Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1961 Supreme(SC) 41

SUPREME COURT OF INDIA
3rd February, 1961
J.L. KAPUR, M. HIDAYATULLAH AND J.C. SHAH, JJ.
Bangalore Woollen, Cotton and Silk Mills Co. Ltd., Bangalore, (in C. A. No. 448/ 57) and Mysore Spinning & Manufacturing Co. Ltd., Bangalore, (in C. A. No. 449/57) Appellants
Versus
Corporation of the City of Bangalore by its Commissioner, Bangalore City (in Both the Appeals), Respondent.
Civil Appeals Nos. 448 & 449 of 1957.
Advocates appeared
Mr. N. C. Chatterji, Senior Advocate (M/s. D. N. Mukherji and B. N. Gosh, Advocates, with him), for Appellant (in Civil Appeal No. 448 of 1957); Mr. V. L. Narasimhamoorty, Advocate; M/s. S. N. Andley, J. B. Dadachanji, Rameshwar Nath & P. L. Vohra, Advocates of M/s. Rajinder Narain & Co., Advocates, for Appellant (in Civil Appeal No. 449 of 1957); Mr. G. R. Ethirajulu Naidu, Advocate-General, Mysore (M/s. B. R. G. K. Achar and K. R. Chaudhuri, Advocates, with him), for Respondent (in both the Appeals).

Advocates:
B.N.GHOSH, B.R.G.K.Achar, D.N.MUKHERJI, G.R.ETHIRAJULU NAIDU, J.B.DADACHAN, K.R.CHAUDHARY, N.C.CHATTERJI, P.L.VOHRA, RAJINDAR NARAIN, RAMESHWAR NATH ROY, S.N.ANDLEY, V.L.NARASIMHAMURTY

The imposition of octroi on wool and cotton was not in contravention of S. 98(2), S. 130 of the Act, and there was no excessive delegation of power to the Municipal Corporation to specify goods under Class VIII.

Headnote:
MUNICIPAL CORPORATION - TAXATION - OCTROI - IMPOSITION ON RAW COTTON AND WOOL - VALIDITY - COMPLIANCE WITH STATUTORY PROVISIONS - DELEGATION OF POWER - INTERPRETATION OF STATUTORY PROVISIONS - VALIDITY OF TAXATION.
Fact of the Case:

The appellants challenged 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). The appellants contended that the tax was in contravention of S. 98(2) of the Act, S. 130 of the Act, and that there was excessive delegation.
Finding of the Court:

The court held that the publication of the resolution imposing the tax in local newspapers instead of the Government Gazette was a technicality and did not render the imposition illegal. The court also held that there was no contravention of S. 130 of the Act as the goods were specified, the rate of tax was specified, and the resolution was passed to that effect. The court further held that the delegation of power to the Municipal Corporation to specify goods under Class VIII was not excessive delegation.
Issues: 1. Whether the imposition of octroi on wool and cotton was in contravention of S. 98(2) of the Act? 2. Whether the imposition of octroi on wool and cotton was in contravention of S. 130 of the Act? 3. Whether there was excessive delegation of power to the Municipal Corporation to specify goods under Class VIII?
Ratio Decidendi: 1. The publication of the resolution imposing the tax in local newspapers instead of the Government Gazette was a technicality and did not render the imposition illegal. 2. There was no contravention of S. 130 of the Act as the goods were specified, the rate of tax was specified, and the resolution was passed to that effect. 3. The delegation of power to the Municipal Corporation to specify goods under Class VIII was not excessive delegation.
Final Decision: The court referred the following questions to a larger Bench: 1. Whether the imposition in the present case offends Arts. 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?

Judgment

KAPUR, J. : These are two appeals brought against two judgments & 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.

2. On March 31, 1954, a resolution was passed purporting to be under S. 98(1) of the Act by which it was 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 and compressed, made in India or Foreign) Rs. 1/9/- per cent ad valorem

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.

3. 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.

4. 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;

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 (l)(g) of the Constitution.

5. 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.

6. 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 booth 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 provided

Section 98(1). "Before the Corporation passes any resolution imposing a tax or duty or the first time it shall direct the Commissioner to publish a notice in the official Gazette and in the local newspapers 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 notic

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