SUNDERLAL Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE petitioners, by this writ petition under Articles 226 and 227 of the Constitution, are praying for issue of a writ of certiorari for purposes of quashing the Notification dated 10-11-1972 (Annexure A ). published in the m. P. Rajpatra dated 29-6-1973 and in consequence restraining the Municipal council, Tikamgarh (respondent No. 2) from enforcing the octroi duty.

(2.) BRIEF facts leading to the present petition are that the Municipal council, Tikamgarh (respondent No. 2) desired to replace the existing terminal tax by octroi duty. After having followed the procedure as laid down under section 129 (1) to (4) of the M. P. Municipalities Act, 1961 (hereinafter referred to as "the Act") and the rules framed thereunder in imposing taxes on various items as per schedule, the respondent No. 2 forwarded the proposal together with all objections to the State Government through the Collector, tikamgarh. The State Government in exercise of the powers conferred by subsections (5) and (7) of section 129 of the Act sanctioned the proposal vide notification dated 10-11-72 for imposition of octroi on certain animals or goods brought within the limits of Tikamgarh Municipal Council for sale, consumption or use within its limits under clause (v) of sub-section (1) of section 127 of the said Act. It was further directed that the imposition of the said tax shall come into force after thirty days from the date of publication of the said notification in the Madhya Pradesh Gazette. The publication was made in the m. P. Rajpatra dated 29-6-1973. The petitioners who are from a cross-section of dealers and traders in the town of Tikamgarh, have come up challenging the imposition of the octroi duty by the aforesaid notification.

(3.) THE contention of the learned counsel for the petitioners has been that section 127 (2) (c) of the Act requires the State Government to make rules, and thereby prescribe the maximum and minimum limits as to the amount of rate of any tax. Unless such limits are first prescribed, there is no check or guidance for the Municipal Council in initiating the proposal for imposition of octroi duty. Since no rules have been framed in that regard, the imposition of octroi duty is illegal. This argument is advanced on the basis that the imposition of octroi duty is by delegation to two bodies, namely, the State Government and the Council. Unless both the bodies do their job, the delegation is not complete and as such the imposition would not be legal. In the absence of any rules prescribing the maximum and minimum limits as to the amount or rate of any tax, there is no guidance to the Council in initiating the proposal for imposition of octroi duty and it would have powers to act arbitrarily, which the Legislature never intended to bestow upon the Council. It was further contended that the accord of sanction to the proposal by the the State Government would not cure the defect as by exercising powers under executive action under section 129 (5)of the Act it cannot be said to be acting under legislative function under section 127 (2) (c ). On the other hand, learned counsel for the respondent No. 2 contended that it is not necessary for the State Government to make rules prescribing the maximum and minimum limits under section 127 (2) (c) of the Act for imposition of tax for the first time under section 129. According to him, under section 129 (5) the State Government has power on receiving a proposal either to refuse to sanction or sanction it. Therefore, the section 129 of the act itself provides the check and balance and in that view it cannot be said that the Council would have unbridled powers of imposition of tax. Therefore, even if no rule has been made under section 127 (2) (c) that would not matter, and the imposition of octroi duty would still be valid and not open to challenge on that ground.