KIRLOSKAR PNEUMATIC CO. LTD. Vs. MUNICIPAL CORPORATION FOR THE CITY OF POONA

JUDGEMENT

(1.) By this petition the petitioner-Company seeks to challenge the right of the Municipal Corporation for Poona to collect octroi duty on raw materials and articles imported by it for the purpose of its manufacture. The short facts are as follows.

(2.) The respondent-Corporation was constituted as a Municipal Corporation under the Bombay Provincial Municipal Corporations Act of 1949, somewhere in 1949. The Act itself incorporated certain rules for the municipal administration including taxation. Under section 127, sub-section (1) the Corporation is required to impose property taxes and the taxes on vehicles, boats and animals and it has no option not to impose the same. By nub-auction (2) it has option to impose other kinds of taxes, one of which is the octroi. By sub-section (3) it is provided that the municipal taxes shall be assessed and levied in accordance with the provisions of the Act and the rules. Sec. 149, sub-section (1) requires the Corporation to make detailed provision by rules in connection with the assessment and collection of any of the taxes which it decides to levy under section 127, regarding such matters as the rules do not provide for. With other clauses in the sub-sections we are not at present concerned. Sub-section (2) of section 149 enables the Government to either refuse to sanction the rules and refer the same back to the Corporation for reconsideration or to sanction the same with or without modifications. Sec. 453 provides that the rules in the Schedule as amended from time to time shall be deemed to be parts of the Act. Sec. 457 relates to the powers of the Corporation to frame rules with regard to the matters enumerated therein. Clause 7 thereof relates to municipal taxes and sub-clause (c) deals with the powers of the Municipal Corporation to frame rules in relation to all matters referred to in sub-section (2) of section 149 in respect of taxes leviable under sub-section (2) of section 127. Thus the rules have to provide for the nature of the taxes to be levied, rate thereof, class or classes of persons, articles of properties liable to tax, exemption therefrom, if any, to be granted.

(3.) At the time the Act was passed, it contained certain rules for imposition and recovery of taxes by the Corporation. These rules are contained in Chapter 8 of the Schedule. Rules 26 to 29, 35, 49 and 62 relate to octroi. Later on in order to encourage industrial development in Poona, the State Government added rule 62-B to the Schedule by a resolution dated Sept. 7, 1957, and it was published on Oct. 10, 1957. This rule provided for exemption of taxes and reads as follows: