DHARANGADHRA CHEMICAL WORKS Vs. DHARANGADHRA MUNICIPALITY

JUDGEMENT

(1.) This litigation in which the Appellant has challenged the levy of Octroi Duty imposed by the Respondent-Municipality under its Octroi Rules and Bye-laws framed under the Bombay District Municipal Act, 1901 (as adopted by the Government of Saurashtra) and continued under the Gujarat Municipalities Act 1963 (as adapted and applied to the State of Saurashtra) has a chequered history.

(2.) Briefly stated the facts leading to the present. appeal are these. The Appellant is a Company registered under the Indian Companies Act carrying on business of 'manufacturing Soda Ash in its factory at Dharangadhra within the Municipal limits of the Respondent-Municipality. Originally the Respondent-Municipality being a District Municipality was governed by the provisions of the Bombay District Municipal Act, 1901, as adapted and applied to the State of Saurashtra, (for short the Bombay Act) but with effect from 1-1-1965 it is governed by the Gujarat Municipalities Act, 1963 (for short the Gujarat Act).

(3.) An Octroi Ordinance called the Saurashtra Terminal Tax and Octroi Ordinance No. 47 of 1949 was promulgated by the Rajpramukh and brought into force with effect from 31-8-1949. The object of the Ordinance was to enable the State Government to levy and collect octroi duty in specified cities and towns and other local areas of the State and to pass on the duty so collected by it to those cities and towns until Municipalities therein were constituted under the Bombay Act and those Municipalities made their own Rules and Bye-laws enabling them to levy and collect octroi and. other Municipal taxes. To achieve this object S. 3 of the Ordinance empowered the State Government to impose octroi duty in towns and cities specified in Schedule I thereto, in which Schedule the town of Dharangadhra came to be included subsequently under notification with effect from 26-12-1949. Section 4 of the ordinance authorised the State Government to make Rules for the imposition and collection of octroi duty but under the Rules so framed the Municipality of the concerned city or town was to be the collecting machinery. After the inclusion of the Dharangadhra town in the Schedule I octroi was being levied in that town by the State Government under its Rules but the same was being collected through the machinery of Respondent Municipality.