S. K. Dhaon, J. - (1.) -
(2.) 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. 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 against the said judgment of the If Civil Judge. These appeals were dismissed by a common judgment dated 4th October, 1986, by the II Additional District Judge. However, the Additional District Judge allowed the cross-objections preferred by the Corporation and restrained the Mahapalika, its employees and servants from detaining the trucks and vehicles of the Corporation with material thereon, from imposing any octroi on the goods brought to the Corporation till the Union Parliament enacted any law permitting the Mahapalika to impose and recover octroi. Hence the two writ petitions before this Court. Chapter XXV of the Adhiniyam provides for transitory provisions, repeals and amendments. Section 577 (a), which falls in this Chapter, provides that save as expressly provided by the provisions of the said Chapter or by a notification issued under section 579, any......tax......imposed......under the Municipalities Act, 1916......or any other law in force in any local area constituted to be a City immediately before the appointed day shall, in so far as it is not inconsistent with the provisions of the Adhiniyam, continue in force until it is superseded......under the Adhiniyam. Sub-section (2) of section 2 says that "appointed date" with reference to a City means the date on which the due Constitution of the Mahapalika for the City is notified in the official Gazette. Section 172 of the Adhiniyam authorises the Mahapalika to impose amongst other taxes an octroi on goods or animals brought within the City for consumption, use or sale therein. I have already indicated that prior to 16 November, 1981, the appointed date, so far as the instant case is concerned, the Municipal Board, Gorakhpur was realising octroi. As indicated, the Adhiniyam authorises the Mahapalika to impose octroi. Therefore, by the force of the provisions contained in section 577 (a) the Mahapalika became entitled to realise octroi as was done hitherto fore by the Municipal Board, Gorakhpur, there being no inconsistency between the U. P. Municipalities Act, 1916 and the Adhiniyam so far as the imposition and realisation of the said tax was concerned. It follows that the Mahapalika was entitled to impose and realise octroi with effect from 16th November, 1981 in the area which was under the jurisdiction of the Municipal Board Gorakhpur and it can continue to do so till a change is effected in accordance with law.
(3.) SUB-section (2) of section 3 of the Adhiniyam provides that the State Government may from time to time......by notification in the official Gazette alter the limits specified for any City under sub-section (1) so as to include therein or to exclude therefrom, such area as may be specified. As already indicated, by virtue of a notification issued on 15th June, 1982 under the said provision the area which fell in the jurisdiction of the Notified Area was brought under the jurisdiction of the Mahapalika. By section 6 of the U. P. Urban Local Self-Government Laws (Amendment) Act, 1987 (U. P. Act No. 3 of 1987) (hereinafter referred to as the Act of 1987) sub-section (4) to section 3 of the Adhiniyam was inserted. It will be profitable to extract section 6 of the Act of 1987 :- "6. In section 3 of the principal Act, after sub-section (3), the following sub-section shall be and shall always be deemed to have been inserted, namely :- '(4) Whereby reason of a notification under sub-section (2), any area is included in a city constituted under sub-section (1), such area shall thereby become subject to all notifications, rules, regulations, bye-laws, orders, directions issued or made under this or any other enactment and in force in the City at the time immediately preceding the inclusion of such area, and all taxes, fees and charges imposed under this Act, shall be and continue to be levied and collected in the aforesaid area." A plain reading of sub-section (4) indicates that an area included in a City shall be subject to all notifications, rules, regulations, bye-laws, orders, directions issued or made under any enactment and enforced in the City at the time immediately preceding the inclusion of such area and all taxes, fees and charges imposed under the Adhiniyam shall be and continued to be levied and collected in the area so included. Applying the sub-section to the present case, the conclusion is inevitable that taxes etc. which were being levied and realised by the Mahapalika can be levied and realised in the area which was immediately before 15th June, 1982, under the jurisdiction of the Notified Area. In other words, without more, octroi could be imposed and realised by the Mahapalika from the newly added area to its jurisdiction and this activity could commence from 15th June, 1982 and go on till a change is brought about. Sri Jagdish Swarup, the learned counsel for the Corporation, has contended that sub-section (4) will apply to an area where under the law octroi could be levied but was not being levied and also to an area where law did not permit the levy of octroi. It will have no application where the imposition of octroi has been abolished. The provisions of clauses (a) and (b) of sub-section (2) to section 338 of the U. P. Municipalities Act, 1916, as they stood on or before 7th April, 1979 are relevant. In clause (a) to sub-section (1) the State Government is empowered to apply or adopt to a Notified Area the provisions of all or any of the Section of the said Act, or of any Act, which may be applied to a Municipality or a part......subject to such restrictions and modifications. In clause (b) the State Government is empowered to impose in the whole or part of such area any tax which might be imposed therein under the provisions of the said Act or of any other Act, if the said area were a Municipality. Clause (viii) to sub-section (1) of section 128 of the U. P. Municipalities Act permitted the imposition of octroi. By the Act of 1979 amongst other provisions clause (b) in section 338 (1) had been substituted to the effect that the notified area was authorised to impose all the taxes mentioned in section 128 (1) of the U. P. Municipalities Act except toll and octroi. Section 4 of the Act of 1979 may be extracted : "4. Abolition of certain taxes. -Notwithstanding anything contained in any other law for the time being in force, where as a consequence of the amendments made by this Act in the U. P. Municipalities Act, 1916 and U. P. Town Areas Act, 1914 the power to impose any tax (which term includes a toll and octroi) has been taken away, any such tax imposed prior to commencement of this Act, in respect of the whole or part of a municipality, notified area or town area shall on the commencement of this Act stand abolished, without prejudice to the liability in respect of such tax incurred prior to such commencement." ;