Judgment

MATHEW, J. :- The appellant filed a writ petition before the High Court of Gujarat at Ahmedabad, praying for issue of a writ or order quashing a notice dated September 15, 1962, issued by the second respondent, the Dhrangadhra Municipality demanding octroi to the tune of Rs. 58,000/- and for restraining the respondent from recovering the amount from the appellant in pursuance of the notice. The High Court dismissed the petition and this appeal, by certificate, is from that order.

2. The appellant is a company registered under the Companies Act and carries on business of manufacturing soda ash at its factory at Dhrangadhra. The Bombay District Municipalities Act, 1901 hereinafter called the Act was extended to the merged territories of Saurashtra including the area of Dhrangadhra Municipality from July 1, 1949, by an Ordinance of the Saurashtra State. Thereafter, the Governor of Saurashtra issued Ordinance No. 47, dated August 27, 1949, called the Saurashtra Terminal Tax and Octroi Ordinance, 1949, hereinafter called the Ordinance . Under clause 4 of the Ordinance, the State Government framed Octroi Rules in 1949, hereinafter called the Rules . By the inclusion of Dhrangadhra town in the schedule, octroi was being levied by the Government under the aforesaid Rules within the Municipality. On November 29, 1952, the petitioner filed a writ petition in the Saurashtra High Court claiming total exemption from payment of octroi on the basis of an agreement between the appellant and the erstwhile ruler of Dhrangadhra State. That writ petition was dismissed by the High Court on September 20, 1951, and the appellant filed an appeal to this Court on the basis of a certificate granted by the High Court. During the pendency of the appeal before this Court, the Municipality had further increased the octroi by 50 per cent with effect from July 1, 1953. The appeal pending before the SC was withdrawn in pursuance of an agreement between the appellant and the Municipality on September 26, 1960. The appellant paid octroi as per the revised rates till July 11, 1962. The appellant thereafter gave notice on September 8, 1962, asking the Municipality not to recover octroi at the said rate. On September 15, 1962, the Municipality served a demand notice on the appellant directing the appellant to pay the balance of octroi amounting to Rs. 58,000/-. On September 26, 1962, the appellant filed the present writ petition.

3. The appellant had raised three contentions before the High Court, namely, that the Rules conferred power only on the Government to levy and collect octroi and the Municipality had no power by means of rules made under clause 4 of the Ordinance to impose it; that the enhancement of octroi by 50 per cent from July 1, 1953 was illegal as the Rules have not been revised by the Government and, if the levy is considered as one imposed under the provisions of the Act, the procedure prescribed by the Act for levy of octroi had not been followed by the Municipality; and that the threat to issue distress warrants in the demand notice for recovery of octroi was illegal as there was no provision in the Rules for recovery of octroi by issue of distress warrant.

4. The High Court considered these contentions and also the preliminary question raised by the respondents, namely, that since the appellant had suppressed material facts in the writ petition, the petition ought to be dismissed for that reason along and it came to the conclusion that there was no merit in the writ petition and dismissed it. In this Court, two broad contentions were raised on behalf of the appellant: (1) that the Rules did not authorise the municipality to impose octroi as the Rules only conferred that power upon the Government and (2) even if the municipality purported to act under the provisions of the Act as applied to Saurashtra, the procedure for levy of octroi had not been followed.

5. To decide the first question, it is necessary to have an idea of the relevant