Judgment

JASWANT SINGH, J. :- This appeal by certificate which is directed against the judgment and order dated 21-9-1976* of the High Court of Karnataka at Bangalore reversing the judgment and order dated March 3, 1976 of a Single Judge of that Court dismissing writ petition No. 6945 of 1975 filed by the respondent involves a substantial question of law of general public importance relating to the validity of the levy of what is styled as supervision fee under Section 124 of the Karnataka Municipalities Act, 1964 (hereinafter referred to as the Act) read with Rule 26 of the Karnataka Municipalities Taxation Rules, 1965 (hereinafter referred to as the Rules).

* Reported in (1976) 2 Kant LJ 314.

2. The facts of the case lie in a short compass and may be stated as follows :-

Iron ore which is extracted from its mine heads in Hospet Taluka is brought over and stocked in Hubli Railyard by the Mysore Minerals Limited which is a Government undertaking. Having taken up the contract of transshipment of the iron ore from Hubli Railward to Karwar and Belekeri harbours, the Mysore Minerals Limited has sublet the same to the West End Minerals and Exports Private Ltd. The latter has in turn entrusted the execution of the contract to the respondent which is engaged in transport business. The iron is accordingly lifted by the respondent in its tracks from Hubli Railyard and carried to Karwar and Belekeri harbours. The trucks of the respondent carrying the iron ore have (enroute) to pass in the course of transit through the limits of various town municipalities situate on the highway of which the appellant happens to be one, but they do not unload and reload the iron ore at any intermediary point or stop.

3. The appellant, on the basis of a resolution passed by it on January 25, 1975, and approved by the State Government levies the aforesaid fee of Re. 1/- per truck under Section 124 of the Act read with Rule 26 of the Rules. The trucks of the respondent using the State highway within the municipal limits of Kalghatgi, District Dhanwar are accordingly made to pay the fee for each of their trips.

4. Feeling that the fee realised by the appellant was invalid, the respondent filed a writ petition, being writ petition No. 6945 of 1975, in the High Court of Karnataka challenging the levy of the fee and seeking the issuance of a writ of mandamus restraining the appellant from realising the said fee.

5. A Single Judge of the High Court upheld the fee in question and dismissed the writ petition holding that the expression importer, place of import and place of export as used in Section 124 (1) of the Act are comprehensive enough to describe a person who merely brings the goods within the municipal limits for immediate exportation and the respondent who answered that description was bound to pay the fee. Aggrieved by this judgment and order, the respondent took the matter in appeal to a Division Bench of the High Court which allowed the appeal and issued the writ prayed for by the respondent by its judgment and order dated 21-9-1976.* It is against this judgment and order that the present appeal is directed.

* Reported in (1976) 2 Kant LJ 314.

6. At the hearing of the appeal, the counsel have reiterated the contentions urged on behalf of the parties in the High Court.

7. The sole question that arises for determination in this appeal relates to the validity of the aforesaid levy. For a proper determination of this question, it is necessary to advert to Section 124 of the Act and Rule 26 of the Rules :

"Section 124 : Non-liability for octroi and refund of octroi on groods in transit. -

(1) Any article or animal brought into the municipal limits for the purpose of immediate exportation may at the option of the importer not be subjected to levy of octroi if such article or animal be conveyed direct from the place of import to the place of export by such routes, within such time, and under such supervision as the municipal council may by resolution determine. For purp