ATLAS CYCLE INDUSTRIES LIMITED versus STATE OF HARYANA AND ANOTHER

Citation: [1992] SUPP. 3 S.C.R. 699 · Decided: 17-12-1992 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Dismissed

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Judgment (excerpt)

' 
( 
I 
ATLAS CYCLE INDUSTRIES LIMITED 
A 
v. 
STATE OF HARYANA AND ANOTHER 
DECEMBER 17, 1992 
[L.M. SHARMA, CJ., S. RATNAVEL PANDIAN, B.P. JEEVAN 
B 
REDDY, S.P. BHARUCHA AND S. MOHAN, JJ.] 
Punjab Municipal Act, 1911: Sections 5(4), 62, 70(2)(c) and 
71-0ctroi-Levy of by Municipal Council of Sonepat-Whether Valid. Con-
stitutional validity of section 5(4) upheld. 
C 
Constitution of India, 1950: Article 14-0ctroi-lmposition of-Punjab 
Municipal Act, 1911-Section 5(4)-Constitutiona/ validity of. 
Words and Phrases--Octroi-Meaning of. 
A notification was issued under Section 62(10) of the Punjab D 
Municipal Act on 3rd November, 1942 which stated that the Municipal 
Committee of Sonepat had imposed a tax called 'octroi' on the articles 
mentioned in the Schedule to the said notification which were imported 
into the octroi limits of Sonepat municipality. 
On 11th February, 1948, it was notified that the limits of Sonepat 
municipality for the purpose of collection of octroi would be the boun· 
daries of the municipality as fixed from time to time. 
On 15th September, 1966 a notification was issued in pursuance 
E 
of the provisions of Section 5(1) whereby the intention of including the F 
areas specified in the Schedule thereto within the municipal limits of 
Sonepat was declared, and the inhabitants of the municipality were 
invited to submit objections in writing to the proposed inclusion. The 
area on which the factories of the petitioner were situated was proposed 
to be included within the municipal limits. 
,Q 
On 3rd November, 1966 the petitioner filed objections to the 
inclusion of the proposed area within the municipal limits of Sonepat, 
and contended that the additional taxes that were already being collected 
by the Central and State Government considerably increased the cost 
of the production of the petitioner's bicycles, that the 'octroi' alone would H 
699 
700 
SUPREME COURT REPORTS (1992) SUPP. 3 S.C~:. 
A be Rs~1.30 per bicycle manufactured; that the burden would thus be 
unbearable and suggested that the proposed inclusion of the Industrial 
Unit within the municipal limits should be dropped. 
On 11th August, 1967, the notification issued und~r Section 5(3) 
included within the municipal limits of Sonepat the area in which the 
B factories of both tbe petitioners stood, and on 18th August, 1967, octroi 
was levied upon the materials imported by the two companies into the 
municipal limits of Sonepat. 
The petitioners filed writ petitions in 1967 in the High Court 
C challenging the collection of octroi and inclusion of the industrial area 
within the municipal limits. The saine having been dismissed by the 
High Court, they filed appeals to this Court. This Court in Atlas Cycle 
Industries Ltd. v. State of Haryana, [1972) 1SCR127, allowed the appeals 
and the writ petitions on the ground that no notifications as required 
were issued and made applicable to the included areas under Section 
D 5(4) of the Act, and the municipality was restrained from levying and 
collecting octroi from the petitioners. 
On 15th November, 1971, the Punjab Municipal (Haryana Valida· 
tion and Amendment) Act ,1971 amended Section 5(4) to include the word 
E 'notification' to enable the levy of octroi. The Validation and Amendment 
Act also validated with retrospective effect the levy and collection of octroi. 
Thereupon the petitioners filed the present writ petitions in this 
Court and contended that the right of representation against the levy 
of octroi was an important safeguard, that the petitioners bad been 
F 
deprived of the right to make a representation under Section 62(3) 
against the imposition of octroi upon the area in which the factories 
were situated; they had, therefore, been discriminated against, so the 
provisions of Article 14 of the Constitution were violated, and Section 
5(4), in so far as it bad the effect of imposing octroi upon those areas, 
G · was unconstitutional. It was further contended that the retrospective 
imposition of octroi was bad under Article 14 because it singled out 
those which were atrected by the retrospectivity and denied them the 
opportunity of representation. 
The writ petitions were contested on behalf of the respondent by 
H contending that the levy and collection of octroi was no longer open to 
ATLAS CYCLE IND. v. STAIB OF HARYANA 
701 
the question by the petitioners, and that Section 5 and 62 of the Act A 
operated in different fields. Under the provision of 

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