Introduction to the regulatory environment in India
The regulatory environment also known as Legal Aspects of Business, Business law, Commercial Law, Mercantile law is a subject which provides an element of limitation to all the business strategies regulated through different statutory provisions and rules. It not only emphasizes on substantive law but also on procedures and compliances thereby prepares the students of Business for the legal environment they would eventually face in the corporate situation.
The legal environment and its 3 “I’s”- The rule of law is envisaged by the people of any state and hence in India the preamble of the Constitution starts with the words “We, the ...view middle of the document...
In case of any ambiguity to interpret the Constitutional provisions it declares the freedom of people, their rights, duties, basis of government policies and sets the limitation for all transactions commercial or otherwise. In the 1995 case of Union Government Vs LIC of India the Supreme Court has once again held that Preamble is the integral part of the Constitution.
Originally, the preamble described the state as a "sovereign democratic republic" but after the Forty-second Amendment (in 1976) it was changed to "sovereign socialist secular democratic republic". The term “socialists” implies social and economic equality, meaning the absence of discrimination on the grounds only of caste, colour, creed, sex, religion, or language. This also guarantees social equality as equal status and opportunities for all. The government endeavours to make the distribution of wealth more equal and provide a decent standard of living for all ensuring economic equality, the commitments of a welfare state. The government has adopted a mixed economy and the government has framed many laws to achieve the aim.
CONSTITUION IS SUPREME LAW- Clear understanding of concepts is vital for any discussion on taxation or legal matters as power to levy and collect tax is derived from Constitution. If it is found that any Act, Rule, Notification or Government orders is not according to the Constitution, it is illegal and void and it is called ultra vires the Constitution.
INDIA IS UNION OF THE STATES-Our Constitution generally follows British pattern, though concepts of federal structure are borrowed from American and other Constitutions.
India is a Union of States- The structure of Government is federal in nature, Government of India (central Government) has certain powers in respect of whole country. India is divided into various States and Union Territories and each States and Unions like Gujrat, Maharashtra, Tamilnadu, Kerala, Uttar Pradesh, Punjab etc. and Union Territories like Pondicherry, Chandigarh etc.
Administration of State-President of India is head of the State. (Here, the word State is used with a different meaning). The States has three organs.
A. LEGISLATIVE ORGAN-Parliament consists of President, Lok Sabha(House of People) and Rajya Sabha(Council of States). Parliament makes laws for governance of the country. It also sanctions budgetary expenditure for Government.
B. EXECUTIVE (ADMINISTREATIVE) ORGAN-Administration is looked after by Government for which Council of Ministers is at its head. The Council of Ministers is headed by Prime Minister. Government has to implement the laws passed by Parliament.
C. JUDICIAL ORGAN-It has always been found in all the countries that control and check over executive power s essential. In absence of such control, misuse of power is very much likely. Our Constitution therefore provides independent judiciary with wide powers. The highest court in India is Supreme Court. Law declared by Supreme...