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Panchamlal Sikrilal Vs. Municipal Board and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 202 of 1961
Judge
Reported inAIR1962MP105; 1962MPLJ92
ActsRewa State Municipalities Act, 1946 - Sections 121(1), 122 to 125, 126(1) and 126(2); Constitution of India - Article 286; Uttar Pradesh Municipalities Act, 1916 - Sections 128
AppellantPanchamlal Sikrilal
RespondentMunicipal Board and anr.
Appellant AdvocateA.P. Sen and ;G.P. Singh, Advs.
Respondent AdvocateR.S. Dabir and ;R.K. Tankha, Advs.
DispositionPetition dismissed
Cases ReferredBerar Swadeshi Vanaspathi v. Municipal Committee
Excerpt:
- - but as the decision of the supreme court clearly shows, the provisions of section 67 of the c......within the municipality but sold them, he could not be called upon to pay any octroi tax on the goods brought by him. secondly, it was urged that the several meetings at which the tax proposals were first formulated, the proposals sanctioned by the government were considered and the date for the imposition of the tax was decided upon were not held in conformity with the provisions of the act and were invalid, and consequently the imposition of the tax was not in accordance with sections 122 to 125 of the act.4. in our judgment, there is no force in these contentions. section 121(1)(f) says :'(1) subject to any general rules or special orders of the government in this behalf, the taxes, which a board may impose in the whole or any part of a municipality, are : ......... ...............
Judgment:

Dixit, C.J.

1. This is an application under Article 226 of the Constitution of India for the issue of a writ of certiorari for quashing the resolutions and notifications of the opponents for the imposition of an octroi tax from 15th October 1959 on goods or animals brought within the limits of the Municipal Board, Rewa, for consumption or use therein and for the issue of a direction restraining the opponents from levying and collecting the octroi tax.

2. The petitioner is a retail shopkeeper in Rewa town carrying on business in cloth and general merchandise. He brings cloth and other goods from various places for sale within the limits of the Rewa Municipal Board constituted under the Rewa State Municipalities Act, 1946. It was in 1954 that the Board first mooted the proposal for the imposition of octroi tax on goods and animals brought within the municipal limits in the exercise of its powers under Section 121(1)(f) of the Act. For this purpose meetings of the Board were held on 13th and 24th May 1954, and the Board acting under Section '122(1) framed certain proposals for the imposition of the tax. The proposals were published as required by Section 122(3). After the publication of the proposals some objections were made to them. The objections were to have been considered at a meeting on 1st September 1954. The consideration of the objections was however postponed to a date in December 1954.

But before the Board could consider the objections, it was dissolved and an Administrative Officer was appointed under Section 283 to carry out the functions of the Board. On 21st October 1954 the Administrative Officer considered the proposals for imposition of the octroi tax, which had already been published, and the objections thereto, and after rejecting the objections forwarded the proposals to the Government for sanction under Section 123(4). In 1956 the State Government sanctioned the proposals and sent them to the Board along with the rules to be framed in respect of the imposition of the tax. This was done under Section 125 of the Act. The rules were published in the Government Gazette dated 6th October 1956. It appears that in the meantime the regime of the Administrative Officer came to an end and a legally constituted Board again began, functioning. At a meeting held on 13th February 1957 the Board decided that the Government be requested to drop the proposals for imposition of the tax. On 22nd November 1958, the Board again resolved to represent to the Government that in view of the altered circumstances it was not necessary to impose any octroi tax.

These requests were turned down by the Government, as, under Section 125(2), after the tax proposals are sanctioned by the Government it is mandatory for the Board to fix a date for the imposition of the tax by passing a special resolution. Ultimately at a meeting held on 30th March 1959, the Board decided that the tax be imposed from 15th October 1959. On 14th August 1959 a notification was published in the Government Gazette imposing octroi lax as specified in the notification issued on 29th September 1956 'on goods or animals brought within the limits of Rewa municipality for consumption or use therein with effect from the 15th October 1959.' In the schedule to the notification published in 1956 the articles which were subjected to octroi tax were describe and those articles included the goods in which the petitioner deals.

3. Before us, the validity of the imposition was challenged mainly on two grounds. First, it was said that under Section 121(1)(f) the Board was empowered to levy an octroi tax on goods or animals brought within the municipal limits for consumption or use therein and not on goods or animals brought within the municipal limits for sale, and that as the petitioner himself did not consume or use the goods which he brought within the municipality but sold them, he could not be called upon to pay any octroi tax on the goods brought by him. Secondly, it was urged that the several meetings at which the tax proposals were first formulated, the proposals sanctioned by the Government were considered and the date for the imposition of the tax was decided upon were not held in conformity with the provisions of the Act and were invalid, and consequently the imposition of the tax was not in accordance with Sections 122 to 125 of the Act.

4. In our judgment, there is no force in these contentions. Section 121(1)(f) says :

'(1) Subject to any general rules or special orders of the Government in this behalf, the taxes, which a Board may impose in the whole or any part of a Municipality, are :

......... .......... .......... (f) An Octroi on goods or animals brought within the Municipality for consumption or use therein; .......... .......... ..........'

Shri Sen, learned counsel for the petitioner, contended that the words 'for consumption or use therein' occurring in clause (f) necessarily implied that the person bringing the goods or animals within the municipal limits must himself consume or use them; and that the sale by such a person of the goods brought was not 'consumption or use' within the municipality. In order to emphasize the point that 'consumption or use' of goods did not include 'sale' of goods, learned counsel referred to the wording of Entry No. 52 of List 2 of Schedule VII to the Constitution which speaks of 'Taxes on the entry of goods into a local area for consumption, use or sale therein.' He also pointed out that Section 128 of the U. P. Municipalities Act, 1916, also originally provided for levy of an octroi tax on goods or animals brought within the municipal limits for consumption or use therein but that later On it was amended in 1953 and the word 'sale' was introduced so as to permit levy of octroi tax on goods brought for sale. A reference was also made to the Explanation to Article 286 of the Constitution as it stood before it was amended in 1956. and to the observations of the Supreme Court in the State of Bombay v. United Motors (India) Ltd., (AIR 1953 SC 252) explaining the meaning of the expression 'for the purpose of consumption in that State'. Learned counsel added that Section 121(1)(f) being a taxing provision should be strictly construed and the clause could not be read in a manner so as to authorise the imposition of an octroi tax on goods and animals brought for sale within the municipal limits when it did not contain any words having that effect.

5. It is quite true that Section 121(1) (f) is a taxing provision and must be construed strictly. The scope of the provision must be determined by the language used therein. In the construction of a taxing provision there is no room for any intendment and nothing can be read in or implied. But the rule of strict construction does not mean that the language of the provision should be tortured into meaning something artificial, if its natural meaning is not repugnant to reason. It would also not be permissible to construe Section 121(1)(f) with reference to the language that was used in the Explanation to Article 286 or in the provisions of any Sales Tax Act when they are not pari materia. It would also not be right to call in aid the language originally used in Section 128 of the U. P. Municipalities Act, 1916, which was an enactment of a legislative authority altogether different from that which enacted the Rewa State Municipalities Act, 1946.

Now, the plain meaning of Clause (f) is that an octroi tax can be levied on goods or animals brought within the municipality for consumption or use therein. The words 'consumption' or 'use' do not connote the idea that the person bringing the goods should himself consume or use the goods. If he sells the goods brought within the municipal limits, then there would be 'consumption druse' of the goods by the purchaser. Even if the ultimate consumption or use is by the purchaser, the goods brought by the seller continue to remain as those brought within the municipality for consumption or use. There are no words in Clause (f) to indicate that the person bringing the goods within the municipal limits must himself use or consume the goods. The word 'therein' is very significant and has been used to stress the fact that the goods or animals brought within the municipality must be for consumption or use within the municipal limits and not for the purpose of being exported out or in transit.

The words 'consume' and 'use' mean what they say; and the fact that the goods or animals brought within the municipal limits will be sold before they are consumed or used within the municipal limits is an irrelevant circumstance. The natural and ordinary sense of the words 'consume' and 'use' is consumption or use by anyone. It does not mean consumption or use only before sale. Considering the provision as a whole and the apparent object of it in securing that all goods or animals brought within the municipality and consumed therein as distinguished from the goods brought within those limits for export and consumption thereafter elsewhere should be subjected to an octroi tax, we can see nothing repugnant to the object of the provision if on a literal construction of it, it is taken to mean as authorising the levy of octroi tax on goods or animals within the municipal limits for consumption or use therein whether by the person bringing the goods or by a person purchasing the goods within the municipal limits. The construction does not involve a result so unreasonable that the Legislature could not have contemplated it.

The fact that the octroi tax is paid by the person bringing the goods or animals within the municipal limits does not mean that the person himself must consume or use the goods. The burden of the tax is no doubt on the consumer or the user of the goods. It the person bringing the goods himself consumes or uses the goods he bears the burden. On the other hand, if he sells them the burden is passed on to the purchaser and the ultimate consumer bears it. In this view of the matter, it is not necessary to consider whether there is 'consumption' or 'use' of goods by a person who has brought them within the municipal limits when he sells them therein, or to refer to the meaning given to those terms in the provisions of several statutes dealing with the levy of sales tax.%

6. The validity of the tax cannot also be challenged on the ground that it was not imposed in accordance with the provisions of Sections 122 to 125 of the Act inasmuch as the meetings at which the proposals lor taxation were framed and the date for the imposition of the tax was decided upon had not been properly called and held. The reason is that Section 126 (2) prescribes that

'A notification of the imposition of a tax under Sub-section (1) shall be conclusive proof that the tax has been imposed in accordance with, the provisions of this Act.'

This Sub-seciton thus bars an enquiry into the question whether the procedure followed in the imposition of the tax was or was not in accordance with Sections 122 to 123 of the Act. The matter is really concluded by the decision of the Supreme Court in the Berar Swadeshi Vanaspathi v. Municipal Committee, Shegaon, C. A. No. 234 of 1959, D/- 28-3-1961 : (AIR 1982 SC 420). That was a case where the imposition of an octroi duty by the Shegaon Municipal Committee under the C. P. and Berar Municipalities Act, 1922, was challenged inter alia on the ground that all the steps necessary under Section 67 of that Act for the imposition of an octroi duty had not been taken and, therefore, the provision had not been complied with.

The argument was that the sole objection to the taxation proposal which had been preferred by the appellant before the Supreme Court was not considered at all by the municipal committee and, therefore, Section 67(4) had not been complied with. The Bombay High Court rejected this argument on the ground that the non-consideration of the objection was an error in procedure and that Section 67(8) precluded any such challenge to the validity of tile tax. Section 67(8) of the C. P. and Berar Municipalities Act, 1922, is in terms similar to those of Section 126(2). The Supreme Court observed that the language of Sub-section (8) of Section 67 lent support to the view taken by the Bombay High Court and the notification directing the imposition of octroi falling under Section 67(71 was conclusive evidence of the tax having been imposed in accordance with the provisions of the Act and that it could not be challenged on the ground that all the necessary steps had not been taken.

7. The validity of the notification dated the 27th July 1959, published in the Government ' Gazette dated 14th August 1959, which is a notification issued under Sub-section (1) of Section 126 imposing the tax from 15th October 1959, cannot, therefore, be challenged on the ground that the tax was not imposed in accordance with Sections 122 to 125. Shri Sen, learned counsel for the applicant, however, endeavoured to argue that it was only a notification made after compliance with the provisions of Sections 122 to 125 that when issued could not be questioned under Section 126(2) of the Act. The argument was that no notification could be issued under Section 126(1) unless there was a resolution of the Board under Section 125(2) directing the imposition of the tax from a certain date; that there could be no such resolution of the Board without the sanction under Section 123 of the Government to the taxation proposals; and that there could be no proposals without full compliance of Section 122. In effect the argument of the learned counsel is that Section 126(2) does not preclude an enquiry into the validity and regularity of the procedure followed under Sections 122 to 125 for the imposition of the tax. This is just what Section 126(2) bars.

The argument proceeds on the assumption that Sections 122 to 125 lay down certain statutory conditions precedent which must be complied with before a notification under Section 126(1) can be issued, and that if those conditions are not performed there could not be any power to make any notification imposing a tax. But as the decision of the Supreme Court clearly shows, the provisions of Section 67 of the C. P. and Berar Municipalities Act, 1922, (analogous to Sections 122 to 125 of the Rewa State Municipalities Act, 1946) are merely procedural and non-compliance with them is only an error in procedure. It is On. this basis that under Section 126 (2) of the Rewa State Municipalities Act, 1946, or Section 67(8) of the C. P. and Berar Municipalities Act, 1922 a notification of the imposition of a tax is made 'conclusive proof' that it has been imposed in accordance with the provisions of the relevant Act. The contention that the octroi duty levied by the Municipal Board is invalid as it was not imposed in accordance with Sections 122 to 12-5 of the Act of 1946 must, therefore, be rejected. No other ground attacking the validity of the tax was urged before us.

8. The result is that this petition fails andas dismissed with the costs of the Municipal Board,Rewa. Counsel's fee is fixed, at Rs, 100/-. Theoutstanding amount of security deposit after deduction of costs shall be refunded to the petitioner.


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