All India Bar Examination (AIBE) 3-III Previous Year Question Papers with Answers

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98.

A statute empowers a subordinate authority to regulate the activities of tobacco industries and levy taxes on them. The statute permits the authority to give retrospective effect to its regulatory notifications under the statute. The authority issues regulatory a notification levying a developmental tax leather on industries retrospectively. Which of the following statements most accurately applies the principles below?


Principle :

In order to give retrospective effect to delegated legislation, the power to do so must be explicitly and clearly conferred by the parent enactment, and in the absence of the same, delegated legislation operating retrospectively will be held ultra vires.

A: The notification is valid, as the power to levy taxes is sourced directly from a statute.
B: The notification is valid, as the enactment clearly and specifically provides for retrospective application of all notifications under the enactment.
C: The notification is ultra vires, as the statute did not clearly and specifically provide that the authority may impose a developmental tax.
D: The notification is ultra vires, as the enactment does not clearly and specifically provide for retrospective levy of taxes.
E: The notification is ultra vires as the authority did not adhere to principles of natural justice, namely the right of hearing, before deciding to impose a tax.

The answer is: D

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Explanation

Option D: The notification is ultra vires, as the enactment does not clearly and specifically provide for retrospective levy of taxes.

Explanation:

According to the principle, for delegated legislation to have retrospective effect, the power to do so must be explicitly and clearly conferred by the parent enactment. In this case, while the statute permits the authority to give retrospective effect to its regulatory notifications, it does not specifically provide for the retrospective levy of taxes. Therefore, the notification levying a developmental tax on leather industries retrospectively is ultra vires, meaning it is beyond the powers of the authority as granted by the statute.