laid down and standard established by statute, no unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities making of subordinate rules within prescribed limits and determination of facts to which policy as declared by Legislature is to apply. These decisions in our judgment do not help contention of Mr.Umrigar as we think that S.4 enumerates classes of persons to whom power could be delegated or sub-delegated by Central Government and it is not correct to say 'that instrumentalities have not been selected by Legislature itself. In aforesaid case, sub-delegation was upheld because S.4 itself enumerated classes of persons to whom power could be delegated or sub-delegated by Central Government. 10. So far as present S.94A is concerned, it says that Corporation subject to any regulation made by Corporation in that behalf, may direct that particular or any of powers and functions which may be exercised or performed by Corporation may, in relation to such matters and subject to such conditions, if any, as may be specified 'be also exercisable by any officer or authority Page 39 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT subordinate to Corporation.' S.94A does not specifically provide that any officer or authority subordinate to Corporation to whom power has been delegated by Corporation may in his turn authorise any other officer to exercise or perform that power or function. But by resolution dated 28-2-1976 Corporation has not only delegated its power under S.85B(i) of Act to Director General, but has also empowered Director General to authorise any other officer to exercise said power. Unless it is held that S.94A of Act enables Corporation to delegate any of its powers and functions to any officer or authority subordinate to Corporation, and he in his turn can sub-delegate exercise of said power to any other officer, last part of resolution dated 28-2-1976 cannot be held to be within framework of S.94A. According to us, Parliament while introducing S.94A in Act, only conceived direct delegation by Corporation to different officers or authorities, subordinate to Corporation, and there is no scope for such delegate to sub-delegate that power, by authorising any other officer to exercise or perform power so delegated. 33. In State of Bihar and others v. Anil Kumar and others, reported in (2017)14 SCC 304, question that fell for consideration of Supreme Court was with regard to validity of investigative process under provisions of Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989. Central Government has framed rules, namely, Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Rules, 1995, in exercise of its powers under Section Page 40 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 23. Rule 7 of Rules mandates that offence under Act shall be investigated by police officer not below rank of Deputy Superintendent of Police. controversy arose because of notification issued by State of Bihar. notification was issued by State Government in exercise of its power vested under Section 9 of SC/ST Act. notification issued by State of Bihar virtually diluted, or rather, did away with Rule 7 of SC/ST Rules (framed by Central Government), which required all investigations in matters arising under Act to be carried by officer not below rank of Deputy Superintendent of Police. notification issued by State of Bihar allowed investigative process under SC/ST Act to be carried by officers three rank below rank of Deputy Superintendent of Police. Supreme Court considered pivotal issue, whether notification issued by State of Bihar in exercise of powers vested in State Government under Section 9 of SC/ST Act could be considered to have been exercised in breach of or in excess of powers delegated to State Government. 34. In aforesaid context, Supreme Court observed as under : 15. next issue that arises for consideration is, whether notification issued by State of Bihar dated 03.06.2002, in exercise of power vested in State Government, under Section 9 of SCST Act , can be considered to have been exercised in breach of, or in excess of power delegated to State Government. It was contention of learned counsel for appellant accused, that Section 9 contemplates possibility of Page 41 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT extending powers of arrest, investigation and prosecution ( of persons, alleged to have violated provisions of 'SCST Act'), in addition to those already provided for under Code of Criminal Procedure. Furthermore, as such, it was submitted, that it was not open to State Government, in exercise of powers vested with it (under Section 9 of 'SCST Act'), to vest such powers of arrest, investigation and prosecution, with police officer(s) below rank of police officer postulated and provided for under 'SCST Rules'. It was submitted, that under Rule 7 of above rules, powers of arrest, investigation and prosecution are mandated to be exercised by police officer, not below rank of Deputy Superintendent of Police. It was therefore submitted, that extension of investigating power, to police officer/official below expressly postulated rank, was not permissible. 16. In order to support his above assertion, learned counsel for appellant accused, also drew our attention to sub-section (2), of Section 9, of 'SCST Act', and on basis thereof contended, that from plain and simple interpretation of language adopted by legislature, in sub-section (2) of Section 9, it would emerge, that additional conferment of authority (with reference to arrest, investigation and prosecution), could only be extended to officer, other than police officer. 16. In order to appreciate contention of learned counsel for appellant accused, it is imperative for us to keep in mind scheme, which was provided for by Page 42 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT legislature, in dealing with offences under 'SCST Act'. In our considered view, at time of introduction and commencement of provisions of 'SCST Act', Section 9 of 'SCST Act' extended power of arrest, investigation and prosecution, to all officers as would be entitled to carry out aforesaid responsibilities, under Code of Criminal Procedure. And as such, it needs to be appreciated, that when provisions of 'SCST Act', came to be worked out, at outset, police personnel only, including those holding rank(s) of Inspector, Sub-Inspector and Assistant Sub-Inspector, exercised above powers. All these police personnel, were authorised by Section 9 of 'SCST Act', to be part of investigative process. In addition, under Section 9 aforementioned, State Government was authorized, to delegate power of investigation (in addition to, power of arrest, and of prosecution), in respect of offences under 'SCST Act', ......to any officer of State Government ..... , as State Government may consider necessary , ...for prevention of and for coping with any offence..... under `SCST Act'. power vested with State Government, under Section 9 of 'SCST Act', was therefore clearly expansive, obviously intended to and was enlarge zone of arrest, investigation and prosecution, to officers/officials in addition to those authorised to do so under Code of Criminal Procedure. power conferred on State Government under Section 9(1)(b), allowed State Government to confer power .....on any officer of State Government ..... power of delegation was not limited to police personnel only, but extended to any officer of Page 43 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT State Government, who may or may not belong to Police Department. It is therefore not possible for us to accept contention advanced by learned counsel for appellant-accused, founded on sub-section (2) of Section 9 of 'SCST Act'. 17. It is also necessary to take note of legislative intent expressed in Section 9, in that, it extended to State Government above discretionary authority. State Government was afforded discretion to vest with ... any officer of State Government ... power of arrest, investigation and prosecution, by augmenting zone provided for through non obstante clause. Obviously therefore, right to delegate such powers of arrest, investigation and prosecution, vested with State Government, was irrespective of provisions of Code of Criminal Procedure. Not only that, above power could be exercised, irrespective of provisions of parent 'SCST Act' itself. It is therefore apparent, that Section 9, was aimed at, and provided for, effective mechanism for arrest, investigation and prosecution, in addition to provisions in place. In case State Government found same as necessary and expedient, for effective implementation of provisions of 'SCST Act', it had right and responsibility, to vest power of arrest, investigation and prosecution, in additional personnel. Stated differently, in case State Government was satisfied, that officers vested with such powers, in consonance with provisions of 'SCST Act', were insufficient to carry out purposes of 'SCST Act', Page 44 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT State Government could extend power, to those not so expressly provided for. Accordingly, in case of inadequacy, to deal with provisions of 'SCST Act', State Government was at liberty to further delegate power of arrest, investigation and prosecution, to ... any officer of State Government ... , for fulfillment of purposes of 'SCST Act'. 21. Having concluded as above, we are satisfied to uphold, not only Rule 7 of SCST Rules , but also notification dated 03.06.2002, issued by State Government, in exercise of power vested in it under Section 9(1)(b) of 'SCST Act'. Accordingly, we find no merit in challenge raised on behalf of appellant-accused, to notification dated 03.06.2002. 35. In Sidhartha Sarawgi (supra), question before Supreme Court was, whether there is any exception to principle that 'delegate has no power to delegate', and whether there is any distinction between delegation of legislative and non-legislative powers. In this regard, Supreme Court observed as under : 4. There is subtle distinction between delegation of legislative powers and delegation of non-legislative/ administrative powers. As far as delegation of power to legislate is concerned, law is well-settled: said power cannot be sub-delegated. Legislature cannot delegate essential legislative functions which consist in determination or choosing of legislative policy and Page 45 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT formally enacting that policy into binding rule of conduct. Subordinate legislation which is generally in realm of Rules and Regulations dealing with procedure on implementation of plenary legislation is generally task entrusted to specified authority. Since Legislature need not spend its time for working out details on implementation of law, it has thought it fit to entrust said task to agency. That agency cannot entrust such task to its subordinates; it would be breach of confidence reposed on delegate. 5. Regarding delegation of non-legislative/administrative powers on person or body to do certain things, whether delegate himself is to perform such functions or whether after taking decision as per terms of delegation, said agency can authorize implementation of same on somebody else, is question to be considered. Once power is conferred, after exercising said power, how to implement decision taken in process, is matter of procedure. Legislature may, after laying down legislative policy, confer discretion on administrative agency as to execution of policy and leave it to agency to work out details within framework of that policy. So long as essential functions of decision making is performed by delegate, burden of performing ancillary and clerical task need not be shouldered by primary delegate. It is not necessary that primary delegate himself should perform ministerial acts as well. In furtherance of implementation of decision already taken by primary delegate as per delegation, Page 46 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT ministerial or clerical tasks may be performed by authorized officers. complexity of modern day administration and expansion of functions of State to economic and social spheres have made it necessary that Legislature gives wide powers to various authorities when situation requires it. Today's governmental functions are lot more complex and need for delegation of powers has become more compelling. It cannot be expected that head of administrative body performs each and every task himself. 6. issue was considered by this Court in Jamal Uddin Ahmad v. Abu Saleh Najmuddin and another4the context of procedure for filing of election petitions under Section 81 of Representation of Peoples Act, 1951. It was held that ministerial or administrative functions of authority on whom powers are conferred by statute can be exercised by authorized officers. It was held that: 13. functions discharged by High Court can be divided broadly into judicial and administrative functions. judicial functions are to be discharged essentially by Judges as per Rules of Court and cannot be delegated. However, administrative functions need not necessarily be discharged by Judges by themselves, whether individually or collectively or in group of two or more, and may be delegated or entrusted by authorization to subordinates unless there be some rule of law restraining such delegation or authorisation. Every Page 47 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT High Court consists of some administrative and ministerial staff which is as much part of High Court as institution and is meant to be entrusted with responsibility of discharging administrative and ministerial functions. There can be "delegation" as also there can be "authorization" in favour of Registry and officials therein by empowering or entrusting them with authority or by permitting few things to be done by them for and on behalf of Court so as to aid Judges in discharge of their judicial functioning. Authorization may take form of formal conferral or sanction or may be by way of approval or countenance. Such delegation or authorization is not matter of mere convenience but necessity at times. Judges are already overburdened with task of performing judicial functions and constraints on their time and energy are so demanding that it is in public interest to allow them to devote time and energy as much as possible in discharging their judicial functions, relieving them of need for diverting their limited resources of time and energy to such administrative or ministerial functions, which, on any principle of propriety, logic, or necessity are not required necessarily to be performed by Judges. Receiving cause or document and making it presentable to Judge for purpose of hearing or trial and many functions post decision, which functions are administrative and ministerial in nature, can be and are generally entrusted or made over to be discharged by staff of High Court, Page 48 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT often by making provision in Rules or under orders of Chief Justice or by issuing practice directions, and at times, in absence of rules, by sheer practice. practice gathers strength of law and older practice greater is strength...... 7. Practical necessities or exigencies of administration require that decision making authority who has been conferred with statutory power, be able to delegate tasks when situation so requires. Thus, maxim delegatus non potest delegare, gives way in performance of administrative or ministerial tasks by subordinate authorities in furtherance of exercise of delegated power by authority. 8. It would also be useful in this context to refer to decision of this Court in Barium Chemicals Limited and another v. Company Law Board and another5wherein it is held at paragraph 36 as follows: .....the maxim delegatus non potest delegare must not be pushed too far. maxim does not embody rule of law. It indicates rule of construction of statute or other instrument conferring authority. Prima facie, discretion conferred by statute on any authority is intended to be exercised by that authority and by no other. But intention may be negatived by any contrary indications in language, scope or object of statute. construction that would best achieve Page 49 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT purpose and object of statute should be adopted. 9. Constitution confers power and imposes duty on Legislature to make laws and said functions cannot be delegated by Legislature to executive. Legislature is constitutionally required to keep in its own hands essential legislative functions which consist of determination of legislative policy and its formulation as binding rule of conduct. After performance of essential legislative function by Legislature and laying guiding policy, Legislature may delegate to executive or administrative authority , any ancillary or subordinate powers that are necessary for giving effect to policy and purposes of enactment. In construing scope and extent of delegated power, difference between essential and non-essential functions of delegate should also be borne in mind. While there cannot be sub-delegation of any essential functions, in order to achieve intended object of delegation, non-essential functions can be sub-delegated to be performed under authority and supervision of delegate. 10. Sometimes, in plenary legislation itself, law makers may provide for such sub-delegation. That is what we see under Sections 21 and 34 of Major Port Trusts Act, 1963, which we shall be discussing in more detail at later part of this judgment. 11. Having analysed legal position as above, we shall Page 50 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT now deal with factual position in these cases. challenge is on judgment dated 28.01.2013 of Division Bench of Calcutta High Court. issue pertains to determination of leases granted by Kolkata Port Trust to petitioners. In case of Universal Autocrafts Private Limited, they were granted lease of plot of land for 30 years, on 19.8.1990. lease deed was executed by Land Manager of Kolkata Port Trust. On 5.2.2008, letter was issued to said petitioner to demolish alleged unauthorized construction and eject sub-tenants from premises. petitioner submitted its reply on 2.5.2008. Not satisfied with reply, on 30.01.2009, notice terminating lease was issued. ejectment notice was signed by Land Manager. main contention is that ejectment notice issued by Land Manager is illegal and without jurisdiction as he is not competent to issue such ejectment notices. In case of Siddhartha Sarawgi, leases were terminated during subsistence of renewed period of 30 years, on ground of sub-letting without consent of Kolkata Port Trust. In his case also, ejectment notices were issued by Land Manager and, hence, it is contended that there can be no eviction on basis of ejectment notice issued by person who is not competent to do so, same being without jurisdiction. said ejectment notices were challenged by both petitioners before Calcutta High Court. In case of Universal Autocrafts Private Limited, learned single Judge of Calcutta High Court allowed writ petition holding that Land Manager was not competent to issue ejectment notice. In writ petition Page 51 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT filed by Sidhartha Sarawgi, learned single Judge of Calcutta High Court found conflict between two earlier decisions and referred matter to Division Bench. Division Bench vide common judgment dated 28.01.2003 held in favour of Kolkata Port Trust in case of both petitioners, which is challenged in these Special Leave Petitions. 12. Major Port Trusts Act, 1963 Ss. 21, 34 (hereinafter referred to as, 'the Act') is Act intended "to make provision for constitution of port authorities for certain major ports in India and to vest administration, control and management of such ports in such authorities and for matters connected therewith". Section 3 of Act provides for constitution of Board of Trustees (hereinafter referred to as 'the Board'). Section 5 provides that: 5. Board to be body corporate.-Every Board constituted under this Act shall be body corporate having perpetual succession and common seal with power, subject to provisions of this Act, to acquire, hold or dispose of property and may by name by which it is constituted, sue or be sued. 13. Section 21 of Act provides for delegation of powers of Board with approval of Central Government on Chairman and specification of exercise of such powers conferred on Chairman by Deputy Chairman or any other officer of Board. provision reads as follows: Page 52 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 21. Delegation of powers.- Board may, with approval of Central Government, specify- (a) powers and duties conferred or imposed upon Board by or under this Act, which may also be exercised or performed by Chairman; and (b) powers and duties conferred or imposed on Chairman by or under this Act, which may also be exercised or performed by Deputy Chairman or any officer of Board and conditions and restrictions, if any, subject to which such powers and duties may be exercised and performed: Provided that any powers and duties conferred or imposed upon Deputy Chairman or any officer of Board under clause (b) shall be exercised and performed by him subject to supervision and control of Chairman." 14. Section 34 of Act provides for mode of executing contracts on behalf of Board. It is provided therein that every contract is to be made by Chairman or any other officer of Board not below rank of Head of Department as authorized by Chairman, on behalf of Board. provision reads as follows: 34. Mode of executing contracts on behalf of Board.- (1) Every contract shall, on behalf of Board, be made by Chairman or by any such officer of Board Page 53 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT not below rank of Head of Department as Chairman may, by general or special order, authorise in this behalf and shall be sealed with common seal of Board: Provided that no contract whereof value or amount exceeds such value or amount as Central Government may from time to time fix in this behalf shall be made unless it has been previously approved by Board: Provided further that no contract for acquisition or sale of immovable property or for lease of any such property for term exceeding thirty years, and no other contract whereof value or amount exceeds such value or amount as Central Government may from time to time fix in this behalf, shall be made unless it has been previously approved by Central Government. (2) Subject to provisions of sub-section (1), form and manner in which any contract shall be made under this Act shall be such as may be prescribed by regulations made in this behalf. (3) No contract which is not made in accordance with provisions of this Act and regulations made thereunder shall be binding on Board. 15. In exercise of power under Section 21 on delegation of powers, Board of Kolkata Port Trust Page 54 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT passed Resolution No. 82 dated 26.05.1988 delegating power to terminate any lease on Chairman. Chairman was also authorized by said Resolution to issue ejectment notices. text of Resolution reads as follows: .. Resolution No. 82-Resolved to sanction proposal for delegation of powers to Chairman by invocation of section 21(a) of Major Port Trust Act, 1963, power to terminate leases sanctioned by Trustees and to authorizing him to issue ejectment notices, subject to sanction of Government. 16. It is contention of petitioners that power to terminate lease having been specifically conferred on Chairman, steps now taken by Land Manager by issuing impugned notices for eviction, are clearly without jurisdiction and, hence, illegal and inoperative. On behalf of Board of Kolkata Port Trust, it is contended that decision to terminate lease has actually been taken by Chairman and issuance of notice of termination in furtherance of decision taken by Chairman alone, has been delegated to Land Manager. Our attention is also invited to Office Order No. 6480/3/0 dated 22.01.1990, which reads as under:- CALCUTTA PORT TRUST No. 6480/3/0 22-1-1990 OFFICE ORDER Henceforth ejectment (sic) notices in respect of leases Page 55 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT determined with my approval may be signed by any one of under-noted officers: Calcutta (1) Deputy Chairman (Calcutta) (2) Land Manager Haldia (1) Deputy Chairman (Haldia) (2) General Manager (Mas) (3) Manager (I&CF) 17. power that is delegated to Chairman as per Resolution No. 82 is power to terminate lease. decision to terminate has been taken by Chairman only and there is no dispute in that regard. In implementation of decision thus taken by Chairman to terminate leases, Chairman has authorized Land Manager to issue ejectment notices. issuance of such notices is mere ministerial act for implementation of decision already taken by Chairman as delegated by Board. Chairman having duly authorized Land Manager in that regard, it cannot be said that ejectment notice issued by Land Manager is without jurisdiction. It is not case of sub-delegation. It is merely ministerial exercise of issuance of notice in implementation of decision, as per specific authorization in that regard. 36. reliance placed by learned counsel on decision of this Court in case of Deep Suresh Gadhecha (supra) is Page 56 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT thoroughly misconceived. We take notice of fact that judgment rendered by Coordinate Bench in Deep Suresh Gadhecha (supra) was in habeas corpus petition. This decision in our opinion is in no manner helpful to writ-applicant in present case. 37. In Bombay Municipal Corporation v. Dhondu Narayan Chowdhary, reported in AIR 1965 SC 1486, Supreme Court considered question, whether delegation by Commissioner, Municipal Corporation, of his functions under Sections 105-B to 105-E of Bombay Municipal Corporation Act, 1888, to certain officers of Corporation, was valid and proper. Supreme Court took into notice Section 68 of Act, 1888, and held as under : 2. Bombay Municipal Corporation Act is Act of 1888 and it has been amended frequently. Section 68 is one of original sections and it provides as follows: 68. Municipal officers may be empowered to exercise certain of powers, etc, of Commissioner. (1) Any of powers, duties or functions conferred or imposed upon or vested in Commissioner by any of sections, sub-sections or clauses mentioned in sub-section (2) may be exercised, performed or discharged, under Commissioner's control and subject to his revision and to such conditions and limitations if any, as he shall think fit to prescribe, by any municipal officer whom Commissioner generally or specially either by name or by virtue of Page 57 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT office, empowers in writing in this behalf; and in each of said sections, sub-sections and clauses word "Commissioner'' shall, to extent to which any municipal officer is so empowered, be deemed to include such officer. (2) sections, sub-sections and clause of this Act referred to in sub-section (1) are following namely:- * * * * Section 105B. Section 105C Section 105D Section 105E * * * * reference to Ss.105B, 105C, 105D and 105E was inserted by Maharashtra Act XIV of 1961. These sections are in Chapter 6A which was also newly added by same Act. It is not necessary to refer to these sections, except portion from S.105B which brings into prominence action taken by Corporation against respondents: 105B Power to evict person from corporation premises. (1) Where Commissioner is satisfied- (a) that person authorised to occupy any corporation premises has, whether before or after commencement of Bombay Municipal Corporation (Amendment) Act, 1960,- Page 58 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT (i) **** (ii) sub-let, contrary to terms or conditions of his occupation, whole or any part of such premises; or..... .the Commissioner may notwithstanding anything contained in any law for time being in force, by notice..... order that that person as well as any other person who may be in occupation of whole or any part of premises. shall vacate them within one month of date of service of notice. It will be noticed that S.68 was originally intended to cover very different matters because Chapter 6A could not have been in contemplation. When Chapter 6A was added and reference to Ss.105B to 105E was included in S.68, wording of that section became applicable to power exercisable under Ss.105B to 105E even though that wording taken literally, is somewhat inapt to cover delegation of judicial power. 3. No question has been raised that any of amendments is ultra vires so words of S.68 must be reasonably construed. It goes without saying that judicial power cannot ordinarily be delegated unless law expressly or by clear implication permits it. In present case amendment of S.68 by inclusion of delegation of functions of Commissioner under Ss.105B to 105E does indicate intention that judicial or quasi-judicial powers contained Page 59 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT in Chapter VIA were expressly intended to be delegated. To delegation as such there can be no objection. What is objected to is provision, both in section as well as in order of delegation, that exercise of function is to be under "the Commissioner's control" and "subject to his revision." These words are really appropriate to delegation of administrative functions where control may be deeper then in judicial matters. In respect of judicial or quasi-judicial functions these words cannot of course bear meaning which they bear in delegation of administrative functions. When Commissioner stated that his functions were delegated subject to his control and revision it did not mean that he reserved to himself right to intervene to impose his own decision upon his delegate. What those words meant was that Commissioner could control exercise administratively as to kinds of cases in which delegate could take action or period or time during which power might be exercised and so on and so forth. In other words. administrative side of delegate's duties was to be subject of control and revision but not essential power to decide whether to take action or not in particular case. This is also intention of S.68 as interpreted in context of several delegated powers. This is apparent from fact that order of delegate amounts to order by Commissioner and is appealable as such. If it were not so appeal to Bombay City Civil Court would be incompetent and order could not be assailed. order of delegate was order of Commissioner and control envisaged both in S.68 and order of delegation Page 60 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT was not control over decision as such but over administrative aspects of cased and their disposal. No. allegation has been made that Commissioner intervened in decision of case or improperly influenced it. In these circumstances, order impugned in appeal cannot be sustained. 38. We may quote few extracts from Beatson, Matthews and Elliott's Administrative Law : ...Some legislation expressly permits discretionary powers to be delegated (see, eg. Local Government Act, 1972, ss.101-102). However, general policy that discretionary power should be exercised by its statutory holder means that such provisions tend to be narrowly construed. For instance, in General Medical Council v. UK Dental Board (1936) Ch 41, although Dentists Act, 1921, permitted GMC to delegate functions to executive committee, court held that this power of delegation did not extend to disciplinary functions. This reflects fact (also illustrated by following case) that courts' willingness to find statutory permission for delegation and importance of function in question appear to be inversely related.... ...Under provisions of scheme, so far from board being in position of employer, board are put in judicial position between men and employers; they are to receive reports from employers and investigate them; they have to inquire whether man has been guilty of misconduct, such as failing to comply with lawful order, or failing to comply with provisions of scheme; and if Page 61 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT they find against him they can suspend him without pay, or can even dismiss him summarily.... ....In first place, decision-maker designated in legislation is likely to have been chosen because of its institutional ability to take decisions in area in question due to expertise of its personnel, its integration into wider decision-making structure, or its ability to gain access to relevant information and expert advice. Moreover, designated agency is most likely to be accountable decision-maker: it may well be subject to regime of political accountability and, in any event, its role in making decisions in relevant area will be transparent, its specification in legislation making it readily identifiable as responsible agency.... 39. We are of view that challenge to legality and validity of impugned notification should fail. 40. As pointed out by Supreme Court in case of Sahni Silk Mills (supra), courts should normally be rigorous while requiring power to be exercised by persons or bodies authorized by statutes. As noted above, it is essential that delegated power should be exercised by authority upon whom it is conferred and by no one else. At same time, in present administrative setup, extreme judicial aversion to delegation should not be carried to extreme. There is only one Commissioner of State Tax in State of Gujarat, and having regard to enormous functions and duties to be discharged under new tax regime, he has been empowered to delegate Page 62 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT his powers to Special Commissioner of State Tax and Additional Commissioners of State Tax. 41. We take notice of fact that delegation has been authorized expressly under Section 5(3) of Act. We would have definitely interfered if Special Commissioner or Additional Commissioners would have further delegated power to officers subordinate to them. Such is not case over here. 42. In impugned notification it has been stated that functions delegated shall be under overall supervision of Commissioner. When Commissioner stated that his functions were delegated subject to his overall supervision, it did not mean or should not be construed as if he reserved to himself right to intervene to impose his own decision upon his delegate. words in last part of impugned notification would mean that Commissioner could control exercise administratively as to kinds of cases in which delegate could take action. In other words, administrative side of delegate's duties were to be subject of control and revision but not essential power to decide, whether to take action or not in particular case. Once powers are delegated for purpose of Section 69 of Act, subjective satisfaction, or rather, reasonable belief should be that of delegated authority. 43. Mr.Pandya invited our attention to decision of this Court in case of Valerius Industries (supra), more particularly, Page 63 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT observations made by this Court in para-35. We quote para-35 as under : In case on hand, Section 83 makes it abundantly clear that it is Commissioner's opinion which is relevant. Legislature has thought fit to confer this power upon Commissioner. Whether such power conferred upon Commissioner by legislature could have been delegated to three subordinate officers referred to above by virtue of order dated 15th January 2018 passed in exercise of power under sub-section (3) of Section 5 read with clause 19 of Section 2 of Act and rules framed thereunder. In our opinion, answer has to be in negative. Although there is no specific challenge to order dated 15th January 2015 passed by Commissioner of State Tax delegating his power under Section 83 to subordinate officers, yet, we are of view that by virtue of such order, such impugned order of provisional attachment cannot be defended. 44. In Valerius Industries (supra), this Court was dealing with matter in which subject matter of challenge was order of provisional attachment under Section 83 of Act. For purpose of Section 83 of Act, Legislature thought fit to confer power upon Commissioner. However, in this regard also, Commissioner has issued notification dated 15th January 2018 delegating his power to three subordinate officers. While considering challenge, this Court observed in para-35 as quoted above. Page 64 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 45. We are of view that observations made by this Court in above referred para-35 could be termed as per incurium as such observations run contrary to Supreme Court decisions referred to above in this judgment. 46. It is accepted principle of administrative law that repository of power must exercise that power personally. However, there are two exceptions to this principle : 1. Legislation provides for power to delegate or authorise : express power to delegate, usually in legislation, allows person who has legislative authority to delegate that authority to others. individual/s or position/s having delegation can exercise authority in their own right. example of express power to delegate can be seen in section 5(3) of Act, 2017. 2. Implied power to authorise : implied power to authorise, arises where even though there may or may not be express power to delegate in legislation, there can be implied power for official to exercise power on person s behalf it is often termed alter ego principle, Carltona principle or implied power to delegate. This principle arose from decision Carltona Limited v Commissioner of Works [1943] 2 ALL ER 560. Page 65 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 47. principle is: devolving power is permitted in cases where nature, scope, and purpose of power in legislation means that it is unlikely that Parliament intended that power is to be exercised personally, and only practical way power can be exercised is by officers who are responsible to person (who has power by legislation). 48. This is also known as principle of agency where agent is acting in principal s name. 49. Whether person other than that named in empowering statute is allowed to act will depend upon statute which lays down provision for delegation. nature of subject matter, degree of control retained by person delegating, and type of person or body to whom power is delegated will be taken into account while delegating powers. 50. We have to our advantage Full Bench decision of Allahabad High Court on subject. We are referring to decision in case of Democratic Bar Association, Allahabad v. High Court of Judicature at Allahabad, reported in AIR 2000 (All) 300. following questions fell for consideration of Full Bench. 1. Whether High Court can delegate its statutory function under Sec. 16(2) of Act, to designate advocate as senior advocate in favour of committee consisting of Hon'ble Judges of Court? Page 66 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 2. Whether Rule 3(B) of Rules, or in form it stands in Rules, is in contravention of provisions contained in Sec. 16(2) of Act and is ultra vires ? 3. Whether High Court has authority to frame Rules known as 'Designation of Senior Advocate Rules, 1999'; under Sec. 34(1) of Act or under any other provision of Act or Constitution, for purposes of evolving procedure to be allowed for designation of Advocate as Senior Advocate. 4. Whether procedure evolved under impugned Rules excludes advocates, practising in district courts, or in tribunals, from consideration to be designated as senior advocates. 5. To what relief, if any, in facts and circumstances of case petitioners are entitled in present writ petition? 51. answer given by Full Bench to first question referred to above is relevant for our purpose. In para-30, court observed as under : From perusal for Sec. 16(2) of Act it is clear that High Court has to form opinion about ability, standing at Bar or special knowledge or experience in law of advocate and when he is found deserving, he is designated as senior advocate. Process of forming opinion by Hon'ble Judges of this Court is continuous process based on Page 67 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT observation of performance of advocate in arguing cases before Judge concerned. Such kind of opinion cannot be formed except by long and sustained observation for years. Opinion forming process is thus, objective, However, it is expressed in subjective manner by designating advocate as senior advocate or by refusing to confer this distinction. expression is subjective as Hon'ble Judges are not required to assign any reasons for such refusal. Opinion forming is objective as concerned advocate appears, argues his cases and his performance regarding ability, standing at Bar and his knowledge and experience of law is judged frequently by Hon'ble Judges. It cannot be disputed that function is necessarily administrative but it is statutory in nature. Whether such kind of statutory function, though administrative in nature, can be delegated. There is no doubt about legal position that when any function is assigned to High Court, High Court means, Hon'ble Chief Justice and all his companion Judges. Normally administrative functions and powers can be delegated in favour of co-ordinate authority or to subordinate authority. However, when administrative function is statutory in nature and function or power is assigned under statute it should be performed or exercised by that authority unless power to delegate such function or exercise of power is specifically provided or may be inferred by necessary implication from provisions contained in statute. Learned counsel for respondents could not lay his hand on any provision contained in Act on basis of which it may be said that High Court has been conferred specific power to Page 68 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT delegate this statutory function contemplated under Section 16(2) of Act. (Emphasis supplied) 52. Thus, dictum as laid in aforesaid Full Bench decision of Allahabad High Court is that, normally administrative functions and powers can be delegated in favour of coordinate authority or to subordinate authority. When administrative function is statutory in nature and function or power is assigned under statute, it should be performed or exercised by that authority unless power to delegate such function or exercise of power is specifically provided or may be inferred by necessary implication from provisions contained in statute. 53. In case on hand, Section 5(3) of Act specifically confers power upon Commissioner to delegate his functions. 54. We also have to our benefit, Division Bench decision of Madhya Pradesh High Court in case of Raghunath v. Indore Municipal Corporation, Indore, reported in AIR 1987 (MP) 181. In said case before Madhya Pradesh High Court, petitioner, being dissatisfied with valuation of property made for purpose of property tax, filed his objections under Section 147 of Madhya Pradesh Municipal Corporation Act, 1956. Those objections were heard and rejected by Assessment Officer of respondent Corporation in pursuance of powers conferred upon him by Commissioner of Corporation. petitioner argued before High Court that respondent no.2, i.e. Commissioner of Corporation, Page 69 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT had no power to delegate powers conferred upon him by Section 148 of Act to any other officer of Corporation, and consequently, orders passed by Assessment Officer overruling objections submitted by petitioner could be termed as without jurisdiction or null and void. On other hand, on behalf of Corporation, it was contended that Commissioner is empowered under provisions of Section 69(4) of Act, 1956, to delegate any of powers, duties or functions conferred upon him by Act to any officer of Municipal Corporation and that in pursuance of that power Commissioner had delegated power conferred upon him by Section 148 of Act. It was argued on behalf of Corporation that orders passed by Assessment Officer overruling objections of petitioner cannot be held to be without jurisdiction or null and void. 55. following questions fell for consideration of Division Bench of Madhya Pradesh High Court : Whether power to determine objections to valuation made under Act, conferred by Section 148 of Act, could be delegated by Commissioner to any officer of Corporation under provisions of Section 69(4) of Act. 56. court proceeded to observe as under : 5. To appreciate contentions advanced by learned counsel for parties, it is necessary to refer to relevant provision of Act. Sub-Sec. (ii) of S.5 of Act defines expression 'Commissioner' as follows: Page 70 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 'Commissioner' means Municipal Commissioner for city appointed under S.54 and includes acting Commissioner appointed under Sub-Sec. (2) of S.57 and any Minicipal Officer empowered under this Act to exercise, perform or discharge any of powers, duties or functions of Commissioner to extent to which such officer is so empowered. Section 69(4) of Act empowering Commissioner to delegate his functions to any officer of Corporation, reads as follows : Municipal Officers may be empowered to exercise powers of Commissioner. (4) Any of powers, duties or functions conferred or imposed upon or vested in Commissioner by this Act may be exercised, performed or discharged under Commissioner's control, and subject to his superintendence and to such conditions and limitations, if any, as he may thank fit to prescribe, by any Municipal Officer, whom Commissioner may generally or specially empower in writing in this behalf. Now, power to determine objections to valuation is conferred on Commissioner by S.148 of Act. That this power, under S.148 of Act to decide objections is quasi-judicial power" was not disputed before us on behalf of respondents. contention urged on behalf of petitioners was that Commissioner had no power to delegate quasi-judicial power conferred upon him by S.148 of Act. Page 71 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 6. As held by Supreme Court in Bombay Municipal Corpn. v. Dhondu Narayan Chowdhary, AIR 1965 SC 1486, it is well settled that judicial power cannot ordinarily be delegated unless law expressly or by clear implication, permits it. S.69(4) of Act, in our opinion, is provision, which expressly permits Commissioner to delegate any power conferred upon him by Act. In absence of provisions of S.69(4) of Act, Commissioner could not have delegated quasi-judicial powers conferred upon him by Act. 7. It is, however, urged on behalf of petitioner that S.69(4) of Act refers only to administrative powers under Act and not to any other power under Act. There is no warrant for construing provisions of S.69(4) of Act in such way as to confine it to delegation of administrative powers only. S.69(4) of Act enables delegation of all powers conferred upon Commissioner by Act, irrespective of nature of power. When officer of Corporation decides objections under S.148 of Act, in pursuance of powers conferred upon by Commissioner, order passed by that officer is tantamount to order passed by Commissioner by virtue of S.5(11) of Act and is appealable to District Court under S.149 of Act. While conferring power on Commissioner to delegate his functions under Act, legislature has not chosen to limit that power to administrative functions only. S.69(4) of Act expressly confers upon Commissioner power to delegate any Page 72 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT power conferred upon him by Act, to any Municipal Officer. That control and superintendence envisaged in S.69(4) of Act cannot bear meaning, which they in delegation of administrative functions, is clear from decision of Supreme Court in AIR 1965 SC 1486 (supra). In that case, while construing similar provision in Bombay Municipal Corporation Act, Supreme Court observed as follows :- What is objected to is provisions both in Section as well as in order of delegation that 'Commissioner's control' and 'subject to his revision'. These words are really appropriate to delegation of administrative functions where control may be deeper than in judicial matters, in respect of judicial or quasi judicial functions, these words cannot, of course, bear meaning, which they in delegation of administrative functions. When Commissioner stated that his functions were delegated subject to his control and revision, it did not mean that he reserved to himself right to intervene to impose his own decision upon his delegate. What those words meant was that Commissioner could control exercise administratively as to kinds of cases, in which delegate could take action or period or time, during which power might be exercised and so on and so forth. In other words, administrative side of delegate's duties was to be subject of control and revision but not essential power to decide whether to take action or not in particular case. This is also Page 73 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT intention of S.68 as interpreted in context of several delegated powers. This is apparent from fact that order of delegate amounts to order by Commissioner and is appealable as such. In view of aforesaid decision of Supreme Court, it cannot be held that fact that power delegated under S.69(4) of Act by Commissioner is to be exercised subject to control and superintendence of Commissioner, rules out delegation of quasi-judicial power conferred upon Commissioner by S.148 of Act. Such construction would also not be reasonable because legislature has chosen to confer power upon Commissioner by S.69(4) of Act, to delegate any of his functions under Act, without any reservation, presumably because, in city, where Corporation is established, Commissioner cannot possibly exercise each and every power conferred upon him by Act. Under circumstances, it cannot be held that objections to valuation preferred by petitioners have been decided by person, who had no jurisdiction to decide those objections. 57. Thus, dictum as laid in aforesaid decision is that, be it quasi-judicial or administrative power, same can be delegated provided law expressly or by clear implication permits it to be delegated. Bench took view that having regard to Section 69(4) of Act referred to above, Commissioner has been empowered to delegate any of his powers. Bench also clarified that in absence of Page 74 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT provisions of Section 69(4) of Act, Commissioner could not have delegated quasi-judicial powers conferred upon him by Act. 58. One important observation made by Division Bench of Madhya Pradesh High Court is, where Corporation is established Commissioner cannot possibly exercise each and every power conferred upon him by Act . In such circumstances, statute has permitted Commissioner to delegate his powers to any of his subordinate authority. 59. last contention of Mr.Pandya is that although Commissioner of Tax has been empowered by statute to delegate his powers, yet, at same time, Section 69 of Act mandates that reasonable belief should be that of Commissioner. argument proceeds on footing that whenever power is to be exercised based on reasonable belief of authority upon whom such power has been conferred, same cannot be delegated though statute empowers statutory authority to do so. In short, Mr.Pandya is trying to draw distinction between particular power to be exercised and power to be exercised based on reasonable belief of authority. In our opinion, it does not make any difference. very same reasonable belief will be that of authority upon whom power is delegated. power under Section 69 of Act can be exercised by authority upon whom power is delegated provided delegatee has reasons to believe that assessee has committed offence under Section 132 of Act. Therefore, condition precedent, i.e. 'reasonable belief', for purpose of exercise of power under Section 69 of Act remains same. Page 75 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 C/SCA/513/2020 JUDGMENT 60. In result, these writ-applications fail and are hereby rejected. Rule stands discharged. (J. B. PARDIWALA, J.) (BHARGAV D. KARIA, J.) /MOINUDDIN Page 76 of 76 Downloaded on : Fri Jun 18 12:55:21 IST 2021 Nathala Maganlal Chauhan v. State of Gujarat
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