- (1.) City of Nagpur Corporation has brought in challenge the order passed by the High Court of Bombay, Nagpur bench in Writ Petition No.1224 of 1980 by obtaining special leave to appeal against the said judgment. Respondent herein had moved the said writ petition challenging the impugned notification dated 10th December 1979 issued by the State of Maharashtra sanctioning the octroi rates proposed by the appellant-Corporation under Section 115 read with Section 114(1)(e) of the City of Nagpur Corporation Act, 1948 (hereinafter referred to as 'the said Act') on the ground that as the State of Maharashtra had not framed any rules fixing the maximum rates of octroi tax under Section 114, sub-section (3) of the said Act, the impugned notification was of no legal effect. The aforesaid challenge to the impugned notification was upheld by the High Court and that is how the appellant-Corporation is in appeal before us. Background facts
(2.) A few relevant background facts leading to these proceedings deserve to be noted at the outset. The respondent, original writ petitioners before the High Court, are manufacturers of incense sticks (agarbatties). They carry on their manufacturing activities within the limits of the appellant-Municipal Corporation. Through a notification dated 10th December 1979 issued by the State of Maharashtra the appellant-Corporation sought to revise the rates of octroi duties on various items including aromatic chemicals, perfumery and natural oils in which the respondents were dealing and which were raw materials for the purposes of their business of manufacturing incense sticks. They had to import within the octroi limits the said raw materials from outside. According to the respondents the impugned notification sought to revise upwards the rates of octroi duty on these articles which went beyond the maximum rates of octroi fixed by the State of Madhya Pradesh under C.P. and Berar Municipalities Act, 1922 (hereinafter referred to as the '1922 Act') and was, therefore, ultra vires and illegal. This contention of the respondents was accepted by the High Court. We may now have a look at the relevant events preceding the instance of the impugned notification.
(3.) The C.P. and Berar Municipalities Act came into force in 1922. On 5th September 1923 a notification was issued by the then local Government under Section 66, sub-section (2) of the 1922 Act regulating the imposition of octroi and also imposing maximum amounts of rates for the said tax. The said notification applied to the local area which now is comprised in the appellant-Corporation. On 3rd February, 1926 a further notification was issued framing Imposition Rules for Terminal Tax under Section 66(1)(o) of the 1922 Act. The said terminal tax was impossible on the goods imported within the limits of the local municipality which was the predecessor of the appellant-Corporation. One further notification under Section 66(2)(e) of the 1922 Act was issued by the then local Government on 29th April 1950 laying down the maximum rates of octroi tax. On 21st February 1951 rules were promulgated under Section 66(1)(c) of 1922 Act for levy of octroi as per Section 66(1)(e) of the 1922 Act. These octroi rules came into force from 1st March 1951 in the local area then comprising the Nagpur City. On 2nd March 1951 the City of Nagpur Corporation Act, 1948 came into force. It is not in dispute between the parties that the said Act governs the controversy raised in this litigation. In supersession of the octroi rules framed on 21st February 1951 a fresh notification was issued by the appellant Corporation framing Octroi Imposition Rules under Section 114(1)(e) of the said Act and the said rules having obtained the requisite sanction from the State of Maharashtra came into force from 1st June 1966. Octroi duty was thereafter being levied by the appellant-Corporation as per the rates imposed on the notified goods covered by the said rules of 1-6-1966. These rules were further amended by notification dated 20th April 1974. These amended rules came into force from 15th May 1974. Up to that stage the respondent-writ petitioners had no grievance. However the said rules came to be further amended by notification dated 10th December 1979 by which the original octroi rules framed under Section 114(1)(e) in the year 1966 came into force from 1st January 1980. The respondent writ petitioners felt aggrieved by this latter amendment to the octroi rules brought in force pursuant to the said notification dated 10th December, 1979.;