The government has argued that it should have the authority to decide what constitutes a 'sovereign function' and, by extension, what is an 'industry' in a case before the Supreme Court.
The Centre told a nine-judge Constitution bench that the 'triple test' for defining industry, established in the 1978 Bangalore Water Supply case, remains sound in law but its indiscriminate application has blurred the line between commercial activity and constitutionally mandated governance.
Attorney General R Venkataramani argued that social welfare schemes and governmental functions cannot be treated as 'industrial activity' even if they involve organisational or operational elements resembling commercial undertakings.
The Centre made a significant pitch for institutional deference, urging the court to refrain from exhaustively defining sovereign functions and instead leave it to the government, subject to judicial review, to determine what activities fall within that category.
