Is issue of public interest justiceable?

EXPERT EYE

One principle that is well settled is that in the face of overriding public interest, the doctrine of legitimate expectation does not have its full sway. The next question, therefore, is about who determines public interest. All notifications on tax matters are issued in public interest. So when the government issues a notification which either increases or decreases the tax rate, it becomes a statement of its economic policy. It has always been accepted by various judgements of the Supreme Court that economic policy is not justiceable. The Kasinka Trading versus UOI "� 1994(74) ELT 782(SC) and Shrijee, Sales Corporation versus UOI "� 1997(89) ELT 452 (SC) cases held that taxation policy could not be pronounced upon by courts unless there was any violation of the Constitution. It was made clear in the well-known case of Indian Express Newspapers versus UOI that a notification is legislative in nature. Here, the Supreme Court interfered to strike down excessive tax on newsprint because it came to the conclusion that the imposition was violative of the fundamental right of freedom of speech under Article 19(1) g. On a mere ground of unreasonableness, an imposition of tax even by an amendment of a notification could not be challenged, it said. Economic policy is not justiceable if it violates fundamental rights.

Economic policy can be laid down either by legislation or by notification. About legislation, there is no doubt that promissory estoppel is not applicable. Now the question is if a notification is legislative or executive. If it is executive, court interference is permissible. In the Indian Express case, the Supreme Court's three-judge Bench gave a detailed judgement that economic policy in a notification was not justiceable as a notification was legislative in nature. It can be challenged only on the ground of violation of fundamental rights.

Later, a Bench of the Supreme Court, in Dai-Ichi Karkaria Ltd versus UOI "� 2000(119) ELT 516(SC), decided that "The mere fact that a notification under Customs Act is required to be laid before Parliament" does not make it a legislative action. So this decision struck down the notification, which had reduced the extent of exemption to oil, in public interest. The court held that the professed public interest was really not public interest. Thus the court considered that public interest declared in the notification was justiceable. This decision is directly contrary to the conclusion arrived at in the Indian Express case. Even in other judgements of the Supreme Court mentioned above, the same decision has been given. So this judgement in the Karkaria case has gone contrary to all other Supreme Court judgements. In the interest of judicial discipline, it was possibly necessary to put the issue before a bigger Bench. However, even the Balco judgement having been delivered after the Karkaria judgement, this judgement cannot be taken as effective any more.

The conclusion is that a notification in taxation is subordinate legislation and is also a legislative action because of which it cannot be justiceable in respect of public interest in which it is declared to be issued. The court cannot judge whether public interest has been exercised by the government justly or not. If the government declares that the notification is in public interest, it cannot be challenged in court. Only Parliament can debate it when it is placed before it.

Smukher2000@yahoo.com