- (1.) THIS is a petition by Gaurishanker under Article 226 of the Constitution of India against the Municipal Board of Jhunjhunu (hereinafter called the Board) and the State of Rajasthan.
(2.) IT has been stated in the petition that the petitioner is residing within the municipal limits of the town of Jhunjhunu. He is a citizen of India and does his business in Jhunjhunu under the name and style of Messrs. Chhanguram basantlat. He imports goods of general merchandise such as tea, biscuits, soap, oil and cigarettes etc. , from outside and sells them in retail and mostly in wholesale to the merchants of Jhunjhunu and of neighbouring villages. The Board levied octroi duty on every import of goods within the municipal limits and has been collecting the said duty from 1st July, 1953. The petitioner along with several other citizens of the town took objections before the Board and the Collector of the district on several occasions against the said levy of octroi duty and its collection, but all of them were disregarded and the Board continued to levy and collect octroi duty.
(3.) THE petitioner assails the levying of the octroi duty by the Board on the following grounds: 1. The action of the Board in levying octroi duty contravenes the provisions of Article 301 regarding the freedom of trade, commerce and intercourse throughout the territory of India subject, of course, to certain restrictions to be imposed under Part XIII of the Constitution. 2. The State of Rajasthan has not imposed any restriction on the freedom of trade and intercourse as envisaged under Article 301 of the constitution. The power to impose any tax or duty could not be delegated by the State to any town municipality and consequently section 59 of the Rajasthan Town Municipalities Act, 1951 (hereinafter called the Act) which purports to confer power on the Municipal Board to impose tax or duty is ultra vires the Legislature. 3. Under Section 59 (4) of the Act, octroi duty could be imposed only on goods brought within the octroi limits for consumption and use and not for sale. The imposition of octroi duty under the notification published in the Rajasthan Gazette dated 6th June, 1953 part II at page 263 by which the Municipal Board purports to impose octroi duty from 1st July 1953 is ultra vires, illegal and without jurisdiction: 4. The mandatory procedure prescribed for the subordinate legislation under the Act has not been followed as (a) the resolution within the meaning of Section 60 (a) was not passed and the rules for the purposes of Clause (h) of Section 44 were not made; (b) the Board did not publish the draft rules at all in prescribed form within the meaning of Section 60 (b) and as such no opportunity was given to the general public for taking objections against the proposed rules; (c) on account of the omission to prepare the rules under section 44 (b) the provisions of Section 60 (c) have been disregarded; (d) the Board has made certain bye-laws for the purpose of clause (k) of Sub-section (1) of Section 46 of the Act which are supposed to be under Section 81 of the Act. These byelaws were not published within the meaning of Section 48 (2)of the Act; (e) the bye-laws after they were sanctioned were not published and the mere factum of sanction was notified in the rajasthan Gazette dated 6th June 1953. 5. The Board cannot legally and validly impose levy and recover octroi duty under the authority of the said bye-laws. 6. The aforesaid bye-laws are not rules and cannot be treated to have been made as such. In any event they were not published under Sections 60 (b) and 62 of the Act. They were never resolved by the board as rules nor were they sanctioned by the government as such, and 7. The imposition of the octroi duty could not have been legally enforced from 1st July 1953, the date being less than one month from the date of the publication of the notification.;