In a recent case, the Supreme Court analyzed the power of the Parliament to overturn Judicial decisions by changing laws and making the execution of the judgment impossible. The power to add or remove laws lies with the Parliament and there can be no interference in it from the side of the Judiciary. However, there is an important distinction between overturning judicial decisions and changing laws. The Parliament, while having the power to do the latter, the former act of overturning judicial decisions is outside the scope of its power and thus it cannot directly overturn judgments pronounced. However, having the power to change the laws, it can change the laws to make the execution of the judgment impossible and thus indirectly overrule it.
The appeal arose out of a judgment of the Himachal Pradesh High Court where it dismissed civil writ petitions filed by the plaintiff and upheld the various amendments to the Himachal Pradesh Passengers and Goods Taxation Act, 1955(henceforth referred to as the “Act of 1955”).
The Appellant, NHPC Ltd., is engaged in the business of electricity generation and has multiple projects in Himachal Pradesh. Many of the project sites of NHPC are very far from the residential Colonies of its workers, thus it operates bus services free of cost for the workers to and from their work sites and also for their children to travel to and from their school. However, with the enactment of the Act of 1955, NHPC is liable to pay passenger tax for the transportation service. NHPC filed a writ petition challenging the vires of the Act and the assessment made in accordance with it.
The Petition was allowed by the Division Bench of the High Court and the Respondents were ordered to refund the tax collected. It held that in the absence of any prescription as to what the ‘normal rate’ of the bus fare would be, the Respondent Authorities could not have levied tax on the NHPC based on artificial assumptions. Moreover, the charging provision could not be given effect unless the terms ‘route’ and ‘normal rate’ had been expressly and unambiguously defined.
Subsequently, the Himachal Pradesh Passengers and Goods (Amendment and Validation) Ordinance was promulgated. It defined the terms ‘business’, ‘fare’, ‘freight’ and ‘passenger’. Further, definitions of terms such as ‘Private Service Vehicle’, ‘road’, and ‘Transport Vehicle’, were introduced and a new charging provision was inserted. Accordingly, the Authorities constituted under the Act, issued notices to the appellant for recovery of tax under the provisions of the Himachal Pradesh Passengers and Goods (Amendment and Validation), Act, 1997(henceforth referred to as the Amendment Act of 1977).
The appellant challenged the vires of the Amendment and Validation Act of 1997 and the assessments made thereunder, as also of the Act of 1955 which was dismissed by the High Court. Aggrieved by the dismissal, the present appeal was filed.
The main issue that the Supreme Court considered was whether the Himachal Pradesh Legislative Assembly has by enacting the Amendment Act of 1997 essentially removed the basis of the judgment of the Division Bench of the High Court where it held that the Act of 1955 did not include within its scope the act of NHPC of providing free of cost transport facilities for their employees and their children. The appeal also questioned whether the transport facility would come under the purview of the Amendment Act of 1997 under Section 3(1-A) and be considered a taxable activity.
The Supreme Court upheld the validity of the Amendment Act of 1997 and affirmed the judgment passed by the Himachal Pradesh High Court. It also held that the State legislature has essentially removed the basis of the judgment of the High Court’s Division Bench in the earlier NHPC case. Hence, the appeal was dismissed.
The Court held that in the present case, there was no intent by the State Legislature to ‘legislatively overrule’ the Himachal Pradesh High Court’s judgment. It had intended to cure the defects of the Act of 1955 by amending the Act retrospectively to widen its scope. The Supreme Court also laid out various principles that are to be followed by the legislature in the exercise of its abrogation powers.
The Supreme Court in this judgment laid down the principles for the exercise of the legislative power of abrogating a law declaring a judgment by the Court to be invalid. In the midst of the discussion, the Court referred to the Tirath Ram Rajendra Nath v. State of U.P., in which the Apex Court has held that there is a difference between encroachment by the legislature in the power of the judiciary and nullification of law retrospectively by exercising a constitutionally valid legislative power. The Court held that while encroachment into the judicial power by the legislature is outside its scope, it can retrospectively nullify a law and thus essentially remove the basis of a judgment of the Court.
The Court also referred to Cheviti Venkanna Yadav v. State of Telangana, wherein it held that the legislature has the power to legislate, including retrospectively amending law which may remove invalidity of laws. However, the Apex Court had observed in the case, that such an act does not intend to overrule the decisions of the Court or encroach upon the power of the Judiciary.
The Constitution grants the legislature the power to legislate law, it includes within its scope the power to amend laws both retrospectively and prospectively to a reasonable degree. As such, the Judiciary cannot interfere in the act of the legislature within the scope of its power nor can it declare an Act to be invalid on the sole ground that it removes the basis of a judgment by the Court without there being any such intent. The Supreme Court can only hold a law to be invalid if it goes against the letter and spirit of the Constitution or contravenes any provision of the Constitution, hence unless and until this requirement is satisfied, the Court cannot declare a law to be invalid, which in this case it did not.
However, the Court also observed that if the intent of the legislative has been to validate Acts which have been held to be invalid by a Court by passing a subsequent legislation without actually curing the defects in the original legislature which was struck down then such act would be ultra-vires. The Court held that such an act would qualify as an attempt at ‘legislatively overruling’ a Judicial Verdict and would amount to encouragement of the Judiciary’s power. Therefore, it would be illegal.
The legislative’s power of abrogation cannot be used as a tool to circumvent unfavourable judgment by a Court. The intent behind abrogation should always be to cure the defects present in the Act rather than to revalidate a law held by the Court as invalid. If the legislature does attempt any such act, after the Judiciary has in the exercise of its constitutional power declared a law to be invalid, then such shall be an encroachment on the Judiciary’s power and be illegal and ultra-vires.
The Court further stated that an act of abrogation may only be carried out in the interests of justice, efficiency, and good governance, and not to further any covert goals of disobeying a court order or eliminating the binding nature of a Judicial judgment.
A judicial judgment is binding in nature and it cannot be simply allowed to be circumvented by simply passing a new act in name without making any change in the previous act, doing so would be a violation of the rule of law and would violate the separation of power as under the Constitution of India. The Supreme Court in its judgment has highlighted the Constitutional limitation on the power of the legislative to abrogate. It has also emphasized the importance of the binding nature of the judgment of a Court and rule of law and that it cannot be circumvented by passing an identical Act without curing the necessary defect. Therefore, highlighting the thin line between encroaching upon the power of the judiciary and the exercise of the constitutional power of the legislature to amend laws.
 Tirath Ram Rajendra Nath v. State of U.P., (1973) 3 SCC 585.
 Cheviti Venkanna Yadav v. State of Telangana, (2017) 1 SCC 283.
This article is written and submitted by Aditi Raj during her course of internship at B&B Associates LLP. Aditi Raj is a BBA. LLB 4th year student at National University of Study and Research in Law, Ranchi.