1. Bhoruka Textiles, a unit of Transport Corporation of India Ltd., a public limited company incorporated under the Indian Companies Act, the petitioner before this Court has established a textile factory on Sy. No. 125 of Sattur village, situated within the territorial area ofHubli-Dharwad Municipal Corporation (The Corporation). The Corporation originally constituted under the Bombay ProvincialMunicipal Corporation Act, 1949 (Bombay Act) is now governed by the uniform Karnataka Municipal Corporations Act, 1976 (Karnataka Act 14/1977) (Corporation Act) from 1-6-1977 from which day, the Bombay Act stood repealed in the Bombay area of new State of Karnataka.
2. Under the Bombay Act that was then in force, the Corporation, with the previous sanction of Government, making appropriate amendments to its bye laws and orders, the first one in No. LMA 158 MNY 67 dated 20-1-1968 (Annexure-B) and the second one in Order No. HMA 481 MNY 75 dated 9th June 1976 (Annexure-A), exempted the petitioner from payment of octroi on contrivable articles imported into its territorial area for a period of ten years from 10-6-1976. On the basis of these orders, the petitioner has not been paying octroi from 9-6-1976 on cotton imported to the territorial area of the Corporation.,
3. The Karnataka Taxation and Certain other Laws (Amendment) Act, 1979 (Karnataka Act 21 of 1979) (1979 Act), inter alia provided for abolition of octroi in the State of Karnataka with effect from 1-4-1979 (vide Sections 9 and 11 of the Act).
4. In order to augment the loss of revenue occasioned by the abolition of octroi and otherwise, the State enacted the Karnataka Tax on Entry of Goods into Local Areas forConsumption, Use or Sale Therein, Act, 1979 (Karnataka Act 27 of 1979) (The Entry Tax Act) that came into force from 1-6-1979, and the same has been upheld by the Supreme Court in State of Karnataka -v.- Hansa Corporation : 1SCR823 . The later amendments made to Entry Tax Act have been upheld by a Division Bench of this Court in Jyothi Home Indusries-v.- State of Karnataka 1984(1) KLJ 394 Section 3 of the Act whichis the charging section provides for levy of a tax on entry of the scheduled goods into a local area for consumption, use or sale therein at the rate stipulated in that Section. This Act which is a fresh taxation measure has been enacted by the State in exercise of its plenary legislative powers derived from Article 246(2) of the Constitution read with Entry No. 52 of State list of VII Schedule to the Constitution. The Act does not repeal any enactment and save any rights,privileges and obligations previously acquired by any person under any previous enactment in force in the State or any part of the State. Section 28 of the Act exclusively deals with exemption from payment of taxes under the Act.
5. Even though the above is the position under the Act, the petitioner, who has defaulted in payment of taxes so far levied under the Act and is facing coercive proceedings for their recovery, has approached this Court on 24-1-1985 for a mandamus to the State Government to grant exemption from payment of taxes till 8-6-1986 and thus restrain theirrecovery by the authorities. This extraordinary claim of the petitioner is founded on the plea that the rights, privileges and obligations conferred on it under the two orders dated 20-1-1968 and 9th June 1976 (Annexures B and A) towards octroi are saved and continued under Section 507 of the Corporation Act and Section 11 of the 1979 Act.
6. Sri R.N. Narasimha Murthy, Learned Counsel for the petitioner, strenuously contends that the rights and privileges conferred or guaranteed to his client in the two orders and in particular the order dated 9-6-1976 (Annexure-A) is saved and continued to it by Section 507 of the Corporation Act and Section 11 of the 1979 Act and Section 6 of the Karnataka General Clauses Act and that the StateGovernment was bound to extend exemption from payment of taxes under the Entry Tax Act for a period of ten years from 9-6-1976 or till 8-6-l086. In support of his contention Sri Murthy strongly relies on the ruling of the Supreme Court in State of Punjab -v.- Mohar Singh, AIR 1955 SC 84.
7. The levy, collection and exemption from payment of Octroi to the petitioner was by the Corporation and not by Government. The approval accorded by Government in the two orders (Annexure-B and A) did not alter that position at all. The levy of entry tax is by the State and not by the Corporation. When that is so, the claim of the petitioner against State Government for exemption from payment of entry tax on the basis of exemption from levy of octroi by the Corporation is inconceivable and cannot be upheld.
8. Let me also assume that the claim for exemption from payment of entry tax by the petitioner can legitimately be made and enforced against State Government and examine its case on that basis also.
9. Earlier, I have noticed the scheme and object of the Entry Tax Act and the exemption provision. Except for Section 28 of the Act, that does not apply, there is no other provision in the Act empowering Government to accede to the claim of the petitioner. In the very absence of an enacting provision for exemption in the Act, the claim of the petitioner cannot be granted by Government.
10. Even otherwise, the Act does not save the rights, privileges if any, granted to any person under any previous enactments like the Bombay Act or the Corporation Act. Any exemption under the Entry Tax Act can be claimed only in terms of the provisions of that Act and not in derogation of the same. The one and the only exemption provision in the Entry Tax Act being inapplicable, the extraordinary claim of the petitioner for continuation of rights or privileges if any granted under the earlier laws iswholly misconceived and cannot be accepted by Government or by this Court.
11. Section 507 of the Corporation Act, Section 11 of the 1979 Act and Section 6 of the Karnataka General Clauses Act that are relied on by Sri Murthy, do not also help the petitioner to claim the continuation of the rights and privileges and in any event an exemption under the Act imposing a new uniform tax thereunder. Every one of these provisions, can only be interpreted as saving of the rights and privileges only to the extent of recoveries and refunds if any, and no more. At any rate, they do not enable the petitioner to sustain an exemption under the Entry Tax Act which is neither recognised nor contemplated in that Act at all. The ratio in MOHAR SINGH's case does not really bear on the point and assist Sri Murthy.
12. The extraordinary claim made by the petitioner which seeks to recognise, preserve and continue the now abolished and therefore, obsolete rights and privileges, cannot survive or run counter to the plenary powers of a sovereign legislature of its taxing powers available under the Constitution. In any event, the claim of the petitioner is more extraordinary as much untenable, than what was claimed and repelled by the Supreme Court in Maharaj Umeg Singh -v.- State of Bombay : 2SCR164 and the Privy Council and Federal Court repelled in Thakur Jagannath Baksh Singh -v.- United Provinces, 73 IA 123 and Thakur Jagannath Baksh Singh-v.-The United Provinces and the principles enunciated in all these cases. In Thakur Jagannath Bakshi Singh's case , Lord Wright, speaking for the Privy Council, expressed thus: 'So startling a claim as that made in the present case cannot be upheld.' In my view, these observations of the Privy Council apply in greater force to the claim of thepetitioner. On the application of these principles, the claim of the petitioner which is wholly misconceived, cannot be upheld by Government and this Court.
13. As the only contention urged for the petitioner fails, this Petition is liable to be rejected. I, therefore, reject this Writ Petition at the preliminary hearing stage without notice to respondent.