(1) This revision application raises a short but rather interesting question as to the competency of a district local board to levy octroi duty. The petitioner sent certain goods from Sawantwadi to Kunkeri and the district local board of Ratnagiri levied octroi duty on these goods when they entered Kunkeri. Kun-Keri is in the Ratnagiri District and after merger Sawantwadi has also become part of the Ratnagiri District. The plaintiff filed a Small Cause Court suit for recovery of the amount which he had paid under protest as octroi duty and the Small Cause Court Judge dismissed the suit holding that the duty had been properly levied. It is from that decision that this revision application is preferred.
(2) Now, the duty has been levied under rules framed by the District Local Board of Ratnagiri and in these rules 'octroi' is defined as a tax on goods brought within the octroi limits for the purpose of consumption, use or trade therein, and 'octroi limits' is defined as the whole of the area subject to the jurisdiction of the Board under Section 4 of the Act. It cannot be disputed that if the rules framed are within the scope of the Act, then the levy has been properly made. But Mr. Samant's contention is that looking to certain amendments which were introduced into the Local Boards Act of 1923 these rules are 'ultra vires'. Now, two new definitions were added in Section 3 of the Bombay Local Boards Act. One was the definition of 'district' and 'district' was defined as the district referred to in Sub-section (1) of Section 3A or the local area declared as a district under Sub-section (2) of that section, as altered by the notification, if any, issued under Sub-section (3) of the same section, Turning to Section 3A, under sub-clause (1) a district is the same as a local area constituted as a district. Then Sub-clause (2) empowers the State Government in special circumstances to declare any local area whether in the same district or in any other district to be a district for the purposes of the Act, and Sub-clause (3) empowers the State Government by a notification in the Official Gazette to exclude from any district any local area comprised therein, or include in any district any local area in the vicinity thereof. No notification has been issued either under Sub-clause (2) or Sub-clause (3) of Section 3A, and it is not disputed that the Ratnagiri District is the same district for the purposes of the Land Revenue Code as for the purposes of the Bombay Local Boards Act, 1923. Then we have the definition of 'octroi' which is defined as a tax by way of case on the entry of goods into a district for consumption, use or sale therein. Therefore, it is clear from this definition that it is only when goods enter into a district from another district that the octroi tax can be levied. No tax would be an octroi tax if it is levied on goods which come from one part of the district into another. Then the other relevant section is Section 4 which provides that the State Government may establish a district local board for an area constituted as a district, and in this case a district local board has been constituted for the Ratnagiri district, and turning to Sub-section (3), a district local board shall have authority for the purposes of this Act over the area for which it has been established, except such portion thereof as is for the time being within the limits of a municipal district or cantonment. This Sub-section therefore defines the jurisdiction of the district local board and it is true that the jurisdiction of the local board is not co-extensive with the district but it is limited to the whole of the district excepting those portions therein which are within the limits of a municipal district or cantonment. In this particular case it is again common ground that Sawantwadi has a Municipality and constitutes a municipal district.
(3) Now, the contention of Mr. Purshottam on behalf of the local board is that the jurisdiction of the district local board did not extend to the municipal limits of Sawantwadi, and as the goods came from Sawantwadi into an area over which the district local board had jurisdiction, it was competent for the district local board to levy octroi duty. This contention is consistent with the rules framed by the district local board to which I have already drawn attention. If it was competent for the district local board to levy octroi duty on goods which are brought within its octroi limits and if octroi limits were to mean the whole of the area subject to the jurisdiction of the board under Section 4 of the Act, then undoubtedly the district local board was within its rights in levying octroi on goods which came from Sawantwadi to Kunkeri, because the goods came from outside the octroi limits of the district local board into those octroi limits. But unfortunately these rules were first framed as far back as 1929 and these rules have continued to remain the same notwithstanding the amendments introduced into the Act to which I have drawn attention. It is clear that the rules framed by the district local board cannot go beyond the scope of the Act itself, nor can they be inconsistent with the Act, and therefore we have got to look at the Act as it is amended to consider whether these rules are proper rules. If octroi means, as it does mean under the amended Act, a tax on the entry of the goods into a district, then it is not open to the district local board to levy octroi when goods come from one part of the district into another although the part from which the goods come are not within the octroi limits of the district local board. The district contemplated in the definition of 'octroi' under the Act is the district defined in the Act itself and that is either the revenue district or the revenue district altered or modified by a notification by Government under Section 3A. If the limits of the district had not been altered, then the revenue district is the same as the district for the purposes of the Local Boards Act and for the purposes of considering the right of the district local board to levy octroi on goods entering into the district. Mr. Purshottam asks me to read the definition in Section 3 with Section 4 and Mr. Purshottam says that the district in the definition of 'octroi' can only mean not the whole of the revenue district but only that portion of the district over which under Section 4 the district local board has jurisdiction. I am unable, to accept that contention. When an expression is defined in the Act, that definition must apply wherever that expression occurs in the statute, unless the Act itself indicates to the contrary, and therefore I can only read the expression 'district' in the definition of 'octroi' as defined by the Act itself. The purpose of Section 4 is entirely different. It prescribes the limits of the jurisdiction of the district local board, whereas the definition of 'octroi' defines what that particular tax is and it makes it clear that the tax can only be an octroi tax provided the goods entered into a district from another district. Mr. Purshottam says that this interpretation, may lead to evasion of the tax by people taking goods to Sawantwadi and then bringing it into the other parts of the district over which the district local board has jurisdiction. I am not really concerned with the possibility of evasion of tax. I am considering rules which are taxing rules and they must be strictly construed in favour of the subject. Therefore, in my opinion, the rules framed by the district local board defining 'octroi' and 'octroi limits' are 'ultra vires' and it was not competent to the district local board of Ratnagiri to levy octroi on goods which entered Kunkeri from Sawantwadi.
(4) The result is that the rule will be madeabsolute with costs, and there will be a decreein favour of the applicant for Rs. 4-6-0.
(5) Rule made absolute.