The Supreme Court Monday held that Budget speeches by the Union Finance Minister are not enactments by the Parliament and a government cannot be bound under the law by them.
A bench of Justices Madan B Lokur and N V Ramana clarified that the legal sanctity can be attached only to the budgetary proposals when they are passed by the Parliament and the law so framed would be stipulated in the Finance Act.
“The Finance Minster’s speech only highlights the more important proposals of the budget. Those are not the enactments by the Parliament. The law as enacted is what is contained in the Finance Act. After it is legislated upon by the Parliament and a rate of duty that is prescribed in relation to a particular Tariff Head that constitutes the authoritative expression of the legislative will of Parliament,” said the bench.
The court was adjudicating an appeal by one Amin Merchant, who complained that there was a difference between the rate as prescribed in the speeches of the Finance Minister for 1993-94 and 1994-95 and the one that were finally being levied. He said that while the budget proposals indicated a lesser rate of interest on import of ‘Compound alcoholic preparations of a kind used for the manufacture of beverages’, the goods were was charged under the Customs Tariff to a prescribed rate of duty of Rs 300 per liter or 400 per cent, whichever is higher.
“Budget proposals announced by the Finance Minister in the Parliament are duly passed and/or approved by the Parliament, no person, executive, bureaucrat or any authority or Court of Law has the authority and/or power to alter or amend the same,” contended Merchant while seeking a refund of the money apart from direction to the government for issuing notifications in accordance with the speeches.
But the judgment, authored by Justice Ramana, underlined that difference between a proposal moved before the Parliament and a statutory provision enacted by the Parliament, particaurly because the process of taxation involves various considerations and criteria.
“The financial proposals put forth by the Finance Minister reflects the governmental view for raising revenue to meet the expenditure for the financial year and it is the financial policy of the Central Government. The Finance Minster’s speech only highlights the more important proposals of the budget,” added the court. It said that the finance bill only connotes the legislative will of the Parliament.
The top court also highlighted that taxation is an unilateral decision of the Parliament and it is the exercise of the sovereign power. “Even assuming that the amount of tax is excessive, in the matters of taxation laws, the Court permits greater latitude to the discretion of the legislature and it is not amenable to judicial review,” said the bench while dismissing Merchant’s petition.