Judgement

RAY, J.:- These two appeals are by certificate against the common judgment dated 18 May, 1970 of the High Court of Punjab and Haryana dismissing the applications of the appellants for a writ of mandamus restraining the Municipality of Sonepat from levying against and collecting from the appellants any octroi in respect of raw materials components and parts imported by the appellants into the factory of the appellants situated at Industrial Area, Sonepat.

2. The factory of each of the appellants was situated at Industrial Area, Sonepat. The appellants carry on business of manufacturing bicycles and bicycle components and parts.

3. On 30 September, 1966 a notification dated 15 September, 1966 was published in the Punjab Government Gazette to the effect that under Sec. 5 (1) of the Punjab Municipal Act, 1911 (referred to for the sake of brevity as the Act) the President of India was pleased to declare his intention of including within the municipal limits of Sonepat in the Rohtak District, the area specified in the Schedule to the notification. The Schedule included the Industrial Area of Sonepat where the factory of the appellants was situated.

4. Under Section 5 (2) of the Act the inhabitants of the area who objected to the proposed inclusion of the said area could submit their objection in writing within six weeks of the date of publication of the notification. The appellants filed objections in writing.

5. On 1 November, 1966 after the bifurcation of Punjab the State of Haryana came into existence. A notification dated 11 August, 1967 was published in the Haryana Government Gazette. The Gazette notification was to the effect that the Governor of Haryana was pleased to include within the Municipality of Sonepat in the Rohtak District the areas mentioned in the notification. The industrial area within which the factory of the appellants was situated was thus included within the local limits of the Municipality of Sonepat.

6. From 18 August, 1967 the respondent-Municipality purported to impose, levy and collect from the appellants octroi in respect of raw materials, components and parts imported by the appellants into their factory for consumption or use in the manufacture of bicycles and bicycle components.

7. The respondent-municipality relied on the provisions contained in Section 5 (4) of the Act in support of their contention that imposition of octroi which was in force within the municipality applied to the area included within the limits of the municipality by the notifications, and, therefore, the appellants were liable to payment of octroi. The provisions of Section 5 (4) of the Act are as follows:-

"When any local area has been included in a municipality under sub-section (3) of this section of this Act, and, except as the State Government may otherwise by notification direct all rules, bye-laws, orders, directions and powers made, or conferred under this Act and in force throughout the whole municipality at the time, shall apply to such area".

8. The respondent-municipality relied on the provisions contained in Section 5 (4) of the Act that all rules, bye-laws, order, directions and powers made, or conferred under the Act and in force throughout the whole municipality would apply to such an area, and, therefore, the notification No. 3798-C-42/60545 dated 3 November, 1942 issued under Section 62 (10) of the Act notifying the imposition of octroi within the octroi limits of the Sonepat Municipality became applicable to the area included.

9. The relevant provisions for imposition of tax are to be found in Sections 61 and 62 of the Act. Under Section 61 of the Act any municipal committee may impose tax of different kinds enumerated there. The three broad heads of taxes under Section 61 of the Act are those provided in Section 61 (1) (a), 61 (1) (b) to (f) inclusive and 61 (2). Tax mentioned in Section 61 (1) (a) of the Act is on buildings and lands. Tax mentioned in Section 61 (1) (b) to (f) is tax on profession, calling,