M.HIDAYATULLAH, J.

(1) IN this appeal by certificate ,under Article 133 (1) (b) of the Constitution granted by the High court of Mysore against its judgment and order dated 31/05/1960, the Burmah Shell Oil Storage & Distributing Company of India Ltd. is the appellant and the Belgaum Borough Municipality, Belguam, the respondent. The appeal arises out of proceedings commenced by the Company against the Municipality under Article 226 of the-constitution for a writ or, writs to prohibit the Municipality from arguing octroi from the Company on its products brought inside the octroi limits for sale. The petition of the company was dismissed by the High court. The Company deals in petrol and other petroleum products which it manufactures in its refineries situated outside the octroi limits of Belgaum Municipality It brings these products inside the said area either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn sell them to others. The Company also directly sells its products to government both Civil & Military, and to local bodies and big private concerns. The Company has a Divisional Office and Depot in Belgaum and the petition in the High court was filed ,by the Divisional Manager in- charge of that area. The Company in the normal course of its business operations appoints dealers and licensees and typical forms of agreement between the Company and such dealers and licensees have been exhibited in the case. According to the Company, the goods, brought by it within the octroi limits can be divided into four separate categories as follows 1 . Goods consumed by the Company 2. Goods sold by the Company through its dealers or by itself and consumed within the octroi limits by persons, other than the Company; 3. Goods sold by the Company through its dealers or by itself inside the octroi limits to other persons but consumed by them outside the octroi limits ; and (4) Goods sent by the company from its Depot inside the octroi limits to extra-municipal points where they are bought and consumed by persons other than the company.

(2) WE are concerned in this appeal with a period of three years commencing on 22/10/1955, and ending on a like date in 1958. During this time, octroi duty levied on all goods brought inside the octroi limits of the Municipality, irrespective of their destination according to the four; categories above enumerated, amounted to Rs. 1,40,544.51 nP. The Company claimed in the High court that it was not liable to pay octroi on categories other than the first. This claim was rejected but the Municipality agreed to give a refund according to rules in respect of the fourth category.

(3) BEFORE dealing with the contentions in the case it is necessary to refer briefly to the scheme of taxation under the Bombay Municipal Boroughs Act, 1925, by which the Belgaum Municipality is governed and the by-laws and rules made by the Municipality for the levy of octroi within the octroi limits of the Municipality. The Municipality draws its power to levy taxes from section 73. That section provides inter alia as follows :`(1) Subject to any general or special orders which the State government may make in this behalf and to the provisions of section 75 and 76 a Municipality may impose for the purposes of this Act any of the following taxes, namely x x x x (iv an octroi on animals or goods or both, brought within the octroi limits for consumption, use or sale therein;

(4) THE words -use or sale` were substituted for the words `or use` from 5/05/1954, by an Amending Act of 1954 (Bombay Act 35 of 1954). In other words, before 1954 the word `sale` did not figure in the description of `octroi on animals or goods or both` which the Municipality was authorised to impose.

(5) SECTIONS, 75 and 76 lay down the procedure which the Municipality must follow before imposing a tax. It is not necessary to quote the sections-. It is sufficient to say that the Munic