MAGANLAL KARSANDAS Vs. BEDI GRAM PANCHAYAT

JUDGEMENT

(1.) This is a petition under Article 226 of the Constitution of India and also purports to be under Article 227 of the same Constitution which challenges the levy of an octroi by the Gram Panchayat Bedi who is respondent No. 1. Petitioner is a grain merchant doing his business at Bedi which was formerly a part of the territory of the former Saurashtra State. During the Saurashtra regime the village of Bedi was a part of the territory of the municipal borough of Jamnagar and was governed by the Municipal Boroughs Act. During that regime however there was in force Saurashtra Ordinance No. 57 of 1949 (hereafter called the Ordinance) which regulated the constitution and affairs of the Gram Panchayat (hereafter called the Panchayat). Sec. 41 of the Ordinance conferred power on Panchayats to levy inter alia taxes mentioned in Schedule J in accordance with at the rates and subject to exemptions prescribed. Sec. 53 of the Ordinance conferred power upon the State Government to make rules to carry into effect the purposes of the Act. The Saurashtra State made rules under sec. 53 read with sec. 41 aforesaid for the levy of octroi. These octroi rules are called hereafter rules simpliciter. By rule 3 octroi was levied on goods mentioned in the First Schedule at the rates mentioned in one of the columns of that Schedule. Petitioner is dealing in foodgrains. The octroi rate which was prescribed for foodgrains in that Schedule was two pies in a rupee. This Ordinance was in force at the time of the merger of the Saurashtra State with the State of Bombay and continued to be in force after the merger. the Bombay Village Panchayats Act III of 1959 (hereafter called the Panchayats Act) came into force on 23rd January 1959 and was applied to the territories in the State of Bombay on 1st June 1959. Sec. 185 of the Panchayats Act repealed the Ordinance. Thus it is an admitted position that on the date of the coming into force of the Panchayats Act the Panchayats Act became applicable to Bedi village and the Ordinance ceased to have effect in that area. Sec. 186 of the Panchayats Act however saved certain provisions of the Ordinance and certain other things. Clause (1) of sec. 186 enacted that any local area which was declared to be a village immediately before the coming into force of the Panchayats Act shall be deemed to be a village under this Act. Clause (8) saves inter alia a rule made in respect of the said village and in force immediately before the commencement of this Act. However since on the date of the coming into operation of the Panchayats Act Bedi was a part of a municipal borough and was not a village under the Ordinance there is no dispute that Bedi was not deemed to be a village under the Panchayats Act or that none of the rules which may have been framed by the former Government in regard to such villages applied to Bedi. However on 26th of March 1960 Bedi was created a village under the power vested in the Bombay Government by sec. 4 of the Panchayats Act. On 6th October 1960 a gram Panchayat was established for Bedi. After the establishment of the gram panchayat that body proceeded further to levy octroi on a number of articles including foodgrains. On 18th October 1960 respondent No. 1 the Gram Panchayat passed a resolution resolving that octroi chargeable on the goods imported within our village from outside shall be according to the rules of the Jamnagar Village Panchayat Mandal. The latter is respondent No. 2 and is also constituted under the provisions of the Panchayats Act. On the same date first respondent published a public notice inviting within one month objections from the public to the proposed levy of octroi. No objection was received within the above time limit. Therefore on 15th November 1960 first respondent passed a resolution recording that no such objection had been received and resolved to levy octroi. On 7th March 1961 first respondent published a declaration in the form of a schedule prescribing rules of octroi on different goods and invited objections. As no objections were received first respondent passed a resolution on 10th April 1961 levying octroi on goods as proposed. This proposal was submitted by it for sanction to the Divisional Commissioner at Rajkot. That officer purporting to act under the powers saved by clause (8) of sec. 186 of the Panchayats Act accorded sanction to the above levy by his order dated 14th of June 1961. The merchants of Bedi felt aggrieved by the above levy. Although the resolutions of first respondent did not specify under what particular legal provision the octroi was being levied it is common ground that first respondent had the power to levy octroi under sub sec. (1) of sec. 124 of the Panchayats Act. We shall have occasion to notice the provisions of that sub-section in detail at the proper place. sub-sec-sec. (5) of sec. 124 entitles any person aggrieved by inter alia the imposition of a tax to prefer an appeal to the Panchayat Mandal. Accordingly the merchants preferred the above appeal under sub-sec. (5) of sec. 124 of the Panchayats Act. Second respondent dismissed that appeal by its order dated 29th November 1961. Petitioner also challenges this appellate order and prays for a writ of certiorari for quashing that appellate order.

(2.) Now in order to understand the submissions made by Mr. Shah in support of this petition it is necessary to quote first the relevant part of sec. 124 sub-sec. (1) of the Panchayats Act under which the octroi has been levied. That sub-section is as follows:

(3.) Now from the above discussion it is quite clear that the main point which arises for determination in the present petition is whether the rules framed under the Ordinance survived the repeal. At one time Mr. Hathi placed reliance upon clause (8) of sec. 181 of the Panchayats Act. That cause does save the rules framed under the Ordinance but it so saves only in respect of villages which are deemed to have been saved under clause (1) of sec. 186 of the Panchayats Act. On the admitted facts of the present case Bedi village did not become a village under the Panchayats Act since that village had not been declared to be such under the Ordinance. Therefore Mr. Hathi later on conceded that clause (8) aforesaid did not apply to the facts of the present case. Mr. Hathi however places strong reliance upon sec. 25 of the Bombay General Clauses Act 1904 (hereafter called the Clauses Act). That section applies when an Act is repealed and re-enacted by a Bombay Act with or without modifications. It has not been disputed by Mr. Shah that the Ordinance which was repealed was a Bombay Act within the meaning of the Clauses Act and that that Act was re-enacted by the Panchayats Act. Therefore it is not disputed that sec. 25 of the Clauses Act would apply. That section enacts that in the above circumstances amongst others rules made under the repealed Act shall so far as it is not inconsistent with the provisions re-enacted continue in force and be deemed to have been made......under the provisions so re-enacted unless and until it is superseded by..... rule made.......under the provisions so re-enacted. Therefore under sec. 25 there is no doubt whatsoever that the rules under the Ordinance would survive. Not only these rules would continue to be in force but they must be deemed to have been made under the Panchayats Act Under the circumstances in our judgment the challenge contained in the first part of the first submission must be negatived. We have already pointed out that it is not disputed by Mr. Shah that the impugned octroi was levied after following the procedure laid down under the rules framed under the Ordinance. Petitioner has never challenged the levy of the impugned octroi on the ground that any of the provisions contained in those rules had been violated. The challenge was based only on the ground that the State Government had failed to prescribe rules as to the manner in which the levy of an octroi had to be made. Under the circumstances inasmuch as the octroi was levied after following the procedure laid down in the rules under the Ordinance which are to be deemed to have been made under the Panchayats Act the levy of the octroi cannot be challenged on the ground that the manner of the levy as fixed by the rules had not been followed. For the same reason the second submission of Mr. Shah must be rejected too. Having regard to the fact that the above rules are to be deemed to have been made under the Panchayats Act it cannot be said that the levy is bad on the ground that the rules under the Ordinance were followed. Therefore the first part of the first submission and the whole of the second submission of Mr. Shah must be rejected.