Case: Bangalore Woollen, Cotton And Silk Mills Co. Ltd Vs. The Corporation Of The City Of Bangalore By Its

The facts of the case are set out in the order of the Divisional Bench and it is unnecessary to restate them. The appellants in the two appeals and in the two petitions under Art. 32 are challenging the constitutionality of the octroi duty on cotton and wool imposed by the respondent Corporation within its octroi limits. The procedure for levying municipal taxes and the power of control of Government in regard to those taxes is laid down in S. 98 of the City of Bangalore Municipal Corporation Act (Act 69 of 1949) hereinafter termed the Act. The procedure is that a resolution intending to impose a tax has to be passed by the Corporation and that resolution is required to be published in the Official Gazette and in the local newspapers. The rate payers can then submit objections and after considering such objections received during the specified time the Corporation may by resolution determine to levy the tax or duty. When such a resolution has been passed the Commissioner is required to publish forthwith a notification in the Official Gazette and in the newspapers as set out in sub-s. (1) of S. 98 of the Act. This notification is to specify the date from which, the rate at which and the period of levy, if any, for which such tax is levied.

Court's reasoning:
3. It is unnecessary in this case to discuss the relevance of marginal notes in the construction of S. 38(1) (b) because in our opinion the language is unambiguous and clear and it validates any defect in any act done or proceedings taken under the Act and makes it immune from being questioned on the ground of any defect or irregularity in such act or proceedings not affecting the merits of the case and merely because it is in a chapter dealing with Municipal Authorities or other parts of the section dealing with another subject is no reason for confining its operation to the defects contended for by thehistory of these taxes therefore shows that in the Devolution Rules underthe Government of India Act, 1915, octroi, terminal tax and taxes on professions and callings were three distinct heads of taxation. Similarly inthe Government of India Act, 1935, and in the Constitution the two entries are separate. Therefore when S. 142-A was added inthe Government of India Act, 1935, its operation was limited to entry 46 of List II and had no reference to entry 49 which deals with cesses on entry of goods. The position under the Constitution is exactly the same and therefore neither S. 142-A ofthe Government of India Act, 1935 nor Art. 276 has any effect on entry 49 inthe Government of India Act, 1935 or entry 52 in the Constitution. The learned Attorney General in support of his argument that the impugned tax is a tax on trade, relied upon three judgments: Municipality of Chopda v. Motilal Manekchand, ILR (1958) Bom 483 : (AIR 1958 Bom 487  ), Gajadhar Hiralal Firm v. Municipal Committee, Washim, ILR (1958) Bom 625  : (AIR 1958 Bom 378  ) and Municipal Committee Karanja v. New East India Press Co. Ltd., Bombay, AIR 1949 Nag 215.None of these cases has any applicability to the tax now impugned because the facts were different and the imposition was of a different character. The attack on the constitutionality of the impugned tax on the ground of contravention of Art. 276 is therefore not sustainable and must beunder this section if the corporation resolved to levy octroi on animals or goods brought within the octroi limits of the city then this octroi was to be levied at rates not exceeding those laid down in that section. This, it was submitted, was subordinate legislation and therefore was not saved by Art. 305 because "existing law" as defined means any law, ordinance, order, by-law, rule or regulation passed before the Constitution and as the impugned tax was a new regulation passed after the Constitution it was not saved by Art. 305. In support of this reliance was placed on the observations of this Court in Hamdard Dawakhana v. Union of India, AIR 1960 SC 554   but as was observed by the Divisional Bench that case does not apply to the facts of the presentare unable to accept this distinction because even though the words used in the present statute are different the combined effect of Ss. 97 and 130 and Part V of Schedule III including class VIII which have been set out above is that the words are of very general nature and would have the same effect as if, all articles were intended to be and were included. In view of this it is unnecessary to discuss the second contention.