Case: Village Panchayat Of Kanhan Pipri Vs. Standing Committee, Zila Parishad, Nagpur, And Ors

2. In order to appreciate the points raised before us it is necessary to give the relevant facts and statutory provisions. The Village Panchayat of Kanhan Pipri, hereinafter referred to as the Panchayat, was originally constituted under the C. P. and Berar Panchayat Act, 1946 (C. P. and Berar Act No. 1 of 1947). On June 1, 1959, the Bombay Village Panchayat Act, 1958 (Bombay Act III of 1959) - hereinafter referred to as the Act-came into effect in Vidharba region, and by virtue of this Act the appellant was deemed to be a Panchayat under the Act.3. On July 14, 1961, the Panchayat passed resolution No. 2 with view to levy octroi duty. The resolution, after reciting the need for levying octroi duty and the relevant statutory provisions, concludes...... it passes the resolution to levy minimum octroi tax on the goods coming within its local limits as per the Schedule No. 1 of the Rules.On November 17, 1962, resolution No. 5 was passed which reads as followsThe meeting considered the question of imposition of octroi duty. It has been unanimously resolved that by virtue of Gram-panchayat Resolution No. 2, dated 14th July, 1961, that octroi duty shall be imposed on the goods coming into its local limits, the committee accepts the same. The matter of levying octroi duty shall be undertaken in accordance with the Panchayat Act and its rules. Therefore matter of Octroi Rules, calling for objections for the tax and taking of decisions thereon after the consideration, number of the octroi posts and places etc., should be got decided by the appropriate authority. This matter may be taken into hand very urgently. It is so decided by theJanuary 26, 1963, a public notice was issued under R. 3 (b) of the Maharashtra Village Panchayats Taxes and Fees Rules l9B0-hereinafter referred to as the Fees Rules. On February 19, 1963, M/s. Brooke Bond of India (Pr) Ltd.-hereinafter referred to as the Company - respondent before us, preferred objections against the proposed levy of octroi. On February 25, 1963, resolution No. 3 was passed. After setting out the previous resolutions and the publication of the notice by beat of drum, and various objections received, itconsidered all these above objections and suggestions and having given a satisfactory explanation for the same, this Committee unanimously resolves that as per the above resolution octroi should be levied on all the goods coming into the limits of the Panchayat, as per schedule I item 1, and levy the minimum octroi as per the rules in Schedule I item a. This levy should come into force from 1st April, 1963 and its final publication be done on 1st March 1963 as per rules and by public notice and by announcement by beat of drums (throughMarch 17, 1963, resolution No. 3 was passed fixing octroi limits and number of octroi nakas and their places. On March 18 1983, the Panchayat wrote to the Collector, Nagpur, seeking his approval to the octroi limits, number of octroi nakas and their places.5. It appears that the Panchayat started collecting octroi from April 1, 1963. On May 29, l963, the Company filed an appeal under S. 124 (5) of the Act before the Panchayat Samiti, Parson. The Panchayat Samiti, however, rejected the appeal by its resolution dated September 4, 1963. This decision was communicated to the Company by letter dated September 19, 1963, stating that the appeal "has been rejected by the Samiti as per its resolution dated 4th September, 1963, because the same was not filed within limitation as per the provisions of Bombay Village Panchayat Act and Rule 5 of Taxes and Fees Rules of 1960."6. The Company thereupon filed an appeal before the Standing Committee, Zila Parishad, Nagpur-hereinafter referred to as the Standing Committee-on October 22, 1963. While the appeal was pending the Tehsildar Ramtek on January 14, 1961, approved the octroi limits and the number and location of octroi nakas within the limits of the jurisdiction of the Panchayat under R. 21 of the Fees Rules. On April 6, 1964, the Standing Committee allowed the appeal of the Company on two grounds; first, that it was necessary for the Panchayat to have the octroi limits fixed with the approval of the Collector before levying octroi under R. 21; and secondly, that the Company was not importing tea within the limits of the Panchayat for consumption, use or sale. Thereupon, the Panchayat, as already stated filed an application under Art. 226 of the Constitution before the High Court.7. The High Court held that the Panchayat Samiti could not dismiss the appeal of the Company as being barred by limitation because R. 5 of the Fees Rules was ultra vires the powers of the rule-making authority. The High Court further held that the octroi duty was not validly levied by the Panchayat as it had failed to fix the octroi limits in accordance with law. The High Court did not deal with the question whether the companys tea was imported into the limits of the Panchayat for consumption, use or sale because it felt that sufficient facts had not been found by the Standing Committee. The High Court felt that it would not be proper to determine facts for itself.

Reasoning:
It seems to us that the octroi duty has been levied in accordance withscheme of the Fees Rules accordingly seems to be that the general procedure for levying taxes or fees is laid down and then this procedure is made applicable to the levy of various taxes mentioned in the other parts of the Rules.Viewed in this background it seems to us that R 3 (b) does not require the Panchayat to fix the octroi limits in the resolution passed under R. 3 (b). It only deals with two items, (1) selection of the tax and the rate at which it is to be levied. Rule 3 (c) has to be similarly read. The Inhabitants of the village would be entitled to object only to these two matters, namely (1) the tax or fee imposed and the rate at which it is levied. Under R. 3 (d) what the panchayat does is to consider objections and suggestions and then finally make the choice as regards two things, i. e., the tax or fee to be imposed and the rate at which it is to be levied.13. This interpretation is reinforced by a propel reading of R. 4. Rule 4 requires a notice stating two things, (1) the tax or fee to be levied and (2) the rate.We are, however unable to agree with the learned counsel for the appellant that before the octroi limits are approved octroi can be collected.We consider that the fixing of the octroi limits with the approval of the Collector is an essential condition precedent to the levy of octroiare unable to agree with this submission.Apart from the fact that it may in certain circumstances lead to illegal levies, there is nothing in the language of R. 21 which indicates that the Collector can regularise an imposition made without the authority of law. The Collector may in particular cases enlarge the octroi limits or reduce the octroi limits and it would lead to great confusion if either of the things happens after the Panchayat had been collecting octroi duty within the octroi limits submitted by it to the Collector forthe language of R. 3 (b) we are unable to appreciate how action taken under the Act and the rules is required to be notified to the public. There is nothing in the language to warrant such a construction.16. In conclusion we hold that the octroi duty was validly levied and that it could be imposed and collected with effect from January 14, 1964.Coming to the questionof the vires of R.5, it seems to us that the High Court has placed a wrong interpretation on R. 5, The High Court has held that as R..5 applies to all appeals under S. 124 (5) of the Panchayat Act, the fixing of the commencement of the period of limitation as the date of publication of the notice under R. 4 far all appeals is arbitrary and destructive of the right of appeal. But this interpretation, with respect is not correct, if R. 5 is read in the setting in which it occurs.Rule 5 follows immediately Rr. 3 and 4 and is headed "Appeal against levy of any tax or fee", and the period of Sixty days of limitation commences from the date of the publication of the notice under R. 4, i. e. the notice following the decision of a Panchayat to levy any tax or fee. This date shows that R. 5 is dealing only with appeals against levy of any tax and not with the assessment or imposition of a tax or any further appeals to the Panchayat Samiti under S. 124 It is true that the opening sentence makes a reference to an appeal under sub-s. (5) of S. 124, and this opening sentence would cover all appeals under sub-s. (5) of S. 124, but in the context and stating, the heading of R. 5 brings out the scope of the rule. Accordingly, the appeal of the Company to the Samiti was wrongly dismissed as time-barred.It follows from this that the Standing Committee was entitled to deal with the appeal onis true that the Standing Committee inspected the premises of the Company but in their order they have given very scanty facts. They do not say whether the tea is crushed, processed or treated chemically to convert it into a marketableis also not quite clear whether the tea which is imported by the Company is known in trade circles as a different commodity form the tea actually sent out in boxes. In the circumstances we must also decline to deal with this point.