GOURISHANKER Vs. MUNICIPAL COUNCIL
HIGH COURT OF MADHYA PRADESH
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(1.) BY this application under Articles 226 and 227 of the Constitution the petitioner, who holds kerosene and diesel oil agency from the Indian Oil Corporation Ltd. , and does business in Narsimhapur, seeks a writ of certiorari for quashing a notification issued by the Government on 14th July 1966 under Section 130 (1) of the Madhya pradesh Municipalities Act, 1961 (hereinafter referred to as the Act) sanctioning the abolition of the terminal tax and toll tax which had been imposed by the municipal Council, Narsimhapur, on 12th April 1916 under the Central Provinces Municipal Act, 1903. He also prays that the 'narsimhapur Municipality Octroi (Assessment, Collection and Refund) Rules, 1966' framed by the State government in exercise of its powers conferred by Clauses (a) and (b) of Section 127 (2), Section 133, Sections 355 (1) and 356 of the Act be declared to be invalid and the respondents be restrained from giving effect to those Rules, and further that the respondent Municipal Council be prohibited also from recovering any octroi duty on kerosene and diesel oil from 1st November 1966.
(2.) THE material facts are that on 12th April 1916 the Municipal Council, narsimhapur, in the exercise of its powers under the Central Provinces Municipal act, 1903, imposed a terminal tax on goods brought within the municipal limits by rail. The abolition of this terminal tax was sanctioned by the Government by a notification issued on 14th July 1966 in exercise of its powers under Section 130 (1) of the Act of 1961. On the same date, the Government issued the 'narsimhapur Municipality Octroi (Assessment, Collection and Refund) Rules, 1966'. These Rules were made by the Government in the exercise of its powers under the provisions of the Act of 1961 to which a reference has already been made earlier. The preamble to the Rules says that they have been made "for the assessment, collection and refund of Octroi tax within the limits of Narsimhapur municipality". Rule 2 (e) of the said Rules defines 'octroi limits' as meaning "the octroi limits of the Municipality as fixed by the byelaw made under Sub-clause (f), and Clause (2) of Section 358 of the Act". Rule 3 then says : "goods subject to tax are, wherever produced, liable to pay the tax as soon as they enter the Octroi limits of the Municipality. " the Municipal Council imposed an Octroi tax on kerosene and diesel oil and other goods with effect from 1st November 1966.
(3.) IT was argued by Shri Dharmadhikaree, learned counsel for the petitioner, that under Section 127 (1) (v) the Municipal Council could impose an octroi on animals or goods brought within the limits of the Municipality for sale, consumption or use within such limits: that the Council could also under Clause (xvi) of Section 127 (1) impose a terminal tax on goods or animals imported into or exported from the limits of the Municipality. But by the proviso to Clause (xvi) it was expressly provided that a terminal tax and an octroi duty shall not be in force in any municipality at the same time. Learned counsel said that the terminal tax imposed by the Municipal Council on 12th April 1916 could not be abolished by the Council with the previous sanction of the Government in the exercise of its powers under section 130 (1) of the Act of 1961 because Section 130 (1) enabled the abolition of a tax imposed under the Act of 1961 and not of taxes imposed under the Act of 1903; and that as the terminal tax imposed on 12th April 1916 was continued by article 277 of the Constitution and also Section 127 (4) of the Act of 1961, it could only be abolished by Act of the Legislature. It was, therefore, contended that the abolition of the terminal tax by the notification issued on 14th July 1966 was illegal and invalid and in no way affected the continuance of the terminal tax and that as the terminal tax continued to be in force the Council could not impose octroi tax under Section 127 (1) (v) and thus the imposition of the tax with effect from 1st November 1966 and the 'narsimhapur Municipality Octroi (Assessment, Collection and Refund) Rules, 1966, were invalid. Learned counsel also submitted that in any case under the aforesaid rules no octroi tax could be recovered from the petitioner so long as the octroi limits of the Municipality were not defined and that the Municipal Council had not till now defined these limits.;
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