DIGVIJAY CEMENT COMPANY LIMITED Vs. RANIP NAGARPALIKA

JUDGEMENT

(1.) The question involved in this Special Civil Application is the correctness of the assessment and levy of octroi duty by the respondent Ranip Nagar Palika on the items viz; clinker and asbestos fibre imported by the petitioner, Shri Digvijay Cement Company Ltd.

(2.) After the enactment of the Act No.17 of 1993 amending Municipalities Act, 1963, the Ranip Gram Panchayat governed under the provisions of Gujarat Panchayats Act, 1963 became a Nagarpalika i.e. Municipality. Before coming into force of the amended provisions of the Gujarat Panchayats Act, 1963 (Gujarat Act 18 of 1993) with effect from 15.4.1994 as a transitional measure, three Notifications were issued on 14.4.1994 declaring the Gram/Nagar Panchayat as transitional areas as Municipalities in smaller urban areas and appointing administrators in the Nagar Panchayat and Municipalities with effect from 14.4.1994. Its consequence was provided under Notification dated 15.4.1994. Clause 2 of the said Notification provides besides other things, that any Rule, Bye-law or form made, issued or granted or deemed to have been made under Panchayats Act, immediately before the said date, in respect of the local area shall continue in force and shall be deemed to have been made, issued or granted in respect of the municipal boroughs, until it is superseded or modified by any other appointment, notification, notice, order, scheme, licence, permission rules, bye-law or form made under the Municipalities Act. Section 3 of the aforesaid Notification provides that any tax, fee or cess levied under section 181 of the Gujarat Panchayats Act, 1961, which was immediately before the said date were being levied by the State Government or Ranip Gram Panchayat shall continue to be levied in the Municipal Boroughs until it is superseded. By virtue of the aforesaid Notification, the respondent has levied and collected octroi duty as per schedule-I of Rule 24 of the Gujarat Gram & Nagar Panchayats (Taxes & Fees) Rules.

(3.) Prior to 1.4.1995, the respondent was collecting octroi under an agreement of lumpsum payment. The petitioner's application for renewal of the agreement was rejected and the petition company was informed that the octroi will be collected as per the octroi schedule. The petitioner challenged the action of the respondent by way of filing Special Civil Application which was registered as Special Civil Application No. 2679/95. The said Special Civil Application, was resisted by the respondent on the ground that Ranip Nagar Panchayat having been converted into Nagarpalika, it is governed by the provisions of Gujarat Municipalities Act and as such the provisions of section 179 of the the Gujarat Panchayats (Payment of lumpsum contribution by Factories in lieu of Taxes) Rules, 1964 would have no application after the agreement having ended on 31.3.1995. It was thus realised that respondent Nagarpalika cannot be compelled to enter into such agreement and liability to pay octroi has arisen after 1.4.1995. In view of this, the learned Advocate for the petitioner made a submission that the petitioner will make an application to the Nagar Palika under section 128 of the Gujarat Municipalities Act, which enables the Municipality to direct that a current account may be kept open on behalf of the Municipality on the octroi duty from a person and accordingly the petitioner did not press the petition at that stage. The petition was accordingly rejected as not pressed.