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1987 Supreme(All) 550
HIGH COURT OF ALLAHABAD
S.K. DHAON, J.
Nagar Mahapalika Gorakhpur, Through Its Administrator - Appellant
Versus
II Additional District Judge, Gorakhpur - Respondent
Civil Misc. Writ Petition No. 19337 of 1986 and Civil Misc. Writ Petition No. 19389 of 1986
Decided on : Dec 07, 1987
Advocate appeared:
B.D. Mandhyan
The main legal point established in the judgment is the jurisdiction and authority of the Mahapalika to impose and collect octroi, and the liability of the Corporation to pay octroi to the Mahapalika.
Headnote:
Octroi - Municipal Tax - U.P. Urban Local Self-Government Laws (Amendment) Act, 1979, U.P. Act No. 17 of 1979, U.P. Urban Local Self-Government Laws (Second Amendment) Act, 1987, U.P. Act No. 3 of 1987 - Section 577(a), Section 2(2), Section 172, Section 3(4), Section 4 - The court discussed the applicability of the U.P. Urban Local Self-Government Laws (Amendment) Act, 1979 and the U.P. Urban Local Self-Government Laws (Second Amendment) Act, 1987 in relation to the imposition and realization of octroi by the Municipal Board and the Mahapalika. The court interpreted the provisions of these acts to determine the jurisdiction and authority of the Mahapalika to impose and collect octroi, and the impact of the abolition of octroi in the Notified Area on the Mahapalika's authority to levy octroi.
Fact of the Case:
The Municipal Board of Gorakhpur was levying octroi, and the Notified Area Committee Gorakhpur was also levying octroi before the U.P. Urban Local Self-Government Laws (Amendment) Act, 1979 abolished the power of local bodies to levy toll and octroi. Subsequently, the area under the jurisdiction of the Notified Area was included in the jurisdiction of the Mahapalika, which continued to realize octroi. The Corporation, a government entity, sought a refund of the octroi paid to the Mahapalika.
Finding of the Court:
The court found that the Mahapalika had the jurisdiction to realize octroi from the Corporation from the date of inclusion of the area under its jurisdiction, and that the Corporation was not exempt from paying octroi. The court held that the appellate authorities erred in directing the Mahapalika to refund the octroi to the Corporation and in restraining the Mahapalika from realizing octroi from the Corporation. The court also found that the appellate authorities acted without jurisdiction in directing the Mahapalika to refund the octroi realized by the Notified Area before the inclusion of the area in the Mahapalika's jurisdiction.
Issues: The issues involved the jurisdiction and authority of the Mahapalika to impose and collect octroi, the impact of the U.P. Urban Local Self-Government Laws (Amendment) Act, 1979 and the U.P. Urban Local Self-Government Laws (Second Amendment) Act, 1987 on the imposition and abolition of octroi, and the liability of the Corporation to pay octroi to the Mahapalika.
Ratio Decidendi: The court held that the Mahapalika had the jurisdiction to realize octroi from the Corporation, and that the Corporation was not exempt from paying octroi. The court also found that the appellate authorities erred in directing the Mahapalika to refund the octroi to the Corporation and in restraining the Mahapalika from realizing octroi from the Corporation. The court further held that the appellate authorities acted without jurisdiction in directing the Mahapalika to refund the octroi realized by the Notified Area before the inclusion of the area in the Mahapalika's jurisdiction.
Final Decision: The petitions were allowed, and the orders of the lower courts were quashed. The interim orders were vacated, and the parties were directed to bear their own costs.
S. K. Dhaon, J.
1. This and the companion writ petition No. 18389 of 1986 arise out of the same judgment, they involve identical controversy and, therefore, can be conveniently disposed of by a common judgment.
2. The material facts in brief are these. On or before 16th November, 1981, the Municipal Board Gorakhpur was in existence. This Board was levying and realising octroi. On or before 7th April, 1979, there was in existence the Notified Area Committee Gorakhpur (hereinafter referred to as the Notified Area) within the local limits of which the Fertilizer Corporation of India (hereinafter referred to as the Corporation) carried on commercial activities. The Notified Area had levied octroi and the same was being realised from the Corporation. On 7th April, 1979, the Governor of Uttar Pradesh had promulgated the U. P. Urban Local Self-Government Laws (Amendment) Ordinance, 1979 (U. P. Ordinance No. 6 of 1979) which was replaced by the Uttar Pradesh Urban Local Self-Government Laws (Second Amendment) Act, 1979 (U. P. Act No. 17 of 1979) (hereinafter referred to as the Act of 1979). By the Ordinance as well as by the Act the power of the Notified Areas and the Town Areas in the State to levy toll and octroi was taken away. The two taxes which were imposed by the aforesaid local bodies were abolished with effect from 7th April, 1979. On 16th November, 1981, a notification purporting to be under section 3 (1) of the U. P. Nagar Mahapalika Adhiniyam, 1959 (hereinafter referred to as the Adhiniyam) was issued whereby the area lying within the limits of the Municipal Board, Gorakhpur was constituted in a city and the city was nomenclatured as the Nagar Mahapalika, Gorakhpur (hereinafter referred to as the Mahapalika) in accordance with the provisions of section 4 of the Adhiniyam. On 15th June, 1982, the State Government by a notification purported to have been issued under subsection (2) of section 3 of the Adhiniyam altered the limits of the city (Gorakhpur) so as to include therein the area under the jurisdiction of the Notified Area. Thus the said area came into the jurisdiction of the Mahapalika. The Corporation paid and the Notified Area received from it a sum of Rs. 2,19,192.08 p. after 7th April, 1979 and before 14th June, 1982 as octroi. After 15th June, 1982, and till 22nd December, 1982, the Mahapalika realised a sum of Rs. 4,78,384.82 p. as octroi from the Corporation. The Mahapalika persisted in realising octroi from the Corporation subsequent to 15th June, 1982. The Corporation on 14th February, 1983, sent a communication No. GP/Legal/37 to the Administrator of the Mahapalika praying that the sum of Rs. 2,19,792.08 p. may be refunded to it. On the same date, it made a similar representation No. GP/ Legal/36 to the Administrator praying that the sum of Rs. 4,78,384.82 p. may be refunded to it and the Mahapalika should desist from realising any octroi from it. By a communication dated 18th March, 1982, the Administrator rejected both the objections. Feeling aggrieved, the Corporation preferred two separate appeals under section 472 of the Adhiniyam which were registered as Appeals No. 1 and 2 of 1983. In Appeal No. 1 of 1983 the prayers, inter alia, were that the Mahapalika may be permanently restrained from realising or recovering any octroi, a decree for a refund of Rs. 4,78,382.82 may be passed and a permanent injunction be issued directing the Mahapalika to refund the octroi realised after 15th June, 1982. In Appeal No. 2 of 1983, the prayers, inter alia, were that the Mahapalika may be restrained from recovering any outstanding of the octroi for the period beginning from 7th April, 1979 and ending on 14th June, 1982 and a decree for a sum of Rs. 2,19,792.08 p. may by passed. These two appeals were disposed of by the II Civil Judge, Gorakhpur on 30th August, 1983, by a common judgment and the Corporation obtained the reliefs as prayed. The Mahapalika preferred two separate appeals No. 336 and 337 of 1983 aga
