H. N. G. FERNANDO, C.J.-^-IUeperuma Sons Ltd. v.
Government Agent, Galle
1968Present: H. N. G. Fernando, C.J.ILLEPERUMA SONS LTD., Petitioner, and GOVERNMENT'AGENT, GALLE, Respondent
S. C. Applications 394 and 305 of 1967—M. C. Oalle,
Heavy OH Motor Vehicles Taxation Ordinance [Cap. 249), as amended by FinanceAct No. 2 of 1963—Sections 2 (i), 2 (7), 4 (1)—Alteration of rates of tax—Order made by Minister—Requirement that it should be laid before Houseof Representatives within the specified period— Effect of non-compliance—Interpretation of statutes—Delegated legislation—Procedure.
Where rates of tax prescribed in the First Schedule to the Heavy Oil MotorVehicles Taxation Ordinance, as amended by the Finance Act, No. 2 of 1963,are varied by the Minister by Order published in the Gazette in terms of sub-section(7) of section 2 of that Ordinance, the provisions of paragraph (b) of sub-section(7) requiring the Order to be laid before the House of Representatives within th^specified period are mandatory and must be complied with in order to givevalidity to the Taxation Order.
Podi Appuhamy v. The Government Agent, Kegalla (70 N. L. R. 544) notfollowed.
Applications to set aside two orders of the Magistrate’s Court,Galle.
C. Banganathan, Q.C., with M. T. M. Sivardeen, for the Petitioner.N. Tittawella, Crown Counsel, for the Respondent.
Cur. adv. vult.
May 17, 1968. H. N. G. Fernando, C.J.—
A certificate under Section 4 (1) of the Heavy Oil Motor VehiclesTaxation Ordinance (Cap. 249) was issued by the Government Agent,Gallo, on 12th August 1967 certifying that tax amounting to Rs. 6,192 wasdue under the Ordinance, in respect of a motor vehicle (No. 22 Sri 1961)owned by the present petitioner, for certain periods commencing from1st June 1964 and ending on 31st December 1965. Another certificateso issued and dated 14th August 1967 was in respect of another vehicle(22 Sri 8511) for certain periods between 1st May 1963 and 31st December1965. In each of these cases the learned Magistrate of Galle made orderin terms of s. 4 (1) of the Ordinance for the recovery of the specifiedamounts in the same manner as a fine imposed by the Court.
• • • •
In these two applications the petitioner has challenged the validity of
the Certificate on grounds to which I will immediately refer.
H. N. G. FERNANDO, C.J.—IUeperuma Song Ltd. t>.
Government Atjeni, Galle
Section. 2 (1) of the Ordinance provides that the tax in respect of HeavyOil Motor Vehicles shall be paid in accordance with the rates prescribed inthe First Schedule to the Ordinance. The Finance Act No. 2 of 1963amended s. 2 of the Ordinance by inserting therein a new sub-section (7)which reads as follows :—
“ (7) (a) The rates prescribed in the First Schedule to this Ordinancemay, from time to time, be varied by the Minister of Finance by Orderpublished in the Gazette.
(6) Every Order made under paragraph (a) of this subsection shallcome into force on the date of its publication in the Gazette or on suchlater date as may be specified in the Order, and shall be brought beforethe House of Representatives within a period of one month from thedate of the publication of such Order in the Gazette, or if no meeting ofthe House of Representatives is held within such period, at the firstmeeting of that House held after the expiry of such period, by a motion• that such Order shall be approved. There shall be set out in a scheduleto any such motion the text of the Order to which the motion refers.
(c) Any Order made under paragraph (a) of this subsection whichthe House of Representatives refuses to approve shall, with effectfrom the date of such refusal, be deemed to be revoked but withoutprejudice to the validity of anything done thereunder. Notification ofthe date on which any such order is deemed to be revoked shall bepublished in the Gazette. ”
In pursuance of the provisions of the new sub-section (7) an Order wasmade by the Minister of Finance setting out a new Schedule of the ratesof tax in variation of the rates previously contained in the Schedule to theOrdinance, and this Order was published in Gazette No. 13,620 of 29thApril 1963. Accordingly the tax due in respect of the two vehiclesinvolved in these applications has been calculated at the rates specifiedin that Order. But the contention raised on behalf of the petitioner hasbeen that the Order is invalid and of no effect on the ground of non-compliance with the provisions of paragraph (b) of the new sub-section (7).This paragraph (b) requires that the Order be brought before the House ofRepresentatives “ within a period of one month from the date of thepublication of such Order in the Gazette, or if no meeting of the House isheld within such period, at the first meeting of that House held after theexpiry of such period, by a motion that such Order shall be approved.’’
In the case of the present Order therefore a motion for approval shouldhave been moved in the House before 29th May 1963 if a meeting tookplace before that date or else at the first meeting which took placethereafter. Owing, however, to what must obviously have been grossofficial negligence, tlie motion for approval was not mo*ed fn the Hodfeeuntil 20th August 1964. Counsel for the petitioner has argued that
H. N. G. FERNANDO, C.J.—Illepernma Sons Ltd. v.
Government Agent, Galle
because a motion for approval was not passed in the House within thetime specified in paragraph (b) the Order was fully inoperative, or at theleast that the Order became operative only on the date of the approval ofthe House and not earlier.
Crown Counsel, however, has referred to a judgment of Alles J., inS. C. 635/67 M. C. Kegalla Case No. 59559 delivered on 11th November1967 holding that the provisions of the new paragraph (b) of the newsection are not mandatory, and that by virtue of the motion passed in theHouse on 20th August 1964, the Order remains valid as from the dateof its first publication in the Gazette.
I regret that I am unable to agree with that judgment. It is afundamental principle of British Constitutional Law that the subjectcannot be taxed except directly by Statute enacted by Parliament, oralternatively by Resolution of the House of Commons passed by virtueof enabling power in a Statute. The new sub-section (7) of Section 2of Cap. 249 provides for this alternative method which is prescribed,in the Revenue Protection Ordinance (Cap. 250) and is often utilised inthe case of the imposition or variation of customs duties.
Provisions of the nature contained in the sub-section (7), which givesstatutory force to a taxation Order prior to its being approved by theHouse of Representatives is considered to be expedient only because it issometimes necessary to prevent speculative dealings and other similartransactions which might take place in the interval between the time whennotice of a motion or resolution is given in Parliament and the time whenthe motion or resolution is actually passed. But a sine qua non for suchtemporary validity of a Taxation Order is that the Minister responsiblemust perform the obligation which he owes to Parliament to bring theOrder before the House of Representatives for approval.
Paragraph (c) of the new sub-section no doubt provides that even if theHouse refuses to approve a Taxation Order and the Order thereby becomesrevoked, the levy of the taxes prior to the time of such revocation will bevalid. But this validity flows, in my opinion, from the fact that the lawis observed and that Parliament is duly invited to consider whether or notto approve the Order. But in a case where the order is not brought beforeParliament at all or where as in this case the order is brought beforeParliament long after the prescribed time, paragraph (c) is of no avail.The simple reason I have for this conclusion is that paragraph (c) doesnot contemplate either any omission or any delay in moving therequisite motion for approval. I
I hold for these reasons that the failure to comply with the provisions ofparagraph (6) of the new sub-section (7) had the consequence that theOrder as published in the Gazette of 29th April 1963 had no validityas fcuch. **
1 (1967) 70 N. L. R. 644.
H. N. G. FERNANDO, C.J.—IU^peruma Sons Ltd. v.
Govertynent £.gent, GfMe
Different considerations however arise by reason of the fact that theHouse of Representatives did approve the new rates of tax by the motionpassed on 20th August 1964. The method of taxation provided for inthe new sub-section is—
that an Order is made by the Minister fixing rates of tax, and
that the House of Representatives passes a motion approving
the rates of tax.
The Minister’s Order is temporary and provisional. But the motionin the House is intended both to validate the [Minister’s Order and toapprove the new rates of tax permanently. The House of Representativeshaving thus approved the new rates of tax permanently by the motionpassed on 20th August 1964, the constitutional requirement that taxationmust be approved in the House has been satisfied. In these circumstancesthe Court must be slow to hold that the proceedings in the House were anullity. Accordingly I hold that the new Schedulo of rates became valid•and operative as from the date of the passing of the motion ofapproval, i.e., as from 20th August 1964.
The orders made by the Magistrate in these two cases for the recoveryof these certified amounts as fines and for the issue of distress warrantsfor the recovery are set aside.
I must note however that the Government Agent may yet be entitledto recover, by means of the issue of fresh Certificates, tax for the periodending on 20th August 1964 at the rates specified in tho original Scheduloto Cap. 249, and to recover tax for the periods subsequent to 20th August1964 at the new rates. But even if he is so entitled, such recoveriescannot be made by virtue of tho certificates issued on 12th and 14thAugust 1967, because in these Certificates tax for at least part of theentire period was levied at rates which were not valid prior to 20thAugust 1964.
Orders set aside.
ILLEPERUMA SONS LTD., Petitioner, and GOVERNMENT AGENT, GALLE, Respondent