D.L.MEHTA, J. - (1.) BY this writ petition filed under Article 226 of the Constitution of India, the petitioner has prayed that Rajasthan Municipalities Act, 1959 (hereinafter referred to as 'the Act') and the notification No. Tax. F.114(2) DLB -1961 dated 13 -5 -68 published in Rajasthan Rajpatra dated 13 -5 -68 imposing the duty of octroi do not apply to the goods imported from outside the State of Rajasthan which are not manufactured or produced in the State of Rajasthan and no tax of octroi can be imposed on such imported goods. Thus, he challenged the validity of the notification referred to above and prays for a declaration that the notification may be declared ultra vires as far as it applies to the goods imported from outside the State of Rajasthan which are not manufactured or produced in the State of Rajasthan and that no tax of octroi can be imposed on such imported goods. He has also prayed that directions may be issued restraining the respondents from imposing, realising or demanding payment of duty of octroi on goods imported within the State of Rajasthan which are not manufactured or produced in Rajasthan.
(2.) PETITIONER is an industrial unit located at Kota where 'rayon, tyre -chord fabrics, rayon tyre yarn rayon tyre chord and their ancillary products like sulphuric acid, carbon sulphide, sodium sulphite and sodium sulphate are produced. For the purpose of manufacturing 'tyre -yard, tyre -chord fabric and/or tyre -chord, the basic raw materials and chemicals used are 'tyre chord grade wood pulp, sulphur, stead coas' and chemicals as per annexure A, B and C. The petitioner has further submitted that tyre -chord grade wood pulp or any other like goods which could be used for the manufacture of tyre -chord fabric or tyre -yard as a substitute for tyre -chord grade wood pulp are not produced and/or manufactured in India and the petitioner has to entirely depend upon the import of the sail items from outside India. The petitioner further contends that the steaming coal sulphur and various chemicals as per annexures A, B and C are not produced anywhere in the State of Rajasthan. The petitioner has to depend entirely on these items and raw materials and chemicals to be brought to Kota in Rajasthan from the States and outside India. The petitioner submits that levy and collection of the duty and octroi on the movement of goods by the respondents on goods like tyre chord grade wood pulp, steam coal and various chemicals as per Anx. A, B and C which are not manufactured and/or produced anywhere in the State of Rajasthan and cannot be subject to any tax on the movement of the goods by the State of Rajasthan under the Constitution, it was submitted that the tyre -chord grade wood pulp is not manufactured in India and is imported from U.S.A., steam coal is not produced in Rajasthan and it is imported from Madhya Pradesh and sulphur also not produced in Rajasthan and is imported from other countries and chemicals are imported from France and other States of India and, therefore, the power to legislate for levy of tax is not available. It wan. also contended that the Act and the notification in question being fiscal in nature, cannot be said to constitute a reasonable restriction on the freedom of trade concerned and intercourse within the territory of India. It was also contended that Article 304(b) of the Constitution of India is not applicable and will not save the notification.
(3.) MR . M.D. Purohit, learned Counsel for the petitioner has argued the writ petition with all the force at his command and has vehemently submitted that Municipality cannot impose the octroi duty and the notification issued by the State Govt. imposing the octroi is void. He has invited my attention to Article 301 of the Constitution which reads as under: 304. Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Learned Counsel for the petitioner contends that notification and the provisions of Section 104 of the Act puts immediate and direct impediment on trade, commerce and intercourse. Article 304 of the Constitution reads as under: 304. Notwithstanding anything in Article 301 or Article 303, the Legislature of a State may be law, (sic) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced and (b) .. (c) Provided that no Bill or amendment for the purposes of Clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. The Rajasthan Municipalities Act, 1959 (Act No. 39 of 1959) received the assent of President on 7th day of September, 1959. Section 104 of the Act imposes tax. It reads as under: 104. Obligatory taxes - (1) Every board shall levy, at such rate and from such date as the State Govt. may in each case direct by notification in the official Gazette and in such manner as is laid down in this Act and as may be provided in the Rules made by the State Govt. in this behalf, the following taxes, namely - (1) .. (2) an octroi on goods and animals brought within the limits of the Municipality for consumption, use or sale therein; and.... The octroi can only be levied on goods and animals brought within the limits of the Municipality for consumption, use or sale therein. Thus, it is clear that the power to impose octroi are limited only when the goods are brought within the limits of the Municipality for consumption, use or sale therein. Rule 9 of the Rajasthan Municipalities (Octroi) Rules, 1962 (hereinafter referred to as the 'Rules') is as under: 9. Declaration of goods brought into the Municipal limits. - (1) Every person bringing within the Municipal limits goods liable to payment of octroi shall produce such goods at the octroi outpost and shall declare whether goods are intended: (i) for consumption, use or sale within the Municipality; or (ii) for immediate transportation outside the Municipality, or (iii) for temporary detention witrin the Municipal limits and eventual transportation outside the Municipal limit. (2) Declaration under Clause (i) of Sub -rule (1) 'may be oral declaration under Clause (ii) and (iii) shall be in writing in Form No. 1 and shall be tendered to the incharge of the octroi outpost at the time of bringing the goods within the Municipality. If no such declaration is made the goods shall be treated as having been brought within the Municipal limits for consumption, use or sale therein. It makes very clear that if the goods are imported or brought within the Municipal limits for immediate transportation outside the Municipality or temporary retention within the Municipal limits and eventual transportation outside the Municipal limits, then the goods are not liable to payment of octroi. However, a declaration has to be given at the time of the import within the Municipal limits as provided under Clause (2) of Rule 9. ;