Judgment

S.MOHAN, J. (concurring)

(1) I have had the advantage of perusing the judgment of my learned brother (Bharucha. J.). I am in entire agreement with the conclusions arrived at therein. However, I think it would be appropriate to add a few lines.

(2) THE facts have been set out in his judgment. I will confine myself only to the question of law.

(3) THE power to tax by the State can be exercised only by the State Legislature. The extent of the power is fixed by the Constitution. The said legislature can impose all taxes as are covered by the subjects enumerated in List II (State List) under the Seventh Schedule. Insofar as the municipalities or local self-governments are concerned, they are authorised by the State to levy some of these taxes for their own purposes. As laid down in Municipal Board of hardwar v. Raghuhir Singh, "the local authorities levy the tax as agent of the State Legislature. The extent of the powers must be found in the statute which creates the municipality and endows the municipality with such powers."

(4) THE power to tax is a necessary adjunct of a system of local selfgovernment . The amounts collected by way of taxes are mainly intended to enable them to meet their fiscal needs in the municipal area.

(5) IN the instant case, we are concerned with the levy of octroi. The word octroi comes from the word octroyer which means to grant and, in its original use, it meant an import or a toll or a town duty on goods brought in to a town. Grice in his National and Local Finance says (at page 303 that they were known as in-gate tolls because they were collected at toll-gates or barriers.

(6) UNDER the Punjab Municipal Act, 1911 (hereinafter referred to as the Act) the power to levy the octroi is traceable to Section 61, Ss. (2.

(7) THE said Ss. states as under:

"(2 Save as provided in the foregoing clause with the previous sanction of the State government any other tax which the State Legislature has power to impose in the State under the Constitution.

EXPLANATION.IN this section tax includes any duty, cess or fee."

(8) OCTROI is traceable to Entry 52 of the List II (State List) of the Seventh Schedule. That Entry reads as follows: Taxes on the entry of the goods into a local area for consumption, use or sale therein."

(9) IN Jothi Timber Mart v. Calicut Municipality it has been held:

"ENTRY of goods within the local area for consumption, use or sale therein is made taxable by the State Legislature: authority to impose a general levy of lax on entry of goods into a local area is not conferred on the State Legislature by Item 52 of List II of Schedule VII of the Constitution. The Municipality derives its power to tax from the State Legislature and can obviously not have authority more extensive than the authority of the State Legislature. If the State Legislature is competent to levy a tax only on the entry of goods for consumption, use or sale into a local area, the Municipality cannot under a legislation enacted in exercise of the power conferred by Item 52, List II have power to levy tax in respect of goods brought into the local area for purposes other than consumption, use or sale."

(10) THE procedure as to the levy is set out under Section 62 of the Act. This section details the entire procedure for the imposition of taxes and provides the method of levy right from the point when the committee conceives the idea of levy to the final stage when the proposal attains the authority of law. Such a proposal will have to be initiated by a special resolution which shall be passed at a special meeting. On passing of such a resolution, a notice shall be published defining class of persons or description of property to be taxed, the amount or rate of the tax and the system to be adopted for levy of the tax. If any objection is received, it has to be considered by the committee and the committee may amend it if it s