Judgment

N.M.KASLIWAL, J.

(1) THIS appeal by grant of special leave is directed against the judgment of Gujarat High court dated 10/01/1977. The High court partly allowed the writ petition filed by the appellants and quashed the im- position and recovery of octroi duty from the appellants for the period from December 1, 197 3/03/1974 being bad in law and directed the respondent-Municipal Corporation of the city of Baroda to refund the amount of octroi duty collected from the appellants during the aforesaid period and dismissed the petition involving challenge regarding the imposition and collection of octroi duty for the period commencing from 1/04/1974.

(2) ON 1/04/1966, the Baroda Municipality was converted into a corporation under the Bombay Provincial Municipal Corporations Act, 1949. The Municipal Corporation used to levy octroi as per the rules framed under the Bombay Municipal Boroughs Act, 1925 by issuing different notifications under Section 493 read with Appendix IV of the Bombay Provincial Municipal Corporations Act, 1949 (hereinafter referred to as the Act). The Act was amended by the Gujarat Act 16 of 1970 on 31/12/1970. By this amendment Section 452-A was inserted in the Act. By the said Section 452-A power was conferred on the government of Gujarat to make suitable provisions by order on alteration of limits of a city.

(3) BY notification dated 18/08/1973, issued under Ss. (3 of Section 3 of the Act, the government of Gujarat proposed to alter the limits of the Baroda Municipal Corporation so as to include within the limits of the said corporation the area shown in Schedule A to the notification. On the day of issuance of notification dated 18/08/1973, the new area sought to be included in the limits of the Municipal Corporation was lying within the Gram Panchayat. The Development Commissioner of the Gujarat government as such issued a notification on October 16, 1973 under subsection (2 of Section 9 of the Gujarat Panchayat Act, 1961, excluding the aforesaid areas from the Gram Panchayat. The present appellants among others submitted their objections against the inclusion of the aforesaid areas and after taking them into consideration, the government of Gujarat issued final notification dated 15/11/1973 in the Panchayats and Health Department in exercise of the powers conferred by Ss. (3 of Section 3 of the Act directing that the aforesaid areas should form part of the Baroda Municipal Corporation with effect from 1/12/1973.

(4) PARAGRAPH (viii) of Ss. (1 of Section 452-A of the Act laid down that where the limits of a city are altered so as to include any area therein or exclude any area therefrom, the State government may, notwith standing anything contained in this Act or any other law for the time being in force, by order published in the Official Gazette, provide for all or any of the following matters, namely:

"(VIII) the extension and commencement of all or any appointments, notifications, notices, taxes, orders, schemes, licences, permissions, rules, bye-laws or forms made, issued, imposed or granted under this Act by, or in respect of, the absorbing local authority and in force within its area immediately before the notified day, to the area so included in a City under clause (a), in supersession of corresponding appointments, notifications, notices, taxes, orders, schemes, licences, permission, rules, bye-laws or forms in force in such area immediately before the notified day;"

(5) THE State government then issued an order on 30/03/1974 in exercise of the powers conferred by paragraph (viii) of Ss. (1 of Section 452-A of the Act which reads as under: "Panchayats and Health Department Sachivalaya, Gandhinagar, Dated 30/03/1974. ORDER No. KP/74-79/BMC-1073/2593 p. : Whereas by government Notification, Panchayats and Health Department, No. KP/227- 73/BMC-1267-11480/P, dated 15/11/1973, the limits of the City of Baroda have been altered with effect on a