Full Judgment Text
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PETITIONER:
BAGALKOT CITY MUNICIPALITY
Vs.
RESPONDENT:
BAGALKOT CEMENT CO.
DATE OF JUDGMENT:
23/10/1962
BENCH:
SARKAR, A.K.
BENCH:
SARKAR, A.K.
DAS, S.K.
KAPUR, J.L.
HIDAYATULLAH, M.
DAYAL, RAGHUBAR
CITATION:
1963 AIR 771 1963 SCR Supl. (1) 710
CITATOR INFO :
RF 1972 SC 121 (24)
D 1984 SC 583 (22)
RF 1985 SC1683 (4)
ACT:
Octroi Duty-Municipal District, connotation of-Octroi limits
equated with municipal district-Extension of municipal
district-Whether octroi limit also extended-If extended area
liable to octroi duty-Bombay District Municipal Act, 1901
(Bom. 3 of 1901), ss. 3(5), 4, 48, 59-Bombay General Clauses
Act, 1904 (Bom. 1 of 1904), s. 20.
HEADNOTE:
The appellant municipality imposed octroi duty on
certain,goods brought within the octroi limits. The by-laws
fixed the octroi limits to be the same as the Municipal
District. Section 4 of the Bombay District Municipal Act
1901, under which the municipality was constituted,
empowered the Government to declare any local area to be 1
municipal district. At the time of the ’imposition of the
octroi (duty the respondent’s factory was situated outside
the municipal district and was not subject to the octroi
duty. Subsequently, the Government extended the municipal
district so that the factory came to be included within that
district. The appellant contended that upon such extension
its octroi limits also stood extended to include the factory
and the respondent became liable to pay octroi duty in
respect of goods brought into, the factory.
711
Held (per Das, Kapur and Sarkar, jj., Hidayatullah and
Dayal, jj., dissenting), that octroi duty was not leviable
on the respondent. The expression ’municipal district" in
the by. law referred to the municipal district as existing
when the, bylaw was framed. The context prevented the
definition of "municipal district" in the Act, namely, the
municipal district as from time to time existing, from being
applied under s.20 of the Bombay General Clauses Act, to
interpret the by-law. The by-law had been made without
being published to the respondent, and if it was so read
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referring to the municipal district from time to time
existing it would be invalid for non-compliance with the
provisions of s. 48 of the Act.
Per Hidayatullah and Dayal, JJ. The octroi limits fixed
under the by-laws included the area newly added to the
municipal district and the respondent was liable to pay
octroi duty on the goods entering its premises. In view of
s. 20 of the Bombay General Clauses Act, the expression
"municipal district" in the by-law will have the same mean-
ing as that expression has in the Act. There is nothing
repugnant in the subject or context which would make this
definition inapplicable. At the time when the municipal
district was extended notice was published to the respondent
and it could have objected to the inclusion of the area on
the ground that the bye-law imposing the octroi duty would
affect it adversely. There is no express provision in the
Act that no rule or ’by-law shall be applicable to the newly
added area till it is freshly enacted.
Rajnarain Singh v. The Chairman, Patna Administration
Committee, Patna, [1956] 1 S.C.R. 290, referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 327 of 1962.
Appeal from the orders dated.July 5, 1961, of the Mysore
High Court, Bangalore in Writ Petition No. 556 of 1960.
M. C. Setalvad, Attorney General of India and Naunit Lal,
for the appellant.
C. K. Daphtary, Solicitor General of India, S. T. Desai
and I.N. Shroff, for the respondent.
112
1962. October 23. The judgment of Das, Kapur and Sarkar,
JJ., was delivered by Sarkar, J. The judgment of Hidyatullah
and Dayal, jj., was delivered by Dayal, J.
SARKAR, J.-This is an appeal against a judgment of the High
Court of Mysore which held that the respondent was not
liable to pay any octroi duty to the appellant municipality
in respect of dutiable goods brought to its factory as on a
proper interpretation of the appellant’s by-law fixing the
octroi limits, the respondent’s factory was outside those
limits. The question that arises in this appeal is one of
the interpretation of that by-law.
The appellant municipality was constituted under the Bombay
District municipal Act, 1901. Section 4 of the Act gives
power to the Government to declare any local area to be a
municipal district and to extend, contract or otherwise
alter the limits of any municipal district. Section 9
provides that there shall be a municipality for every
municipal district. Section 59 of the Act inter alia
provides that a municipality may subject to certain
conditions impose "an octroi on animals or goods, or both,
brought within the octroi limits for consumption, use or
sale therein". In exercise of its powers under this
section, the appellant municipality imposed an octroi, duty
on certain goods. Section 48 of the Act gives a
municipality power to frame by-laws for various purposes
including that of "fixing octroi limits". The appellant
municipality framed a by-law under this Nation fixing octroi
limits, in these terms : "The Octroi limits of the Municipal
District shall be The same as the Municipal District." The
dispute is as to the meaning of the words "Municipal
District’ in this by-law.
The respondent is a company owning a factory which prior to
September 3, 1959, was outside the
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713
municipal district of the appellant municipality as such
district was till then constituted. There is no dispute
that the respondent has all along been bringing into its
factory goods of the variety specified in the rule imposing
the octroi duty for consumption and use therein but no duty
was payable so long as the respondent’s factory was outside
the municipal district and therefore also admittedly outside
the octroi limits as defined by the aforesaid by-law. By a
notification issued on August 25, 1959, the Government of
Mysore extended the municipal district of the appellant
municipality with effect from September 3, 1959, and as a
result of this extension the respondent’s factory came to be
included within that district. On such extension the appel-
lant municipality demanded octroi duty on goods brought into
the respondent’s factory contending that the factory had
thereupon come within its octroi limits as defined by the
by-law. The respondent disputed this contention and moved
the High Court of Mysore under Art. 226 of the Constitution
for a writ of mandamus directing the appellant municipality
to forbear from collecting the duty. The High Court did not
accept the appellant municipality’s contention and issued
the writ.
The question is whether upon the extension of the municipal
district the factory came within the octroi limits as
defined by the by-law. The appellant municipality says it
did and for these reasons: The expression "municipal
district" has not been defined in the by-laws and therefore
the definition of that expression in s. 3(5) of the Act
would by virtue of s. 2O of the Bombay General Clauses Act,
1904, apply in interpreting the by-law. Under sub-sec. (5)
of s. 3 of the ’Act a municipal district means the municipal
district of a municipality for the time being and hence the
octroi limits prescribed by the by-law would be the
municipal district of the appellant municipality as
constituted from time to time. Upon the extension
714
of the appellant municipality’s municipal district,
therefore, its octroi limits would stand extended and the
factory would admittedly be within the extended limits.
We are unable to accede to this contention. It is based on
s. 20 of the General Clauses Act. Now under that section,
expressions used in by-laws are to have the same meaning as
they have in the Act unless there is anything repugnant in
the context. If there is any such repugnancy., the
definition in the Act cannot be resorted to for interpreting
a by-law. It seems to us that there is such repugnancy in
the present case and this we now proceed to show.
As we have earlier said., a by-law is made under s. 48. That
section provides that a by-law can be made only with the
sanction of the Government. Sub-section (2) of’ that
section requires that "Every Municipality shall, before
making any by-law under this section,
publish..................... for the information of the
persons likely to be affected thereby, a draft of the
proposed by-law". There are provisions enabling persons to
make objections to, or suggestions regarding a proposed by-
law and for these being considered by the municipality
before it makes the by-law and thereafter by the Government
before it give’ its sanction. It is therefore, not open to
much doubt that a by-law made without the previous
publication of its draft to the persons mentioned would be
an invalid by-law. Now who are these persons ? They must be
"persons likely to be affected thereby", that is, by the by-
law, they must be Persons whom the by-law when made is
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likely to affect by its own terms.’ Since however anyone can
send goods to places within the octroi limits, all the world
may in a sense be said to be affected by a by-law fixing
those limits. If all such persons were contemplated by s.
48 (2), then a by-law fixing octroi limits to be valid,
would have to be published to all the world.
715
This would be an impossibility and was clearly riot
intended. Quite obviously publication to persons residing
outside the municipal district as constituted when the by-
law was made or who were not the rate-payers of the
municipality was not contemplated. The present by-law must
therefore have been made without publication to such
persons. It is not said that the respondent was not one of
them.
Now suppose the appellant municipality’s contention was
right. Then the by-law would now bring within the octroi-
limits of the appellant municipality the respondent’s
factory and some other premises though the by-law had not
been published to the respondent or the owners of the
premises. The respondent and all other such persons would
then be affected by the by-law though the by-law bad not
been published to them before it was made. Such a by-law
would be invalid under the Act. It would be invalid from
the beginning and not only on the extension of the municipal
district for it would be a by-law not made in compliance
with the provisions of s. 48 and therefore not a by-law
validly made.
But then it may be said that when made, the by-law did not
affect any one to whom it had not been published and
therefore it had been validly made. This argument seems to
us to proceed on a misconception. The by-law would still be
invalid as contingently affecting persons to whom it had
never been published, namely, those who resided outside the
municipal district as constituted when the by-law was made,
the contingency being the extension of the municipal
district. Those persons would be contingently affected by
the by ,law itself because the limits mentioned in it were
capable of being extended to include them. They are so
affected because the by-law itself provided that the limits
fixed by it would in a certain contingency stand extended.
716
We, therefore, think that the expression "’municipal
district" in the by-law must be understood as referring to
the municipal district as existing when the by-law was
framed. The context would prevent the definition in the Act
being applied to interpret the by-law. The by-law cannot,
therefore, refer to the municipal district as from time to
time existing. Now it is not in dispute that if the octroi
limits fixed by the by-law are so understood, then the
respondent’s factory has all along been outside those limits
and the respondent cannot be made liable to pay octroi duty.
It makes no difference that its factory is now within the
municipal district of the appellant municipality for it is
still outside its octroi limits.
It was said that if the view that we have taken is right,
then no by-law can ever affect people to whom it had not
been published before it was made, and if this is so, then
on the extension of a municipal district, all the existing
by-laws would have to be re-made for the added area for they
could not affect the people there as to them, ex-hypothesis,
the by-laws had not been published before they had been
made. It was contended that such a result could not have
been intended by the Act and, therefore, the view that we
have taken is erroneous.
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As regards this argument, we first observe that nothing has
been brought to our notice from which it can be gathered
that it was not the intention of the legislature that on the
extension of the municipal district the by-laws have not to
be re-enacted. If that was not the intention of the
legislature, then of course the entire foundation of the
present argument would fail and it would require no further
discussion. Let us however assume that it was intended that
the existing by-laws would apply to the added areas without
fresh re-enactment. If such was the intention, that
intention must necessarily be referrable to some provision
in the Act. In such a case it would be
717
because of that provision of the Act that the by-laws would
be affecting people to whom they had not before their making
been published and not by their own terms or force. From
what we have said it does not follow that a by-law cannot
under some provision in the Act other than s. 48 affect
people to whom it had not been published before it was made.
All that we have said is that a by-law cannot be made under
s. 48 so as to affect people by its own terms or force
unless to them it had been previously published.
We are concerned only with the initial validity of a by-law
for interpreting the meaning of the words used in it. The
argument for the appellant contemplates a situation where an
existing valid by-law is by an independent statutory
provision made to affect people to whom it had not been
published before it was made. With such a situation we are
not conceded. We are unable to agree that if some provision
of the Act exists which makes a valid by-law applicable to
the newly added areas of a municipality and to the residents
there, though to them the bylaw might not have been
published before it was made, it would follow that a by-law
could be validly made under the Act without previous
publication to persons likely to be affected thereby. We
repeat that if it cannot be so made, the present by-law
cannot be read as including within the octroi limits the
municipal district as extended from time to time. To do
that would be to give it a meaning against its context and
this, the General, Clauses Act does not warrant.
It was contended on behalf of the appellant that since at
the time the municipal district was extended an opportunity
had been given to the respondent to object , it could not
now take any exception to the imposition of the octroi duty
on the ground that it had no opportunity to object to the
rule levying the duty or the by-law fixing the octroi limits
718
when these were made. All this seems to us to be to no
purpose. The respondent is not basing its objection to pay
the octroi duty on this ground. All that it says is that it
is not liable as its factory is not within the octroi
limits. It raises a question of interpretation of the by-
law. The fact that the respondent could have objected to
the extension of he municipal district is wholly irrelevant
in interpreting the by-law fixing the octroi limits and the
only question in this case is of such interpretation. We
may add that if a by-law is invalid because it had not been
published to persons likely to be affected by it, it would
not become valid when the municipal district of the
municipality concerned was extended on notice to everyone
entitled to object to the extension.
Then it was said that the by-law could not be amended for it
could only be put in the same term in which it stands now as
it is intended to put the entire municipal district within
the octroi limits. The fallacy in this argument seems to us
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to be that even if a by-law was framed in identical words
now, the content of it would be different, the municipal
district contemplated by the new by-law would be different
from that contemplated by the earlier one. Therefore, in
substance, the by-law would be a changed one inspite of the
identity of its form. It would be different in effect.
In the view that we have taken we think it unnecessary to
pronounce upon the contention of the respondent that the
definition in s. 3(5) of the Act did not contemplate a
municipal district as from time to time constituted.
The appeal fails and is dismissed with costs.
RAGHUBAR. DAYAL, J. We are of opinion that this appeal
should be allowed.
Section 59(1)(b)(iv) of the Bombay District Municipal Act,
1901 (Bom. Act3 of 1901), hereinafter
719
called the Act, authorises any Municipality to impose an
octroi on animals or goods, or both, brought within the
octroi limits for consumption, use or sale therein. The
Bagalkot Municipality imposed this tax and provided, under
by-law No. 3 framed by it in the exercise of powers
conferred under s. 48(1)(j), that "the octroi limits of the
Municipal District shall be the same as the Municipal
District". This by-law was framed prior to the extension of
the limits of the Bagalkot Municipal District over which the
Bagalkot Municipality had jurisdiction. The necessary
declaration extending the aforesaid limits was made by the
State Government under s. 4 of the Act on August 25, 1959.
After the extension of the limits of the Municipal District,
the factory run by the respondent company came within the
limits of the Municipal District in which the Bagalkot
Municipality exercises control. The Municipality did not
frame any new by-law fixing afresh the octroi limits of the
Municipal District. It however demanded octroi duty from
the respondent company on the goods which were brought to
the factory. The respondent company objected to the demand
on the ground that the factory to which the goods were
brought was beyond the octroi limits fixed under the by-law
framed by the Municipality and that the goods on which
octroi was demanded were not brought within the octroi
limits. It contended that, in the absence of the. framing
of any fresh by-law fixing such octroi limits as would
include the factory within them, the Municipality could not
claim octroi duty on the goods entering the factory. This
contention found favour with the High Court which issued a
mandamus to the Municipality to forbear from collecting any
octroi in respect, of goods delivered by the railway
administration’ at the factory premises and also directed
the company to pay octroi on the goods carried by road at
the point of entry and to get a refund of the octroi at the
point
720
Where the goods left the octroi limits. were also issued to
the Municipality for such refund.
The Municipality has appealed against the J. order of the
High court. It is contended on its behalf that the octroi
limits fixed under the by-law framed by the Municipality
extend up to the limits of the Municipal District as
extended by the Government declaration of August 25, 1959,
and that there was no necessity for framing any fresh by-law
fixing new, octroi limits.
We have to determine the extent of the octroi limits of the
Municipality as fixed under by-law No. 3(1) which reads :
" The octroi limits of the Municipal District shall be the
same as the Municipal District."
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The octroi limits fixed were coterminous with the limits of
the Municipal District, whatever they may be from time to
time. If the limits of the Municipal District were
extended, the octroi limits ,would be the extended limits of
the Municipal:District and, if the limits of the Municipal
District were contracted, the octroi limits would be
similarly contracted.
Section 3(5) defines ’municipal district’ to mean any local
area which is at present a municipal district, and any local
area Which may, hereafter , be constituted a municipal
district under section 4, if such municipal district has not
ceased to exist under the provisions of the said section.’
Section 4 empowers the State Government, subject to the pro-
visions of ss. 6, 7 and 8, to extend,,, contract or other-
wise alter the limits of any municipal district from time to
time. It is clear therefore-and there is nothing in the
section to indicate to the contrary that subsequent to the
extension, contraction or alteration of the limits there
does not come into existence a new municipal district. The
erstwhile muni-
721
cipal district continues with this modification that its
area is either extended or reduced or its limits are
altered. Sub-sections (2) and (3) provide, inter alia, for
the setting forth clearly of the local limits included or
excluded from existing municipal districts by notification
and for erection and maintenance of boundary-marks defining
the altered limits of the municipal district. The municipal
district, as defined in s. 3(5) of the Act, therefore means
the local area within its limits as fixed for the time
being.
In view of’s. 20 of the Bombay General Clauses Act, the
expression ’municipal district’ in the by-law will have the
same meaning as that expression has in the Act, unless there
be anything repugnant in the subject or context. We do not
find any such repugnancy in the context of the by-law which
would make the definition of the municipal district in the
Act not applicable to the expression ’municipal district’ in
octroi by-law no. 3.,
The octroi duty is, by nature, a duty which is
realised on goods entering certain limits over which the
municipality charging the octroi has control. There is no
reason why octroi duty’ which is levied solely for the
purpose of raising funds, and not to afford protection to
trade in any particular area, be not charged from the. same
goods entering a certain part of the municipality, that is
to say, there is no good reason why the limits within which
goods on entry from beyond should pay octroi duty be
different from the limits of the municipal district over
which the municipality has control. The question then
arises, why cl. (iv) of sub-s. (1)(b) of s.- 59 uses the
expression ’octroi limits’ instead of "municipal district’,
an expression which is used with reference to some other
taxes which the municipality can impose. The answer is
found in the provisions of ss. 39 and 81 of the Act.
722
Clause (b) of s. 39 empowers a municipality to enter into an
agreement with another municipality, cantonment authority,
local board, panchayat or committee appointed for an area
under Chapter XIV regarding levy of octroi duty whereby the
octroi duties respectively leviable by the contracting
bodies may be levied together, instead of separately, within
the limits of the area, subject to the control of the said
bodies. Section 81 authorises any one of the contracting
bodies to establish such octroi limits and octroi stations
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as may be deemed necessary for the entire area in which the
octroi is to be collected. The limits of any such two
contracting parties will not be common throughout and will
not be identical with the limits of either of the municipal
districts and therefore it would be necessary for the
municipality, which is to collect octroi duties under the
agreement, to fix the octroi limits for the entire area for
the purpose of collecting octroi duties.
Sub-section (2) of s. 77 provides for penalty for the
evasion of octroi in cases of goods liable to the payment of
octroi and passing into a municipal district without payment
of such octroi. It is noticeable that it does not use the
expression ’passing into tile octroi limits of a municipal
district’, but uses the expression passing into a municipal
district’.
The use of the expression ’octroi limits’ in cl. (iv) of s.
59 (1)(b) therefore need not lead to the conclusion that a
municipality can pick and choose between its parts and
exempt any part of it from the levy of octroi duty. It
follows therefore that ordinarily octroi duty must be
imposed on all good entering the limits of the municipal
district controlled by the municipality. This is what by-
law No. 3 framed by the appellant Municipality provides for.
It is contended for the respondent that the Municipality
cannot make a by-law fixing such octroi
723
limits as vary from time to time. We see no good reason why
it cannot do so. Further, the by-law No. 3(1) fixed the
limits of the municipal district to be the octroi limits.
These are definite limits and vary only when an alteration
is made by the Government in the limits of the municipal
district and then too on account of the content of the
expression municipal district’. The definition of
’municipal district’ will be read into the definition of
’octroi limits’ as required by the General Clauses Act and
they will vary with that definition.
The municipality does not exceed its jurisdiction to frame
the by-law fixing the octroi limits to vary from time to
time according to the limits of the municipal district. No
question of extending its jurisdiction arises in case the
limits of the municipal district are contracted. No
question of exceeding its jurisdiction arises if the limits
are extended, as at the time the by law would be applicable
to the extended limits, the municipality will have
jurisdiction to make a by-law applicable for that area. If
it frames a by-law in such a way as to be immediately
effective in the area newly, added to its limits, it cannot
be said to be exceeding its jurisdiction. just as the Act
contemplates the (extension of the limits of the municipal
district and the application of its various provisions
therein , the by-laws made applicable within the area of the
municipal district will be applicable to the extended area
the moment any fresh area is added to the municipal
district.
We do not find anything in the Act or rules which disables
the, municipality to fix the octroi limits in this way, or,
in other words, which makes it incumbent on the
Municipality to fix the octroi limits as frequently as the
area of the municipal district is altered by a notification
of the Government under s. 4.
There is nothing in the Act that the by-laws duly framed by
a municipality become null and void
724
and ineffective when the limits of the municipal district
for which they were framed are extended. Such is not the
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contention for the respondent either. It is not contended
that those by-laws do not continue to be in force within the
old limits of the municipal district. What is contended by
the respondent is that they cannot apply to the new area
added to the old municipal district’, until the requisite
procedure laid down for the framing of the by-laws under
sub-ss. (2) and (3) of s. 48 has been followed; as, other-
wise, the persons residing in the newly added area would
have no occasion to object to the by-laws which are sought
to be made applicable to them. The sub-sections are
"(2) Every Municipality shall, before making
any by-law under this section, publish in such
manner as shall in their opinion be
sufficient, for the information of the persons
likely to be affected thereby, a draft of the
proposed bylaw, together with a notice
specifying a date on or after which the draft
will be taken into consideration, and shall,
before making the bylaw receive and consider
any objection or suggestion with respect to
the draft which may be made in writing by any
person before the date so specified.
(3) When any by-law made by a Municipality
is submitted to the Central Government, State
Government or Commissioner for sanction, a
copy of the notice published as aforesaid and
of every objection or suggestion so made,
shall be submitted for the information of the
Central Government, State Government or
Commissioner along with the said by-law."
The respondent’s contention is met for the appellant by
reference to s. 8 of the Act which affords an opportunity to
the persons who entertain any objection to the proposal for
including the proposed area
725
in the existing municipal district to file objections with
reasons therefore within the specified period. It is urged
for the respondent that no objection with respect to any
particular by-law or rule can be made at the time when the
Government notifies objections against the proposal to
extend the limits of a municipal district. There is nothing
to bar such an objection. The objector can say that he
would not like that area to be included in the municipality
as it would make him and others liable to certain taxes,
which, in the circumstances prevailing in that area, would
not be right and would be prejudicial to the residents of
that area. This is the view taken by this Court in
Rajnarain Singh v. The Chairman Patna Administration
Committee, Patna (1).
In that case, a certain local area was included within Patna
City by a notification issued by the local Government under
s. 6 of the Patna Administration Act, 1915 (Bihar & Orissa
Act 1 of 1915). There was no provision in that Act for the
local Government notifying any objections from the residents
of the area to be included within Patna against tile
proposal for such inclusion. The validity of the
notification was not questioned in that case. Shortly after
the inclusion of the area within Patna, the local Government
issued a notification under s. 3 (1) (f), on April 23, 1951,
extending to Patna the provisions of s. 104 of the Bihar &
Orissa Municipal Act, 1922 with some modifications and
thereby made the residents of the newly added area subject
’to certain taxes. That notification was held to be bad
because the local Government had brought about a change of
policy by the modification made. It was said,-
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"In our opinion, the majority view was that an
executive authority can be authorised to
modify either existing or future laws but not
in any essential feature. Exactly what
constitutes an essential feature cannot be
enunciated in general
(1) [1955] 1.S.C.R. 290, 301, 303.
726
terms, and there was some divergence of view
about this in the former case, but this much
is clear from the opinions set out aboveit
cannot include a change of policy.
Now coming back to the notification of 23rd
April, 1951.. Its vires was challenged on many
Grounds but it is enough for the purposes of
this case to hold that the action of the
Governor in subjecting the residents of the
Patna Village area to municipal taxation
without observing the formalities imposed by
sections 4, 5 and 6 of the Bihar and Orissa
Municipal Act of 1922, cuts across one of its
essential features touching a matter of policy
and so is bad."
It was further observed,-
"The notification of 23rd April, 1951, does in
our opinion, effect a radical change in the
policy of the Act. Therefore it travels
beyond the authority which, in our judgment,
section 3 (1)(f) confers and consequently it
is ultra vires."
The change in policy was in the sense that the scheme of the
Bihar & Orissa Municipal Act 1922, was that the people would
not be made subject to the liability-,, of municipal
taxation without being afforded an opportunity to object
against such a proposal. The provisions of the 1922 Act
referred to as guaranteeing this right to the people were
stated to be ss. 4, 5 and 6 of that Act. Section 4 empowers
the State Government to declare its intention to constitute
or alter the limits of the municipality. Section 5 provides
for taking into consideration objections submitted within
the specified time after the aforesaid declaration and s. 6
empowers the State Government by notification to constitute
the municipality and to extend to it all or any of the
provisions of that Act or to govern any local area in the
municipality.
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It follows that under the present Act persons residing in an
area to be included in the municipal district could file
objections to the proposed inclusion of the area to the
Municipal district on the ground that certain by-laws
imposing taxes will affect them adversely.
Further, sub-s.(2) of s.48 of the Act provides the
publication of the by-law proposed to be made for the
information of the persons likely to be affected thereby.
The persons to be affected by the bylaw fixing octroi limits
are not only the inhabitants of the municipality, but
include persons who bring goods into the municipality for
consumption, use or sale therein. In fact it is such
persons who are the first to be affected by the levy of the
octroi duty. They will have to pay it first. They may pass
it on to the purchasers subsequently. It is to be presumed
that the publication made at the time of the making of the
by-law fixing the octroi limits must have been such as had
given notice to the persons other than the residents within
the municipality. Such persons could file objections
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against the proposed by-laws. It follows therefore that the
residents of the area subsequently added to a municipality,
an area which is bound to be adjacent to the original area,
cannot effectively contend that they had no opportunity of
objecting to the making of the by law.
Further, the provisions of these sub-sections can have
reference only to the occasion when bylaws are to be framed
or amended and can have no effect on the question of the
applicability of the bylaws to the newly added area of the
municipal district. In the absence of any express provision
in the Act to the effect that no rule or by-law shall be
applicable to the newly added area till it is freshly
enacted after following the regular procedure, we are not
prepared to accept this contention, air, its acceptance
would mean that the municipality becomes
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liable for discharging its functions under the Act with
respect to matters it has to deal with in that area and
would be deprived of the necessary powers which it possesses
for enabling it to discharge those functions properly till
it has re-enacted all the old by-laws.
Section 59 of the Act refers to the imposition of taxes,
naturally, for the purpose of obtaining funds to meet the
municipality’s obligations within the district under its
authority. Residents within an area of the municipal
district cannot therefore avoid the liability to pay a tax
merely on the ground that when that tax was imposed the area
in which they reside was not included within the municipal
district. The legislature could not have intended the
exemption of such persons from payment of the tax when it
provided for the extension of the limits of a municipal
district but did not expressly provide for the applicability
of the rules and by-laws then in force to the newly added
area or for the liability of the residents of the newly
added area to the taxes then in force within the municipal
district and for the reimposition of such taxes and the
remaking of such rules and by-laws in accordance with the
prescribed procedure.
We are of opinion that the extension of the limits of the
municipal district connotes that the area newly added to the
municipal district comes not only under the control of the
municipality, but also becomes subject to such laws, rules
and by-laws which be in force within the municipal district.
Lastly, reference may be made to s. 191B in Chapter XIV-A.
It provides inter alia that when any local area is added to
a municipal district, the State Government may,
notwithstanding anything contained in the Act or in any
other law for the time being in force, by order published in
the official gazette, provide for the extension and
commencement
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of all or any taxes, rules by-laws’ or forms made, issued,
imposed or granted under the Act by any existing
municipality and in force within its area immediately before
the day from which the local area was included to the
municipal district, to and in all or any of the other areas
of the successor district municipality, in supersession of
corresponding taxes, rules, by-laws, it’ any, in force in
such other areas immediately before the aforesaid day, until
the matters so extended and brought into force are, further
superseded or modified under the Act. No order under this
provision seems to have been issued ,by the State
Government. The provision, however, indicates that the
compliance of the procedural provisions mentioned in sub-s.
(2) of s.48, of the Act is not a necessary condition for the
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existing by-laws of a municipality to apply to the areas
included in it at a later time. If such an order is issued
by the Government, that clarifies the position. its, enact-
ment, however, does not mean that in the absence of such an
order, all the matters mentioned in cl.(x) of sub-s.(1)
of’s.19B will not Ineffective in the area included in a
municipal district under a notification under s.4 of the
Act.
We bold that the octroi limits fixed under bylaw No. 3
include the area newly added to the municipal district by
the notification of August 25, 959, and that, consequently,
the respondent company ",as liable to pay octroi duty on the
goods entering its premises. We would ’therefore allow this
appeal with costs, set aside the order of the Court below
and dismiss the writ petition of the respondent.
By COURT : In accordance with the opinion of the majority,
this appeal is dismissed with costs.
730