LexJIT RAM SHIV KUMAR AND ORS. ETC. versus STATE OF HARYANA AND ANR. ETC.
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' 689 JIT RAM SHIV KUMAR AND ORS. ETC. A v. STA~ OF HARYANA AND ANR. ETC. April 16, 1980 [S. MURTAZA FAZAL ALI AND P. S. KAILASAM, JJ.J B P1'11}11b M1111icipal Act, 1911 as amended by Punjab Act 48 of 1951, Section 62.A-Power of State Government to di'rect the ,\lunicipality to impose any tax ulllkr ~ction 61-Exemption from payment of octroi duty not within the com· pelence of the Municipality and ultra vires of its powers-.Whet/1er any suc/1 lllCI whidi is void ab initio, enforceable-Principle of Promissory Estoppel, ingrt• dienll of-Applicability to the instant case. C The Municipal Committee of Bahadurgarh, respondent No. 2 established Maadi Fateh in Bahadurgarh Town with a view to improve trade in the area. The Municipal Committ<e decided that the purchasers of the plots for sale in the Mandi would not be required to pay octroi duty 01> goods imported within the said Mandi. A resolution (No. 8) dated 2().12-1916 was passed by the Mllllicipality to this effect. Hand bills wore issued for tho sale of the plots on the basis of tpe resolution and it was proclaimed that Fateh. Mandi would remain exempt from payment of octroi. Subsequently by resolution No. 4 dated 20-5-1917, the Municipal Committee decided that the term No. 14 to the conditions of sale, namely, that tho purchasers of plots would not be required to pay octroi, be amended to the effect that the Mandi shall remain intmuno from payment of octroi duty for ever. When the resolution was received by the Commissioner of Ambala, in paragraph 3 of his letter datod 26-6·1917, he minuted that the undertaking by the Municipal Commissioner never to in1pose octroi duty in the Mandi was ultra vires and therefore the purchasers of the p)Qla should be informed so that they may withdraw from the purchases. on receipt of this letter the President of the Municipal Committee made represen- tations that if octroi duty was to be levied, tha-e would be no purchasers for the plota end the entire scheme would fall tllrough. On this, the Commissioner reviled his earlier view and withdrew his objection by further observing tha~ "as l!OOn es the market is established it will be necessary to consider what form of taxation is best to cover the market share of municipal expelnses". The Muni· cipal COmmittee on I().3-1919 imposed house-tax of Rs. 3·14·6 per cent per alinum on the shopkeepers to cover the ell<penditure of tho market. This state of affairs continued till 4-9-1953 when the MunicipaJ Committee by nolification No. 9697-C.53163830 dated 4·9-1953 included Fateh Mand~ Bahadurgarh, within the Cktroi limits. The Examiner of Local Funds pointed out that the h.funicipal Committee- is under obligation to charge octroi on goods imported into Fateh Ma'1di. The President of the Municipal Committee made a repr0oentation to the Deputy Comm:ssioner on 24-2-1954. The Municipal Committee again passed another resolution No. I dated 2-3·1954 that the Fateh Mandi will remain free from octroi duty according to the terms of the procla- mation of the sale relating to the sale of plots. The matter was referred to Punjab State which after thoroughly examining the whole matter, confirmed Resolution No. I passed by the Municipal Committee on 2·3-1954. Subs'e- D E F G Jl A 'C D E F G H 690 SUPREME COURT REPORTS [1980] 3 S.C.R, quently, the Municipal Committee changed its mind and by its resolution dated S-5-1954, resolved .that octroi duty should also be levied on the goods imported into Fateh Mandi. But this resolution was annulled by the Punjab Government under s. 236 of the Punjab Municipal Act. The Examiner of Local Funds Accounts in the meantime insisted on the levy of octroi duty on the goods imr-orted into Fateh Mondi and the Punjab Govermnent after discussing the issue on 9-4-19 56 informed the President of the Municipal Committee that the Government's action in confirming ·me resolution No. 1 of 2-3-1954 of the Municipal Committee, Bahadurgarh exempting goods imported into Fateh Mandi from levy of ocroi duty under s. 70(2)(c) of the Municipal Act, 1911, is lluite in order ood that no ·separate notification to this effect was necessary under -the rules. Again on 21-7-1965, the Municipal Committee Bahadurgarh resolved that the Govemment be requested to cancel Resolution No. 1 dated 2-3-1954. The State of Haryanai Respondent No. 1 which came into existence on 1-11-64,wtaer the Punjab Reorganisation Act, by
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