Administrative Law

Lachmi Narain v. Union of India

AIR 1976 SC 714

Facts

The Bengal Finance (Sales Tax) Act was extended to the Union Territory of Delhi.
Section 2 of the Union Territories Laws Act allowed the Central Government to extend State laws to Union Territories with restrictions and modifications.
After the Act was extended, the Government later removed a mandatory notice requirement.
This modification was challenged as excessive and beyond the delegated power.

Whether the Government could use the power of “modification” after extension to remove an important statutory safeguard.

Power to extend a law with modifications is valid only within limits.
“Modification” means adaptation needed to make the law workable in the new territory.
It cannot be used to change the essential feature, central purpose, or legislative policy of the Act.

The Court said the power to modify is not a separate, continuing power.
It is part of the power to extend the Act.
Therefore, it can be exercised only when the Act is being extended, not again later whenever the Government wants.
Once the Act is extended, the modification power is exhausted.
The Court then examined the nature of the deleted notice provision.
The notice requirement was not a minor procedural detail.
It gave affected dealers/taxpayers an opportunity before adverse tax action was taken.
Removing it changed the protection built into the Act.
So, this was not a local adaptation for Delhi.
It altered an important safeguard and therefore changed the substance of the law.
The PPT explains this clearly: only modifications necessary for adjustment/adaptation are allowed; modifications cannot change the central purpose or essential features of the Act, and the notice clause was mandatory, not directory.
MP Jain also states that Lachmi Narain confines “restrictions and modifications” to peripheral changes that keep the policy, essence and substance of the extended law intact.

The Supreme Court held the later modification invalid.
The Government could not remove the mandatory notice requirement after the Act had already been extended.
The power of modification had exhausted itself at the time of extension.
Use this case for: delegated power to modify a law cannot be used to rewrite its essential features or legislative policy.
It is a continuation of Delhi Laws Act and Rajnarain Singh.