JUDGMENT

PARIPOORNAN, J. :—The appellant, petitioner in Civil Writ Petition No. 144 of 1972, High Court of Delhi, has filed this appeal, on a certificate granted by the High Court under Article 133(1)(a), (b) & (c) of the Constitution of India, against the Judgment of the High Court dated 15-9-1972 (reported in 1973 Tax LR 2546). The appellant company has its registered office at Ghaziabad in the State of Uttar Pradesh. It carries on the business of manufacturing and dealing in Vanaspati and its products. It has a facotry at Ghaziabad. The products are carried on by railway and/or by road into the Union. Territory of Delhi. The Delhi Municipal Corporation Act, 1957 (Act 66 of 1957), hereinafter referred to as the Act, was enacted by Parliament and it came into force on 28-10-1957. Section 178 of the said Act provides for the levy of terminal tax at the rates specified in the Tenth Schedule to the Act on all goods carried by railway or road into the Union Territory of Delhi from any place outside Delhi. Under the said provision, the Delhi terminal tax agency realised a sum of Rs. 2,95,396.01 for the years 1969, 1970 & 1971 as terminal tax from the petitioner on vanaspati products carried by railway and/or road into the Union Territory of Delhi. Alleging that Section 178 of the Act directly and immediately impedes the movement of goods from one place to another, restricts trade, commerce and intercourse and also discriminates between goods manufactured within the Union Territory of Delhi and the goods manufactured outside the said territory, the appellant-company prayed for a declaration that Section 178 of the Act is ultra vires and is violative of Article 301 of the Constitution of India, and for the issuance of a writ of prohibition or direction directing the respondents to forebear from realising any terminal tax from the petitioner, and for a refund of the aforesaid sum of Rs. 2,95,396.01 realised by the respondents as terminal tax from the petitioner. The petitioner stated that the terminal tax chargeable under Section 178 was not referable to any service rendered or to be rendered by any railway or road transport and was not protected by Articles 302, 303 and 304 of the Constitution of India. It is alleged that the petitioner wrote letters on 18-11-1971 and 20-12-1971 , requesting the respondents the Union of India and others, to refrain from levying and/or collecting any terminal tax under Section 178. Since there was no response, the appellant was constrained to file the writ petition and seek appropriate reliefs.

2. A Division Bench of the Delhi High Court by Judgment dated 15-9-1972, held that the levy of tax under Section 178 of the Act is a direct and immediate restriction on trade and offends Article 301 of the Constitution of India. It further held that the levy is neither regulatory nor compensatory. The Division Bench also held that the said provision is saved by Article 302 of the Constitution of India. Though the scope of Articles 303 and 305 was also discussed, the Court did not consider it necessary to express any final view on the various pleas raised in that behalf. The Court held that though Section 178 of the Act contravened Article 301, it is saved by Article 302 and the writ petition was dismissed. It is from the aforesaid Judgment dated 15-9-1972, the petitioner has filed this Civil Appeal by certificate granted by the High Court.

3. We heard counsel for the appellant Sri S. Ganesh and also counsel for the respondents Sri N. N. Goswami. Counsel for the appellant referred to the averments in paragraphs 3 and 7 of the writ petition and the reply thereto by the respondents in paragraph 8 of its counter, and contended that Section 178 of the Act discriminates between goods manufactured within the Union Territory of Delhi and the goods manufactured outside the said territory. The goods manufactured outside the said territory alone has to pay the terminal tax under the Act. This, according to counsel for the