V.K. Bali, J. - (1.) THERE is no dispute that, in view of the provisions contained in Article 256 of the Constitution of India read with Entry 52 of List I of the VII Schedule, the State can levy taxes on the entry of any goods into the local area for consumption, use or sale therein. There is also no dispute that the state has delegated these powers to the Municipal Committee under Section 61 of the Punjab Municipal Act, 1911 (hereinafter referred to be as the 1911 Act'). Explanation to Section 61 (2) of the 1911 Act further clarified that in the said section, tax includes any duty, cess or fee, which the State legislature has the power to impose in the State under the Constitution, of course, with the previous sanction of the State Government. 'Octroi' has been defined in Chapter v. of Rule I to mean entry into limits of municipality, of goods for consumption, use or sale therein. What is, however, seriously disputed, is competence of the Government of Punjab giving powers as per instructions dated 27.5.1989 (Annexure P -1) to the Commissioner. Municipal Corporation, Jalandhar, Ludhiana and Amritsar and all Executive Officers of the Municipal Committees and Notified Area Committees in the state of Punjab, whereby it has been clarified that Municipal Authority can inspect shops and building to see whether any goods have been imported without payment of octroi and further that in their endeavor to check the octroi evasion they can also take police assistance from District Administration. The primary grouse of the Petitioners, who are dealing in electronic goods in Patiala, is that instructions (Annexure P -1) go far beyond the provisions of Sections 76 and 77 of the 1911 Act, by virtue of which provisions alone, the Municipal Authorities have power to check the evasion of octroi. Challenge to Annexure P -1 on the ground aforesaid failed, as Civil Writ Petition filed by the Petitioners bearing No. 9892 of 1990 was dismissed by the learned Single Judge vide order dated June 4, 1993. In this Letters Patent Appeal filed under Clause X of the Letters Patent, challenge is. obviously, to the judgment of learned Single Judge.
(2.) BEFORE we may examine legality of instructions (Annexure P -1), it would be appropriate to extract facts of the case even though succinctly, all the Appellants, for facility of reference, hereinafter referred to as the Petitioners, are running their shops of electronic goods at Patiala. As per the case set up by them, they bring television sets, radios, watches and other electrical goods to their shops after paying the octroi. They have their godowns outside the limits of the periphery of the Municipal Committee from where they are also selling goods to the villagers. When Municipal Committee started harassing them for giving accounts of goods brought in their shops within the municipal limits, they submitted their accounts to the Municipal Committee by showing each and every article which had been brought within the municipal limits, after paying octroi at the barriers of the Municipal Committee. However, Municipal staff came to different bazars from 14.7.1992 to 16.7.1992 along with C.R.P.F. personnel and started raiding their shops in the town. They picked up goods from the shops of number of the Petitioners, which includes television sets, watches, radios etc. without even issuing receipts. They forcibly entered the shops and whatever they found, they took in their custody with a threat to arrest the owners of the shops and, thus, created anarchy in different bazars of the city. The members of the Association wanted to know under which law they can enter the premises of the Petitioners for search and seizure, but, the raiding party only gave a threat to them to arrest them for creating hindrance in the matter of search and seizure. After reproducing Section 77 of the 1911 Act. the Petitioners submitted that the action of the authorities is without jurisdiction because circular/instructions (Annexure P -1) issued by the Punjab Government is against the provisions of the 1911 Act. The Act nowhere authorises raiding of shops/premises and, therefore, instructions (Annexure P -1) are contrary to the provisions of Sections 76 and 77 of the 1911 Act or in other words, giving such powers to the Municipal Authorities would result in insertion or addition to Sections 76 and 77, which cannot be done but for by legislative measures. The cause of the Petitioners was hotly contested in the written statement filed on behalf of Respondents 1 and 2. By way of preliminary objections, it was pleaded that the Petitioners have not come to this Court with clean hands, as they have failed to bring true facts to the notice of this Court. The Act authorises the Local Body to search and seize any article on which the octroi is chargeable to satisfy the demand in case the person bringing or receiving conveyance or package within the octroi or terminal taxes are leviable refuses to pay the same on demand by an officer authorised by the State Government or the Committee in this behalf. As such circular, Annexure P -1, is stated to be in consonance and not against the provisions of Section 77 of the 1911 Act and Section 115 of the Punjab Municipal Corporation Act. 1976. Respondent No. 3, the Municipal Committee, in its written statement asserted that the Petitioners have misstated while alleging that the Municipal Committee staff along with C.R.P.F. personnel had gone to raid the premises of the Petitioners in different shops in the town and picked up goods from there. This is a false allegation. The factual position is that after receiving letter from the State Government. Municipal Committee has issued notice to all the dealers engaged in sale of electronics goods. Specimen of the notice has been annexed to the written statement as Annexure R -1. Through this notice, they were informed that the electronic goods, which they have brought within the municipal limits without paying octroi charges, are tenable to octroi and, therefore, the Petitioners were requested to show the receipts of the electronic goods for which octroi has been paid. If the octroi had not been paid then the goods were to be seized by the inspection staff. After receiving the notice, the deputation of the dealers met the Administrator, Municipal Committee, on 13.7.1992 and requested that they may be given a chance to pay octroi voluntarily. The Administrator gave them 15 days time upto 28.7.1992 and keeping their promise, the Respondent committee did not raid any premises of the Petitioners. It is then pleaded that after taking a period of 15 days, most of the reputed dealers (13 of them) deposited octroi that had been evaded to the Municipal Committee and writ petition on their behalf, in any case, has become infructuous. It is further pleaded that me allegation of the Petitioners that Municipal Committee staff had raided their premises, shops or house and had taken the goods from there is incorrect and the same is mis -statement on facts. Neither any municipal staff nor the CRPF had gone to their premises. On facts, it is further stated that it is an admitted position that the Petitioners have their stores/go -downs out side the area of Municipal Committee, from where delivery of articles is given to the customers of the villages and town with an intention to evade octroi while the sale is always executed from their shops within the municipal limits. This evasion of octroi leads to huge loss of public funds. The Petitioners charge octroi from the purchaser along with price of the article but do not pay the octroi to the Municipal Committee and, therefore, they intend to defraud the Municipal Committee. Validity of Annexure P -1 has been defended by pleading that the same does not violate Sections 76 and 77 of the 1911 Act.
(3.) BEFORE we may deal with the legal questions as formulated above, we would like to mention that after going through the pleadings of the parties we are convinced that the allegation made by the Petitioners that their shops were raided by the staff of the Municipal Committee along with CRPF personnel and their goods were picked up does appear to be false. The facts of the case reveal that before any action could be taken or the shops could be inspected, a notice was given to the Petitioners. It is conceded position that some of the Petitioners, pursuant to the notice, referred to above, did pray for time to pay the octroi and indeed paid the same.;