The main legal point established in the judgment is that no tax or fee can be charged except by authority of law, and exemption from tax can only be granted where it is leviable. The court emphasized that if an item is not liable for octroi duty at all, there is no question of granting any exemption.

R. K. Agrawal and K. N. Ojha, JJ.—By means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner, L. H. Sugar Factory Limited, seeks a writ, order or direction in the nature of mandamus commanding the respondents not to charge/realise octroi on sugarcane brought to the petitioner’s factory. It further seeks refund of a sum of Rs. 81,000 which is claimed to have been illegally realised as octroi on the sugarcane brought to the petitioner’s factory from 14th November, 1988 to 15th January, 1989.

2. Briefly stated, the facts giving rise to the present writ petition are as follows :

The petitioner is a public limited company incorporated under the Companies Act. It is engaged in the business of manufacture and sale of sugar by vacuum pan process and allied products at its factory situated within the municipal limits of Pilibhit. The petitioner purchases sugarcane from outside the municipal limits of Pilibhit and brings the same to its factory. The Municipal Board, Pilibhit, started charging octroi on the sugarcane brought to the petitioner’s factory at Pilibhit from outside the municipal limits @ 5 paise per quintal. The petitioner continued to pay octroi duty at the aforementioned rate till 31st August, 1982. Thereafter, the Municipal Board stopped realising octroi duty from the petitioner on the sugarcane brought by it to its factory. According to the petitioner, the Municipal Board, Pilibhit, published proposals proposing to levy octroi duty @ 20 paise per quintal on the sugarcane. The proposal was published in the U. P. Gazette dated

7th November, 1981. Objections were invited from the public. The petitioner also filed its objections to the proposed levy of octroi duty @ 20 paise per quintal on the sugarcane. It appears that the Commissioner, Bareilly Division, Bareilly, granted approval to the final list of items and the octroi duty leviable therein as per the recommendations of the Municipal Board, Pilibhit. The approved list was published in the U. P. Gazette on 28th August, 1982. The list was to be made effective from 1st September, 1982. In this list, sugarcane was omitted. From Ist September, 1982, the Municipal Board, Pilibhit, stopped levying and realising octroi duty on sugarcane brought by the petitioner from outside the municipal limits of Pilibhit to its factory. Subsequently, the State Government issued an order on 3rd July, 1987, purporting to be under Section 157 (3) of the Municipalities Act, 1916 (hereinafter referred to as “the Act”). It directed that in those municipalities where octroi duty is leviable on sugarcane brought for crushing within the sugar factory at more than 10 paise per quintal, octroi should be realised only @ 20 paise per quintal. However, where the octroi duty was less than 10 paise per quintal, this order will not authorise the Nagar Palika to charge 10 paise as octroi. Taking shelter behind this Government order, the Municipal Board, Pilibhit, started realising 10 paise per quintal as octroi duty on sugarcane from the petitioner. The petitioner paid octroi duty for the period 14th November, 1988 to 15th January, 1989, which came to Rs. 81,000. The petitioner thereafter challenged the action of the Municipal Board on the ground that no octroi duty is payable under the aforesaid Government order.

3. We have heard Sri Triloki Nath, the learned counsel for the petitioner, and Sri V. K. Dixit, learned counsel appearing for the respondents.

4. Sri Triloki Nath, the learned counsel for the petitioner, submitted that the Municipal Board, Pilibhit had, while publishing the proposal in the Gazette dated 7th July, 1981, superseded its previous list of octroi duty which culminated in the final list dated 20th August, 1982, which was published on 28th August, 1982, effective from Ist September, 1982, in which sugarcane did not find any mention and, therefore, from Ist September, 1982, no octroi duty is chargeable or payable. He submitted that u