TMI Blog1971 (8) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... 970, of the High Court of Punjab and Haryana dismissing the applications of the appellants for a writ of mandamus restraining the Municipality of Sonepat from levying against and collecting from the appellants any octroi in respect of raw materials, components and parts imported by the appellants into the factory of the appellants situated at Industrial Area, Sonepat. The factory of each of the appellants was situated at Industrial Area, Sonepat. The appellants carry on business of manufacturing bicycles and bicycle components and parts. On September 30, 1966, a notification dated September 15, 1966, was published in the Punjab Government Gazette to the effect that under section 5(1) of the Punjab Municipal Act, 1911 (referred to for the sake of brevity as the Act), the President of India was pleased to declare his intention of including within the municipal limits of Sonepat in the Rohtak District, the area specified in the Schedule to the notification. The Schedule included the industrial area of Sonepat where the factory of the appellants was situated. Under section 5(2) of the Act the inhabitants of the area who objected to the proposed inclusion of the said area could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent kinds enumerated. The three broad heads of taxes under section 61 of the Act are those provided in sections 61(1)(a), 61(1)(b) to (f) inclusive and 61(2). Tax mentioned in section 61(1)(a) of the Act is on buildings and lands. Tax mentioned in section 61(1)(b) to (f) is tax on profession, calling, trade and of other forms which are not material for the purpose of the present appeals. Under section 61(2) of the Act the municipality may impose with the previous sanction of the State Government any other tax which the State legisla ture has power to impose in the State under the Constitution. The levy of octroi is under section 61(2) of the Act. Competency to impose octroi is because of item 52 of the State List which reads "taxes on the entry of goods within the local limits of the area for sale therein." The power to levy octroi is indisputable and was not challenged. The contention on behalf of the appellants was that the provisions contained in section 62 of the Act should have been followed. Section 62 consists of 12 sub-sections. Broadly stated, under section 62 of the Act a municipal committee passes a resolution proposing the imposition of any tax under section 61. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 61(1)(a) of the Act the State Government on receipt of the order of sanction of the Deputy Commissioner shall notify the imposition of the tax in accordance with such order and in the notification shall specify a date not less than one month from the date of the notification, on which the tax shall come into force. In the case of tax falling under section 61(2) of the Act the municipality has to submit proposals together with objections to the Deputy Commissioner. The Deputy Commissioner shall submit the proposal and objections with his recommendation to the State Government. The State Government on receiving the proposals for taxation under section 61(2) of the Act may sanction or refuse to sanction the same or return them to the committee for further consideration. In the case of tax falling under section 61(2) of the Act when the State Government on receipt of the proposal and objections along with the recommendation of the Deputy Commissioner sanctions the imposition of the tax the State Government under section 62(10) of the Act shall notify the imposition of the tax and shall in the notification specify a date not less than one month from the date of the notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een imposed in accordance with the provisions of the Act. It is the notification under the statute which is conclusive evidence of the imposition of tax. The controversy in the present appeals is solved by finding out as to whether the notification dated November 3, 1942, imposing octroi within the limits of the Sonepat Municipality became applicable by reason of the provisions contained in section 5(4) of the Act. It is noticeable at the outset that section 5(4) of the Act speaks of rules, bye-laws, orders, directions and powers and does not significantly mention "notifications". It is apposite to consider sections 6, 7 and 8 of the Act which deal with the effect of exclusion of local area from the municipality. In the case of exclusion of an area from the municipality it is provided in section 8(1)(a) of the Act that " this Act and all notifications, rules, bye-laws, orders, directions and powers issued, made or conferred under the Act, shall cease to apply thereto." When the Act provided for notifications ceasing to apply in the case of exclusion of local areas, and in the immediately preceding section 5 refrained from using the word "notifications" becoming applicable in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the included area would "suffer all the burdens that are inherent in their inclusion within the municipal limits ". This conclusion of the High Court is not supported either by the decision of this court or by the provisions of the statute. In the first place, a taxing provision always receives a strict interpretation for the obvious reason that there must be clear and express language imposing a tax and the date from which such tax shall come into effect. Notifications under the Act are the only authority and mandate for imposition and charge of tax. Notifications are not made applicable to included areas under section 5(4) of the Act. There cannot be any taxation by implication. Secondly, in the Bagalkot City Municipality case there was no provision comparable to section 5(4) of the Act and this court did not decide that taxes would become automatically leviable. On the contrary, this court in the Bagalkot City Minicipality case, in interpreting the words "municipal District" occurring in a bye-law, did not extend the meaning of "municipal district" to include areas which were subsequent to the making of the bye-law added within the limits of the municipal district. The reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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