RAM NARAIN ETC. Vs. STATE AND OTHERS

JUDGEMENT

(1.) Various petitioners in these four petitions carry on their trade and business at Shahganj, district Jaunpur. They are aggrieved by the action of the Municipal Board Shahganj in levying octroi duty and have approached this Court for relief under Art. 226 of the Constitution.

(2.) Briefly stated, the facts giving rise to these petitions are that to begin with the local area which now forms part of Shahganj Municipality had been declared to be a Notified Area under Sec. 337 of the U. P. Municipalities Act. On 10th Aug., 1977 the Government promulgated U. P. Municipalities, Notified Area and Town Areas (Alpakalik Vevastha) Adhyadesh, 1977, U. P. Ordinance No. 16 of 1977, where-under all Notified Areas in the State, including Notified Area Shahganj, were superseded. The Ordinance provided that notwithstanding anything contained in the U. P. Municipalities Act, the Chairman and all members of the Notified Area were to cease to hold their respective offices and all powers, functions and duties of the Notified Area Committee and its Chairman were to be vested in and exercised, performed and discharged by the District Magistrate and that the District Magistrate including the person or authority to whom the District Magistrate delegated his powers, were deemed to be Notified Area Committee or its Chairman as the occasion required. The Ordinance was subsequently replaced by an Act which continues to be operative even now. By an order dated 25th Oct., 1977 the Administrator/District Magistrate, Jaunpur delegated, with the exception of some of the powers mentioned therein all powers that had been vested in him in connection with the Notified Area Shahganj, to one Sri Karnail Singh, S. D. M. Shahganj. After the transfer of Sri Karnail Singh in Nov., 1977 Sri Hira Mani Singh Yadava, S. D. M. Shahganj, was appointed as Officer-in-charge and the powers of the Administrator were delegated to him by the District Magistrate on the same terms on which it had been delegated in the case of Sri Karnail Singh. On 5th May, 1978 the State Government established in place of Notified Area Shahganj, a Municipality known as 'Shahganj Municipality and subsequently directed the Municipal Board Shahganj to impose octroi duty with a view to raise funds required for performing the duties imposed upon it by the U. P. Municipalities Act. Thereupon the Officer-in-charge of the Board namely Sri Hira Mani Singh Yadava, S. D. M. Shahganj purporting to act as the Board, prepared a proposal (under Sec. 131 of the U. P. Municipalities Act) and draft rules for levying tax in the nature of octroi duty and published the same in newspapers 'Prakash and 'Aaj1 dated 7th June, 1978 and 14th June, 1978. Various objections, received against the proposed imposition of octroi duty as also to the draft rules, were heard by Sri Hira Mani Singh S. D. M. Eventually, the District Magistrate passed an order dated 19th Aug., 1978 rejecting those objections. Imposition of octroi duty was thereafter approved by the Commissioner, vide his order dated 41th April, 1979, and the Administrator of the Board was directed to determine the date with effect from which the tax was to be levied. Accordingly the Administrator passed a special resolution dated 3rd May, 1979 and fixed 1st June, 1979 as the date with effect from which the levy was to be imposed and the resolution as also the rules as approved by the Commissioner were published in the official gazette dated 13th June, 1979.

(3.) Learned counsel for the petitioner impugned the imposition of octroi duty by the Municipal Board Shahganj on the ground that the same had been levied in contravention of the provisions of Sections 131 to 135 of the U. P. Municipalities Act. According to him the provisions contained in the U. P. Municipalities Act contemplated that the proposal for levying tax in the nature of octroi duty has to be framed by the Municipal Board itself in the form of a special resolution specifying various matters detailed in Sec. 131 of the Act. This function of the Board cannot, as provided in Sec. 112 of the Municipalities Act, be delegated to any other person or authority. Accordingly, the very first step of framing a proposal to impose such tax taken by Sri Hira Mani Singh S. D. M. was completely without jurisdiction and that this defect rendered the imposition of the tax illegal.