New Delhi, February 26
On the day of rail budget with the government laying down a road map for several of its economic policies, the Supreme Court in a significant judgement said the judiciary must keep itself away from the executive and legislature’s economic decisions and give greater “latitude” to the laws on fiscal and tax measures.
“All decision in the economic and social spheres are essentially ad hoc and experimental. Since economic matters are extremely complicated, this inevitably entails special treatment for special situation. The state must therefore be left with wide latitude in devising ways and means of fiscal or regulatory measures, and the court should not, unless compelled by statute or by the Constitution, encroach into this field, or invalidate such law,” a Bench of Justices H. K. Sema and Markandey Katju ruled.
Deriving force from a Constitution Bench verdict in R.K Garg’s 1981 case on economic policy decisions and several of the US Supreme Court decisions on the liberty to the government on the issues of “social experiments”, Justice Katju writing the verdict for the Bench, said the courts must observe restraint on them.
Holding that the courts had no expertise in evaluating the impact of the economic policies, the Bench said, “Judges should practise greater restraint while dealing with economic statues, they (courts) should be activist in defending the civil liberties and fundamental rights of the citizens.”
The court said this was necessary because though ordinarily the legislature represents the “will of the people and works for their welfare.”
It further held that the role of judiciary only comes when the civil liberties and fundamental rights of the citizens were affected by any law passed by the legislature.
“There can be exceptional situations where the legislature … may violate the civil liberties and rights of the people… It was because of this foresight that the founding fathers of the Constitution in their wisdom provided fundamental rights in its Part III,” the apex court said.
The court gave the ruling while upholding an amendment affected by Andhra Pradesh in the Indian Stamp Duty Act, to curb the practise of under valuation of the real value of the properties in the sale deeds and defrauding the government in the payment of proper revenue charges.
The amended Section 47A of the act was declared unconstitutional by the Andhra Pradesh High Court. It required a party to deposit 50 per cent deficit stamp duty as a condition precedent for a reference to the collector to deal with such cases where parties clandestinely undervalued the property to evade duty.
While laying down a law for judicial restraint, particularly in fiscal and tax matters, Supreme Court set aside the high court ruling holding that the amended law being an “economic measure, cannot be said to be unconstitutional.”
