JUDGMENT

M. FATHIMA BEEVI, J.:- These two appeals by special leave are filed by the Municipal Board, Bareilly, against the judgment of the Allahabad High Court quashing the Gazette Notification dated August 27, 1969 amending the octroi schedule of the Bareilly Municipality so as to impose octroi on "Mineral oil".

2. The respondents Bharat Oil Company and others filed writ petitions under Art. 226 of the Consitution of India challenging the notification on the ground inter alia that the appellant, the Municipal Board Bareilly (hereinafter referred to as the Board) had no authority to impose octroi on mineral oil in view of the proviso to Rule 131 of the Octroi Rules contained in the U.P. Municipal Account Code, 1925. This was countered by the appellant stating that the R. 131 was superseded by the 1963 Rules which govern the imposition of octroi by the appellant Board. The single Judge in allowing the Writ Petitions took the view that R. 131 restricted the power of the Board to impose the octroi and the subject-matter of the rule is not covered by the 1963 Rules. The appeals preferred were dismissed by the Division Bench of the High Court agreeing that the bar under R. 131 regarding the imposition of octroi duty on mineral oils continued notwithstanding the 1963 Rules.

3. The appellant is a Municipal. Board governed by the provisions of the U.P. Municipalities Act, 1916 (hereinafter referred to as the Act). S. 128 of the Act provides for imposition of taxes by a Municipal Board. The relevant part of the said section reads as under:

128. Taxes which may be imposed (1) Subject to any general rules or special orders of the, State Government in this behalf, the taxes which a board may impose in the whole or any part of a municipality are

(i) X X X

(viii) an octroi on goods or animals brought within the municipality for consumption, use or sale therein."

4. Sections 131 to 135 of the Act contain provisions relating to the framing of proposals for the imposition of taxes by the Municipal Board, inviting objections to the said proposal, the approval of the said proposal by the State Government, the framing of rules by the State Government on the basis of such proposals, under S. 296 of the Act and for the issue of a notification about the imposition of tax from the appointed date.

5. Section 153 of the Act provides that assessment and collection of taxes and other matters relating to taxes may be regulated by Rules. S. 296 empowers the State Government to make rules in respect of matters 550 described in S. 153.

6. In exercise of the powers under Ss. 131 to 135 and 296 of the Act, the Government of the United Provinces framed octroi rules which were published vide notification dated the 25th October, 1925. The said rules are included in the Municipal Account Code (Chapter, X Rules 131 to 231) published by the Government of U.P.

7. Rule 131 provided that subject to the exception contained in the proviso octroi may be ordinarily levied on commodities included in the list set-out in the said rule. The proviso to this rule stated that octroi shall not be levied on certain articles which included mineral oil. R. 131 was amended vide notification dated the 2nd November, 1953 and for the words "the mineral oil" in the proviso the words "mineral oils classified as ,motor spirit, kerosene or diesel oil" were substituted.

8. Separate rules for the assessment and collection of octroi in the Bareilly Municipality were framed by the Government of U.P. in exercise of the powers conferred by S. 296 of the Act. The draft rules were notified vide notification dated the 16th February, 1963 and published in the U. P. Gazette dated 23rd February, 1963. The said notification reads as under.

"No. 89-B/Xl-C-129-60- The following ,draft of the rules for the assessment and collection of octroi in the Bareilly Municipality, in supersession of the existing Octroi Rules contained in the Municipal Account Code in so far as they apply to the said municipality, which the Gover