Adani Power Ltd. vs Union of India 2026 INSC 1 - Precedent - Delegated Legislation - Tax Levy

Law of Precedent - The discipline of precedent is not a matter of personal predilection; it is an institutional necessity - Legal Maxim - Stare decisis et non quieta movere - to stand by what is decided and not to disturb what is settled, is a working rule which secures stability, predictability and respect for judicial outcomes. The law cannot change with the change of the Bench. When a coordinate Bench of a High Court has already determined a question of law, a subsequent Bench of equal strength is bound to follow that view; if it doubts its correctness, the only permissible course is to refer the matter to a larger Bench. (Para 78- 80)

Legal Maxim- Stare decisis et non quieta movere - to stand by what is decided and not to disturb what is settled, is a working rule which secures stability, predictability and respect for judicial outcomes. (Para 78) Interest reipublicae ut sit finis litium - It is in the public interest that there be an end to litigation would squarely apply; the State must exemplify obedience to judgments, not resistance to them. (Para 84)

Constitution of India - Article 32,226- Delegated legislation is subject to judicial review not only for substantive unreasonableness, but also for purpose. Where the dominant purpose for which a delegated power is conferred is departed from, and the power is pressed into service to achieve an end for which it was never granted, the exercise is ultra vires. The immunity of a fiscal notification from scrutiny is no greater than that of any other form of subordinate legislation. (Para 56)

Legislation - Taxation - A delegate cannot do indirectly what it has no authority to do directly. The power to exempt is not a power to tax. The two stand on opposite constitutional planes. The essential legislative function of imposing a tax or duty rests with Parliament and must be located in a charging provision. The executive cannot, by subordinate instrument, enlarge the field of taxation under the pretext of tailoring an exemption. (Para 55)

Fiscal jurisprudence: a tax or duty can only be levied where there is (i) a clear charging provision enacted by competent legislature; (ii) an identifiable taxable event; and (iii) a statutory rate-making mechanism. The machinery provisions may regulate assessment and collection. Exemption notifications may relax or remit the levy. But neither machinery provisions nor exemption notifications can substitute for the absence of a charge. (Para 59)