RAM NIWAS GUPTA Vs. STATE OF HARYANA

JUDGEMENT

(1.) THESE two writ petitions Civil Writ No. 2975 of 1967, Ram Niwas Gupta v. State of Haryana and Civil Writ No. 444 of 1968, Jit Ram Shiv Kumar v. State of Haryana came up for hearing before me in the first instance and I referred them for decision to a Division Bench in view of the fact that there was a judgment of a Division Bench of the Lahore High Court in Municipal Committee, Sonepat v. Dharam Chand AIR 1935 Lah 632, the correctness of which had been doubted. In pursuance of my reference order, these petitions were placed for hearing before a Division Bench consisting of my Lord the Chief Justice and myself on December 1, 1969. and we referred them to a Full Bench in view of the fact that the Lahore judgment was a judgment by a Division Bench. This is how these writ petitions have come up before this Full Bench for decision. This judgment will dispose of both the writ petitions.

(2.) THE facts are that the Municipal Committee, Bahadurgarh, decided to establish a Mandi known as Fateh Mandi in 1916 and settled the terms of auction by resolution No. 8 dated November 20, 1916. One of the terms of the sale, namely. No. 14, was that the Mandi would be free from the imposition of octroi tax but that the owners of the plots in the Mandi would be required to pay house-tax which might be imposed for meeting the expenses of the Mandi. At a special meeting held on May 20, 1917, the Municipal Committee, Bahadurgarh, passed resolution No. 4 providing that term No. 14 of the conditions of sale of the plots in Fateh Mandi be amended so as to read that the Mandi would remain immune from payment of octroi tax for ever. The Commissioner, Ambala Division, objected to this term and by his letter No. 2454 dated June 26, 1917, addressed to the Deputy Commissioner, Rohtak, with a copy to the President, Municipal Committee, Bahadurgarh, intimated his disapproval to resolution No. 4 dated May 20, 1917. The Municipal Committee, by Its resolution No. 6 dated August 30, 1917, requested the Commissioner, Ambala Division, to confirm condition No. 14 in the proclamation of sale and by his letter No. 3627/m-40-LF, dated September 20, 1917, the Commissioner withdrew his objection to the said resolution but it was stated in the letter that "as soon as the market is established, it will be necessary to consider what form of taxation is best to cover the market share of municipal expenses". By resolution No. 1, dated March 10, 1919, the Municipal Committee, Bahadurgarh, imposed house-tax at the rate of Rs. 3/14/6 per cent of the annual value on the shopkeepers of the Mandi to cover an expenditure of approximately Rs. 800/- per annum for the said market.

(3.) IT is stated by the learned counsel for the petitioners that octroi was being levied in other parts of the limits of Bahadurgarh Municipality but Fateh Mandi was kept out of the octroi limits. By notification No. 9697-C-53/63830 dated September 4, 1953, the octroi limits of the Municipal Committee, Bahadurgarh, were extended and made conterminous with the municipal limits with the result that Fateh Mandi was included within the octroi limits. The Examiner, Local Fund Accounts, in the course of his audit of the accounts of the Municipal Committee raised an objection to the granting of exemption by the Municipal Committee to the goods imported in Fateh Mandi from payment of octroi and stressed that octroi should be imposed on the goods imported in that Mandi. The Municipal Committee reconsidered the whole matter and by resolution No. 1 dated March 2, 1954, decided that Fateh Mandi, Bahadurgarh, would remain free from payment of octroi according to the terms of the proclamation of sale relating to the sale of plots in the said Mandi. This resolution was passed in a special meeting of the Committee held on that date and was referred to the Punjab State for confirmation under Section 70 (2) of the Punjab Municipal Act, 1911 (hereinafter called the Act ). The Punjab Government confirmed the resolution by a memorandum dated May 4, 1954.