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TMI Blog1961 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 1955, the Government of Bombay passed an order directing that the octroi tax shall not be leviable by the appellant municipality. This order has given rise to the present proceedings. The appellant municipality filed a petition in the High Court at Bombay under article 226 of the Constitution challenging the validity of the order. This petition was dismissed by the High Court. The appellant municipality has now come up to this court in appeal against the decision of the High Court. The questions that arise in this case will be stated after a few of the sections of the Act have been referred to. Chapter VII of the Act deals with municipal taxation. We shall be concerned principally with sections 59, 60, 61 and 62 which are all contained in this chapter and deal with imposition of taxes by municipalities. It will be necessary also to consider section 46. Section 46 gives power to a municipality to make rules for various purposes as specified in the several clauses contained in it. Under clause (1) of this section, a municipality has power to make rules for the purpose of " prescribing, subject to the provisions of Chapter VII, the taxes to be levied ". Section 59 is the sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59, subject to which only a tax could be imposed by a municipality. The appellant municipality does not dispute that it can impose a tax only under section 59 but it contends that the general or special orders mentioned in the section subject to which it has the power to impose tax, are orders which were in existence before the rule prescribing the tax was framed and once a rule has been framed by it and the Government has accorded its sanction to that rule, the Government has no power to control the imposition of tax under it by any order made under section 59. The question so raised is one of the construction of section 59. But for such construction we have to refer also to the other sections earlier mentioned. In our opinion, the Government's contention is well-founded. The municipality's power to tax arises only under section 59. Under that section, it has been given the power to impose a tax after following the procedure prescribed but subject always to the general or special orders of the Government. The appellant municipality can succeed in this appeal only if the word " impose " in section 59 means the acquisition of the power to tax by following the procedure laid down i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the power so acquired. It is of some significance to note that in section 46(1) the words used are " make .... rules . . . prescribing .... the taxes to be levied ". What we wish to point out is that in connection with the making of the rules the Act uses the word " levied " in section 46(1) and in connection with an actual impost, the word " imposed " in section 62. We, therefore, think that it would be legitimate to construe the word " impose " in section 59 in the sense in which it has clearly been used in a connected provision, that is, section 62. Hence, in our view, " impose " in section 59 means the actual levy of the tax after authority to levy it has been acquired by rules duly made and sanctioned, and it is such imposition that is made subject to the general or special orders of the Government. Therefore, the Government can at any time by any such order prohibit the imposition of the tax. Mr. Sastri for the appellant said that the general or special orders in section 59 refer to orders that can be made under section 73, but the present order had admittedly not been made under that section. Section 73 does not empower an order prohibiting the imposition of a tax alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have had the advantage of perusing the judgment just delivered and I agree with the order passed. The relevant facts and the statutory provisions which bear on the points arising in the appeal have all been set out by Sarkar J. and do not require to be repeated. There is no dispute that the levy of the duty by the municipality as and from January 1, 1955, was lawful because the requirements of sections 59 to 62, were satisfied when the levy was made. No general or special order of the State Government stood in the way of the municipality making the particular levy and the sanction of the State Government under section 59(1)(b) had been accorded to it, and the relevant rules had conformed to the procedural and other requirements of these sections. The power of the municipality in the matter of the levy of the tax is, however, not absolute but is made subject, apart from other provisions to which I shall advert, to such general and special orders as the State Government might pass by virtue of the opening words of section 59 of the Act. The argument strenuously pressed by Mr. Viswanatha Sastri was this : The Government had, no doubt, a power to prescribe and control by genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. Section 73 cannot, therefore, be construed as negativing by implication the right claimed by the State Government under section 59, for it refers to and comprehends a totally different subject-matter. Coming now to the construction of sections 59 to 62 as themselves supporting the theory of the exhaustion of the power, the submission was this. " The general or special orders " could only restrict the power of a municipality " to impose a tax ". On the scheme of provisions contained in sections 59 to 62 a tax was " imposed " only once, though when imposed and in operation the levy and collection of such a tax might be periodic and throughout the life of the imposition. Hence there was no scope for the exercise of the power of the State Government to make " any special or general order " in relation to a tax after it has once been " imposed " because the power to prescribe conditions or restrictions by general or special order is with reference to the " imposition " of the tax. I feel unable to accept this construction. The whole foundation of the argument is based on a denial of the premise that a power to impose tax is a continuing power. In my judgment the " imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may make against the imposition or enhancement of such tax, (b) it shall not be lawful for the municipality to abandon or modify or to abolish such tax when imposed, and (c) the Provincial Government may at any time cancel or modify any requisition made by it under this section, and the levy of the tax or the enhancement, except as to arrears theretofore accrued due, shall thereupon cease or be modified accordingly." Government are thus empowered both to direct the municipality to impose a tax when Government consider the same necessary in the interests of municipal finance and administration as also to direct the municipality to desist from continuing the imposition when the necessity ceases. In cases where a tax is imposed by the municipality by virtue of the provisions in sections 59 to 62, the municipality itself could revoke the tax if the rules so provide, for section 47 of the Act enacts : " (1) Subject to the requirements of clause (a) of the proviso to section 46 every municipality may, except as otherwise provided in clause (b) of the proviso to section 74, at any time for sufficient reason, suspend, reduce or abolish any existing tax by suspending, altering or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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