Case: Bhaskar Textile Mills Limited Vs. Jharsuguda Municipality and Others

under the Act of 1920 after April 1, 1966 when the repeal became effective on the coming into force of the Act. It was, however, contended in that case that cl. la of Schedule 9 of the Act keeps the repealed enactment alive for tax purposes and, therefore, the municipality had the authority to impose the property tax under the Act of 1920 notwithstanding its repeal by the new Act. This Court, however, took the view that the provisions contained in the Schedule are of a transitional nature. They were intended to apply during the period of transition following upon the repeal of old municipal laws and the introduction of the li new law. The object of clause 12 of Schedule 9 was to authorise the levy of taxes which, on the commencement of the Act, Were levied under the repealed laws. This Court further added that the municipality might have been levying property tax since long on properties situated within its limits, but until April 1, 1966 the villages of Ramakrishnapuram and Sriharipur am were outside those limits. Qua the areas newly included within the municipal limits, the tax was being imposed for the first time and therefore it was incumbent on the municipality to follow the procedure prescribed by the first proviso to section 81(2). Residents and tax payers of those areas never had an opportunity to object to the imposition of the tax and that valuable opportunity cannot be denied to them. It is obligatory upon the municipality not only to invite objections to the proposed tax but also to consider the objections received by it within the specified period.For the State, however, reliance was placed in that case on s.3(4) of the Act to contend that the inclusion of the two villages within the municipal area attracts of its own force every provision of the Act with effect from the dale on which the final notification is published. by the Government under s.3(3). In support of this contention it cited the decision of this Court in Atlas Cycle Industrial Ltd. v. State of Haryana &Anr. This argument on behalf of the State was, however, repelled and the Court observed:"Far from supporting the argument, we consider that the decision shows how a provision like the one contained in Section 3(4) cannot have the effect contended for by the appellant. In the Atlas Cycle case, section 5(4) of the Punjab Municipality Act, 1911 provided that when any local area was included in the municipality, "this Act and...all . rules, bye-laws, orders, directions and powers made, issued or conferred under this Act and- in force throughout the whole municipality at the time, shall apply to such areas."."15. But this Court took the view that since section 5(4) of the Punjab Act did not, significantly, refer to notifications and since section 62(1) of the Punjab Act spoke of "notification" for the imposition of taxes, it was not competent to the municipality to levy and collect octroi from the company on the strength merely of the provision contained in s. 5(4) of the Punjab Act. That case, however, is distinguishable and cannot be of much assistance for solving the problem before us. Section 5 of the Orissa Municipal Act makes all the provisions of the Act and of any rules, by-laws, notifications, or orders made thereunder, which immediately before such inclusion were in force throughout such municipality, applicable to such area, unless the State Government, in and by the notification, otherwise direct. This section, therefore, includes not only the provisions of the Act, rules and bye-laws but also includes notifications. This distinguishes the. . present case from the Visakhapatnam Municipalitys case (supra).For the appellant, next reliance was placed upon Bagalkot City Municipality v. Bagalkot Cement.(1) In that case also at the time of the imposition of the octroi duty the respondents factory was situated outside the municipal district and was not subject to the octroi duty. Subsequently, the Government extended the municipal district so that the factory came to be included within that district. The appellant in that case contended that upon such extension its octroi limits also stood extended to include the factory and the respondent became liable to pay octroi duty in respect of goods brought into the factory. The majority view was that the expression "municipal district" in the bye-law referred to the municipal district as existing when the bye-law was framed. The context prevented the definition of "municipal . district" in the Act, namely, the municipal district as from time to time existing from being applied under s.20 of the Bombay General Clauses Act to interpret the bye-law The bye-law had been made without being published to the respondent, and if it was so read referring to the municipal district from time to time existing it would be invalid for non-compliance with the provisions of s.48 of the Act. This case again is distinguishable in view of the wording of s.5 of the Orissa Municipal Act:16. Lastly it is urged that the octroi duty levied in this case by the Municipality is unreasonable and excessive. The Municipality is required to provide certain amenities not only for the permanent residents within the municipality, but also even for casual visitors who may on occasions enter the limits of the municipality. The entry of large quantities of goods within the municipality almost daily from outside necessarily creates innumerable problems such as provisions of water supply, lighting facilities, facilities for conservancy, sanitation, maintenance of good roads and markets etc. which the Jharsuguda Municipality has done and there is no allegation to the contrary by the appellant. From the material placed before us we are of the view that the levy is not an unreasonable one. It is not also excessive. . The imposition of octroi cannot, therefore, be challenged on the ground that there is violation of Art. 19(1)(g) of the Constitution.Considering the case from any aspect the imposition of octroi duty, in our opinion, does not suffer from any infirmity.17

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

Explanation:
1[ds]But this Court took the view that since section 5(4) of the Punjab Act did not, significantly, refer to notifications and since section 62(1) of the Punjab Act spoke of "notification" for the imposition of taxes, it was not competent to the municipality to levy and collect octroi from the company on the strength merely of the provision contained in s. 5(4) of the Punjab Act. That case, however, is distinguishable and cannot be of much assistance for solving the problem before us. Section 5 of the Orissa Municipal Act makes all the provisions of the Act and of any rules, by-laws, notifications, or orders made thereunder, which immediately before such inclusion were in force throughout such municipality, applicable to such area, unless the State Government, in and by the notification, otherwise direct. This section, therefore, includes not only the provisions of the Act, rules and bye-laws but also includes notifications. This distinguishes the. . present case from the Visakhapatnam Municipalitys case (supra).For the appellant, next reliance was placed upon Bagalkot City Municipality v. Bagalkot Cement.(1) In that case also at the time of the imposition of the octroi duty the respondents factory was situated outside the municipal district and was not subject to the octroi duty. Subsequently, the Government extended the municipal district so that the factory came to be included within that district. The appellant in that case contended that upon such extension its octroi limits also stood extended to include the factory and the respondent became liable to pay octroi duty in respect of goods brought into the factory. The majority view was that the expression "municipal district" in the bye-law referred to the municipal district as existing when the bye-law was framed. The context prevented the definition of "municipal . district" in the Act, namely, the municipal district as from time to time existing from being applied under s.20 of the Bombay General Clauses Act to interpret the bye-law The bye-law had been made without being published to the respondent, and if it was so read referring to the municipal district from time to time existing it would be invalid for non-compliance with the provisions of s.48 of the Act. This case again is distinguishable in view of the wording of s.5 of the Orissa Municipalit is urged that the octroi duty levied in this case by the Municipality is unreasonable and excessive. The Municipality is required to provide certain amenities not only for the permanent residents within the municipality, but also even for casual visitors who may on occasions enter the limits of the municipality. The entry of large quantities of goods within the municipality almost daily from outside necessarily creates innumerable problems such as provisions of water supply, lighting facilities, facilities for conservancy, sanitation, maintenance of good roads and markets etc. which the Jharsuguda Municipality has done and there is no allegation to the contrary by the appellant.From the material placed before us we are of the view that the levy is not an unreasonable one. It is not also excessive. . The imposition of octroi cannot, therefore, be challenged on the ground that there is violation of Art. 19(1)(g) of the Constitution.Considering the case from any aspect the imposition of octroi duty, in our opinion, does not suffer from any infirmity.The argument proceeds on the assumption that the proviso to s.4(1) applies. But a bare persual of the proviso clearly indicates that the requirement is thatof the adult male population of the town to which it refers should be engaged in pursuits. The provision, to our mind, applies not to all the classes ofof s.4 but it applies only to cl.(a) ofof s.4, because it is cl.(a) of s.4(1) which talks of town. Therefore, the proviso, in . . Our opinion, has no application to the present case and that cannot be taken to be a ground for challenging the notification for inclusion of village Ektali in the Jharsuguda Municipality. This takes us to the third ground.The appellant had filed an objection underof s.4. The said objection was examined by the District Magistrate, Sambalpur and the Revenue Divisional Commissioner (Northern Division), Sambalpur: They overruled the objection treating it to be of general nature. Thereafter, the Community Development and the Panchati Raj (Grama Panchayat) Department were consulted to agree with this proposal, to which they agreed, and it was thereafter. that the Urban Development Department issued a final notification dated 12th August, 1975 to include the above village into the municipal limits of Jharsuguda Municipality. The contention of the appellant that the objection had not been considered by the State Government cannot be accepted in as much as the objection is required to be made through the Magistrate of the district. Naturally, the District Magistrate while forwarding the objection to the State Government made his comment. The Revenue Divisional Commissioner intervenes in the channel of communication between the District Magistrate and the State Government and he, therefore, had an occasion to. process the matter.Government while dealing with the matter consulted the. Panchayati Raj Department and ultimately notified in terms of notification dated 12th August, 1975. In the circumstances it cannot be accepted that the objection filed by the appellant had not been considered by the Statethe material placed before us we are of the view that the levy is not an unreasonable one. It is not also excessive. . The imposition of octroi cannot, therefore, be challenged on the ground that there is violation of Art. 19(1)(g) of the Constitution.Considering the case from any aspect the imposition of octroi duty, in our opinion, does not suffer from any infirmity.