VIJAPUR MUNICIPALITY Vs. STATE OF BOMBAY

JUDGEMENT

(1.) THE second opponent company is under a contract with Government to supply to it a certain number of tube wells. These tube wells are to be constructed in various districts including the district of Mehsana, and for the purpose of the construction of these tube wells the second opponent company brought within the municipal limits of the Vijapur Municipality, which is the petitioner, certain articles like engines, pumps, pulleys, fly-wheels, accessories, spare parts, etc. , and the petitioner Municipality imposed octroi duty upon these articles. The second opponent company failed to pay the octroi duty so imposed and the petitioner proceeded to attach the articles belonging to the second opponent company in order to recover the tax which had been imposed. The State of Bombay, which is opponent No. 1 before us, stepped in and issued an order on April 8, 1953, purporting to be an order issued in the exercise of the powers conferred upon it by Section 59 of the Bombay District Municipal Act, to the effect that--

(2.) NOW, it will be noticed that the order of April 8, 1953, which is challenged clearly falls into two parts. It prevents the Municipality from levying octroi tax on articles mentioned in that order in future and it also prevents the Municipality from collecting' amounts which are due or outstanding in respect of tax which has already been levied. So that the order seeks to prevent the Municipality not only from imposing the octroi tax in future on certain articles, but it also seeks to prevent the petitioner from recovering arrears of tax due to the Municipality by a person who has imported articles which were liable to the payment of octroi duty.

(3.) THE power of the Municipality to impose tax is to be found in Chapter VII of the Bombay District Municipal Act, and Section 59 provides that subject to any general or special orders which the State Government may make in this behalf, any municipality may impose the taxes which are enumerated, and one of the taxes is an octroi on animals or goods or both, brought within the octroi limits for consumption or use therein. Before this tax can be imposed, the conditions laid down in Clauses (a) and (b) of Section 59 are to be satisfied, and those are (a) the procedure required by Section 60 is to be followed, and (b) the levy or imposition of impost has to be with the sanction of the State Government in the case of City Municipalities. But It must also be borne in mind -- and chat is the most important feature of this section -- that the power of the Municipality to impose a tax is subject to the overriding condition which is that any general or special order issued by the State Government may regulate, limit and control the power of the Municipality to impose a tax. Section 60 lays down the procedure which the Municipality has to follow preliminary to imposing a tax. It provides for a resolution being passed by the Municipality, making of rules, giving of details as to property, person, and the amount of the tax. Then Clause (b) provides that after the resolution has been passed, the Municipality has to publish the form of rules, and Clause (c) provides for objections which may be raised by any inhabitant of the municipal district objecting to the imposition of the tax, and it casts an obligation upon the Municipality to take the objections into consideration and make a report on those objections and submit it to the State Government. Section 61 gives the power to the State Government to sanction, modify and impose conditions with regard to the imposition of tax by the Municipality. Then Section 62 provides for publication of sanctioned rules with notice, and Clause (c) deals with a case where the levy of a tax has been sanctioned for a fixed period and that clause provides that the levy shall cease at the conclusion of the period except so far as regards unpaid arrears which may have become due during that period. Section 73 deals with the power of the Government to suspend levy of objectionable taxes. If the incidence of a tax is unfair or any part of it is obnoxious to the interest of the general public, the Government may require the Municipality to remove the objection within a certain time, and if that objection is not removed, the power is given to Government by notification in the Official Gazette to suspend the levy of such tax or of such part thereof until such time as the objection thereto is removed. Section 74 empowers the Government to require the Municipality to impose taxes and Clause (c) gives the power to Government to cancel or modify any requisition made under this section and the levy of the tax or the enhancement, except as to arrears theretofore accrued due, shall thereupon cease or be modified accordingly. Section 174 appears in Chapter XII which provides for the control by Government of Municipalities and it gives the power to the Director ot Local Authorities -- and prior to the amending Act XXVI of 1953 the power was given to the Collector -- to suspend the execution or prohibit the doing of any act on the part of the Municipality, if the Director is satisfied that the doing of such an act is causing or likely to cause injury or annoyance to the public or to lead to a breach of the peace or is unlawful; and under Sub-section (2) the Director of Local Authorities has to forward this order to the State Government; and Sub-section (3) gives the power to the State Government to rescind the order or revise or modify or confirm the order or direct that the order should be continued to be in force, with or without modification, permanently or for such period as it may specify. Section 180 gives the power to the Government, Commissioner and Collector to have and exercise authority and control over their immediate Subordinates, the power being similar to the power exercised in the general and revenue administration.