MUNICIPAL COUNCIL, PUSAD versus GOKALDAS DOSSA & CO. LTD.

Citation: [1980] 2 S.C.R. 7 · Decided: 13-11-1979 · Supreme Court of India · Bench: R.S. SARKARIA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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MUNICIPAL COUNCIL, PUSAD 
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GOKALDAS DOSSA & CO. LTD. 
November 13, 1979 
[R. S. SARKARIA ~ND 0. CHINNAPPA REDDY, JJ.) 
CaltStltution of India 1950, Article 276(2), Government of Indio Act 1935, 
S. 142At2), Central Provinces and B&ar Municipalities Act 1922, S. 66(l)(b) & 
Profession Tax Limitation Act 1941, S 3 arid Item 4 of Schedule-Baja . and 
Bal~ T(lx-Ta:r by municipality on ginning and pressing cotton-Continuance o.f 
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irnposifion in ex~s of constitutional limits-Validity of. 
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Pu.sad was part of District Akola, which was one of the four Hydel'l\b•d 
A11iped Districts, popularly known as Berar. These districts not forming a 
part of British India, were administered by the Govemor-General·in-Cpuncil, 
who enacted .. law applicable in Berar, known as the Berar Municipal Law, 
1886. 
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On January 22, 1924 1lle Governor-General-in-Council issued a notification 
the effect of which was that the Berar Municipal Law, 1886, was repealed and 
in its place the Central Provinces Municipalities Act, 1922 was made applicable 
to Berar. Further, the taxes imposed under the Berar Municipal law were 
.dct!med to have been imposed under the Central Provinces ~Iunicipalities Act, 
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1922. 
On August I, 1941, the C.P. and Berar Legislature enacted the C.P. and 
Berar .Act as a result of which, the words "and Berar" were added after the 
words "Central Provinces" in the Central Provinces Municipalities Act, 1922. 
In the meanwhile, the Profession 1'ax Limitation Act, 194·1 'vas enacted by 
the Dominion- Legislature in pursuance of the power given by the Government 
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of India Act, 1935, and it came into force on April 1, 1941. It proTided that 
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after· its commencement, the Municipalities would not impose or levy taxes 
which exceeded Rs. 50/- per arinum. However, by section 3 1fead with Item 4 
of the Schedule to the Act, any tax levied by a Municipality in respect of any 
profession, trade, or calling imposed under section 66 (1 )(b) 
of the C.P. 
Municipalities Act, 1922 was eXempted fron1 the aforesaid ceiling . 
The appellant Municipality which was constituted .. a 
Municipal· Com-
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mittec under the Central ProTinces Municipalities Act 1922, imposed a tax 
under 1cction 66(1)(b) read with section 67, sub-sections 5 and 7 of the said 
Act on ginning and pressing cotwn by a notification dated January 9, 1932. 
The tax was known as Boja and Bale Tax. It issued a demand noti.ce and a 
bill in nw;pect of the said tax to the respondent firm who was doing the busi-
ness of ginning and pressing cotton within the limits of the municipality. The 
objectioos: of the responde.nt having been turned down, they approached the 
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High Court in a Writ Petition for a declaration that the Boja and Bale Tax 
imposed on them was ultra vires and unconstitutional and that the demand 
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SUPREME COURT REPORTS 
[1980] 2 S.C.R. 
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notice be quashed. The High Court allowed the writ petition and quashed the 
demand notice on the ground that the tax was in excess of the ceiling limit 
of Rs. 250 /- per annum fixed in Article 276 of the Constitution. 
In the appeal to this Court it was contended on behalf of the appellant, rely-
ing on the decision of this Court in A1unicipal Conunittee Akot 
v. 
Manila! 
Manekji Pvt. Ud. & Anr. [1967] 2 SCR 100. th~t the Boja and Bale Tax having 
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b<en imposed under the C.P. Municipalities Ac~ 1922, in 1932, 3Jld there being 
no question of importing any deeming fiction the demand for the tax was valid. 
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Allowing the appeal, 
HELD : 1. The demand notice in question does not 
contravene section 
142A(2) of the Government of India Act, 1935, and Article 276(2) cf the 
Constitution and is valid. 
[15 A] 
2. Jn Z..funic:ipal Con1nzittee, Akot v. Manilal Manekji Pi't. Ltd, 
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Anr. 
[1967] 2 S.C.R. 100, this Court held that the word 'imposed' in Item 4 of the 
Schedule to the Profession Tax Limitation Act, 1941, meant that the taxes which 
can be continued to be levied should have been Imposed before the said Act 
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came into foi;ce. 
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3. Jf the tax in question bad in fact been imposed under section 66(1) (b) 
of the Central Provinces Municipalities Act, 1922, before the coming into force 
of the 1941 Act, it would fall within the exemption of item 4 read with section 
3 of the Profession Tax Limitation Act, 1941 and the continuance of such an 
imposition in excess of the constitutional limit, will be in consonance with the 
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proviso to section 142A(2) of the Government of

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