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2020 ] LEGISLATIVE COMPETENCE OF RULES 36(4) AND 86A OF CGST RULES, 2017 J81
must have “a statutory peg on which to hang” - V. Sundeer v. Bar Council of India,
JT 1999 (2) SC 141. In other words such a rule to be valid must have a nexus with
any of the statutory functions entrusted to the rule making authority.
The function of enroling advocates under the Advocates Act, 1961 is en-
trusted to the State Bar Councils, which can also provide by rules the conditions
subject to which a person may be admitted as an advocate on any such roll, the
Bar Council of India cannot make a rule restricting the enrolment on the State roll
to only those who had not completed 45 years of age, or for training new entrants
before enrolment and such rules cannot be sustained under Section 49(1) of the
Act which enables the Bar Council of India to make rules for discharging its func-
tions under the Act.
Hon’ble Delhi High Court in case of Subhash Chand Aggarwal v. Union of
India on 25 July, 2011 -
We are also of the opinion that a delegated power to legislate by making rules
“for carrying out the purposes of the Act” is a general delegation without lay-
ing down any guidelines; it cannot be so exercised as to bring into existence
substantive rights or obligations or disabilities not contemplated by the pro-
visions of the Act itself.”
Power to make rules for carrying out the provisions of the Act
Power to make rules is not conferred in general terms to carrying out the
purposes of the Act, but it is limited to particular topics, a rule made to be justi-
fied will have to be within ambit of those topics otherwise it will be invalid.
Rule-making power conferred by Section 27 of the Bihar Money-lenders
Act, 1938 to prescribe the form of registration certificate and the particulars to be
included in an application made for the purpose of being registered as money-
lender, does not empower the making of any rule fixing the upper limit up to
which the loans advances by money-lender are to remain outstanding an any
particular period of time - Sant Saran Lal v. Parasram, AIR 1966 SC 1852.
Natural Justice for exercise of power being of administrative nature
Rule 86A of the CGST Rules, 2017 is administrative in nature. Power to
Block the Credit of the Input Tax varies from assessee to assessee. In case of Qua-
si Legislative, there is no need of Opportunity of Being Heard.
Legislative Nature - Where the power to be exercised under the provi-
sions of a statute does not concern with the interest of an individual and relates
to the public in general or concerns with general direction of a general character
and lays down a future course of action, it is generally held to be legislative in
character. Example - A statutory power to fix the different rates of electricity du-
ty or to allow exemption in payment thereof has been held to be legislative.
Administrative Nature - Example - Fixation of price of levy of sugar un-
der Section 3C of the Essential Commodities Act, 1955 is legislature in nature but
calculations of the amount payable to each producer is administrative in nature.
Hence in our view before exercise of the power given to Commissioner
to Block the Electronic Credit Ledger, reasonable opportunity of being heard
must be given to the assessee. Power under Rule 86A of the CGST Rules, 2017 is
not of legislative but of administrative in nature.
[Continued on page J105]
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