The imposition of octroi duty on entry of goods within municipal limits amounts to interference with the freedom of trade and commerce, but such interference is permissible under Article 304 of the Constitution if the State passes a law as provided in that article.

WANCHOO, C. J.

( 1 ) THIS is an application under Article 226 of the Constitution by Surajmal Baj for issue of a writ of mandamus, prohibition or any other appropriate writ, or direction or order against the State of Rajasthun and the Administrator of the Municipality of Jaipur City, and two others, in connection with the demand of octroi from the applicant.

( 2 ) THE case of the applicant is that he is a resident of Jaipur City and carries on trade and commerce in allopathic medicines. He was entering the city of Jaipur on 4-9-1953, at about 1 P. M. with a packet of allopathic medicines sent to him by may and Baker (India) Ltd. , New Delhi, for the purpose of his trade and commerce. He was stopped by the Octroi Inspector who was also made a party to this petition and was asked to pay octroi duty amounting to Rs. 1/6/6 and was informed that the goods bo detained till the octroi duty was paid. It was urged that this demand and detention of his goods were illegal for the reasons that the octroi imposed by the Municipal Council of Jaipur City from 1-91953, was suspended on the 3rd September, and thereafter the Municipal Council was superseded and an Administrator appointed, and no octroi duty had been imposed by the Administrator in accordance with the terms of the Jaipur Municipal act, 1943. Thus there was no octroi duty in force on 4-9-1953, and the demand made from him was illegal. It was further contended that under Article 301 of the constitution trade and commerce was free throughout the territory of India, and no duty in the nature of octroi could be levied or collected at all by the State or the municipal Council. The applicant, therefore, prayed for the issue of an appropriate writ.

( 3 ) THE application was opposed on behalf of the State of Rajasthan and the administrator of the Municipality of Jaipur City, and it was urged in reply that the levy of octroi duty was not covered by Article 301, and was, in any case, protected under Article 305 of the Constitution, that the Municipal Council of Jaipur had no authority to suspend the octroi duty without the approval of the Government, that the meeting in which the duty was suspended by the Municipal Council was irregular and therefore the resolution suspending the duty had no force.

( 4 ) WO shall first deal with the argument based on the provisions of the constitution. In this connection, reference may be made to Article 301 which provides that subject to the other provisions of that Part, trade, commerce and intercourse throughout the territory of India shall be free. Article 302 gives power to Parliament to impose restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Article 303 restricts power of legislation and forbids giving of preference to one state over another or making any discrimination between one State or another subject to the exception that such preference or discrimination can be made in case there is a situation arising from scarcity of goods in any part of the territory of India. Article 304, among other things, gives power to a State Legislature, notwithstanding Article 301 or Article 303, to impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest, provided that any bill for this purpose must have the previous sanction of the President before being introduced in the Legislature of a State. Article 303 is important and runs as follows: "nothing in Articles 301 and 303 shall affect the provisions of any casting laws except in so far as the President may by order otherwise provide. " Article 306 provides for continuance of certain duties by Part B States, while Article 307 gives power to Parliament to appoint such authority by law as it considers proper for carrying out the purposes of articles 301, 303 and 304. The contention