MEGHRAJ NEMICHAND Vs. STATE

JUDGEMENT

(1.) THESE five writ petitions have been presented by cloth dealers of Pipar town situated in the district of Jodhpur. The grievance of the petitioners is that the Municipal Board, Pipar was realising octroi duty on all varieties of cloth formerly at the flat rate of Rs. 2% per quintal but by a notification issued on May 6, 1971, octroi duty is now charged at the rate of 1% on the cost price of the cloth brought in the town of Pipar by the petitioners. The contention of the petitioners is that the revised rate of octroi duty on cloth levied at 1% of the cost price is violative of the provisions of Article 14 of the Constitution being discriminatory, as in several other cities and towns of the State of Rajasthan like Bikaner, Parbatser, Jaipur, Karanpur, Ganganagar, Jodhpur and Pali the octroi duty is still levied on the basis of weight of cloth imported and there is no rational basis for this gross disparity nor there is any nexus with the object sought to be achieved. Learned counsel relied upon two decisions of this Court in support of his aforesaid submission: Johari Mal vs. State of Rajasthan (1) and Popular House vs. State of Rajasthan (2 ).

(2.) THE respondent Board has controverted the submission of the petitioners and urged that the earlier basis of collecting octroi by weight on all varieties of cloth was itself discriminatory and as such, the method of levying octroi duty on different varieties of cloth on the basis of the cost price thereof is more rational.

(3.) THE explanation offered by the Municipal Board, Pipar in respect of the charging of octroi duty by it on ad valorem basis rather than on the weight bash, in my view, discloses rational thinking in the matter of prescribing rates for charging octroi duty. Looking to the figures which have been supplied by the respondent Board regarding the meagre quantity of cloth imported in the town of Pipar by the petitioners, the charging of octroi on weight basis would be wholly unrealistic. In my view, there is an inherent inconsistency in charging octroi duty on weight basis on all qualities of cloth like terylene or silk or woollen or cotton including rough varieties thereof. If octroi duty is charged on terylene or silk on weight basis @ Rs. 2/ per quintal, then as pointed out by the respondents, the octroi duty of only Rs. 2/- chargeable on the quintal of terylene or silken cloth, which may be of the value of Rs. 50,000/ to Rs 1,00,000/- would be ridiculously low and almost nugatory. According to the petitioners own affidavit dated April 12, 1977, the cost of one quintal of long cloth or other rough varie-ties of cotton cloth may be about Rs. 2100/- or 2200/- and charging of the octroi duty of Rs. 2/- on one quintal of long cloth or rough varieties of cotton of the aforesaid value and also charging octroi duty of Rs 2/- for one quintal of terylene or silk of the value of Rs. 50,000/- to one lac is ex facio outrageous. As held by Tyagi J in the case of Popular House (2), while dealing with the question of import of medicine?, the charging of octroi duty on weight basis could be justified only in these cases where it was desired by the Municipal Boards to develop wholesale markets in particular commodities within their areas, and in cases of such big cities where there are varied and more important sources of income of the Municipal Boards rather than the receipts from octroi duty. THE petitioner has referred to the fact that octroi duty is collected on weight basis in cities like Jaipur, Jodhpur and other important cities in the State, where wholesale Mandis of cloth are said to be developed and in their case the charging of octroi duty on weight basis may have some justification, as in those big cities cloth is imported in wagon loads for wholesale consumption in the areas around them Similar is the case of Udaipur, Ganganagar, Bikaner and Ajmer which are also big cities having flourishing wholesale markets of all varieties of cloth and places like Pali, which is also desired to be developed as a wholesale Mandi of cloth. THE Government in such places may provide for charging of octroi duty on weight basis in order to provide incentive for larger imports to cater the needs of the surrounding areas But to hold that octroi duty should also be charged in smaller towns like Pipar, where there is a small retail market of cloth, on weight basis in the same manner as in larger cities like Jaipur, Jodhpur, Udaipur, Bikaner, Ganganaear and Ajmer, where there are well developed wholesale markets or Mandis of cloth and Pali, where wholesale market of cloth is being developed, would be to stretch the principle of equality into an absurdity. As I have already pointed out above, in such smaller towns, charging of octroi duty on weight basis at the same rate of say Rs 2/- per quintal or Rs. 4/ per quintal would introduce outrageous discrimination in respect of the import of different varieties of cloth, because by prescribing the same rate of tax on weight basis in respect of the various varieties of cloth ranging from terylene and silken to rough cotton varieties, the difference in the octroi duty payable per meter on such different varieties of cloth would rather be exorbitant and awful. Taking into consideration the fact that cloth is sold by retail sale on per meter basis and not on Weight basis, it would be wholly unrealistic and even ridiculous if the principle of equality enshrined in Article 14 of the Constitution is applied by charging octroi duty @ Rs 2/ per quintal on finer varieties of cloth and artificial thread like terylene and silken of the value of Rs. 50,000/- to rupees one lac per quintal while charging the same duty of Rs. 2/- per quintal in respect of rough varieties of cotton cloth like Lattha, which may be of the value of Rs. 2100/- to 2200/- per quintal. Thus, in my view, the charging of octroi duty on weight basis on various varieties of cloth ranging from terylene and silk to rough and cheaper cotton cloth would itself amount to discrimination when considered in relation to the import thereof within the same municipal area.