B.J.DIVAN - (1.)Both these Letters Patent Appeals arise from the judgment of M. P. Thakker J. in Special Civil Application NO. 87 of 1971 decided by our learned brother on February 20 1971 The petitioner in the Special Civil Application is a trader and a resident of Anjar in the district of Kutch and the respondent in the Special Civil Application was the Anjar Municipality. In the Special Civil Application the petitioner was challenging the imposition of the of octroi on Kapas (cotton) ginned or unginned and Kalan (cotton-ponds). the petitioner contended that the Municipality was trying collect octroi on cotton and cottonpods without due authority of law because the requirements of law for the imposition of this levy were not satisfied. The Anjar Municipality imposed octroi for the first time on April 1 1963 after the provisions of the Gujarat Municipalities Act 1963 had come into force. At the time when the octroi was imposed for the first time the Municipality was constituted as a Municipal Borough under the Gujarat Municipalities Act. The necessary rules and bye-laws were duly sanctioned before April 1 1968 and from that date octroi was being levied by the Anjar Municipality in accordance with the rules and bye-laws. Under Rule 3 A of the bye-laws provision was made for category of tax and taxable articles and it was provided that on all the goods that may be imported into the octroi limit of Anjar Borough Municipality mentioned in Schedule I annexed to the Rules for use consumption or sale octroi will be levied at the rates shown in such Schedule but the exemptions laid down in Schedule II will have to be observed. Thus it is clear that Schedule I set out the lists of articles on which the octroi could be levied and Schedule II set out the list of articles which were exempted from levy of octroi. IT may be mentioned that Schedule I was divided into two parts. In the first part of Schedule I were set out articles on which octroi was to be levied on valuation i.e. on ad valorem basis; where as second part set out the articles on which octroi was to be levied either on weight or measurement or quantity.
(2.)The Rules which were framed before the octroi was levied with effect from April 1 1968 were framed under sec. 271 cl. (1) which permits the municipality to make rules not inconsistent with the Act and the Rules or orders made by the State Government under the Act inter a prescribing the taxes to be levied in the municipal borough for municipal purposes the circumstances in which exemption will be allowed the condition on which and the extent to which remission will be granted and the system on which refund will be allowed and paid in respect of such taxes. The bye-laws regarding the imposition of octroi and governing the system of octroi were made under sec. 275(1)(1) which enables the municipality to make from time to time alter or rescind bye-laws not inconsistent with the Act fixing octroi limits and stations providing for exhibition of tables of octroi; regulating subject to any general or special orders which the State Government may make in this behalf the system under which refunds are to be made on account thereof when the animals or goods on which the octroi has been paid or articles manufactured wholly or in part from such animals or goods are again exported and the custody or storage of animals or goods declared not to be intended for consumption use or sale within the municipal borough; and prescribing a period of limitation after which no claim for refund of octroi shall be entertained and the minimum amount for which any claim to refund may be made. Under the Gujarat Municipalities Act 1963 (hereinafter referred to as the Act sec. 99 provides that subject to any general or special orders which the State Government may make in this behalf and subject to the provisions of secs. 101 and 102 a municipality may impose for the purposes of the Act any of the taxes set out thereunder and under cl (iv) of sub-sec. (1). it is open to the municipality to levy an octroi on animals or goods or both brought within the octroi limits for consumption use or sale therein. We may mention that under clause (b) of the second proviso to sec. 99(1) it has been provided that subject to such exemptions and conditions as the State Government may prescribe by rules no octroi shall be leviable on agricultural produce brought within the octroi limits for sale in accordance with the provisions of the Gujarat Agricultural Produce Markets Act 1963 in market established within such limits under that Act.
(3.)It is common ground between the parties that within the limits of Anjar Municipality a market yard constituted under the provisions of the Gujarat Agricultural Produce Markets Act is functioning and hence subject to the rules which have been made by the State Government prescribing exceptions and conditions as mentioned in the said cl. (b) of the second proviso to sec. 99(1) to octroi on agricultural produce brought within the octroi limits of Anjar Municipality for sale in the market yard set up in accordance with the provisions of the Gujarat Agricultural Produce Markets Act the octroi has to be levied and collected. On April 30 1970 Anjar Municipality decided to amend the octroi list by including Kapas i.e. cotton whether ginned or unginned and Kalan i.e. cotton-pods in the list of items on which octroi should be levied. It may be mentioned at this stage that under the rules and bye-laws which came into force on April 1 1968 under item No. 100 of part 1 of Schedule I octroi duty at the rate of 1 np. was to be paid on valuation basis on all articles which are not included in Part I and Part 2 and the octroi was to be. paid as we have stated above at the rate of 1 paise per one rupee of the value of the goods. In the list of exempted items at Sr. No. 19 in Schedule II cotton Kapas and cotton-seeds were mentioned in the rules and bye-laws which came into force from April 1 1968 It may be mentioned that there is a slight difference between the English version and the Gujarati version of Schedule It of the Rules of 1968. But under bye-law 21 the English version is the authorised text of the bye-laws and similarly under rule 23 the English version is the authorised text of the rules pertaining to the levy and collection of octroi by the Anjar Municipality. The Gujarati version mentioned cotton Kapas Kalan and Kapasia (i.e. cotton-seeds) whereas the English version mentioned only Cotton Kapas and cotton-seeds i.e. ginned cotton unginned cotton and cottonseeds but it did not include cotton-pods (Kalan). It is therefore clear that by virtue of the residuary article even before April 30 1970 it was Open to Anjar Municipality to collect octroi on cotton-pods since they were not specifically exempted in Schedule It of the octroi rules and byelaws. However it is common ground that before April 30 1970 AnJar Municipality had not collected any octroi on cotton-pods. As we have mentioned earlier by the Resolution of April 30 1970 Anjar Municipality decided to amend the octroi lists by including Kapas and Kalan i.e. cotton and cotton-pods in the list of items on which octroi was leviable on the basis of measurement weight or quantity as distinguished from octroi on the basis of valuation After passing that Resolution of April 30 1970 the Municipality published the notice and under sec.101 of the Act invited objections from the residents of the area under Anjar Municipality to the different amendments which the Municipality had resolved to make by the Resolution of April 3o 1970 After the objections were received the Municipality considered those objections and on July 30 1970 the Municipality passed a Resolution disallowing most of the objections and resolved that the different rates of octroi and the amendments to the rules and bye-laws as set out in the schedule to the resolution should be carried out. It was in this Resolution of July 30 1970 that it was inter alia mentioned that the following three items should be taken out from the list of exempted items under Schedule II and should be inserted in Part 2 of Schedule I for levying octroi at the rates mentioned against each of the three items in the Resolution. Those three items were :
1. Grain of every kind and pulse.. 2. Unginned cotton and ginned cotton) except pressed bales. 3. Cotton-pods.
This Resolution of July 30 1970 mentioned against ginned and unginned cotton to levy octroi at the rate of 25 Paise per 40 Kg. and as against cotton-pods it proposed that octroi should be levied at 10 Paise per 40 Kgs. It may also be mentioned that this was also the original proposal which was considered and resolved upon by the Municipality at the meeting of 30th April 1970; and the resolution was to levy octroi at the rate of 30 paise per 40 Kgs. of Kapas and at 25 Paise per 40 Kgs. of cottonpods. The rates were thus reduced in the case of cotton ginned or unginned and the rates in respect of both these items was reduced as shown above. In the resolution of April 20 1970 under the head of Part 2 it was first mentioned the above three items of grain of every kind and pulses Kapas and Kalan as items to be excluded from the exempted list and immediately below these force items it was mentioned the three items mentioned above to be excluded from the list of exempted items and to be added in Part 2 . Thus the Resolution of April 30 1970 as it is shown from the original minute book of the Anjar Municipality which has been produced before us clearly mentioned that Kapas and Kalan which were being treated as exempted in Schedule II were to be subjected to octroi on the basis of weight and were to be added in Part 2 of Schedule I. In the Resolution of July 30 1970 before setting out the three items: grain of every kind and pulses unginned cotton and cotton except pressed bales and cotton-pods a note was added as follows :
It is resolved that the below-mentioned items from Schedule II are to be excluded from exemption and are to be added in Part 2 afresh for levying octroi at the rates mentioned below."
Thereafter the Anjar Municipality through its officers sent the Resolution of July 30 1970 together with the objections and its own opinions thereon together with the notice and the rules to the State Government as contemplated by sec. 101(c) of the Act. The Government of Gujarat exercising its powers under sec. 271 proviso (a) read with sec. 102 of the Act accorded sanction with modification to the revised rules of octroi on certain items in Schedule I as proposed by the said Municipality. Proviso (a) to sec. 271 provides that no rule or alteration of rescission of a rule made under sec. 271 shall have effect unless and until it has been approved by the State Government. Sec. 102 of the Act provides that the State Government may refuse to sanction the rules submitted under sec. 101 or may return them to the municipality for further consideration; or if no objection or no objection which is in its opinion sufficient was made to the proposed tax within the period prescribed under sec. 101 may sanction the said rules without modification or subject to such modifications not involving an increase in the amount to be imposed as it deems fit. This Resolution of the Government was passed on December 24 1970 and it may be mentioned so far as is relevant for the purpose of this judgment that in the Schedule the rates of octroi of Anjar Municipality are mentioned and different items in Schedule I where octroi was being levied on valuation basis are set out and the new rate per value of one rupee of the value of item concerned are provided in column 4 of this Resolution. In this Resolution at the end under the heading Part 2 several items at Sr. Nos. 1 to 10 are mentioned where the different items on which new proposed rates of octroi on the basis of weight of quantity or measurement was to be levied are set out. After completing Sr. Nos. 1 to 10 the Resolution mentions :
" Deduction from Exempted Items 1. 19 Cotton (Kapas) Clarification: Cotton includes all kinds 0-25 per 40 Kg. of cotton including ginned cotton and unginned cotton. 2. 19-B: Cotton Pods 0-10 per 40 Kg.

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