Case: The Berar Swadeshi Vanaspathi and Ors Vs. The Municipal Committee, Shegaon and Anr

2. The appellants are some of the ratepayers of the Municipal Committee of Shegaon which is respondent No. 1 in this appeal. The other respondent is the State of Bombay. The appellants were carrying on trade and business which involved their bringing goods within the limits of the Municipal Committee. On July 25, 1954, the Municipal Committee passed a resolution for the purpose of levying an octroi duty instead of terminal tax. This resolution was published in the State Gazette on June 29, 1956, along with rules for assessment. On August 4, 1956, objections were invited to the proposed tax. The objections by the first appellant were filed on August 4, 1956, and by some others on August 5 and 6. At a meeting of the Municipal Committee dated August 16, 1956, the objections of the other appellants were rejected as being time barred and those by the first appellant were rejected because it was the only objector whose objections were within time. Some representations were made by the first appellant to the Government and a few days later the other objectors also made similar representations but the Government issued the notification sanctioning the imposition of the tax and the Draft Rules on October 27, 1956, though the Gazette Notifications were published on two separate dates, i.e., October 30 and October 31, 1956. The appellants then filed a petition under Art. 226 in the High Court of Bombay at Nagpur challenging the legality of the imposition of the tax. Two main grounds were urged: (1) that the notification was ultra vires because S. 67 of the C. P. and Berar Municipalities Act, 1922 (Act II of 1922), hereinafter termed the Act, had not been complied with and (2) that the rate of tax in regard to certain articles was unauthorised in that it was more than the maximum which could be levied under the law. The High Court rejected the first ground but accepted the second objection and gave relief accordingly.3. Appellants Nos. 2 to 6 have not taken steps for the prosecution of the appeal and the appeal, in so far as it relates to them, is dismissed for non-prosecution.

Reasoning:
5. As stated above, there were two notifications issued by the Government both of October 27, 1956. One was published in the Gazette on October 30, 1956, and the other on the following day. The first notification was as follows4963-5869-M-XIII.-In exercise of the powers conferred by sections 71, 76 and 85 of the Central Provinces and Berar Municipalities Act, 1922 (II of 1922), the State Government are pleased to sanction the following draft rules for assessment, collection and refund of the octroi tax within the limits of the Shegaon Municipality, in the Buldanarules shall come into force from the date of their publication in the Madhya Pradesh Gazette Extraordinary":-And the second notification4962-5869-M-XIII.-In exercise of the powers conferred by sub-section (2) of section 67 of the Central Provinces and Berar Municipalities Act, 1922 (II of 1922), the State Government are pleased to confirm the following draft rules for the imposition of the octroi tax within the limits of the SHEGAON MUNICIPAL COMMITTEE in the Buldana district, under clause (c) of sub-section (1) of section 66 of the said Act, on animals and goods brought for sale, expenditure or use in supersession of the rules of terminal tax, sanctioned, under Notification No. 37-16-B-VIII dated the 15th February,rules shall come into force from the date of their publication in the Madhya Pradesh Gazette Extraordinary".-The first notification purports to be in exercise of the powers under S. 71, which relates to Rules for assessment and for preventing evasion of assessment of taxes; to S. 76 which provides for collection of taxes and S. 85 which relates to refunds. That notification therefore lays down the various rules and other matters necessary for the collection of taxes. The second notification on the face of it is under sub-s. 2 of S.It appears to us that this is a mistake and should have been under sub-s. (7) of S.67. By this notification the State Government confirmed the draft rules for the imposition of the octroi duty which in the context must mean imposition of the tax because the very first rule states:-Rule 1 "Octroi shall ordinarily be levied on commodities included in the following classes and specified in the schedules. hereto annexed and at the rates therein entered".The various classes of articles and commodities on which octroi was to be levied are then set out and then the exceptions and explanations are given. With these rules are the schedules specifying the goods under each class which are liable to octroi duty and the rate at which the octroi duty was chargeable. This notification therefore clearly is one which directs imposition of octroi and falls within sub-s. (7) of S. 67 and having been notified in the Gazette it is conclusive evidence of the tax having been imposed in accordance with the provisions of the Act and it cannot be challenged on the ground that all the necessary steps had not been taken.