Friday, September 28, 2001, Chandigarh, India


M A I N   N E W S

Cong stalwart Vijayabhaskar Reddy dead

Hyderabad, September 27
Congress stalwart and former Andhra Pradesh Chief Minister Kotla Vijayabhaskar Reddy, who had earned the name of ‘Mr Clean’ in state politics, died here today after prolonged illness. He was 81.

Reddy, who was a member of Lok Sabha for six terms, a CWC member and Chairman of the party’s Disciplinary Action Committee (DAC), was admitted to Apollo Hospitals here last month following lung ailment.

He is survived by his wife, three daughters and two sons, including K. Suryaprakash Reddy, a former MP and presently the president of Kurnool District Congress Committee. PTI

Social security cess quashed
Yoginder Gupta
Tribune News Service

Chandigarh, September 27
“The common problem in the country is ‘deficit’. But let us remember the old saying, ‘the less a government costs, the more it is worth.’ A rigid economy and free spending are self-contradictory concepts. To meet the resource crunch, we have to reduce the expenses, not to levy tax on everything.”

This was observed by a Division Bench of the Punjab and Haryana High Court comprising Mr Justice Jawahar Lal Gupta and Mr Justice Ashutosh Mohunta here today while quashing the Punjab Social Security Act, 2000. The Bench delivered the judgement on a bunch of 23 writ petitions.

The Act sought to set up a social security fund by imposing a social security cess equivalent to 10 per cent of the sale or purchase tax. The quashing of the Act may throw cold water on the cash-starved Punjab Government’s plans to provide financial assistance in the form of pension to senior citizens, widows, destitute women, dependent children and disabled persons.

Speaking for the Bench Mr Justice Gupta lauded the object of the Act, which “embodies a measure to alleviate human hardship, to reduce the old man’s misery, to provide succour to the suffering, to help the aged, decrepit, disabled, to take care of the needy... It is certainly, as the aims and objects of the Act declare, a measure of social reform. It reflects the humane face of the government.”

However, it was the issue of conformity of the cess to the constitutional requirements as well as the question of the imposition of cess being within the legislative competence of the state which failed to pass judicial scrutiny.

Appearing on behalf of the petitioners, a senior advocate, Mr H.L. Sibal, submitted that the state had devised a method to collect funds for populist measures like “sangat darshans”. He said the Act was beyond the legislative competence of the state legislature. All taxes collected by the state must go to the Consolidated Fund, and, therefore, the impugned statute violated the constitutional mandate.

Mr Sibal said while entries 9 and 42 of List II and entry 23 of the Concurrent List permitted the state to enact a law with regard to social security, these entries did not permit the imposition of a cess. He further said that the state had resorted to the device of enacting the impugned provisions “to avoid the proceeds of the cess being credited to the Consolidated Fund of the state and the budgetary discipline imposed by the Constitution... The action is violative of Articles 202, 203, 204 and 266 of the Constitution.”

The Additional Advocate-General, Mr Lakhinder Bir Singh, appearing for the state, submitted that the object for the imposition of the cess was good. Thus, the levy was legal and should be sustained.

The Bench said the mandate of the Constitution was clear. All revenue collected by the state as taxes must go into the Consolidated Fund of the state. No money could be withdrawn from the Consolidated Fund “except under appropriate made by law passed”in accordance with the provisions of Article 204 of the Constitution. “The reason is simple. The tax-payer’s money is in trust with the state. It should be spent in accordance with the will of the elected representatives of the people. Thus, the ‘revenues’ cannot go into any fund like the ‘Social Security Fund’. The money cannot be drawn or utilised by the executive at its will and pleasure.”

The Bench, however, did not sustain the plea of equitable estoppel based on exemption tendered by the petitioners. 

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