Judgment

SARKAR, J. : (On behalf of himself, B. P. Sinha C.J.I. and K. C. Das Gupta and J. R. Mudholkar JJ.) The appellant is a city Municipality within the meaning of the Bombay District Municipal Act, 1901 & is governed by that Act. It had by a resolution duly passed by it, made a rule under S. 60 of the Act selecting for type purpose of an octroi tax of 0-4-0 annas per Bengali maund, milk brought within its octroi limits for consumption, use or sale therein. On November 29, 1954, the Government of Bombay had given its sanction to the rule under S. 61 of the Act. The appellant Municipality thereafter published the rule and the sanction as required by S. 62 of the Act and the tax was accordingly imposed with effect from January 1, 1955. On April 4, 1955 the Government of Bombay passed an order directing that the octroi tax shall not be leviable by the appellant Municipality. This order has given rise to the present proceedings.

2. The appellant Municipality filed a petition in the High Court at Bombay under Art. 226 of the Constitution challenging the validity of the order. This petition was dismissed by the High Court. The appellant Municipality has now come up to this Court in appeal against the decision of the High Court.

3. The questions that arise in this case will be stated after a few of the sections of the Act have been referred to. Chapter VII of the Act deals with municipal taxation. We shall be concerned principally with Ss. 59, 60, 61 and 62 which are all contained in this chapter and deal with imposition of taxes by Municipalities. It will be necessary also to consider S. 46.

4. Section 46 gives power to a Municipality to make rules for various purposes as specified in the several clauses contained in it. Under cl. (i) of this section, a Municipality has power to make rules for the purpose of "prescribing, subject to the provisions of Chapter VII, the taxes to be levied." Section 59 is the section on which the decision of this case will really turn and we, therefore, think it right to set out that portion of it which is relevant for our purpose.

S. 59. (1) Subject to any general or special orders which the State Government may make in this behalf, any Municipality-

(a) after observing the preliminary procedure required by S. 60 and

(b) with the sanction of the State Government in the case of City Municipalities.

................... and subject to such modifications or conditions as under S. 61 the State Government..........................., in according such sanction, deems fit,

may impose, for the purposes of this Act, any of the following taxes, that is to say,

. . . .. . . . . . . . . . . . . . . . . . . . . . ... ..

..... ............... . ..........

(iv) an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein;

Section 60 lays down the procedure to be observed by a Municipality preliminary to imposing a tax. It requires that first a resolution stall be passed at a meeting of the Municipality selecting the tax and making rules for the purposes of cl. (i) of S. 46 prescribing the tax. Thereafter the resolution has to be published with a notice in a Specified form inviting the inhabitants of the Municipal area to submit within a month their objections, if any, to the tax. After the objections have come in, they are to be considered by a Committee of the Municipality and unless on the report of the Committee the Municipality decides to abandon the tax, it had to submit the objections with its opinion thereon any modifications it desires to make and the rules prescribing the tax to the State Government. Section 61 provides that on receipt of the rules and the other things mentioned in S. 60 from the Municipality, the Government may refuse to sanction the rules, or return them to the Municipality for further consideration or sanction them with or without modifications or subject to conditions prescribed: Section 62 lays down that the rules as sanctioned by the Government sh