Judgment

PALEKAR, J. :- This is an appeal by certificate from an Order of the Madhya Pradesh High Court issuing a mandamus against the Municipal Corporation, Jabalpur, ordering the Corporation to forbear from recovering octroi tax on certain goods at a rate exceeding two annas per maund, which was the maximum limit fixed by the State Government.

2. Under the Central Provinces and Berar Municipalities Act, 1922 which applied to Municipalities including that of Jabalpur, the Provincial Government, purporting to act under Section 66 (2) of the Act, fixed by notification No. 2093-714-VIII dated 5-9-1923 the maximum ad valorem rates for the imposition of octroi by the Municipalities. The Municipal Committee, Jabalpur acting under Section 66 (1) of the Act imposed from 14-5-1943, subject to the maximum already prescribed, octroi on metal and metal goods at the rate of Rs. 2/5/6 per cent ad valorem. Item No. 70 was as follows :

"Metal and metal goods (excluding pure gold and silver) watches, clocks, motor, motor cycle, tricycles, perambulators and machines and machinery and their spare parts, tools of all kinds, parts of all kinds, printing press and machines - @ Rupees 2/5/6 per cent ad valorem".

3. Respondent Soorji Bhanji Keniya was a local trader and he used to import within the octroi limits of Jabalpur, Hardware goods, machinery and machine parts which admittedly fell within the above item and he was liable to pay ad valorem duty as prescribed above.

4. Later in 1950 by notification under section 66 (2) of the Act. No. 1584-1661-M-XIII dated 29-4-1950, the State Government made the following rule :

"Octroi tax shall not be imposed on any article specified in column (2) of the table below in excess of the rates specified in the corresponding entry in column (3) thereof :

Table

1. 2. 3.

S. No. Name of Articles Rate

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

9. Mild Steel and wrought iron and their manufactures Rs. -/2/- per maund

5. The above rule came into force from 5-6-1950 and it was the claim of the respondent that ad valorem tax fixed in 1943 could no longer continue in force and the only rate at which his goods would be liable to the octroi tax was the rate not exceeding two annas per maund.

6. In the meantime the City of Jubbulpore Corporation Act, 1948 was passed and was brought into force on 1-6-1950. By reason of section 2 of that Act, the Municipality of Jubbulpore was withdrawn from the operation of the Central Provinces and Berar Act, 1922 but by virtue of Section 3 (2) the notifications, taxes etc. which were in force under the Central Provinces and Berar Act, 1922 continued to be in force as if they were enacted under the appropriate provisions of the new Act viz. the City of Jubbulpore Corporation Act, 1948. The provision for levying octroi was Section 120 (1) (e) and sub-section (3) of that section empowered the Provincial Government to regulate the imposition, assessment and collection of taxes and specify maximum amounts of rates for any tax.

7. By Government Notification No. 3821/179/M. XIII dated July 12, 1954 the State Government, purporting to act under Section 120 (3) of the City of Jubbulpore Corporation Act, 1948 made some amendments in the notification dated April 29, 1950 referred to above. For the entry "mild steel and wrought iron and their manufactures", the following was substituted : "steel and iron and mild steel section including plates, bars and other iron manufactures". One more item was added "12. spares and components, parts of machinery - two annas per maund."

8. The Respondent s claim was that the goods which he imported fell within the two items referred to above and were liable to pay octroi not exceeding the rate of two annas per maund.

9. The Madhya Bharat Municipal Corporation Act, 1956 was first enforced only in the Cities of Indore and Gwalior on October 30, 1956. But by an amendment which came into force on May 20, 1961, the Act came to be known as the Madhya Pradesh Municipal Corporation Act, 1956 and was applied t