( 1 ) THE petitioners carry on business as wholesale mer- chants within the limits of Modasa Town. The first respondent is the Modasa Nagar Panchayat and the second respondent is the State of Gujarat. The petitioners challenge in this petition the levy of octroi duty by the first respondents Panchayat under Resolution dated December 20 1975 In order to determine the merits of the challenge it would be necessary to set out a few facts.

( 2 ) THE case of the petitioners is that in the course of their business as wholesale merchants they import various goods from large commercial towns into Modasa. Modasa being the premier town of Sabarkantha District it is the centre for purchase of goods so far as the surrounding villages are concerned. Hardly ten to fifteen percent of the goods brought within the limits of Modasa according to the petitioners are meant for sale consumption or use by the ultimate consumer within the town and nearly 85 to 90 percent of the goods are reexported to different villages in the surrounding areas.

( 3 ) A meeting of the respondent Panchayat was called on November 10 1975 for transacting business as set out in the agenda fixed for the said meet