Judgment

TULZAPURKAR, J.:- This litigation in which the Appellant has challenged the levy of Octroi Duty imposed by the Respondent-Municipality under its Octroi Rules and Bye-laws framed under the Bombay District Municipal Act, 1901 (as adopted by the Government of Saurashtra) and continued under the Gujarat Municipalities Act 1963 (as adapted and applied to the State of Saurashtra) has a chequered history.

2. Briefly stated the facts leading to the present. appeal are these. The Appellant is a Company registered under the Indian Companies Act carrying on business of manufacturing Soda Ash in its factory at Dharangadhra within the Municipal limits of the Respondent-Municipality. Originally the Respondent-Municipality being a District Municipality was governed by the provisions of the Bombay District Municipal Act, 1901, as adapted and applied to the State of Saurashtra, (for short the Bombay Act) but with effect from 1-1-1965 it is governed by the Gujarat Municipalities Act, 1963 (for short the Gujarat Act).

3. An Octroi Ordinance called the Saurashtra Terminal Tax and Octroi Ordinance No. 47 of 1949 was promulgated by the Rajpramukh and brought into force with effect from 31-8-1949. The object of the Ordinance was to enable the State Government to levy and collect octroi duty in specified cities and towns and other local areas of the State and to pass on the duty so collected by it to those cities and towns until Municipalities therein were constituted under the Bombay Act and those Municipalities made their own Rules and Bye-laws enabling them to levy and collect octroi and. other Municipal taxes. To achieve this object S. 3 of the Ordinance empowered the State Government to impose octroi duty in towns and cities specified in Schedule I thereto, in which Schedule the town of Dharangadhra came to be included subsequently under notification with effect from 26-12-1949. Section 4 of the ordinance authorised the State Government to make Rules for the imposition and collection of octroi duty but under the Rules so framed the Municipality of the concerned city or town was to be the collecting machinery. After the inclusion of the Dharangadhra town in the Schedule I octroi was being levied in that town by the State Government under its Rules but the same was being collected through the machinery of Respondent Municipality.

4. It appears that the Respondent-Municipality by its Resolution dated 30-3-1953 enhanced the prevailing rate of octroi duty by 50% without complying with the provisions of Ss. 60 to 62, of Chapter VII of the Bombay Act. The appellant challenged this enhancement in the rate of octroi duty by filing a writ petition (No. 769 of 1962) in the High Court of Gujarat and also filed a suit for refund of the excess amount recovered from it for the period ending September 30, 1961 after serving a statutory notice on the respondent-Municipality. The High Court dismissed the writ petition and upheld the enhancement on the view that while enhancing the rate by its Resolution dated March 30, 1953 the Respondent-Municipality had followed the procedure prescribed by the Bombay Act for imposing the octroi and that the enhanced imposition was not under the Ordinance No. 47 of 1949. On appeal, this Court by its judgment dated 20-9-1972 held that the enhanced imposition of duty by the Respondent-Municipality was illegal as the mandatory provisions of Ss. 60 to 62 of the Bombay Act had not been complied with nor could the enhanced levy be justified under Ordinance No. 47 of 1949 because the State Government alone had the power thereunder to impose the duty or prescribe its rate and not the Respondent-Municipality. To get over the effect of this Courts decision a Validating Act being Gujarat Act No. 6 of 1978. was passed whereunder the imposition of octroi levy and collection thereof prior to 30-4-1965 was validated. We are not, however, concerned with the Validating Act inasmuch as that Act has nothing to do with the imposition of levy