LexMUNICIPAL BOARD MAUNATH BHANJAN versus SWADESHI COTTON MILLS CO. LTD. & ORS.
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865
MUNICIPAL BOARD MAUNATH BHANJAN
v.
SWADESHI COTTON MILLS CO. LTD. & ORS.
January 28, .1977
(Y. V. CHANDRACHUD AND P. N. SHINGHAL, JJ.]
U.P. Municipalities Act, 1916, Ss. 131(3),
134(1)
&
(2), 135(2)
and
300-Draft rules for levying octroi not changed after publication 11/s 131(3)-
Whether their Re-publication necessary on mere reduction of tax rates-Re-publi-
cation only of reduced tax rates, whether violateS S. 300 and the General Clauses
Act, S. 23-Resolution u/s 134(2), whether rgndered nugatory if passed before
publication of rules-Notification u/s 135(2), whether requires specific refer-
ence to section.
In 1968-69 the respondent was constructing a textile factory within the area
of the appellant Board, and obtained exemption from the levy of octroi on its
incoming building material on the ground that it was a new concern. It then
~tarted bringing more articles within its premises with the result that octroi
was demanded from it.
The Board got permission from the State Government
for realising the same. In a writ petition by the respondent to challenge the
levy, the High Court struck down the. imposition of octroi on three grounds :
I. The provisions of Ss. 134 (I) and 300 of the Act and S. 23 of the
General Clauses Act were violated owing to publication only of the
tax rates and not the draft rules for the levy of octroi.
II. The resolution of the Board u/s 134(2) could not authorise
imposition of tax as it was passed before the publication of
rules.
III. No notification was pJJblished as r~quired u/s 135 (2).
Allowing the appeal by special leave, the Court
the
the
HELD : 1. The draft rules were once published as required by sub-s. (3) )
of s. 131, and as only the rates had- been reduced and the rules had not been
modified, it was not necessary to re-publish them. [868 A-Fl
Municipal Board, Hapur v. Raglmvendra Kripal & Ors. [1966] I SCR 950
and Raza Buland Sugar Co. Ltd. v. Municipal Board, Rampur, [1965]
1 · SCR
970, referred to.
·
2. The Resolution dated June 20, 1950, could authorise the imposition of
the tax from July 15, 1950, although it was passed before the publication of
the rules. The resolution was not rendered nugatory and it was not necessary
for the Board to pass another one.
[868 0-H]
3. It is the nature of the not,ification which is decisive of the section under
'which it has been issued and it would not matter if it did not make a specific
reference to sub-section (2) of section 135 and made a reference to Section 300
instead.
[869 BJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 527 of 1976.
Appeal by Special Leave from the Judgment and Order dated the
26-3-1976 of the Allahabad High Court in Civil Misc. Writ No. 6277
cf 1974.
A
B
c
D
E
F
G
H
866
SUPREME COURT REPORTS
[1977] 2 ~C.R.
A
L. N. Sinha, Sol. General, S. C. Agarwala and V. !. Francis for
B
c
D
E
the Appellant.
Yogeshwar Prasad and (Miss) Rani Arora for Respondent No. 1.
0. P. Rana for Respondent No. 2.
The Judgment of the Court was delivered by
SHINGHAL, J.
This appeal by special leave is directed against the
judgment of the Allahabad High Court dated March 26, 1976. It
relates to the validity of the imposition of octroi with effect from July
15, 1950, on certain goods brought within the Maunath
Bhanjan
Municipality, hereinafter referred to as the Board.
The challenge to the imposition was made by the Swadeshi Cotton
Mills Company Ltd., hereinafter referred to as the Company.
The
Company started constructing a textile factory, a part of which, at any
rate, fell within the area of the Board.
It applied for and obtained
exemption from the levy of octroi on its building material on
the
ground that it was a new concern.
It howeVler started bringing more
articles within its premises, and the Octroi Superintendent
made
a demand for a payment octroi on June
25, 1969.
The
Com-·
parry tried to avoid the levy on the basis of the order of exemption,
but the Executive Officer of the Board repeated the demand on May
30, 1970 and June 16, 1970.
The Board also wrote to the State
Government for permission to realise octroi from the Company. The
Government gave the permission to realise the tax.
The Company
thereupon challenged the levy of the octroi in the High Court by a writ
petition.
The High Court took the view that the initial imposition
of the octroi was illegal, allowed the writ petition, and issued a manda-
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