JUDGMENT Jagmohan Lal, J. - I have gone through the judgment prepared by my brother Prem Prakash. I agree with him that both the writ petitions should be allowed. I would however state my own reasons for coming to this conclusion. 2. In both these writ petitions the constitutional validity of Section 5 of the Opium Act, 1878 (to be hereinafter called as the Act) and the rules framed thereunder by the State Government of Uttar Pradesh known as U. P. Poppy-Heads (Amendment) Rules, 1969 (to be hereinafter called as the Rules) promulgated under a notification dated July 1, 1969 is being assailed. 3. The first contention of Sri R. N. Trivedi, learned counsel for the petitioners, was that even if Section 5 is held constitutional, the State Government under the authority delegated to it by that section could provide for levy of a duty on the retail sale of opium and since the petitioners are whole-sellers of opium they could not be subjected to that duty and to that extent the Rules are ultra vires the section itself. Sec. 5 of the Act provides as follows:- "5. The State Government may, from time to time, by notification in the official Gazette, make rules consistent s with this Act, to permit absolutely or subject to the payment of duty or to any other conditions', and to regulate within the whole or any specified part of the territories administered by such Government, all or any of the following matters:- (a) the possession of opium; (b) the transport of opium; (c) the importation or exportation of opium; and (d) the sale of opium. and the farm of duties leviable of the sale of opium by retails:- Provided that no duty shall be levied under any such rule on any opium I imported and on which a duty is imposed by or under the law relating to sea customs for the time being in force or under the dangerous Drugs Act, 1930". 4. This argument of the learned by counsel is based on a spelling mistake of the word `farm' used in that portion, of this section which has been underlined by me, that has crept in most of the text-books in which this word has been spelt as `form'. It has been verified from the Gazette that the correct word used in the authoritative text of section is 'farm' and not `form'. It has been verified from the Gazette that the correct word used in the authoritative text of section is 'farm' and not `form'. If the underlined portion is treated as part of item (d) with the spelling of this word as `form', this item in conjunction with the relevant portion of the opening clause of the section would read like this: "The State Government may,... make rules to permit subject to . the payment of duty ........... the sale of opium and the form of duties leviable on the sale of opium by retail." It would not make any sense. On the other hand, if the underlined portion is treated as a separate item after item (d) with the word `farm', it would in conjunction with the relevant portion of the opening clause read as follows: " The State Government may make rules to permit absolutely or subject to the payment of duty or to any other conditions and to regulate, the farm of duties leviable on the sale of opium by retail." It means that under item (d) it is permissible for the State Government, if it so chooses, through rules made by it to that effect, to permit the sale of opium whether by retail or wholesale, subject to payment of duty. In case a duty is levied on retail sale and the State finds it administratively inconvenient to collect the duty directly from the retail sellers, it can farm out to intermediaries the right to collection of such duties leviable on the sale of opium by retail either absolutely on payment of some commission to them. In my opinion, there is no warrant for the contention that under item (d) a duty can be levied only on the retail sale of opium and not its wholesale. 5. The second point raised by Sri R. N. Trivedi was that even if the section and the Rules are both held constitutional, no duty could be levied under the Rules on opium produced in Uttar Pradesh or that produced outside Uttar Pradesh but imported in Uttar Pradesh prior to the date on which these Rules came in force i.e., July 1, 1969. This contention appears correct. This contention appears correct. The charging provision in the Rules is contained in rule 42-A which reads : "42-A (i) Excise Duty shall be payable on poppy-heads produced in Uttar Pradesh at the following rates:- (a) on poppy-heads exported outside Uttar Pradesh 25 Paise per Kilogram. (b) on poppy-heads other than mentioned at (a)50 paise per Kilogram. (ii) A countervailing duty at the rate of 50 paise per kilogram shall be payable on poppy-heads produced outside Uttar Pradesh and imported into Uttar Pradesh." From this provision it is clear that the excise duty is to be levied on poppy-heads produced in Uttar Pradesh and countervailing import duty on poppy-heads produced outside Uttar Pradesh but imported into Uttar Pradesh. Under rule 48-D the duty is to be collected from the wholesale dealers, like the petitioners, who are required to submit on the first day of each month a return in Form P. H. 9 setting out a correct account of the poppy-heads sold by them in Uttar Pradesh or exported out of Uttar Pradesh. A wholesale dealer is also required to deposit before or on the 5th day of the month following the month to which the statement relates the duty payable on poppy-heads sold by him in Uttar Pradesh and the poppy-heads exported by him out of Uttar Pradesh. It is a matter of mutual arrangement between the cultivator and the wholesale dealer or the wholesale dealer and the retail dealer as to who will ultimately bear the burden of this tax. The incidence of the tax is on the poppy-heads produced in Uttar Pradesh with a countervailing duty on poppy-heads imported into Uttar Pradesh. 6. The rules framed by an authority under the provisions of a statute are usually prospective in operation unless the statute itself authorises the rule-making authority to make rules with retrospective effect and the rules so made specifically state so. In the present case there is nothing in the Rules to show that they had any retrospective operation. Sec. 5 also does not that the Rules made by the State Government can be given retrospective effect. So. the Rules will be deemed to be prospective in their operation. 7. Poppy is sown in October/November and harvested in March/April every year. In the present case there is nothing in the Rules to show that they had any retrospective operation. Sec. 5 also does not that the Rules made by the State Government can be given retrospective effect. So. the Rules will be deemed to be prospective in their operation. 7. Poppy is sown in October/November and harvested in March/April every year. So the poppy-heads that had been produced before July, 1969 whether they were in the stock of the wholesale dealers like the petitioners on that date or were subsequently sold to them by the cultivators could not be subjected to this excise duty. This excise duty would be leviable only on the poppy-heads produced after July 1, 1969. In Anant Ram & Co. v. State of U. P., 1971 A.L.J. 1057 Lokur, J. held that excise duty, under rule 42-A(i) could be levied only on poppy-heads produced after the 1st July, 1969 and not also on poppy-heads produced before that date. I am in respectful agreement with this view of the learned Judge. 8. The next point and which is the most important point in the case, urged by the learned counsel for the petitioners, is that Section 5 suffers from the vice of excessive delegation and as such is violative of the protection guaranteed by Art. 14, and for that reason it is liable to be struck down under Art. 13(1) of the Constitution. Once that section itself is held unconstitutional the impugned Rules which have been framed under the authority of that section would automatically fall to the ground. 9. Sec. 5 confers rule-making power on the State Government. These Rules are to be framed for the purpose of permitting and regulating possession, transport, import or export and sale (wholesale or retail) of opium which otherwise was prohibited by Sec. 4. This section provides that except as permitted by this Act, or by any other enactment relating to opium for the time being in force or by rules framed under this Act or under any such enactment no one shall possess, transport, import or export or sell opium. In view of this prohibitory provision it was essential to confer rule-making power on the executive to lay down the terms and conditions under which the various operations e.g. possession, transport, import or export and sale of opium are to be permitted and regulated. In view of this prohibitory provision it was essential to confer rule-making power on the executive to lay down the terms and conditions under which the various operations e.g. possession, transport, import or export and sale of opium are to be permitted and regulated. If the scope of this rule making power had been confined only to this extent there could not be much objection to it on the ground of excessive delegation to the executive. The learned counsel for the petitioners however, referred to a decision of the Supreme Court in Harakhchand v. Union of India, AIR 1970 S.C. 1453 in which Sec. 5(2) (b) of the Gold (Control) Act, 1968 was struck down as void on the ground of excessive delegation of legislative power. Under this provision the Administrator appointed under that Act was empowered, so far as it appeared to him to be necessary or expedient for carrying out the provisions of that Act, by order to regulate by licenses, permits or otherwise, the manufacture, distribution, transport, acquisition, possession, transfer, disposal, use or consumption of gold. The reason for declaring this provision unconstitutional was that these very matters for which regulatory power v/as delegated to the Administrator in extremely wide terms had also been provided for in Secs. 8, 11, 21, 31(3) and 34(3) of that Act had further a parallel power had been conferred on the Centra Government by making rules on the same matters under Sec. 114(2) (d). But over the rules so made by the Central Government the Parliament had supervisory control under Sec. 114(3) which made it incumbent upon that Government to place the rules before each House of Parliament while it is in session for a total period of thirty days. The orders passed by the Administrator under Sec. 5(2) (b) were not, however, amenable even to any such control. So it was held to be an excessive delegation of legislative power. These considerations do not apply to rule making power conferred on State Governments so far as the rules are framed only to regulate possession, movement and sale etc. of opium. Besides, opium unlike gold is a dangerous drug within the meaning of the Dangerous Drugs Act, 1930 of which uncontrolled cultivation, possession and sale can be hazardous to the health of the community. of opium. Besides, opium unlike gold is a dangerous drug within the meaning of the Dangerous Drugs Act, 1930 of which uncontrolled cultivation, possession and sale can be hazardous to the health of the community. For that reason cultivation of poppy plants, which are included in the definition of opium, has also been prohibited under Section 5 of the Dangerous Drugs Act, 1930 unless it is permitted by licence issued under that Act. This provision was challenged before the Supreme Court in Bahadur Singh v. Union of India, W.P. Nos. 111, 148 and 162 of 1955. D/d. 17.2.1956. The Supreme Court upheld the constitutionality of this provision and of an order issued under it by the Central Government totally prohibiting the cultivation of poppy-heads in a particular area. This decision was followed by a division bench of this Court in Bailey Singh v. State, AIR 1967 Allahabad 341 when the constitutional validity of this provision was similarly challenged. It will be useful in this connection to compare the provisions contained in Section 6 of the Dangerous Drugs Act with the provisions contained in Section 5 of the Act. Sec. 5 of the Dangerous Drugs Act provides: "(1) No one shall - (a) cultivate the poppy (papaver somniferum L.) or (b) manufacture opium, save in accordance with rules made under Sub-sec. (2) and with the conditions of any licence for that purpose which he may be required to obtain under those rules. (2) The Central Government may make rules permitting and regulating the cultivation of the poppy (papaver somniferum L.) and the manufacture of opium, and such rules may prescribe the forms and conditions of licences for such cultivation and manufacture, the authorities by which such licences may be granted, the fees that may be charged therefor, and any other matter requisite to render effective the control of the Central Government over such cultivation and manufactures. (3) The Central Government may also make rules permitting and regulating the sale of opium from Government factories for export or to State Governments or to manufacturing chemists." 10. It is evident from this section that the only taxing power conferred on the Central. Government through rule-making under Sub-sec. (2) is to charge a licence fee, if the rules so provide, from the cultivators and manufactures to whom licences may be granted for cultivating poppy and manufacturing opium therefrom. It is evident from this section that the only taxing power conferred on the Central. Government through rule-making under Sub-sec. (2) is to charge a licence fee, if the rules so provide, from the cultivators and manufactures to whom licences may be granted for cultivating poppy and manufacturing opium therefrom. Such licence fee is usually commensurate with the services rendered or the expenses incurred on the administrative machinery for the enforcement of the terms of the licence. If a similar power of levying licence fee had been conferred on the State Governments by Section 5 of the Act no valid objection could be taken against it. But the section as it stands gives a discretion to the State Governments to utilise the rules purely as a fiscal measure to sugment their revenues, if they so choose, by providing for payment of duty by the persons who are permitted to carry on any, some or all of the operations mentioned in items (a) to (d) in relation to opium. In other words, it is open to a State Government under this section to frame rules only for the purpose of permitting and regulating the possession, transport, importation or exportation and sale of opium without charging any duty as was the case in this state also when the original U. P. Poppy-Heads Rules 1961 had been framed with effect from June 22, 1961 till they were amended by the impugned Rules on July 1, 1969. Those rules did not contain any provision of taxation except charging a small licence fee of Rs. 1/-. It is equally permissible on a State Government to levy a duty on the person who are permitted to possess opium or on the persons who are permitted to transport opium or on the persons who are permitted to import and export opium or on those who are permitted to sell opium in wholesale or retail or even on all of them. No legislative policy has been laid down in the Act in what circumstances a State should impose a duty on all or some of the persons connected with the various operations of opium and in what circumstances this duty should not be levied at all. No legislative policy has been laid down in the Act in what circumstances a State should impose a duty on all or some of the persons connected with the various operations of opium and in what circumstances this duty should not be levied at all. The only negative condition laid down in the proviso to this Section 5 is that no duty shall be levied under any such rule on any opium imported on which a duty is imposed by or under the law relating to the sea customs for the time being in force or under the Dangerous Drugs Act, 1930. The rest has been left to the sweet will of the State Governments. They are free to levy or not to levy any duty at all, and if a State Government chooses to levy a duty, it can do so in respect of any, some or all of the afore-mentioned operations and at any rate it thinks proper. In this way, a blanket power of taxation has been conferred on the State Governments through rule-making without indicating any legislative policy or laying down any guidelines for such taxation by way of imposition of duty. The legislature has wholly abdicated its function and effaced itself in this important matter of taxation. 11. At this place, it may be pointed out that the excise duty imposed under the impugned Rules by the State Government of Uttar Pradesh is 50 paise per Kilogram on the poppy-heads produced in Uttar Pradesh and sold in the State by a wholesale dealer, while in respect of the poppy-heads exported by the wholesale dealer outside the Uttar Pradesh it is 25 Paise per Kilogram. Similarly a counter-vailing duty of 50 Paise per Kilogram has been imposed on the poppy-heads produced outside this State but imported in this State. The petitioners had alleged that the wholesale price of poppy is normally 40 to 50 paise per Kilogram. According to the contention of the Government the usual price is 80 to 100 paise per Kilogram. Whichever version is accepted, it is evident that this excise duty is at a very high rate. It can place the producers and whole-sale dealers of poppy-heads in this State to a serious financial burden as compared to the producers and whole-sale dealers in other States which do not levy any such duty and thus lead to unjustified discrimination. 12. Whichever version is accepted, it is evident that this excise duty is at a very high rate. It can place the producers and whole-sale dealers of poppy-heads in this State to a serious financial burden as compared to the producers and whole-sale dealers in other States which do not levy any such duty and thus lead to unjustified discrimination. 12. So far as the question of permissible scope of delegated legislation is concerned the matter has been raised before the Supreme Court in several cases and that Court has evolved some well established principles on the point. In Vasanlal Maganbhai v. State of Bombay, AIR 1961 S.C. 4 , Gajendragadkar, J. (as his Lordship then was), speaking for the majority, made the following observations at page 7 of the report: "It is now well established by the decisions of this court that the power of delegation is a constituent element of the legislative power as a whole, and that in modern times when the Legislatures enact laws to meet the challenge of the complex socioeconomic problems, they often find it convenient and necessary to delegate subsidiary or ancillary powers to delegates of their choice for carrying out the policy; laid down by their Acts. The extent "to which such delegation is permissible is also now well settled. The Legislature cannot delegate its essential legislative function in any case. It must lay down the legislative policy and principle, and must afford guidance for carrying out the said policy before it delegates its subsidiary powers in that behalf." 13. Again, Subba Rao, C. J. in M/s Devi Das v. State of Punjab, AIR 1967 S.C. 1895 laid down the following principles on the subject of permissible scope of delegation of legislative power at page 1901 of the report : - "The Constitution confers a power and imposes a duty on the legislature to make laws. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct. Obviously it cannot abdicate its functions in favour of another. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation. It must necessarily delegate the working out of details to the executive or any other agency. But there is a danger inherent in such a process of delegation. An overburdened legislature or one controlled by a powerful executive may unduly overstep the limits of delegation. It may not lay down any policy at all, it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive; it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation. This self effacement of legislative power in favour of another agency either in whole or in part is beyond the permissible limits of delegation. It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits. But the said liberal construction should not be carried by the courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities. It is the duty of the court to strike down without any hesitation any arbitrary power conferred on the executive by the legislature." 14. It is not unconstitutional for the Legislature to leave it to the executive to determine the details to the working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rales at which it is to be charged in respect of different classes of goods, and the like. See Banarsi Das v. State of M. P., AIR 1958 S.C. 909 . But at-least the Legislature must clearly indicate that it meant to enact the law as a fiscal measure for the purpose of raising revenue for the State. After having done so and enunciating clearly the Legislative policy, the details relating to giving effect to that policy can be delegated to the executive Government. If among these details the fixation of rate of tax is also meant to be delegated to subordinate authority, the Legislature should give necessary guidance for the determination of reasonable rates. After having done so and enunciating clearly the Legislative policy, the details relating to giving effect to that policy can be delegated to the executive Government. If among these details the fixation of rate of tax is also meant to be delegated to subordinate authority, the Legislature should give necessary guidance for the determination of reasonable rates. If this power of determination of rate is delegated to local bodies, guidance may sometimes be spelt out from the extent of the needs of and the expenses required by the delegate to discharge its statutory functions as was held in Corporation of Calcutta v. Liberty Cinema, AIR 1965 S.C. 1107 . But when this power of fixation of rate of tax in a fiscal statute is delegated to State Government whose needs, are unlimited, guidance must be available in the statute itself otherwise than merely taking into account the needs of the Government in order to prevent the delegate from imposing unreasonable" or excessive rates. See M/s Devi Das v. State of Punjab, AIR 1967 S.C. 1895 . The laying down of maximum rate of tax in the statute itself may be one of the modes of giving guidance to the delegate. There may be several other forms of giving such guidance. It was held by the Supreme Court in Delhi Municipality v. P. G. S. & W. Mills, AIR 1968 S.C. 1232 that what form the guidance should take is against a matter which cannot be stated in general terms. It will depend upon the circumstance of each statute under consideration. In some cases guidance in broad general terms may be enough. In other cases more detailed guidance may be necessary. In the field of taxation the guidance may take the form of providing maximum rates of tax upto which a local body may be given the discretion to make its choice, or it may take the form of providing for consultation with the people of the local area and then fixing also rates after such consultation. It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watchdog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided. It may also take the form of subjecting the rate to be fixed by the local body to the approval of Government which acts as a watchdog on the actions of the local body in this matter on behalf of the legislature. There may be other ways in which guidance may be provided. But the purpose of guidance, whatsoever may be the manner thereof, is to see that the local body fixes a reasonable rate of taxation for the local area concerned. So long as the legislature has made provision to achieve that reasonable rates of taxation are fixed by local bodies, whatever may be the method employed for this purpose provided it is effective it may be said that there is guidance for the purpose of fixation of rates of taxation. 15. In the light of these observations if we examine the scheme and the provisions of the Act it is difficult to hold that the Legislature has even clearly enunciated any policy that the statute has been enacted as a fiscal measure, much less to discover in it any guidelines for the exercise of taxing power incidentally conferred on the State Government under Section 5 by making rules to that effect if they so choose. The preamble of the Act simply says that it is expedient to amend the law relating to opium. After the repeal of Section 2 of the Act by Act No. 12 of 1891, it is not even possible to know what previous law relating to opium was sought to be amended under this Act. A reference to Section 2 as contained in the original Act enacted in 1878 however shows that it was the opium Act, 1876 (Act No. 23 of 1876) which was repealed and re-enacted by this Act. It was unnecessary repeal Section 2 by Act No. 12 of 1891 which has obliterated the historical legislative link between the Act under consideration and its predecessor Act which was repealed and re-enacted, through this Act. 16. There is no substantive provision in the Act as it stands laying down any binding rule that there shall be any taxation at all by way of imposing a duty on the persons who are permitted to possess, transport, import or export or sell opium. 17. 16. There is no substantive provision in the Act as it stands laying down any binding rule that there shall be any taxation at all by way of imposing a duty on the persons who are permitted to possess, transport, import or export or sell opium. 17. Sec. 6 of the original Act which was subsequently repealed by the Dangerous Drugs Act, 1930 provided that the Governor-General in Council may from time to time, by notification in the Gazette of India, impose such duty as he thinks fit on opium or on any kind of opium imported by land into British India or into any specified part thereof, and may alter or abolish any duty so imposed. Sec. 7 relate to the warehousing opium legally imported, whether before or after the payment of any duty leviable thereon, into the territories administered by the State Government Section 23 provides for the recovery of arrears of any fee or duty imposed under the Act or any rule made thereunder and also for any arrear due from any farmer of opium revenue Section 24 provides that if any amount is due to any farmer of opium revenue from his licenses he may seek the help of the Collector of the district or other authorities to recover such amount on his behalf. None of these provisions can be said to lay down any policy regarding taxation of opium which has been wholly left to the discretion of the State Governments by framing rules, under Sec. 5. 18. The predecessor Act (Act No. 23 of 1876) contained some provisions regarding the import and export oi opium. Under Section 4 of that Act if any opium was imported by sea in any part of the country then known as British India, it was liable to payment of duty if any, prescribed by the Indian Tariff Act, 1878, or any other law for the time being in force relating to the duties of i customs on goods imported by sea into British India. But if opium was to be imported by land, it could be done only after a pass had been granted by an officer appointed in this behalf by the Governor-General in Council or a local government. But if opium was to be imported by land, it could be done only after a pass had been granted by an officer appointed in this behalf by the Governor-General in Council or a local government. The Governor-General in Council was also empowered to permit the import of opium, or any kind of opium, by land into any specified part of British India on payment of such duty, or on such other terms as the Governor-General in Council thought fit. The export of opium was also subject to the same conditions as laid Sown in Sec. 5. It appears that though f a wide power had been conferred on the Governor-General in Council also to permit the import or export of opium by land (and not by sea) on payment of such duty or on such other terms as they thought fit, a doubt had arisen whether they could permit the import for export absolutely without the payment of any duty. 19. The statement of objects and reasons of the bill which was enacted into Opium Act, 1878, published in the Gazette of India 1877 Part V at page 645 shows that one of the objects of the bill was to remove the doubts as to whether Secs. 4 and 5 of Act No. 23 of 1876 admitted of the free export and import of opium when thought desirable. These doubts were removed by enacting Section 5 in the Act under which it was left to the discretion of the State Governments to permit the importation or exportation of opium absolutely or subject to the payment of duty or to any other conditions by making necessary rules to that effect. Thus the legislature abdicated its own legislative function in favour of the State Governments who were free to levy a duty or not in relation to the various operations of opium. It may have been permissible and not open to challenge in court in 1878 when this Act was passed. But after the enforcement of the Constitution this unguided, uncanalised and unbriddled delegation of legislative function cannot be justified and to that extent Section 5 will be deemed void under Art. 13 (1). 20. It may have been permissible and not open to challenge in court in 1878 when this Act was passed. But after the enforcement of the Constitution this unguided, uncanalised and unbriddled delegation of legislative function cannot be justified and to that extent Section 5 will be deemed void under Art. 13 (1). 20. The learned Standing Counsel for the Union of India relied on Art. 372 of the Constitution which provided that all the law in force in the territory of India immediately before the commencement of the Constitution shall continue in force therein until altered or repealed or amended by a competent Legislature or other competent authority. This provision is, however, subject to other provisions of the Constitution as provided in this very Art. 13(1) is one of such provisions of the Constitution and this Section 5 will have to justify itself in the crucible of the provisions contained in this Article before it can continue in &. force as a valid law. For reasons stated above it cannot be so justified. 21. I would accordingly allow both these writ petitions and hold that Section 5 of the Opium Act, 1878 is void in so far as it delegates to State Governments power of imposing duty on possession, transport, importation or exportation, and sale of opium and consequently the Rules known as the U. P. Poppy-Heads (Amendment) Rules, 1969 framed by the State Government of Uttar Pradesh under this section are also void. The Petitioners are not liable to pay any duty imposed under these Rules. 22. Prem Prakash, J.0 - In these two connected petitions under Art. 226 of the Constitution of India, the petitioners are wholesale dealers in poppy-heads, holding the licence in Form P.H.I prescribed by the U.P. Poppy-Heads Rules, 1961, as amended by the U.P. Poppy-Heads (Amendment) Rules, 1969, made under Section 5 of the Opium Act, 1878 (to be hereinafter referred to as the Rule and the Act respectively). 23. 23. On July 1, 1969, the State of Uttar Pradesh by Notification No. 6377-E/13-338-68 promulgated the U. P. Poppy-head' (Amendment) Rules, 1969, to provide that "permission for, and regulation in regard to, the possession, transport, importation, exportation and sale of poppy-heads shall be subject to payment of duty and other conditions as provided by this notification." Pursuant to these Rules, a licensed cultivator of poppy could transport poppy-heads, which are the produce of his cultivation, from his place of cultivation to his residence or from either place to any other place within the district for sale only to a licensed wholesale dealer holding transport or export pass granted under the Rules; a licensed cultivator of poppy-head during the period from April 1 to July 13 each year is required to sell poppy-heads, which are the produce of his cultivation, only to a licensed whole-sale dealer or to the Government. Under rule 30 any person desiring to sell poppy-heads in whole-sale quantities has to apply to the Collector for a licence in Form P.H.I. The condition of the licence, inter alia, provide that the Collector shall be competent to cancel the licence if any duty or fee payable by the licensee be not duly paid under the conditions of the licence. The P.H.I licensee is required to deposit on the close of the fifth day of the month following the month to which it relates the duty payable on the poppy-heads sold by him in Uttar Pradesh or the poppy-heads exported out of U.P. in the local treasury. A person holding licence in Form P. P.H.1 is required to sell poppy-heads to a person holding licence in Form P.H.1 or P.H. 2 (which is a licence meant for a retailer) or holding permit in Form P.H. 3 or licence in Form L-1 or L-2 issued under the Medical and Tiolet Preparations (Excise Duties) Rules, 1956. The duty payable on poppy-heads under rule 42-A is recovered from the person holding licence in Form P.H. 1; if it is not deposited within five days of the close of the month to which it relates, the Collector could recover the same as arrears of if land revenue. Rule 42-A reads thus: "42-A (i) Excise Duty shall be payable on poppy-heads produced in Uttar Pradesh at the following rates: (a) on poppy-heads ex-ported outside Uttar Pradesh - 25 Paise per Kilogram. Rule 42-A reads thus: "42-A (i) Excise Duty shall be payable on poppy-heads produced in Uttar Pradesh at the following rates: (a) on poppy-heads ex-ported outside Uttar Pradesh - 25 Paise per Kilogram. (b) on poppy-heads other than mentioned at (a) - 50 Paise per Kilo-gram. (ii) A countervailing duty at the rate of 50 Paise per Kilogram shall be / payable on poppy-heads produced outside Uttar Pradesh and imported into Uttar Pradesh." 24. I need not go into all the diverse contentions raised in the petitions as the learned counsel for the petitioners has confined his grounds of attack to two matters only. In the first place, Sec. 5 has been assailed to upon the ground that it is one unconstitutional delegation of legislative power, and secondly, it is contended that no countervailing duty or excise duty could be levied in respect of the quantities of poppy-heads in stock on July 1, 1969. The poppy is sown sometime in October/November and is harvested some-time in March/April every year. The licence to the cultivator under the Rules is issued for the period from 1st October to 30th September. No duty, it is contended, was therefore, leviable upon poppy produced in Uttar Pradesh before 1st July, 1969. Similarly, it has been urged that no counter-vailing duty could be levied on poppy-heads produced outside Uttar Pradesh and imported in Uttar Pradesh before 1st July, 1969. 25. I shall, at the outset, deal with the first branch of the argument. 26. In order to dispose of the first ground of attack it would be relevant to notice Section 5 of the Act which reads : - "5. 25. I shall, at the outset, deal with the first branch of the argument. 26. In order to dispose of the first ground of attack it would be relevant to notice Section 5 of the Act which reads : - "5. Power to make rules to permit such matters - The State Government may, from time to time, by notification in the official Gazette, make rules consistent with this Act, to permit absolutely or subject to the payment of duty or to any other conditions, and to regulate, within the whole or any specified part of the territories administered by such Government, all or any of the following matters:- (a) the possession of opium; (b) the transport of opium; (c) the importation or exportation of opium; and (d) the sale of opium and the farm of duties leviable on the sale of opium by retail; Provided that no duty shall be levied under any such rule on any opium imported and on which a duty is imposed by or under the law relating to sea customs for the time being in force or under the Dangerous Drugs Act, 1930." 27. This section purports to authorise the State Government to permit absolutely or subject to the payment of duty, the possession of opium, the transport of opium, or to any other conditions and to regulate on the matters specified therein. Assuming for the present purpose that the State Government can frame rules to regulate the possession of opium, transport of opium, importation or exportation of opium or the sale of opium and prescribe the manner in which the duty leviable on the sale of opium by retail shall be collected, the question regarding the levy of duty, the circumstance and the rate of levy, is obviously one of legislative policy. Accordingly I have to look to the statute to see whether the Legislature has declared a policy with respect to that subject; whether the Legislature has set up a standard for the State Government's action; whether the Legislature has required any finding by the State Government in the exercise of the authority to enact the duty. 28. Sec. 5 is brief and unambiguous. It does not seek to lay down rules for the guidance of the State Government; it leaves to the State Government to constitute authorities for the determination of circumstances in which the duty shall be levied. 28. Sec. 5 is brief and unambiguous. It does not seek to lay down rules for the guidance of the State Government; it leaves to the State Government to constitute authorities for the determination of circumstances in which the duty shall be levied. It does not state in what circumstances and under what conditions the State Government shall prescribe the duty. It does not require any finding by the State Government as a condition of their action. The Legislature in Section 5 thus declares no policy as to the levy of duty. So far as this section is concerned, it gives to the State Government an unlimited authority to determine the rates and lay down or not to lay down the conditions regarding the payment of duty by a licensee, as it may see fit. Whenever a whole-seller defaults in payment of the duty, the conditions of the licence prescribe that the amount could be realised by the Collector as arrears of land revenue and the Collector is also competent to cancel the licence. 29. I proceed to examine the context if it furnishes a declaration of policy or a standard of action which can be deemed to relate to the subject of levy of duty and thus to imply what is not there expressed. It is important to note that Section 5 is headed "power to make rules to permit such matters." Sec. 4 prohibits the possession, transport, import or export, or sale of opium except as permitted by the Act or by the Rules framed under the Act. 30. I may also turn to "the statement of objects and reasons", which, amongst others things, states : "The present Bill has the following object...First........, secondly, to remove the doubts as to whether Secs. 4 and 5 of the Act admitted of the free export and import of opium, when thought desirable; thirdly, to permit and regulate, by rules framed under that Act, Sec. 8, the farm of opium duties and to facilitate the recovery of their dues by farmers." The preamble of the Act does not state any thing except that the Act was brought to amend the Opium Act, 1857. In the 'statement of objects and reasons' it is manifestly clear, there is nothing as to the circumstances or conditions in which the duty would be levied by the State Government. In the 'statement of objects and reasons' it is manifestly clear, there is nothing as to the circumstances or conditions in which the duty would be levied by the State Government. As to the rate of duty the Statement of objects and reasons does not lay down any policy of limitation. It is simply an introduction of the Act leaving the legislative policy as to the levy of the duty and the rate thereof to be declared and defined by the subsequent sections. The farm of opium duties could be regulated and provisions could be made to facilitate the recovery of such duties, these being matters of detail, in the execution of the law. But in leaving levy of the duty to the State Government without standard or a rule to be dealt with as it pleased, the statute commits to the State Government the functions of a Legislature rather than those of an executive or an administrative officer executing a declared legislative policy. I find nothing in the statement of objects and reasons which limits or controls the authority conferred by Sec. 5. 31. The question whether such a delegation of legislative power is permitted by the statute is not answered by the arguments that it should be assumed that the State Government will act for what it considers to be the public good. The point is not one of motives but of constitutional authority for which the best of motives is not a substitute. The basic question, that arises for consideration, is whether such a delegation of legislative power, where the legislature has neither declared a policy with respect to the subject in controversy nor it has prescribed any standard to determine the conditions or the rate of duty, can be held as permissible delegation of power or it should be struck of because it confers an unchannelled, uncontrolled and arbitrary power on the State Government. 32. The Constitution provides that Parliament may make laws for the whole or any part of the territory of India and the Legislature of a State may make laws for the whole or any part of the State (vide Art. 245). Art. 265 provides that no tax shall be levied or collected except by an authority of law. 32. The Constitution provides that Parliament may make laws for the whole or any part of the territory of India and the Legislature of a State may make laws for the whole or any part of the State (vide Art. 245). Art. 265 provides that no tax shall be levied or collected except by an authority of law. The Parliament or the State Legislature is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested. Undoubtedly, in a welfare State, such as is ours, the legislation in order to implement the "Directive Principles of State Policy," may be faced with complex conditions involving multitude of details with which the Legislature cannot deal directly. Delegation by the Legislature has, therefore, been recognised as necessary in order that the exertion of legislative authority does not become a futility and the burden of minutes may clog the administration of law and stop the wheels of the Government'. The Constitution does not forbid the Legislature to leave to the subordinate agency the making of rules within the prescribed limits and the determination of facts to which a policy, as declared by the Legislature, has to apply. But the constant recognition of the necessity of such provisions cannot be allowed to obscure the limits of the authority to delegate if the constitutional process of legislation, which is an essential part of our system of Government, is to be maintained. 33. The Supreme Court has frequent occasions to refer to these limitations and to review the course of legislative action. At the very outset may letter to In re Art. 143. Constitution of India and Delhi Laws Act (1912), AIR 1951, S.C. 332 etc. where the scope of permissive delegation of legislative power was examined. Fazl Ali, J. summed up his conclusion thus : The legislature must normally discharge its primary legislative function itself and not through others. (2) The Legislature may legislate in a sphere, in which it has a sovereign power, in any way it regards as best suited to carry out its policies in making the particular law, and it may use any outside agency to the extent it finds necessary to go things that are inconvenient or impossible for the Legislature itself to deal with. (3) The Legislature cannot, abdicate its legislative functions and must, therefore, see that the outside agency acts in a subordinate capacity. (4) there are only two main checks in India on the power of the Legislature to delegate, namely, its good sense and the principle that it should not go to the extreme of abdication and self effacement. (vide page 355). The majority held that the Legislature in India, whether established before or after the Constitution, could as a rule delegate its legislative exercising essential legislative functions which consisted in laying down a policy or a rule of conduct to guide the exercise of delegated authority. Legislative policy could not be left to discretion of the delegate, but where such policy was laid down by the Legislature, the rest could be validity delegated. 34. The question was further considered by the Supreme Court in Rajnarain Singh v. Chairman, Patna Administration Committee, Patna, AIR 1954 S.C. 569 . Sec. 3(1) (f) of the Patna Administration Act, 1915, empowered the local Government to extend to Patna the provisions of another section of the said Act (The Bengal Municipal Act, 1884, which was later substituted by the Bihar and Orissa Municipal Act, 1922) "subject to such restrictions and modifications as the local Government may think fit." The Supreme Court upheld the grant of this power subject to the limitation that the modification should not include a change of policy or any essential change in the Act regard as a whole. In that case the Government selected only the charging section of the Act and applied it to Patna so as to subject it to municipal taxation. The Government did not apply Secs. 4, 5 and 6 of the Act which afforded a statutory guarantee that no municipality competent to tax shall thrust upon a locality without giving its inhabitants a chance of being heard and to object. Omission to apply Secs. 4, 5 and 6 effected a material change in the policy of the Act and in consequence the notification was struck down. The notification applying Section 104 to the area was, therefore, held ultra vires. 35. Omission to apply Secs. 4, 5 and 6 effected a material change in the policy of the Act and in consequence the notification was struck down. The notification applying Section 104 to the area was, therefore, held ultra vires. 35. The Supreme Court, however, adopted a fairly liberal approach in actually determining whether an Act transferring law making powers contained such a legislative policy or prescribed a rule of conduct to guide the exercise of discretion by the delegated authority and in that series the first case is Harishankar Bagla v. The State of Madhya Pradesh, AIR 1954 S.C. 465 where the validity of Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 was attacked on the ground of excessive delegation of legislative power; the Act was an emergency measure and, as stated in its preamble, it was intended to provide for the continuation during a limited period, all powers to control the provision, supply and distribution of, and trade and commerce in certain commodities specified in the Act itself. It was contended that there was nothing to guide the Government in framing rules under Section 3 to grant or refuse permits, but the Court held on reading the preamble and other provisions that the delegation was not bad since the Legislature had laid down its policy which was 'maintenance or increase in supply of essential commodities and of securing equitable distribution and availability on fair prices." 36. In Bhatnagar and Co., Ltd. v. Union of India, AIR 1957 S.C. 478 the Supreme Court searched for the legislative policy not only within the delegating Act but also in what they called its "predecessor statute". Sec. 3 of the Imports and Exports (Control) Act, 1947, authorised the Government to prohibit, restrict or otherwise control exports from and imports into India of certain commodities. It was attacked on the ground that the Legislature had delegated the authority without laying down any principle and without giving any guidance to the delegate. By reading the preamble of the Act the Court discovered that this enactment did not purport to lay down the material provisions for the first time, but continued the previously existing provisions in that behalf. It was, therefore, considered legitimate to read the preamble and the relevant provisions of the predecessor Act to find out the policy underlying the Act. By reading the preamble of the Act the Court discovered that this enactment did not purport to lay down the material provisions for the first time, but continued the previously existing provisions in that behalf. It was, therefore, considered legitimate to read the preamble and the relevant provisions of the predecessor Act to find out the policy underlying the Act. The predecessor enactment, namely, the Defence of India Act, referred in its preamble to the emergency which had arisen at the time of its passing and provided in Section 2 that it was essential to secure the public safety and maintenance of public order and the maintenance of supplies and services essential to the life of the commodity. The Court, therefore, concluded that the board and main principle underlying the Imports and Exports Act was to maintain supplies essential to the community and it provided sufficient guidance to regulate the authority delegated by Section 3 of the Act. 37. In Edward Mills Co. Ltd. v. State of Ajmer, AIR 1955 S.C. 25 the validity of the Minimum Wages Act, 1948, was considered. The object of the Act, as stated in its preamble, was to provide for fixing minimum rate of wages in certain employments. The procedure for fixing such wages was laid down by the Act itself and the Schedule attached to the Act specified the employment in respect of which the minimum wages of the employees could be fixed. Sec. 27 authorised the "appropriate Government" to add to either part of the schedule any employment after giving due notice in the Gazette. It was argued that the Act provided no legislative policy or criteria according to which the Government could choose an employment to be included in the schedule. Rejecting the contention, the Supreme Court observed that the Legislature intended to apply the Act to only such industries where by reason of unorganised labour or want of proper arrangements for effective regulation wages of labourers in a particular industry were very low. It was on the basis of these facts that the list of trades had been drawn up, in the schedule attached to the Act. It was on the basis of these facts that the list of trades had been drawn up, in the schedule attached to the Act. It was also observed that the expediency of including a particular trade in the schedule depended upon varying conditions of labour and other various facts which could best be ascertained by the person incharge of the administration and, therefore, the power delegated to the Government was held to be necessary to carry out the purpose and policy of the Act. 38. In Union of India v. Bhanamal Gulzarimal Ltd., AIR 1960 S.C. 475 , the Supreme Court, upon a challenge of the power, conferred upon the Iron and Steel Controller by Clause 11-B of the Iron and Steel (Control of Production and Distribution) Order, 1941, issued under Secs. 3 and 4 of the Essential Supplies Act, rejected the contention of excessive delegation observing that the power conferred on the Central Government by Section 3 and on the authority specified by Section 4 was canalised by the clear enunciation of the legislative policy in Section 3 and that clause 11-B further canalised the exercise of the said power. The concept of fair prices, namely, that the commodity should be made available for equitable distribution on fair prices, was held as sufficient guidance for exercising its powers by the Central Government in carrying out the policy of the statute. Sec. 11-B was held to embody a scheme to enable the Controller to take steps to give effect to the policy laid down by Section 3 of the Act. On these premises their Lordships rejected the further contention that the discretion of the delegate, namely, the Controller, should have been fettered by reference to prices prevailing during a particular base period. 39. In Hamdard Dawakhana v. Union of India, AIR 1960 S.C. 554 the Supreme Court for the first time after the Delhi Laws Act case declared a portion of a parliamentary enactment void on the ground of excessive delegation of legislative power. By Section 3 of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, advertisement of drugs for treatment of certain diseases specified in the section "or any other disease or condition which may be specified in the rules made under this Act" was prohibited. By Section 3 of the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954, advertisement of drugs for treatment of certain diseases specified in the section "or any other disease or condition which may be specified in the rules made under this Act" was prohibited. Sec. 16 conferred a general power on the executive to make rules for carrying out the purposes of the Act and in particular authorised the executive "to specify any disease or condition to which the provisions of Section 3 shall apply". The Court held that the words "or any other disease or condition which may be specified in the rules made under this Act" occurring in Section 3 conferred uncanalised and uncontrolled power upon the executive. 40. In Harakchand Ratanchand Banthia v. Union of India, AIR 1970 S.C. 1453 the Supreme Court struck down Sec. 5(2) (b) of the Gold Control Act, 1968 on the ground of excessive delegation of power. Sec. 5(2) (b) conferred upon the Administrator the power so far as it appeared to him to be necessary or expedient in carrying out the provisions of the Act, to regulate "by licences, permits or otherwise, the manufacture, distribution, transport, acquisition, possession, transfer, disposal, use or consumption of gold." 41. It is, therefore, clear from the above discussion that so long as a policy, or principle or some standard is prescribed by the Legislature on the basis of which the executive has to exercise the legislative power conferred on it, the delegation will be treated as permissible and will, therefore, be upheld by the Court. It will be open to the Legislature to formulate policy as broadly and with as little or as much detail as it thinks proper and it may delegate the rent of the legislative work to a subordinate authority who may work out the details within the frame work of that policy. 42. The American Judiciary has approached the principle of delegation in much the same manner in as much as the American Supreme Court reviewing the applicable considerations in Sunshine Anthracite Coal Co. v. Adhins, 310 U.S. 381 observed at page 398 thus: - "The problem of fixing reasonable prices for bituminous coal cannot be differentiated legally from the task of fixing rates under the Interstate Commerce Act (February 28, 1920, 41 Stat. at L. 484. Chap. v. Adhins, 310 U.S. 381 observed at page 398 thus: - "The problem of fixing reasonable prices for bituminous coal cannot be differentiated legally from the task of fixing rates under the Interstate Commerce Act (February 28, 1920, 41 Stat. at L. 484. Chap. 91, 49 U.S.C.A. $ 15) and the Packers and Stockyards Act (August 15, 1921, 42 Stat. at L. 166, Chap. 64, 7 U.S.C.A. $s. 211). The latter provide the standard of "just and reasonable" to guide the administrative body in the rate-making process. The validity of that standard Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 74 Led 524, 50 $ CT 220, supra, the appropriateness of the criterion of the "public interest" in farious contexts New York Cent. Securities Corp. v. United States, 287 U.S. 12, 24, 77 Led 138, 145, 53 $ St 45, United States v. Chemical Foundation, 272 U.S. 1, 71 Led 131, 47 $ Ct 1 and Avent v. United States, 266 U.S. 127, 69 Led 202, 45 $ Ct 34, the legality of the standard of "unreasonable obstruction" to nevigation Union Bridge Co. v. United States, 204 U.S. 364, 51 Led 523, 27 $ Ct 367, all make it clear that there is a valid delegation of authority in this case. The standards which Congress has provided here far exceed in specificity of others which have been sustained. Certainly in the hands of experts the criteria which Congress has supplied are wholly adequate for carrying out the general policy and purpose of the Act. To require more would be to insist on a degree of exactitude which not only lacks legal necessity but which does not comport with the requirements of the administrative procees." 43. In Bowles v. Willingham, 321 U.S. 503 the Court upheld the validity of the Emergency Rent Control Act enacted during the Second World War against a charge of improper delegation of powers. The Court stated that the Congress had made clear its policy of waging war on inflation and had defined the circumstances in which its announced policy was declared operative and the method by which it was to be effectuated. "Those steps", as observed by the Supreme Court, "constitute" the "performance of the legislative function in the constitutional sense". The Court stated that the Congress had made clear its policy of waging war on inflation and had defined the circumstances in which its announced policy was declared operative and the method by which it was to be effectuated. "Those steps", as observed by the Supreme Court, "constitute" the "performance of the legislative function in the constitutional sense". The Act had supplied the standard and the base period to guide the Administrator in determining what the maximum rentals should be in a given year. 44. In Electric Power & Light Corporation v. Securities and Exchange Commission, 329 U.S. 90 the American Supreme Court sustaining the validity of Sec. 11(b)(2) of the Public Utility Holding Company Act of 1935 observes: "it becomes constitutionally sufficient if Congress delineates the general policy, the public agency which has to apply it and the boundary of this delegated authority." 45. Counsel appearing on behalf of the State has canvassed before us that the recognition by the Supreme Court in numerous cases of conferment of powers by the Legislature to subordinate agency, to fix the rate of taxes, should be given due weight in determining the validity of the impugned delegation and that such practical construction should not be overlooked unless the legislation is clearly incompatible with the Constitution. 46. Reference has been made to Pandit Banarsi Das Bhanot v. State of Madhya Pradesh, AIR 1958 S.C. 909 . There Sec. 6(2) of the Berar Sales Tax Act, 1947, which empowered the State Government to amend the schedule to the Act to provide exemption from the Sales Tax, was impugned on the ground of impermissible delegation of legislative power. Accepting the law as laid down by the Supreme Court in Raj Narain Singh case Venkatarama Aiyar, J. speaking for the Court said- "Now, the authorities are clear that it is not unconstitutional for the legislature to leave it to the executive to determine details relating to the -working of taxation laws, such as the selection of persons on whom the tax is to be laid, the rates at which it is to be charged in respect of different classes of goods, and the like." The Supreme Court referred to Powell v. Appollo Candle Co., (1885) 10 A.C. 282, Syed Mohamed and Co. v. State of Madras, AIR 1953 Madras 105 and Hampton Jr. and Co. v. State of Madras, AIR 1953 Madras 105 and Hampton Jr. and Co. v. United States, (1928) 276 U.S. 394 and added that the power conferred by Sec. 6(2) was "in consonance with the accepted legislative practice relating to the topic and was not unconstitutional." 47. In their later decisions in M/s Devi Das Gopal Krishnan v. State of Punjab, AIR 1967 S.C. 1895 and The Municipal Corporation of Delhi v. Birla Cotton, Spinning and Weaving Mills, Delhi, AIR 1968 S.C. 1232 the Supreme Court had the occasion to re-examine Banarsi Das's case with reference to the contention that it is open to the Legislature to delegate the power to fix rate to a subordinate agency. Expressing their partial disagreement with the observations made therein, the Chief Justice speaking for the Court made it clear in Devi Das's case at page 1900 that the power to fix rates must be supported by some reasonable guidance given under the Act; a similar view was expressed by the Chief Justice in Delhi Municipality's case observing at page 1242 that the proposition that the rate of tax is not an essential feature had been too broadly stated in Banarsi Das's case, and that the power to fix rate of taxation can be delegated subject to "proper guidance and ....... safeguards and limitations in that behalf". 48. Next, we have been referred to Western India Theatres Ltd. v. Municipal Corporation of the City of Poona, AIR 1959 S.C. 586 , The Corporation of Calcutta v. Liberty Cinema, AIR 1965 S.C. 1107 and Gulabchand Bapalal Modi v. Municipal Corporation of the City of Ahmedabad, AIR 1971 S.C. 2100 . In all these cases the delegation was made to a municipal corporation, an elected body responsible to the people; the power had been granted to impose tax for the purposes of the Act; the delegation was neither unguided nor uncanalised because the obligations and functions of the corporation were set forth in the Act and because the taxing power was "subject to the purposes of the Act". It was held that there was sufficient standard to prevent the delegation from being in excess of the permissible limits. It was held that there was sufficient standard to prevent the delegation from being in excess of the permissible limits. Power to fix rates to carry out the purposes of the Act and for the welfare of the people electing their representatives to the corporation was not regarded as a transfer of general legislative power, but was held to be the grant of the authority to prescribed local regulations, according to immemorial practice, subject, of course, to the interposition of the superior in cases of necessity. "Such power", as observed by their Lordships in G. B. Modi's case "was a necessary adjunct to a system of local self-government". 49. In Western India Theatre's case the Supreme Court discovered the policy in the expression "for the purposes of this Act". Then there was a limitation and the condition of prior approval of the need and object of the tax by the Governor-in-Council which did in the opinion of the Court lay down a principle for the guidance of the Municipal Corporation. 50. In Liberty Cinema's case the majority, taking the view that fixation of rates was not an essential part of legislation, held that when the power to fix rates of taxes is left to another body, the Legislature must provide guidance for such fixation and this guidance their Lordships sought from Sec. 127(3) of the Calcutta Municipal Act which obligates upon the Corporation to prepare a budget each year and subject to the provisions of the Act determine rates and taxes as necessary to provide for the purpose mentioned in Sub-sec. (4), the purpose being to make adequate and suitable provision for such services as may be required for the fulfilment of the several duties imposed by the Act. In the case of a self-governing body with taxation powers a large amount of flexibility in the guidance to be provided for the exercise of that power must exist', (vide page 1119). 51. In the case of a self-governing body with taxation powers a large amount of flexibility in the guidance to be provided for the exercise of that power must exist', (vide page 1119). 51. In Liberty Cinema's case came up for consideration in Devi Das's case where Subba Rao, C.J., speaking for the Court, said, "If this decision is an authority for the proposition that the Legislature can delegate its power to a statutory authority to levy taxes and fix the rates in regard thereto, it is equally an authority for the proposition that the said statute to be valid must give a guidance to the said authority for fixing the said rates". Under Section 5 of the Punjab General Sales Tax Act, 1948 and uncontrolled power was conferred on the provincial Government to levy every year on the taxable turnover of a dealer a tax at such rates as the said Government might direct. Holding Section 5 as an effacement of the legislative power, Subba Rao, C.J. observed: "Under that section the Legislature practically effaced itself in the matter of fixation of rates and it did not give any guidance either under that section or under any other provisions of the Act no other provision was brought to our notice. The argument of the learned counsel that such a policy could be gathered from the constitutional provisions cannot be accepted for, if accepted, it would destroy the doctrine of excessive delegation. It would also sanction conferment of power by Legislature on the executive Government without laying down any guidelines in the Act. The minimum we expect of the Legislature is to lay down in the Act conferring such a power of fixation of rate clear Legislative policy or guidlines in that regard. As the Act did not prescribe any such policy, it must be held that Section 5 of the said Act, as it stood before the amendment, was void." From this case the broad proposition emerges that the power to fix the rate of tax can be delegated to a subordinate agency if the statute contains a policy or furnishes guidance to the delegate in exercising such power. 52. In the Municipal Corporation of Delhi v. Birla Mills, AIR 1968 S.C. 1232 the question as to the limits of delegation of taxing power again came for consideration before the Supreme Court. 52. In the Municipal Corporation of Delhi v. Birla Mills, AIR 1968 S.C. 1232 the question as to the limits of delegation of taxing power again came for consideration before the Supreme Court. The Delhi Municipal Corporation Act entrusted to the Delhi Corporation two kinds of functions, compulsory and optional. In relation to or for implementation of the optional functions the Act did not specify any maximum rate of tax though such a rate was prescribed in the case of functions which were compulsory, The delegation was upheld because the Act furnished sufficient guidelines to prevent the Corporation from exercising the authority in a manner arbitrary or capricious. In Section 150 of the Delhi Corporation Act there is a provision that the maximum rate fixed by the Corporation at its meeting by resolution has to be submitted to the Government for its sanction and without such sanction there can be no imposition of lax. Another limit contained in Section 109 of the Act provides for the preparation of the budget of the Corporation and its approval by the Corporation. The obligatory and optional functions were specified in the Act and therefore, the limit to which it the Corporation could tax was as circumscribed by the need to finance the functions which the Corporation has undertaken to perform. 53. In Gulabchand Bapalal Modi v. Municipal Corporation of the City of Ahmedabad, AIR 1971 S.C. 2100 the Supreme Court reviewed the earlier law on the subject and reiterating the view taken in Municipal Corporation of Delhi's case held that although the statute did not prescribe the maximum rate for levying property tax, but because the levy was made by counsellors responsible to the people and the statute contained "sufficient safeguards and outlines" to enable the Corporation to exercise their functions, the delegation of power was valid. 54. From the above discussion, it would appear that distinction has been drawn by the Supreme Court between the delegation of power to fix rate of tax to a Municipal Corporation and the conferment of such power upon a subordinate agency not falling in that category. "The power to levy taxes by these (political) divisions comes from the State. The State confers it and at the same time exercises a parental supervision by circumscribing it. "The power to levy taxes by these (political) divisions comes from the State. The State confers it and at the same time exercises a parental supervision by circumscribing it. Indeed, on genera] principles, the power is circumscribed by the rule that the taxation by the local authorities can only be for local purposes" (vide Cooley's Treatise on the Constitutional Limitations, page 518). 55. As already noticed above, there was `sufficient guidance' available to the Corporation from the statute itself to enable it to exercise the power reasonably and in accordance with the wishes of the chosen representatives of the people. The present case falls, in my opinion, within the ambit of the principle laid down by their Lordships in Devi Das's case and accordingly hold that Section 5 of the impugned Act in so far it authorises the State Government to impose duly on the matters specified therein is ultra vires the Legislature on the ground of excessive delegation of legislative power. It does not subject the State Government to any restraint or control and in the result makes the State Government the law unto itself. It confers, in that regard, on the State Government an unbridled, uncanalised and uncontrolled power and makes the section, to that extent violative, of the guarantee enshrined in Art. 14 of the Constitution. If its repercussion, in case of its being used unreasonably and arbitrarily, on the right guaranteed by Art. 19(1) (g) is also taken into account, it is liable to be struck down as an unreasonable restriction on that right as well. In consequence Rule 42-A looses its legal validity. The other rules (Rule 42-B to Rule 42-D) cannot survive because they lay down the procedure for collection of the duties; it is not necessary to strike them down, for without Rule 42-A they cannot operate. 56. Counsel for the State has, alternatively, contended that the power to regulate conferred upon the State Government carries with it the power to determine the rate of tax as also the conditions and circumstances which require the levy of such tax. In support of this contention he has invited our attention to Jan Mohammad Noor Mohammad Baghan v. The State of Gujrat, AIR 1966 S.C. 385 . In support of this contention he has invited our attention to Jan Mohammad Noor Mohammad Baghan v. The State of Gujrat, AIR 1966 S.C. 385 . Sec. 5 of the Gujrat Agricultural Produce Markets Act authorises the Director to declare his intention to regulate, purchase and sell agricultural produce and to declare an area or part thereof a market area for the purpose of the Act in respect of all or any of kinds of produce specified in the notification. The argument advanced before their Lordships that the authority conferred upon the Director was wide and arbitrary because no principle was indicated was rejected. But in taking that view their Lordships found that the preamble of the Act clearly indicated that the powers conferred upon the Director were to be exercised for the purpose of regulating buying and selling of agricultural produce and for that purpose to establish markets for sale and purchase of agricultural produce. The powers under Section 6 were to be exercised by the Director after giving an opportunity to persons to raise objections or to make suggestions to the proposed intention of control of sale and purchase of agricultural produce. It was only after the objections are received and considered by the Director in the light of the object and purpose of the Act that there could be regulation of the trade in agricultural produce in the specified area that he could proceed to declare market area. It was, therefore, not a case where there was no guidance given to the subordinate agency to exercise its power. 57. The word `regulate' according to Shorter Oxford Dictionary means "to control, govern or direct by rule or regulation, to subject to guidance or restrictions". A discretion to make regulations to guide supervisory action in specified matters may be constitutionally permissible while it would not be allowable to authorise an executive agency to impose tax without the Legislature laying down the policy or indicating the guidelines for the exercise of such discretion by the said agency. I may note that the learned counsel has not made the submission that the duty levied by the impugned notification was a fee imposed to meet the expenses in the administration or for benefits conferred on the licencees, under the Act. For these considerations the case cited by the counsel for the State has no bearing on the present controversy. 58. For these considerations the case cited by the counsel for the State has no bearing on the present controversy. 58. The case of Bahadur Singh v. Union of India, W.P. Nos. 111, 148 and 162 of 1955. D/d. 17.2.1956 (Petition Nos. 111, 148 and 162 of 1955 decided by the Supreme Court on 17th February, 1956) has no relevance for the purposes of the present controversy because there the vires of Section 5 of the Act had not arisen for consideration before the Supreme Court. 59. Sri Umesh Chandra Srivastava appearing on behalf of the Union of India has submitted that Art. 372 of the Constitution continues the laws in force in the territory of India immediately before the Constitution came into force and, therefore, the Opium Act, being a pre-constitutional law, shall continue in force until altered or repealed or amended by a competent Legislature or other competent authority. In my opinion, the contention has no force. Even if Art. 372 continues the pre-constitutional law of taxation, that provision is expressly made subject to other provisions of the Constitution. If there is an irreconciliable conflict between the preexisting law and the provision of the Constitution, the law shall not prevail to the extent of that inconsistency. The validity of the pre-constitutional law has to be judged with reference to Art. 13(1) of the Constitution. If a pre-constitutional law infringes the guarantee or guarantees in Part III of the Constitution, the pre-constitutional law has to be declared void to the extent of the inconsistency with or contravention of a fundamental right, subject of course Constitution in as much as it confers to the doctrine of sever ability. Upon an analysis of the Act I have come to the conclusion that Section 5 infringes the guarantees of Arts. 14, and 19 of the constitution in as much as it confers upon the State Government, without any guidance given therefor an uncontrolled power to impose duty. The contention of the learned counsel that despite Section 5 infringing Arts. 14 and 19 of the Constitution, it should continue in force with the applicability of Art. 372 of the Constitution, is untenable. 60. The second point raised by the counsel for the petitioners that duty could not be levied on poppy-heads produced before the date of the impugned notification had been answered by a decision of this Court in Anant Ram and Co. 60. The second point raised by the counsel for the petitioners that duty could not be levied on poppy-heads produced before the date of the impugned notification had been answered by a decision of this Court in Anant Ram and Co. v. State of U. P., 1971 A.L.J. 1057 where a Single Judge of this Court held that Rule 42-A (i) is not capable of being construed as justifying levy of duty on poppy-heads produced in Uttar Pradesh before 1st July, 1969, on which date the impugned notification came into force. The learned counsel appearing on behalf of the State does not content the correctness of this view and we are, therefore, relieved of the necessity of entering into this point. In a similar way the learned Single Judge held that countervailing duty provided in Sec. 42-A (ii) is not leviable in respect of poppy-heads imported prior to the coming into operation of the Rules. The rule imposing duty has to be given prospective effect. When the rule provides that duty shall be payable on poppy-heads produced in Uttar Pradesh, it may follow that duty shall be leviable on poppy-heads produced in Uttar Pradesh after the commencement of the Rules. It is true that a tax can be levied retrospectively, but the language of the rule does not permit that interpretation. I accordingly hold that the duty could not be levied on poppy-heads produced in Uttar Pradesh before 1st July, 1969, and on poppy-heads imported from outside before that date. 61. For the foregoing reasons, I would allow both these petitions and hold that Section 5 of the Act is to the extent aforementioned, ultra vires the Legislature on the ground of excessive delegation of legislative power; it inhibits Arts. 14 and 19(1) (g) of the Constitution. Consequently Rule 42-A of the U. P. Poppy-Heads (Amernment) Rule 1969 is struck down as having no binding and legal effect. The petitioners are not liable to pay any duty imposed under these Rules. 62. By the Court. - We allow both the writ petition Nos. 955 and 956 of 1969 and quash the notification dated July 1, 1969 promulgating the U. P. Poppy-Heads (Amendment) Rules, 1969. An appropriate writ shall issue against the State Government prohibiting it from taking any action against the petitioners under the provisions of rule 42-A of the said Rules. By the Court. - We allow both the writ petition Nos. 955 and 956 of 1969 and quash the notification dated July 1, 1969 promulgating the U. P. Poppy-Heads (Amendment) Rules, 1969. An appropriate writ shall issue against the State Government prohibiting it from taking any action against the petitioners under the provisions of rule 42-A of the said Rules. The amounts deposited by the petitioners on account of duty imposed under the said Rule in pursuance of this Court's order dated January 14, 1971 shall be refunded to the concerned petitioners, and the security, if any, furnished by them in pursuance of the said order shall also stand discharged. In the circumstances of the case we make no order as to costs.