He also underlined that activism has to be blended with restraint and there cannot be a compromise with other aspects of the basic structure in the name of independence of the judiciary.
"Judicial review is legitimate domain of judiciary but then the Lakshmanrekha has to be drawn by all the institutions themselves. Lakshmanrekha is very vital," the finance minister said, asserting that "the executive decisions are to be taken by the executive and not the judiciary".
Replying to questions during an interaction at Indian Women's Press Corps in New Delhi, Jaitley reasoned that there are different kinds of recourse and "layers of accountability" available when the executive takes decisions.
He said people have the options of seeking changes in the decision taken by the executive besides voting out the government.
The courts can also strike down a decision taken by the executive if it is found to be unconstitutional but all these options are not available when the court ends up taking executive decisions, Jatiley argued.
"Courts cannot substitute the executive and say I will exercise the executive power. If you do so the three options will not be available, which are there when the executive takes executive decisions," the finance minister said.
He was asked questions about his earlier remarks that the judiciary had been encroaching on legislative and executive authority.
Jaitley also referred to protests by many states over the Supreme Court decision on National Eligibility Entrance Test and asserted that what should be the manner of holding the examination across the country is essentially an executive matter as it is in policy domain.
"It is the case of some of the states that boards are unequal, their languages are dissimilar. Can those who are dissimilar in language and unequal be placed on the pedestal of quality and asked to give the same exam? I think this matter is essentially in the executive domain. We now have a Supreme Court judgement. We will have to see how we deal with that particular issue," he said.
He added that the judiciary and executive are "on the same page" over maintaining the fairness and integrity of exams at all costs.
At the same time, the finance minister noted that the independence of the judiciary is extremely important and that is rightly asserted by the judiciary.
"Just as independence of the judiciary is is part of basic structure, the primacy of the legislature in policy making is also part of basic structure.
"In the name of the independence of judiciary, we cannot compromise the other two basic structures," he said asserting that to protect one basic structure is not enough.
Replying to questions during an interaction at IWPC, the finance minister also stressed that he was not going into any specific issue but speaking on the issue of Constitutionality.
"Element of activism always has to be blended with element of restraint," the finance minister said adding that the correct course is when the two are balanced.
Speaking in the Rajya Sabha, Jaitley had earlier urged the legislators to refrain from handing over budgetary and taxation powers to the judiciary.
Jaitley had made the remark while replying to opposition Congress' demand for a dispute redressal mechanism under which a judge would resolve any dispute between the Centre and states on Goods and Services Tax.
Again speaking in Hyderabad, Jaitley had yesterday said has said that while he respects the apex court, "one should not try to interfere in others' areas".
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