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 of 1974
866 LN Sinha Sol
General SC Agarwala and VJ Francis for the Appellant
Yogeshwar Prasad and Miss Rani Arora for Respondent No 1
OP 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 hereinaf ter referred to as the Board
The challenge to the imposition was made by the Swa deshi 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 however started bringing more articles within its premises and the Octroi Superin tendent made a demand for a payment octroi on June 25 1969
The Company 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 mandamus directing the Board not to realise the tax
The Board feels aggrieved and has come up in appeal to this Court
It appears that the Company took four grounds for challenging the levy of octroi but the High Court examined only the following ground as it took the view that it was enough for the Company s success in the petition and did not examine the other grounds that the procedure prescribed for the imposition of taxes by municipal boards under sections 131 to 135 of the UP Municipalities Act 1916 was not fol lowed by the Municipal Board
 Counsel for the parties have accordingly confined their arguments to the finding of the High Court in favour of the Company on this ground
As the ground on which the Company has succeeded is quite general and vague we asked counsel for the parties to refer to
the precise plea in that respect in the writ petition
They could however only invite our attention to3 ground No 6 of the writ petition where the Company has merely stated that the imposition of octroi was void and illegal because mandatory provisions for imposition of octroi tax as provid ed in the UP Municipalities Act has not been followed
 It is therefore obvious and has not been disputed before us that the 867 Company took a very vague ground to challenge the validity of the imposition of octroi and left it to the High Court to embark on a roving and fishing inquiry on the off chance of finding some violation of the so called mandatory provi sions for the imposition of octroi
 It has not been disput ed before us that the High Court undertook such an inquiry and struck down the imposition on the following ground 1 The draft rules for the levy of the tax were not published and only the rates of octroi were published so that there was violation of the provisions of section 23 of the General Clauses Act and sections 1341 and 300 of the Act
2 The order of the District Magistrate which was equivalent to the special resolution of the Board under sub section 2 of section 134 was invalid as it was passed on June 20 1950 while the rules were finalised and pub lished on July 15 1950
3 There was no foundation or basis of the notification under section 1352 and no such notification was published
Counsel for the Company however strenuously argued that there was no compliance with the provisions of sections 131 to 133 also and made a reference to the decisions in Munic ipal Board Hapur vs Raghuvendra Kripal and others1 and Raza Buland Sugar Co Ltd vs Municipal Board Ratnpur2 for the purpose of showing that parts of sections 131 to 134 were mandatory and had to be followed
We find that the High Court hascategorically stated that the Company did not assert that sub sections 2 and 3 of section 131 had not been complied with and that there was no dispute regarding compliance with the provisions of section 131
 The High Court has also stated that the COmpany has not asserted
that any of the provisions of section 132 has not been followed
 It has further stated that there was no complaint of non compliance with the provisions of section 133 also
 There was thus no challenge to the validity of the imposition of octroi on the ground that there was no compliance with the provisions of sections 131 132 and 133 and we are not called upon to examine the argument that there was non compliance with the provisions of those sec tions
There was also no dispute in the High Court that the Municipal Board was competent to impose octroi tax
 We shall accordingly examine the three grounds on which the High Court has held the imposition of octroi as invalid in this background
Ground No 1
The High Court has held that there was no previous publication of the draft rules for the levy of octroi and that only the rates of octroi were published
So that there was breach of the provisions of sections 1341and 300 of the United 1  2  868 Provinces Municipalities Act 1916 hereinafter referred to as the Act and section 23 of the General Clauses Act
It will be recalled that the High Court has found that the Company had not challenged the imposition of octroi on the ground that there was non compliance with the provisions of sections 131 to 133
It cannot therefore be disputed that the draft rules were published as required by sub section3 of section 131
Moreover we find from the affidavit which has been filed on behalf of the Board that its Officer incharge wrote to the prescribed Authority on January 9 1950 that the draft rules had been published in the San sar on November 1 1949 and may be sanctioned
A copy of that letter has been placed on the record
It may also be mentioned that the Officer Incharge wrote to the Commission er intimating that only two objections had been received which were for reduction of the tax and that after consid ering them the rate of the tax had been reduced from Rs18 to Re 1 per maund and the necessary amendment had been made in the rate chart
An objection was also received from the Shoe Makers  Association and the Commis sioner directed that if the Board wanted to make any modification it may again publish the modified proposals
This was done on February 14 1950 but as only the rates had been reduced and the rules had not been modified it was not necessary to republish the draft rules
The Pre scribed Authority accordingly sanctioned the same on April 1 1950 under section 133
The rules were forwarded to the Prescribed Authority on April 26 1950 and were published in the State Gazette dated July 7 1950
It was stated in the notification that the rules were published under section 300 of the Act which required their previ ous publication but there can be no doubt that it was a notification under sub section 2 of section 135 as it was issued after receipt of the Board s special resolution in pursuance of the sanction of the Prescribed Authority and it was directed that the rules shall take effect from July 15 1950
It is therefore futile to contend that the rules were not made in accordance with the provisions of sections 1341 and 300 of the Act and section 23 of the General Clauses Act which requires certain conditions to be ob served in regard to the making of rules after previous publication
Ground No 2
It is not in dispute that the special resolution for the imposition of the tax was sent by the Officer Incharge of the Municipal Board on June 20 1950 stating that July 15 1950
had been fixed for the levy of the tax
It is true that the rules were published under the notification dated July 7 1950 but that would not neces sarily lead to the conclusion that the resolution dated June 20 1950 was rendered nugatory or that it was necessary for the Board to pass another resolution
The notification shows that the authority concerned not only published the resolution by its notification dated July 7 1950 but also stated that they shall take effect from July 15 1950 which was the date fixed by the resolution dated June 20 1950 for the imposition of the tax
There was therefore no justification for taking the view that the resolution dated June 20 1950 could not authorise the imposition of the tax from July 15 1950 merely because it was passed before the publication of the rules
At any rate any techni cal defect in the date of the resolution could not have 869 the effect of making the imposition void in the facts and circumstances of this case
Ground No 3
As has been shown the notification dated July 7 1950 which was published under section 300 of the Act was in fact and substance issued under the authori ty of sub section 2 of section 133 and it would not matter if it did not make a specific reference to that sub section and made a reference to section 300 instead
The High Court therefore erred in thinking that there was no notification under sub section 2 of section 135 at all
It is the nature of the notification which is decisive of the section under which it has been issued and we have no doubt that the impugned notification was really issued under sub section 2 of section 135
We have thus no doubt that the notification had really been issued in compliance with the requirement of sub sec tion 2 of section 135 of the Act
That would attract the application of sub section 3 of that section which provides as follows 1353 A notification of the imposition of a tax under subsection 2 shall be conclusive proof that the tax has been imposed in accord ance with the provisions of this Act
 So when a probative effect had been given by law making the notification of the imposition of the tax as conclusive proof that the tax had been imposed in accordance with the provisions of the Act no evidence could be allowed to combat that fact and we have no hesitation in holding that the imposition was according to the law
It is not disputed that Maunath Bhanjan is an industrial town and its Board was collecting octroi since July 15 1950
The Company started the construction of its factory in 1968 69 and as has been stated it applied for and obtained exemption from the levy of octroi on its building material on the ground that it was a new concern
The Board granted the exemption on July 21 1967 for a period of 10 years and that fact was acknowledged in the Company s letter dated August 18 1967
The Company prayed for the continuance of the exemption even after that time limit
The State Government however granted the exemption for five years
The Company started importing certain other articles and the State Government ultimately gave permis sion to the Board on April 2 1973 to realise octroi from the Company with effect from May 1974
The Company once again applied for further exemption on August 14 1973 but without success
It is thus clear that far from having any doubts about the validity of the imposition and levy of octroi the
Company accepted the validity thereof and prayed for exemption
It availed of that exemption for some years and applied for its extension until as late as August 14 1973
It was only when further exemption was refused that the Company thought of filing the writ peti tion
As has been shown the Company did not even then venture to point out any reason why the imposition could be said to be invalid and merely stated that the 870 procedure prescribed under sections 131 135 had not been followed
That was far too vague a plea to justify investi gation and interference in the exercise of the extraordinary jurisdiction of the High Court under article 226 of the Constitution
The appeal is allowed the impugned judgment of the High Court dated March 26 1976 is set aside and the writ petition is dismissed with costs
MR Appeal allowed


Summary:
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 started 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 1341 and 300 of the Act and section 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
The resolution of the Board us 1342 could not authorise the imposition of tax as it was passed before the publication of the rules
No notification was published as required us 135 2
Allowing the appeal by special leave the Court HELD 1
The draft rules were once published as required by sub section
3 of section 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 F Municipal Board Hapur vs Raghuvendra Kripal  Ors  and Raza Butand Sugar Co Ltd vs Municipal Board Ramput   referred to
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 resolu tion was not rendered nugatory and it was not necessary for the Board to pass another one
868 G H 3
It is the nature of the notification which is deci sive 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 B