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TMI Blog1972 (9) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... e Governor of Saurashtra issued Ordinance No. 47, dated August 27, 1949, called the Saurashtra Terminal Tax and Octroi Ordinance, 1949, hereinafter called the 'Ordinance. Under Clause 4 of the Ordinance, the State Government framed Octroi Rules in 1949, hereinafter called the 'Rules'. By the inclusion of Dhrangadhra town in the schedule, octroi was being levied by the Government under the aforesaid Rules within the Municipality. On November 29, 1952, the petitioner filed a writ petition in the Saurashtra High Court claiming total exemption from payment of octroi on the basis of an agreement between the appellant and the erstwhile ruler of Dhrangadhra State. That writ petition was dismissed by the High Court on September 20, 1951, and the appellant filed an appeal to this Court on the basis of a certificate granted by the High Court. During the pendency of the appeal before this Court, the Municipality had further increased the octroi by 50 per cent with effect from July 1, 1953. The appeal pending before the Supreme Court was withdrawn in pursuance of an agreement between the appellant and the Municipality on September 26, 1960. The appellant paid octroi as per the revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification issued in that behalf from time to time by the Government: (a) an octroi on animals or goods, on both, brought within the octroi limits, for consumption, 01? use, or sale therein. Clause 4(1) states that the Government may, by notification in the official gazette, make, or may from time to time, alter 07 rescind rules for carrying out the provisions of the Ordinance. Sub-clause (2) of Clause 4 pro vides that without prejudice to the generality of the foregoing provisions, such rules may provide (i) for fixing and alteration of the octroi limit of stations, (a) for the exhibition of tables of octroi, (v) for refund of octroi, (vii) for the time at which and the mode in which such tax may be levied or recovered or shall fee payable. Sub-clause (ix) provides: (ix) designate the persons authorised to deceive payments of any sums so leviable. By Clause 9 the Government is directed to maintain a separate fund in respect of monies received by it on account of any of the taxes specified in Clause 3 for every city or town or local area specified in the schedule. 6. There is no dispute that Dhrangadhra town was included in Schedule I by a notification dated December 12, 1949, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) the class or classes of persons or of property or of both which the Municipality desire to make liable, and any exemptions which they desire to make; (v) the amount for which, or the rate at which it is desired to make such clauses liable, etc., etc. Section 46 (i) states: 46. Every Municipality shall, as soon as conveniently may be after the Constitution thereof and subject to the provisions of Chapter XIIIA, make and may from time to time alter or rescind rules, but not so as to render them inconsistent with this Act, XX XX XX XX XX XX (i) prescribing, subject to the provisions of Chapter VII, the taxes to be levied in the municipal district for municipal purposes, the grounds on which exemptions are to be recognized, the conditions on which and the extent to which remissions may be granted, and the system on which refunds are to be allowed and paid, in respect of such taxes, and the limits of the charges or payments to be fixed in lieu of any tax under Section 71, and the times at which and the mode in which the same shall be levied or recovered or shall be payable, and prescribing the fees for notices demanding payments due on account of any tax, and for the issue and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any other means it appears proper to continue with the Chemical works the present dealings relating to the octroi. Therefore, the Dhrangadhra Municipality is directed to continue the present position with the Chemical Works. These bye-laws will be deemed to have come into force from 1-7-1953. The order of the Collector does not say that any rules have been sanctioned. 12. That no rules have been framed under the Act is clear from the fact that the Municipality has not been able to produce them when the appellant asked for a copy of the same. The Municipality had then stated that "although no rules have been framed, the rules framed by the Government appear to have been adopted," Section 62 of the Act provides that rules sanctioned under Section 61 shall be published by the Municipality in the district for which they are prescribed together with notice reciting the sanction and the date and the serial number thereof, and the tax as prescribed by the rules so published shall, from a date which shall be specified in such notice and which shall not be less than one month from the publication of such notice, be imposed accordingly. In this case, the publication was as follows: Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Co. Ltd. v. Municipal Board, Rampur 14. We do not think that the mandatory provisions of Sections 60 to 62 for imposing a tax have been complied with in this case. Therefore, we hold that the imposition of the tax was illegal. 15. On behalf of the respondent It was submitted that the appellant was estopped from questioning the validity of the tax as it obtained benefit under the agreement dated September 26, 1960, and, therefore, the discretion of the High Court was rightly exercised by dismissing the petition. The respondent further submitted that the appellant was aware of the illegality of the levy in 1953 and that with open eyes it entered into the agreement with the municipality, under taking to pay tax at the rate in vogue on July 1, 1953, and, in consideration thereof, the municipality agreed not to enhance the tax for a period of one year; and so, the appellant cannot be allowed to challenge the legality of the tax. We do not think that there is any substance in these contentions. There was no agreement to pay the tax waiving the illegality attaching to it. There is also nothing to show that the appellant was aware of the illegality in the imposition of the tax and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the preliminary objection raised by the respondent that the writ petition should be summarily dismissed on the ground that the appellant has omitted to refer in the writ petition to the agreement dated September 26, 1960, and thus suppressed a material fact from the Court. The High Court, after having found that the petition was liable to be dismissed on the ground that the appellant has suppressed a material fact, nevertheless, chose to pass upon the contentions of the appellant on merits instead of disposing of the petition on its finding on the preliminary objection. The High Court, having entered into the merits of the case and disposed it of on that basis, we do not think it necessary to consider at length the merit of the preliminary objection. Suffice it to say that it does not appear to us that omission to refer to the agreement dated September 26, 1960, can be characterized as suppression of a material fact in view of the nature of the relief claimed in the writ petition. 18. The appellant can take just exception only to the extent of one-third of. The amount shown in the demand notice as that alone represents the 50 per cent increase. In the result, we quash the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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