BALIA, J. - (1.) THE Railways, represented by the Union of India, through this writ petition has challenged the authority of the Municipal Council, Jodhpur to levy octroi under sec. 104 of the Rajasthan Municipalities Act, on the goods imported within the limits of the Municipal Council. It has also challenged the validity of the notification dated 6. 6. 1981 and 28. 8. 1984. Ancillary to the aforesaid relief, the petitioners claimed the release of the goods seized by the respondent No. 2 for the non-payment of octroi by the petitioner.
(2.) THE goods which are subject matter of the present controversy, are the cement bags imported by the Railway administration for its construction work, which are purchased from the Cement Corporation of India. This is the contention of learned counsel for the petitioners that sec. 107 of the Rajasthan Municipalities Act prohibits levy taxation, enumerated under clause (1) and (2) of sec. 104 of the Act and in clauses (i), (iii), (iv) and (v) of sub-sec. (1) of sec. 105 of the Act, in respect of any and, building, goods vehicles, conveyances, boats or animals, belonging to or vested in the Central Government or the State Government. THE levy of octroi in the goods imported within the municipal limits is authorised under clause (ii) of sec. 104. He also placed reliance on sec. 135 of the Indian Railways Act, 1890. From the pleadings of the parties and the documents placed on record, it appears that the respondent No. 2, the Municipal Council, Jodhpur, wanted to levy octroi in respect of goods imported by the Railway administration, on the ground that the Railway is a department of the Central Government and, therefore, it is not part and parcel of the Central Government, but, as it is being administered by a Board, known as Railway Board, it is commercial undertaking of the Central Government, thus, it being an independent justice person, does not come within the purview of exemption granted under sec. 107 of the Rajasthan Municipalities Act and to get over the provisions of sec. 135, learned counsel relied on certain notifications, dated 6. 06. 1981 and 28. 04. 1982, issued by the State Government, which are Annex. 3 and 3a respectively, annexed with the writ petition. It is also the plea of the respondent that the goods purchased by the government become the property of the State only on its reaching the State grown and not before it. Therefore, if the octroi becomes payable in respect of any goods before it becomes property of the Central or the State Government, or the Railways, does not become exempt from payment of a tax under sec. 107 of the Municipalities Act or under sec. 135 of the Indian Railways Act, as the case may be. So far as the contention of learned counsel for the respondents that the Railways administration is not a part of the Central Government but is a separate and independent undertaking, having a separate juristic identity is concerned, is not acceptable. No material has been placed on record by the respondents to sustain the plea of Railway being not part and parcel of the Central Government but being a separate undertaking having independent existence. Moreover, as it will be seen, presently this distinction about the status of the Railway administration has hardly any relevance with the present controversy. It will be relevant for the present purposes to re-produce the provisions of sec. 107 of the Municipalities Act, as well as sec. 135 of the Indian Railways Act, 1890: Sec. 107 of the Raj. Municipalities Act, 1959 "107. Exemptions from taxation.- (1) None of the taxes specified in sections 104, 105 and 106 shall be leviable by a board in respect of any property belonging to or vested in it. (2) None of the taxes specified in clauses (1) and (2) of section 104 and in clauses (i) , (iii), (iv) and (v) of sub-section (1) of section 105 shall be leviable in respect of any lands, building, goods, vehicles, conveyance, boats, or animals belonging to or vested in the Central Government or the State Government : Provided that, so long as any such tax continues to be levied by the board on like properties of other persons, nothing in this sub-section shall prevent the board from levying that tax to which, immediately before the 26th day of January, 1950 any lands, buildings, goods, vehicles, conveyances, boats or animals of the Central Government were liable or treated as liable: Provided further that any land, building, goods, vehicles, conveyance, boat or animal belonging to or vested in the State Government shall be so exempt from payment of any such tax, if the same is used or intended to be used solely for public purposes of profit. (3) omitted. (4) The tax specified in clause (1) of section 104 shall not be leviable in respect of land and buildings used solely as places of public worship or towards such religious or charitable purposes. Explanation I. 'charitable purpose' includes relief of the poor education and medial relief. Explanation II. When any portion of any land or building is exempted from payment of tax under this sub-section such portion shall be deemed to be a separate property for the purpose of the said tax. (5) The State Government may, if in its opinion, reasonable grounds exist for so doing, grant and define, by notification in the Official Gazette, such exemptions in exceptional cases from payment of a tax leviable under section 104 or imposed under section 105 or under section 106 as it may consider necessary. " Sec. 135 of the Railways Act, 1890: "135. Taxation of Railways by local authorities. Notwithstanding anything to the contrary in any enactment, or in any agreement or award based on any enactment, the following rules shall regulate the levy of taxes in respect of Railways and from Railway administrations in aid of the funds of local authorities, namely ; - (1) A Railway administration shall not be, liable to pay any tax in aid of the funds of any local authority unless the Central Government has, by notification in the Official Gazette, declared the Railway ad-ministration to be liable to pay the tax. (2) While a notification of the Central Government under clause (1) of this section is in force, the Railway administration shall be liable to pay to the local authority either the tax mentioned in the notification or, as an officer appointed in this behalf by the Central Government may, having regard to all the circumstances of the case, from time to time determine to be fair and reasonable. . (3) The Central Government may at any tie revoke or vary a notification under clause (1) of this section. (4) Nothing in this section is to be constructed as debarring any Railway administration from entering into a contract with any local authority for the supply of water or light, or for the scavenging of Railway premises, or for any other service which the local authority may be rendering or be prepared to render within any part of the local area under its control. (5) "local authority" in this section means a local authority as defined in the General Clauses Act, 1887, and includes any authority legally entitled to or entrusted with the control or management of any fund for the maintenance of watchmen or for the conservancy of a river. " In this connection, reference may also be made to another enactment, namely, the Railway (Local Authorities Taxation) Act, 1941; in which sec. 3 was enacted in the same terms as sec. 135 of the Indian Railways Act. This enactment was brought into force due to exigency that has arisen in the wake of Government of India Act, 1935, having came into force. Because of the provisions of Sec. 154 of the Government of India Act, the provisions of Indian Railways Act were not applicable to State owned Railways, and in order to remove said difficulty, the Act of 1941 was brought into force to make it applicable in connection with all Railways, giving the Railways immunity from taxes levied indeed of local funds, except by notification published in the Official Gazette, to be issued by the Central Government in this behalf.
(3.) IT may also be noticed here that Art. 285 (1) save the property of Union from all taxes imposed by a State or by any other authority within the State, except such that the Parliament by law otherwise provide. Likewise, under Art. 289 (1); the property and income of the State has been exempted from Union taxation. Apart from the aforesaid provisions, it is fundamental principal that nobody can tax ones' own property. Aforesaid principles were enshrined under Arts. 285 and 289; exempting the Union property as well as the State property from taxation, which each one of them is authorised to impose under the Scheme of the Constitution. Sec. 107 of the Municipalities Act has obviously been enacted to give effect to aforesaid provisions of the Constitution. Sec. 135 of the Indian Railways Act or sec. 3 of the Act of 1941 referred to above, are both pre-constitutional laws enacted by competent legislatures. They provide specifically, exemption in respect of property belonging to or vested in the Railways. It may be observed here that though powers of taxing on entry of goods brought within the local area for consumption, use or sale therein, under the scheme of distribution of legislative powers under the Constitution, is covered by Entry 52 of List II of Schedule VII, falling in the exclusive field of State Legislature and, power to grant exemption being ancillary too power to impose tax, also falls within the purview of State Legislature, the pre- Constitutional laws are saved under Art. 372 from being hit from the vice of repugnancy. If the pre-constitutional law was made by a competent authority, it does not cease to continue-after the Constitution merely because that authority lost legislative competence over the subject matter, merely on the ground of distribution of legislative powers. Reference in this connection may be made to V. Patankar and Ors. v. C. C. Sastry (1); wherein their Lordships repelled the contention of repugnancy in the case of applicability of House Rent Control Order of 1948, having become repugnant on the commencement of Mysore Rent Control Act, 1951; on the ground that it was an existing law, which was saved by Art. 372 of the Constitution and remain un-affected by Art. 254 of the Constitution. ;