AIBE III 2012 Question 98

A statute empowers a subordinate authority to regulate the activities of tobacco industries and levy taxes on them. The statute permits the authority to give retrospective effect to its regulatory notifications under the statute. The authority issues a regulatory notification levying a developmental tax on leather industries retrospectively. Which of the following Statements most accurately applies the principle below?

1. A The notification is valid, as the power to levy taxes is sourced directly from a statute.
2. B The notification is valid, as the enactment clearly and specifically provides for retrospective application of all notifications under the enactment.
3. C The notification is ultra vires, as the statute did not clearly and specifically provide that the authority may impose a developmental tax.
4. D The notification is ultra vires, as the enactment does not clearly and specifically provide for retrospective levy of taxes. Official answer
5. E The notification is ultra vires as the authority did not adhere to principles of natural justice, namely the right of hearing, before deciding to impose a tax.