Source: http://www.rishabhdara.com/sc/view.php?case=1650
Timestamp: 2019-12-06 21:39:03
Document Index: 631136966

Matched Legal Cases: ['Art. 226', 'Art.\t226', 'Art. 226', 'Art. 276', 'Art.\t301', 'Art. 19', 'Art. 133', 'Art. 276']

BANGALORE WOOLLEN, COTTON AND SILK MILLS CO. LTD. versus THE CORPORATION OF THE CITY OF BANGALORE
1962 AIR 1263	1961 SCR (3) 698
BANGALORE WOOLLEN, COTTON AND SILK MILLS CO. LTD. V. THE CORPORATION OF THE CITY OF BANGALORE [1961] RD-SC 35 (3 February 1961)
03/02/1961 KAPUR, J.L.
CITATION: 1962 AIR 1263	1961 SCR (3) 698
D	1966 SC1686	(9) R	1980 SC 882	(17)
Municipality--Octroi--Resolution intending to levy and final levy, if separate Publication necessary--Notice	technically defective, if can be validated--Power to specify goods	not mentioned in the Schedule--Excessive delegation--Raw Cotton or Wool, nature of--City of Bangalore Municipal	Corporation Act, 1949 (Act LXIX of 1949), ss. 38(1), 97(e), 98(1), 98(2).
The City of Bangalore Municipal Corporation resolved to levy octroi on cotton and wool and the resolution was notified in the Official Gazette as required by s. 98(1) of the City of Bangalore Municipal Corporation Act. Objections	were invited	and the appellants filed their objections to	the tax. Final resolution in regard to the tax was passed under s. 98(2) of the Act which was published in local newspapers but not in the Official Gazette. Notices were also sent to the appellants to the effect that after considering their objections the Municipality had decided to levy octroi on the goods at the rate already notified.	The appellants then filed applications in the High Court under Art. 226 of	the Constitution challenging the legality of the levy of octroi but the High Court dismissed the applications.	On appeal with a certificate of the High Court:
Held, that publication of the resolution in the Official Gazette	and invitation of objections under s.	98(1) which were filed, were sufficient compliance with the provisions of the	Act.	The notice stating that	the tax had	been resolved to be levied instead of stating that it	was intended to be levied was at the most only	technically defective but all such defects were validated by s. 38 of the Act. It was not necessary first to pass a resolution specifying the goods and then another resolution showing the intention of the Municipality to tax those goods. The goods and the rate of tax were specified and the resolution, was passed after following the procedure laid down in s. 98(1).
This amounted to substantial compliance with the provisions of the Act.
The legislature has laid down the powers of the Municipality to tax	various goods and enumerated certain goods; Class VIII in Part V of Schedule III read with s. 97(e) of the Act authorised the Municipality to impose tax on other articles and goods. In 699 the present case there was a resolution which sought to include the goods in dispute in the Schedule for the purpose of imposing the tax.
Bijay Colton Mills Ltd. v. Their Workmen [1960] 2 S.C.R.
982, distinguished.
The conferment	of power upon the Municipality	to specify goods under Class VIII is in the nature of	conditional delegation and does not amount to excessive delegation.
Baxter v. Ah Way (1909) 8 C.L.R. 626, followed.
Hamdard	Dawakhana v. Union of India [1960] 2	S.C.R.	671, held not applicable.
The High Court was right in holding that Cotton and Wool do not cease to be raw materials for the purposes of the	Act, merely	because they are ginned and pressed in	bales.	The resolution in the present case covered the articles imported by the	appellants into the limits of	the Corporation of Bangalore.
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 448 and 449 of 1957.
Appeals	from the judgment and order dated September	27, 1956, of the Mysore High Court in Writ Petitions Nos. 44 and 45 of 1955.
N. C. Chatterjee, D. N. Mukherjee and B. N. Ghose, for the appellant in C. A. No. 448 of 1957.
V. L.	Narasimhamoorthy, S. N. Andley, J. B.	Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant in C. A.
No. 449 of 1957.
G. R. Ethiraiulu Naidu, Advocate-General, Mysore,, B. R. G. K. Achar and K. R. Choudhuri, for the respondent.
1961.	February 3. The Judgment of the Court was delivered by KAPUR,	J.-These are	two appeals brought against	two judgments and orders of the High Court of Mysore which arise out of two petitions filed by the appellants under Art.	226 challenging the legality of the imposition of octroi on wool and cotton under s. 98 of the City of	Bangalore Municipal Corporation Act (Act LXIX of 1949), which for the sake of convenience, will be termed the " Act ".
On March 31, 1954, a resolution was passed purporting to be under s. 98(1) of the Act by which it was 700 resolved to levy an octroi on cotton and wool as follows :- Name of the Articles	Rate of duty
1. Raw cotton and wool (this includes both loose	Rs. 1/9/- per and compressed, made in	cent. ad valorem India or foreign) 2. ... ...
This was notified in the Mysore Gazette on April 3, 1954, and was also published as required by s. 98(1) of the	Act.
Objections were invited and it is admitted that both	the appellants filed their objections. Final resolution under s. 98(2) was passed on December 21, 1954, and the resolution in regard to octroi came into force as from January 1, 1955.
It may be mentioned that the final resolution passed under s. 98	(2) of the Act was not published in the Official Gazette but was published in the local newspapers and a notice	dated December	23,1954, was	also sent to	the appellants to	the effect that after considering their objections the Municipality had decided to levy an octroi on the goods at the rate already notified.
The appellant in C.A. 448/57, filed a petition in the	High Court on March 15, 1955, under Art. 226 challenging	the validity of the imposition of the octroi on the grounds:- (1) that the tax was in contravention of s. 98(2) of	the Act in so far as a notice was not published in the Official Gazette;
(2) that the tax was in contravention of s. 130 of the	Act and (3) that there was excessive delegation.
The appellant in C. A. 449/57, filed its petition on March 17, 1955, in which besides challenging the validity of	the imposition of	the tax on grounds above set out, it	also challenged the vires of the imposition on the grounds :- ,
1. that the	levy of the octroi was in contravention of Art. 276(2) of the Constitution by which a tax on trade exceeding Rs. 250/- per annum could not be imposed 701
2. that it	was a	contravention of Art.	301 which guaranteed freedom of inter-State trade and commerce, and
3. that it was in contravention of Art. 19(1)(g) of	the Constitution.
The High Court rejected all	these	objections and	the appellant has	come to this court on a certificate of	the High Court under Art. 133(1) of the Constitution.
In order to decide the question of the legality of the	tax it is necessary to refer to the relevant provisions of	the Act. Section 97 enumerates the taxes and duties which	the Corporation is	empowered to levy under the Act. Section 97(e) provides:
" 97. The Corporation may levy- (e)an octroi on animals or goods or both brought within	the octroi limits for consumption or use therein." Section	98 which deals with the powers. of	control of Government and	the procedure	for the levying of	the Municipal taxes provides:
Section 98 (1).	" Before the	Corporation passes any resolution imposing a tax or	duty for the	first time it	shall	direct	the Commissioner to	publish	a notice in	the Official Gazette and in the local news. papers of its intention and fix a reasonable period not being less than one month from the date of publication of such notice in the Official Gazette for submission of objections.	The Corporation, may, after considering the objections, if any, received within the period specified, determine by resolution to levy the tax or duty. Such resolution shall specify the rate at which, the date from which and the period of levy, if any, for which such tax or duty shall be levied.
(2) When the	Corporation shall	have determined to levy any tax or duty for	the first time or at a new rate, the	Commissioner shall forthwith publish a notice in the manner laid down in sub-section (1) specifying the date from which, the rate at which and	the period of levy, if any, for which such tax or duty shall be levied." 702 It was argued that instead of passing a resolution Imposing the octroi duty, the Corporation should have 'first published its " resolution " to impose the tax and that	the Corporation could not at once pass " a resolution " by which it imposed the tax. It published that resolution in	the Official Gazette and	also in accordance	with other provisions of	s. 98(1) and invited objections	which	were filed.	The only defect, if defect it can be called at	all, was that instead of saying that it " intended " to impose a tax, the notice which was published said the tax "had	been resolved to be levied." This is a technicality and is of no substance.
The next objection raised was that after the	Corporation adopted	the resolution imposing the tax which was after considering all the objections the publication was only in local newspapers and	there was no	publication in	the Government Gazette and this, it was submitted, was such a serious	defect as to make the imposition illegal and ultra vires.	In support counsel for the appellants relied on certain judgments where publication in the Official Gazette was held to be a condition precedent to the legality of	the imposition of	the tax. These cases are Krishna Jute & Cotton	Mills v. The Municipal	Council, Vizianagram (1);
Municipal Council, Rajamundry v. Nidamarti Jaladurga Prasadarayudu (2). Reference was made also to The Municipal Council, Anantapur v. Sangali Vasudeva Rao (3) ; Manak Chand v. Municipal Council(4) and State of Kerala v. P. J. Joseph (5 ).	This question we are not considering	as we	are referring this case	to a	larger	Bench	on certain constitutional points and shall refer this question also in the sequel.
The second objection raised was that there was no compliance with s. 130 of the Act.	That section is as follows :- Section 130. "	If the corporation by a resolution determines that an octroi should be levied on animals or goods brought within	the octroi limits of (1) A.I.R. 1926 Mad. 152.
(2) A.I.R. 1926 Mad. 800.
(3) (1931) I.L.R. 55 Mad. 207.
(4) A.I.R. 1951 Raj. 139.
(5) A.I.R. 1958 S.C. 296, 299.
703 the city, such octroi shall be levied on	such articles or goods specified in Part V Schedule III at such rates not exceeding	those	laid down in the said' Part in such manner as	may be determined by the corporation." That is not a charging section but it imposes a limitation on the power of the Municipality as to the rate at which a tax can be imposed. It was further argued that before a resolution under s. 98(1) could be passed the goods sought to be taxed had to be specified under s. 130 read	with Schedule 111, Part V of the Act.
Clause	18 of that Schedule provides that octroi on animals and goods shall be levied at the rates not exceeding	the following. Classes I	to VII specify	articles on which octroi can be levied at the maximum rate. Class VIII was as follows:
Octroi	Maximum rate "Other articles which are not speci- fied above and which may be	Rs.2-0-0 per cent.
approved by the Corporation	ad valorem" by an order in this behalf That class empowers the Municipal Council to impose octroi duty on other articles which are not specified but which may be approved by the Corporation. In other	words	the Corporation can choose other articles upon which tax can be imposed	and the respondent Corporation in the present	case did resolve to impose tax on raw cotton and wool and	also fixed the rate at Rs. 1-9-0 per cent. ad valorem.	The submission that as a result of the operation of s. 130 first a resolution had to be passed specifying raw cotton and wool as goods on which octroi duty would be levied and then	the procedure under s. 98(1) and (2) had to be gone through is without	substance. What the Corporation did was that it passed	a resolution choosing these goods to be goods on which octroi duty was to be levied and by the same resolution it resolved that the goods therein specified be taxed	at the	rate therein	specified. There is	no contravention of s. 130 even if the	contention of	the appellants was	to be taken most strictly, The	goods	were specified; the 704 rate of tax to be levied on the goods was also specified;
the resolution	was passed to that effect and the other procedure laid down in s. 98(1) was then followed. In	our opinion it is not necessary that first a resolution should be passed specifying the goods and then another resolution should	be passed showing the intention of the	Municipality to tax	those	goods.	What has been	done substantially complies with the provisions of the Act.
It was next argued that the words of Class VIII in Part V of Schedule III where the' words used are " other articles which are not specified above " and which may be approved by the Corporation by order in this behalf meant that the goods must be precisely defined and included by name in	the Schedule and that the use of the word in this behalf " meant adding	to the list of articles in Schedule III. Reliance was placed on	the interpretation of the word	" in	this behalf	" as given by this Court in Bijay Cotton Mills	Ltd.
v. Their Workmen (1).	But that case has no application to the facts of the present case because the resolution was, as a matter of fact, passed for the purpose of	imposing an octroi	duty on the goods in dispute.	The words used in Bijay Cotton Mills Ltd. v. Their Workmen(2) were in another context	and' even there all that was said	was that a notification had to issue making the Central Government	the appropriate Government. As we have	said above in	the present case there was a resolution which sought to include these goods in the Schedule for the purpose of imposing	the tax.
The excessive nature of delegation under Class VIII in	Part V of Schedule III was also urged but this was not a question which was raised in	the High Court	nor is there	any substance in the matter. The argument raised was that	the power of the Municipal Corporation to specify	goods under Class	VIII was excessive delegation which	was	both uncanalised and uncontrolled and reliance was placed on a judgment of this Court in Hamdard Dawakhana v. Union of India("); but that case has no application to the facts (1) [1960] 2 S.C.R. 982.
(2) [1960] 2 S. C.R. 671, 705 of the present case. In the present case the	Legislature has laid down the powers of the Municipality to tax various goods.	It has enumerated certain articles and animals	and Class VIII read with s. 97(e) of the Act has authorised the Municipality to impose tax on other articles	and goods.
This power is more in the nature of conditional delegation as was held in Baxter v. Ah Way(1) where it was hold	that under a. 52 (g) of the (Australian) Customs Act, 1901, a power given to prohibit by proclamation the importation of certain	articles was not a delegation of legislative power but conditional legislation because	the prohibition of importation was a legislative abet of Parliament itself	and the effect of sub-s. (g) of s. 52 was only to	confer	upon the Governor-General in Council the discretion to determine to which class of goods other than those specified in	the section	and under what conditions the prohibition shall apply.	All that the Legislature has done in	the present case is that it has specified certain	articles on which octroi duty can be imposed and it has also given to	the Municipal Corporation the discretion to determine on	what other goods and under what conditions the tax should be levied.	That,	in our opinion, is not a case	which falls under the rule laid down by this Court in Hamdard Dawakhana v. Union of India (2).
It was contended in C. A. 449/57 that the imposition of duty on raw	cotton	could not cover processed cotton that is cotton which had been ginned, combed and pressed. The	High Court held that the cotton by being ginned or	pressed in bales does not cease to be raw cotton and was to be regarded as raw for the purpose of the Act. The same would apply to wool. The notification levying the tax specifically stated that raw cotton and wool included both loose and compressed, i.e., compressed cotton and wool whether it	was Indian cotton or foreign cotton. It will not, in our opinion, be a correct	meaning to give to the notification if it were " interpreted to apply only to cotton which had been gathered from the fields and had neither been ginned nor pressed." We agree with (1) (1909) 8 C.L.R. 626.	(2) [1960] 2 S.C.R. 671.
706 the High Court that this resolution covers the articles which the appellants in the two cases were importing	into the limits of the Corporation of Bangalore. I The learned Advocate-General appearing for the respondent also relied on s. 38 of the Act which provides :
Section	38 (1). " No act done, or proceeding	taken under this Act shall be questioned merely on the ground-- (a) .............................................
(b) of any	defect	or irregularity in such act	or proceeding, not affecting the merit of the case." This section validates all defects and irregularities in in any act or proceedings which do not affect the merit; of the case.	It was submitted that this section is	in another chapter, i.e., chapter 2 dealing with provisions common to the Corporation and the Standing Committees. It may be that it is in another chapter but the language of the section is wide and applies to all defects or irregularities in any act or proceeding done not affecting the merits of the case.
In our opinion the following points should be heard by	the Constitution Bench*:- (1) Whether the imposition in	the present case offends Art. 276 or 301 of	the Constitution ? (2) Whether the failure to notify the final resolution of the imposition of the tax in the Government Gazette is fatal to the tax ? If the answer to these questions or any of them is in	the affirmative the appeal will have to be allowed.	But if	the two questions	are answered against	the appellants	the appeals	will fail as all other points have been decided by us against the appellants. The costs will follow the event unless the Bench hearing the reference makes other order.
Referred to Constitution Bench final disposal.
*The decision of the Constitution Bench is reported infra.