The imposition of a new tax or the alteration of an existing tax under the Bombay District Municipal Act, 1901, requires the municipality to follow the procedure prescribed in Sections 60, 61, and 62 of the Act, which includes passing a resolution at a general meeting, publishing the proposed rules, inviting objections from inhabitants, and obtaining the sanction of the State Government.

Headnote:
Octroi Duty - Interpretation of Rules - Amendment of Act - Applicability - Procedure for Imposition of Tax - Bombay District Municipal Act, 1901, Ss. 59, 60, 61, 62, 47.
Fact of the Case:

The Burmah-Shell Oil Storage and Distributing Company of India Ltd. challenged the Manmad Municipality's attempt to levy octroi duty on goods imported for sale within the municipality's area. The company argued that the municipality's octroi rules, sanctioned in 1943, did not authorize the levy of octroi on goods imported for sale, and that the municipality could not impose such a tax without following the procedure prescribed in Sections 60, 61, and 62 of the Bombay District Municipal Act, 1901.
Finding of the Court:

The court held that the octroi rules, as sanctioned in 1943, did not empower the Manmad Municipality to levy an octroi on animals or goods imported within the octroi limits for purposes of sale. The court found that the rules, when read in conjunction with the relevant provisions of the Act, only provided for an octroi duty on animals or goods brought within the octroi limits for consumption or use, and not for sale.
Issues: 1. Whether the octroi rules, as sanctioned in 1943, empowered the Manmad Municipality to levy an octroi on animals or goods imported within the octroi limits for purposes of sale? 2. Whether the municipality could impose such a tax without following the procedure prescribed in Sections 60, 61, and 62 of the Bombay District Municipal Act, 1901?
Ratio Decidendi: 1. The court interpreted the octroi rules in conjunction with the relevant provisions of the Bombay District Municipal Act, 1901, and found that the rules only provided for an octroi duty on animals or goods brought within the octroi limits for consumption or use, and not for sale. 2. The court held that the municipality could not impose an octroi tax on goods imported for sale without following the procedure prescribed in Sections 60, 61, and 62 of the Act, which included passing a resolution at a general meeting, publishing the proposed rules, inviting objections from inhabitants, and obtaining the sanction of the State Government.
Final Decision: The court issued a writ of mandamus restraining the respondents, their servants, and agents from levying, collecting, or recovering octroi in respect of goods brought within the octroi limits for the purpose of sale only. The respondents were also ordered to pay the petitioners' costs.

Judgment -Tendolkar, JJ.

1. This is a petition by the Burmah-Shell Oil Storage and Distributing Company of India Ltd., against the Manmad Municipality and the Administrator of the Municipality challenging an attempt of the Municipality to levy octroi duty on goods imported for sale within the area of the Municipality.

2. Only a few facts are material for the determination of this petition. The Manmad Municipality is governed by the provisions of the Bombay District Municipal Act, 1901, and derives its authority to levy taxes from Section 59 of that Act. Several heads of taxation, from amongst which the Municipality may choose one or many, are enumerated in this section, and the head with which we are concerned is (iv) "an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein". This is how the item stands since 11th of May 1954 when, by Section 9 of Act 35 of 1954, the words "use or sale" were substituted for the words "or use". Therefore, prior to the amending Act of 1954, octroi could be levied on animals or goods, or both brought within the octroi limits for consumption or use only, and not on animals or goods brought into those limits for sale. Now, the petitioners have, within the limits of the Manmad Municipality, a depot which caters to the requirements, not only of the residents within the municipal limits, but also of the neighbouring markets. Petroleum products are brought to this depot and naturally they are brought within the octroi limits which are the limits of the Municipality; but these petroleum products are partly for consumption and use within the octroi limits and partly for sale for consumption and use outside those limits. The petitioners were being subjected to octroi duty in respect of the first category of goods and were not being subjected to any octroi duty in respect of the second category of goods until the Administrator of the Municipality, by his letter D/- 17th of March 1956, intimated to the Superintendent of the Burmah-Shell Company at Manmad that the petitioners were liable to pay octroi duty on petroleum products sold within the octroi limits and supplied to stations outside the octroi limits. The amount involved in this claim for octroi duty is a very large one and Mr. Rege, appearing for the petitioners, urged upon us the iniquity of asking the petitioners to pay octroi duty retrospectively, assuming it was leviable, in that they would not now be able to pass on this duty which they would have been entitled to pass on to their purchasers. But, of course, in matters of taxation there cannot be anything in the nature of estoppel, and whatever the iniquity may be, if the tax is properly leviable, since there is no time-limit within which the tax must be collected, the Manmad Municipality would be quite competent to collect it.

3. Now, it is necessary, in the first instance, to consider the relevant provisions of the Bombay District Municipal Act, for levying a tax. Section 59, Sub-s. (1), to the extent to which it is relevant, enacts:

"(1) Subject to any general or special orders which the State Government may make in this behalf, any Municipality

(a) after observing the preliminary procedure required by Section 60 and

(b) with the sanction of the State Government in the case of City Municipalities, and in other cases of the Commissioner, and subject to such modifications or conditions as under Section 61 the State Government or the Commissioner, respectively, in according such sanction, deems fit,

may impose, for the purposes of this Act, any of the fallowing taxes, that is to say:"

and amongst the taxes, tax No. (iv) is an octroi which I have already set out above. Now, the words in this section, namely "the Director of Local Authorities" were substituted in this section for the word "the Commissioner" by Act 26 of 1953 after the office of Commissioners was abolished in the State; and therefore, before that date it was the Commissioner, and not

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