VALLABHDAS NARAYANDAS Vs. MUNICIPAL COMMITTEE OF AKOLA

JUDGEMENT

(1.) BY this petition under Articles 226 and 227 of the Constitution of India, three inhabitants of the Akola town challenge the validity of the imposition of the octroi tax. Petitioners Nos. 1 and 2 are cloth merchants and petitioner No. 3 is an ordinary resident of Akola.

(2.) SECTION 66 of the C.P. and Berar Municipalities Act, 1922, Act No. II of 1922, hereinafter called the Act, empowers a municipal committee to impose certain taxes mentioned therein. The imposition, however, is to be subject to the provisions of other sections contained in Chapter IX which relates to the imposition, assessment and collection of taxes. We are here concerned with Clause (e) of Sub -section (1) of Section 66. Under that clause, a municipal committee is empowered to impose an octroi tax on animals or goods brought within the limits of the municipality for sale, consumption or use within those limits. Sub -section (1) of Section 67 provides that a committee may, at a special meeting, pass a resolution to propose the imposition of any tax under a. 66. Puporting to act under this sub -section, the municipal committee, Akola, passed a resolution on November 11, 1957, to the effect that in pursuance of the power vested in it tinder Section 66(i)(e), octroi tax should be imposed on animals and goods brought within the limits of the municipality of Akola for sale, consumption or use within those limits. It also by the said resolution passed -proposals for levying the said octroi tax and further resolved that the said proposals (referred to as rules in the resolution) be forwarded to the Government for preliminary publication as required by Section 67(2) of the Act, The committee also passed a further resolution that draft rules for the assessment, collection and refund of the octroi tax be also forwarded to the State Government for necessary action. The State Government published the said proposals of the municipal committee in the Government Gazette of January 16, 1958, under notification No. VMA(M) 5457 -1 -A. This notification is purported to have been issued under Sub -section (2) of Section 67 of the Act for the information of all persons likely to be affected thereby and it is mentioned therein that any person desiring to raise any objections to the proposed tax or desiring to make any suggestions should lodge his objections or suggestions with the municipal committee of Akola within 30 days of the publication of this notification in the Gazette. This notification is hereinafter referred to as notification I -A.

(3.) IT appears that to the proposals contained in notification I -A certain objections were lodged by the inhabitants of Akola, with the municipal committee, Akola. These objections were first considered by the President and then the report of the President as well as the objections were considered at a special meeting of the municipal committee convened and held on March 3, 1958. The municipal committee thereafter modified its original proposals in certain respects and sent the modified proposals along with its original proposals, objections received thereto from the inhabitants and its decisions on these objections to the Government as required by Sub -section (4) of Section 67. The date on which these papers Were forwarded to the State Government is not known. The three petitioners at this stage made an application under Articles 226 and 227 of the Constitution to this Court on April 14, 1958, praying therein that the entire proceeding of the municipal committee and the resolution passed by it on March 3, 1958, should be quashed; a mandate be issued against the State Government prohibiting it from sanctioning the proposals sent to it by the municipal committee for the imposition of octroi tax, and from notifying the imposition of octroi tax or taking action under Section 67(7) and 67(8) of the Act. They also by a separate application prayed for an interim injunction against the State Government prohibiting it from sanctioning the proposals of the municipal committee and issuing notification for the imposition of the tax, These petitions came up for hearing before this Court on April 18, 1958. This Court by its order dated April 18, 1958, ordered rule to issue on both these petitions. As summer holidays intervened rule issued on the application for interim injunction was made returnable on June 16, 1958. It appears that the case was not taken up on June 16, 1958, but was taken up on June 23, 1958. In between, on June 17, 1958, appearance was put in on behalf of the State by the learned Additional Special Government Pleader. We are informed that his instructions were to oppose the application for interim injunction. On June 23, 1958, when this application was heard, this Court granted interim injunction. It appears that the State Government had already on June 19, 1958, issued notification under Section 67 of the Act in exercise of the powers conferred on it by Sub -sections (5) and(7) of Section 67 sanctioning the imposition of octroi tax and published it in Gazette Extraordinary of June 19, 1958. It appears that the State Government had not instructed its counsel about the issue of the notification and therefore information about it was not given to this Court by the Government Pleader appearing for the State when the order was made on June 23, 1958. It was later brought to the notice of this Court on June 23, 1958, after the order was made.