Faridabad Complex (Regulation & Development) Act Required President's Assent Which It Did Not Receive: Punjab & Haryana High Court

The Punjab & Haryana High Court has made it clear that the Faridabad Complex (Regulation and Development) Act (the Act), did not receive prior assent of the President before introducing the Bill in the State Legislature, as required under Article 304 (b) proviso.

According to Article 304 (b) proviso, the States may impose reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest, provided, "that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President."

Justice Sureshwar Thakur, Justice Suvir Sehgal and Justice Ritu Tagore said, "this Court has concluded that the impugned provisions, as carried in the assented to legislation, squarely fall within the domain of clause (b) of Article 304 of the Constitution of India. As such, when prior to the introduction of the impugned assented legislation, the sanction of the President was required, whereas, it not being either asked for nor becoming granted."

The Court was hearing a full court reference in a batch of 32 petitions challenging the vires of the Faridabad Complex (Regulation and Development) Act.

After hearing the submissions the Court noted that Section 21 of the Act deals with, "Taxes which may be imposed" and Section 22 prescribes the procedure to impose taxes.

Section 21 states that the Chief Administrator may from time to time with the previous sanction of the State Government in the whole of the Faridabad Complex or any part thereof impose the taxes which includes a "tax payable by the owner, on buildings and lands...", a tax on persons practising any profession or art or carrying on any trade or calling in the Faridabad Complex among others.

The Court said that the restrictions are imposed on trade under the garb of taxes and therefore, the law directly or impliedly falls "within terms of clause (b) of Article 304 of the Constitution of India" since it imposes "reasonable restrictions on the freedom of trade, commerce or course within the State of Haryana, inasmuch as, within the territorial jurisdiction of the Municipal Corporation, Faridabad."

The Court noted that "It is not disputed that prior to the introduction of the assented to legislation in the legislature of the State, the same did not receive the sanction from the President."

It further refused to go into the question of whether the restrictions created in the form of the impugned taxes, through the assented to legislation are or are not reasonable or are in the public interest as that would be beyond the scope of the reference.

Consequently, the full bench opined that the Bill did not receive the President's assent as required under Article 304 (b) proviso.

Title: M/S THE PRINTERS HOUSE LTD. V. STATE OF HARYANA AND ORS. [along with connected matters].

Citation: 2024 LiveLaw (PH) 229

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