The recent tussle between the judiciary and the legislature over judicial appointments coupled with a flurry of some uncharacteristic orders like banning registration of diesel cars above 2000cc and imposing environment cess prove that we are living in a world where judges have never been so powerful in the history of mankind. This is also true in other countries like the US where judicial activism and “ideological judging” have reached new heights—so high that the federal judges once, contradicting their previous positions, proceeded to decide a presidential election (read Supreme Injustice: How the High Court Hijacked Election 2000 by Alan M. Dershowitz)
“Separation of powers” and its evolution
The judiciary occupies a unique position within the separation of the power process as envisaged by French philosopher Montesquieu. Karl Loewenstein, a prominent German scholar, interprets Montesquieu’s The Spirit of the Laws to say that the judicial function should be confined to policy execution and not extend to policy decision and policy control. According to him, all the judge was called on to do was to apply the law, as it was furnished before him, or as he found it, to the individual controversy at the bar.
However, judicial function has undergone a massive transformation since the 18th century. A number of modern constitutions, including those of India and Pakistan, give the judiciary a stature which is not inferior to that of the executive and the legislature. These new classes of constitution, which deviate from the ideas of Montesquieu, accord strong inter-organ controls toward the other power holders namely, the executive and the legislature. These are: (a) the right of the courts to supervise and control the administrative activities of the executive as to their conformity with their statutory basis; and (b) the judicial review of the constitutionality of a legislation passed by the parliament. (read Political Power and the Governmental Process by Karl Loewenstein)
Judicial activism in India
Since the birth of Public Interest Litigations (PIL), there have been an umpteen number of cases where the judiciary issued orders which, by convention, was done by the executive. These orders include a ban on supply of loose 2T oils at petrol pumps, restrictions on school buses, construction of inter-state bus terminals in the north and south-west tips of Delhi, compulsory wearing of seatbelts, parking charges, cleanliness in housing colonies, etc. The most radical of all is the Supreme Court’s direction that the rivers of India shall be inter-linked within 10 years. T.R. Andhyarujina, a former solicitor general of India, beautifully explains the disturbing trends of judicial activism here .
The above examples clearly show that they are directly linked to technology, scientific inputs, urban planning etc., which the executive or any technical branch of the government are best equipped to handle and also to tackle the menace of information asymmetry. In other words, these issues are polycentric in nature which lack the vital criteria for adjudication by courts.
Imposition of environment cess
Recently, a bench comprising of chief justice T.S. Thakur, A.K. Sikri and R. Banumathi imposed an environment compensation cess equal to 1% of the ex-showroom price of diesel vehicles above 2000cc.
Earlier, the Supreme Court had banned registration of vehicles in this category. The latest ruling makes it compulsory for the vehicle manufacturers to pay the environment cess without which they cannot register the vehicle with the motor vehicles department. Further, the Supreme Court also directed the Central Pollution Control Board to create a bank account in a public sector bank specifically for this purpose.
However, the most important question to be asked here is whether the Supreme Court is allowed to impose a cess under the Constitution of India.
Violation of Article 265 of the Constitution of India
Article 265 states that no tax shall be levied or collected except by authority of law. A tax is a compulsory exaction of money by a public authority for public purposes enforceable by law and is not a payment for any services rendered (per C.J. Latham of the Australian high court). Cess is a tax and is generally used when the levy is for some specific administrative expense, suggested by the name of the cess (eg. Swachh Bharat Cess and Krishi Kalyan Cess). As provided in Article 265, a tax can be levied only by an “authority of law”. In Saurashtra Cement & Chemical Industries Ltd. v. Union of India (2001) 1 SCC 91, the Supreme Court explained the phrase “authority of law” as referring to a valid law which means that the tax proposed to be levied must be within the legislative competence of the legislature imposing the tax; the law must be validly enacted; and the law must not be a colourable use of or a fraud upon the legislative power to tax.
Article 265 makes it amply clear that only the legislature has the power to impose any form of tax, which includes a cess as well. The order of the Supreme Court imposing environment cess on diesel vehicles above 2000cc violates doctrine of separation of powers and blatantly ignores the limitations on judiciary as provided in the Constitution of India. Seriousness of this issue can be best illustrated by the following example.
Assumption 1: Central Pollution Control Board has imposed a similar environment cess on diesel vehicles above 2000cc.
Assumption 2: A vehicle manufacturer challenges this cess and is currently before the Supreme Court.
As a general rule, the levy of tax can only be done by the legislature unless the statute permits levy by a subordinate authority. In the example given above, there is no legislation permitting the Central Pollution Control Board to levy environment cess on diesel vehicles above 2000cc. The Supreme Court, bound by its own numerous precedents, will have to invariably strike down the levy as being unconstitutional for want of authority of law. The judges will be wary of the fact that the levy, if upheld, will give unbridled power to the executive. Further, there are several cases where the Supreme Court has held that a statutory body cannot levy tax unless permitted by the legislature.
However, ignoring all precedents, the Supreme Court levied an environment cess, which is by convention, a power enjoyed by the legislature. No amount of activism can justify such an order of the Supreme Court which violates the core values of our Constitution. As pointed out above, a small change in the facts situation would have forced the Supreme Court to make a different order; this is precisely the role of the judiciary—apply laws to a case before it and deliver justice. If the judiciary starts wearing the garb of the legislature, it will rise to become a genuine third power which will be a blatant violation of constitutional norms.
Rahul Unnikrishnan is an advocate at Madras high court.