Case: Municipal Board Maunath Bhanjan Vs. Swadeshi Cotton Mills Co. Ltd. &amp; Ors

of the tax had been reduced from R s.1/8/- 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 Commissioner 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 Prescribed 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 previous 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 Boards 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 134(1) and 300 of the Act and section 23 of the General Clauses Act which requires certain conditions to be observed 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 necessarily 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 technical defect in the date of the resolution could not have the effect of making the imposition void in the facts and circumstances of this case.9. 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 authority of sub-section (2 ) of section 133, and it would not matter if it did not make a specific reference to that subsection 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, --"135(3) A notification of the imposition of a tax under subsection (2) shall be conclusive proof that the tax has been imposed in accordance with the provisions of this Act."10. 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.11. 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 Companys 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 y ears. The Company started "importing" certain other articles, and the State Government ultimately gave permission 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 accept ed 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 petition. 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 "procedure" prescribed under sections 131-135 had not been followed. That was far too vague a plea to justify investigation and interference in the exercise of the extraordinary jurisdiction of the High Court under article 226 of the Constitution.12.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]It will be re called 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-section(3) 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 "Sansar" 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 Commissioner intimating that only two objections had been received which were for reduction of the tax, and that after considering them the rate of the tax had been reduced from R s.1/8/- 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 Commissioner 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 Prescribed 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 previous 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 Boards 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 134(1) and 300 of the Act and section 23 of the General Clauses Act which requires certain conditions to be observed in regard to the making of rules after previousNo. 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 necessarily 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 technical defect in the date of the resolution could not have the effect of making the imposition void in the facts and circumstances of thisNo. 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 authority of sub-section (2 ) of section 133, and it would not matter if it did not make a specific reference to that subsection 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 thewhen 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 theis 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 Companys 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 y ears. The Company started "importing" certain other articles, and the State Government ultimately gave permission 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 accept ed 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 petition. 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 "procedure" prescribed under sections 131-135 had not been followed. That was far too vague a plea to justify investigation and interference in the exercise of the extraordinary jurisdiction of the High Court under article 226 of the Constitution.