LODHA, J.—This is a petition under Article 226 of the Constitution of India by the Municipal Board, Sheoganj through its Chairman against the State of Rajasthan praying that the Rajasthan Governments Local Self Department Notification dated February 22, 1975 a (copy of which has been placed on the record and marked Exhibit-19 at page 60 of the Paper Book) be quashed and the respondents be restrained from interfering with the right of the Municipal Board to levy octroi duty in accordance with the Rajasthan Governments Notification dated April 5, 1973 published in Rajasthan Gazette dated May 31, 1973 (A copy of which has been annexed to the writ application and marked Exhibit-1 at page 17 of the Paper Book).

2. The short question which arises for decision is whether the State Government after having directed the Municipal Board, Sheoganj (hereinafter referred to as the Board) by notification in the Official Gazette to levy octroi, can rescind that notification and thereby deprive the Municipal Board of the right to levy the tax. The question arises in this way. In exercise of its powers under section 104 of the Rajasthan Municipalities Act (No. 38), 1959 (which will hereinafter be referred to as the Act), the Government of Rajasthan issued a Notification dated April 5, 1973 published in Rajasthan Gazette dated May 31, 1973, whereby it directed the Board, to levy octroi on goods and animals brought within its limits for consumption, use or sale at the rates mentioned therein on the expiry of seven days from the publication of the Notification in the Gazette. The Board, however, made a representation (Exhibit-A at page 77 of the Paper Book) to the State of Rajasthan that it would not be feasible to levy octroi and, therefore, the Board may be permitted not to levy it. A few months later, the Cloth Merchants Association of Sheoganj also made a representation to the Chief Minister, Rajasthan for not levying the octroi and the Government of Rajasthan sent the following telegram (Ex. 2 at page 23 of the paper book) to the Administrator, Municipal Board—"Stop forthwith realisation octroi till further orders letter follows" The Govt. also forwarded a copy of the representation of the Cloth Merchants Association to the Administrator, Municipal Board, vide its letter dated January 25, 1974 (Exhibit-15 at page 46 of the Paper Book) and asked the Administrator to send factual report of the case for perusal of the Chief Minister. The Administrator, by his letter dated January 28, 1974 (Exhibit-6) at page 27 of the Paper Book) intimated to the Government that while all the arrangements for collection of the tax had been completed, the telegram (Exhibit-2 was received He further stated that the Board was passing through a financial crisis and its finances could not be put in order without realising the tax. He, therefore, sought the permission of the Government to realise the tax. The Administrator again by his letter dated February 1, 1974 (Exhibit-7) wrote to the Government that the finances of the Municipal Board were so bad that it found it difficult even to pay the salary of the staff and arrange for road lights. While emphasizing the fact that levy of octroi was absolutely necessary, he tried to impress upon the Government that the representation by the Cloth Merchants Association of Sheoganj for not levying the tax was not at all justified and was motivated by purely selfish considerations. The matter was pursued by the Administrator from time to time by his letters dated March 16, 1974, April 19, 1974, June 4, 1974 and August 13, 1974 marked Exhibits 8, 9, 10 and 11 respectively. Elections to the Board took place some time in September, 1974 The Chairman of the elected Board by his letter dated October 21, 1974 (Exhi-bit 12) also requested the Government to withdraw the telegram (Exhibit-2) and permit the Board to commence recovery of the tax. Thereafter, he sent a reminder on November 7, 1974 (Exhibit-I3). The Board in its meeting held

Click Here to Read the rest of this document