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PETITIONER: VALLABHDAS AND OTHERS

       Vs.

RESPONDENT: MUNICIPAL COMMITTEE, AKOLA.

DATE OF JUDGMENT: 27/01/1961

BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. HIDAYATULLAH, M. SHAH, J.C.

CITATION:  1967 AIR  133            1961 SCR  (3) 618

ACT: Octroi  Tax--Legality of imposition--" System of  Assessment ", meaniing of--C.  P. & Berar Municipal Act, 1922 (C.  P. & Berar II of 1922), S. 67(2).

HEADNOTE: The  Municipal  Committee,  Akola, passed  a  resolution  to impose  an octroi tax and forwarded it along with the  draft rules of assessment and collection to the State  Government. The State Government published a notification in the Gazette which contained the articles to be taxed, the rate or  rates at  which  they were to be taxed and a  brief  statement  of objects and reasons for the imposition of the tax.  This was followed  by draft rules as to how taxation was to be  done. Thereafter  the  Municipal Committee affixed on  its  notice board  and also published in the local newspapers  the  said proposed rules but the draft rules in regard to the " system of  assessment  "  were  not  published  along  with   other particulars.   It  was alleged by the  appellants  that  the Municipality  by  not publishing the draft rules  of  the  " system  of assessment ", failed to comply in full  with  the mandatory requirements of s. 67(2) of the Act rendering  the imposition of tax illegal. Held, that the words " system of assessment " did not neces- sarily   mean   the  whole  procedure  of   taxation,   i.e. imposition, collection and procedure in regard to collection and refund.  The notice and not the draft rules relating  to assessment  and collection were required under the Rules  to be affixed on the notice 619 board of the Municipality and at other conspicuous places of the town.  In the instant case the publication of the  Rules relating to the rates at which the tax had been imposed  was sufficient  compliance with the provisions of Section  67(2) of the C. P. S Berar  Municipal Act, 1922, and the rules  made  thereunder. Got,.

JUDGMENT:

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 234/60. Appeal from the judgment and order dated November 18,  1958, of  the  Bombay  High  Court  at  Nagpur  in  Special  Civil Application No. 201 of 1958. N.   C.  Chatterjee,  M. N. Phadke, S. A. Sonhi  and  Ganpat Rai, for the appellants. A.   V.  Viswanatha  Sastri,  B.  R.  Mandekar  and  A.   G. Ratnaparkhi, for respondent No. 1. G.   C. Mathur and R. H. Dhebar, for respondent No. 2. 1961.  January 27.  The Judgment of the Court was  delivered by KAPUR., J.-This is an appeal against the jugdment and  order of  the  High  Court  of  Judicature  of  Bombay  at  Nagpur dismissing  a  petition  under  Arts.  226  &  227  of   the Constitution  challenging the legality of the imposition  of the  octroi  tax  under s. 66(1)(e) of the  C.  P.  &  Berar Municipal Act (Act II of 1922) hereinafter termed the Act. The  appellants who were the petitioners in the  High  Court are  some  of the rate-payers of the town of  Akola  in  the erstwhile  State  of  Bombay and respondent  No.  1  is  the Municipal   Committee,   Akola.   On  November   11,   1957, respondent No. 1 passed a resolution to impose an octroi tax on animals and goods brought within the limits of the  Akola Municipality.   This  resolution  and  the  draft  Rules  of Assessment  and  Collection were later on forwarded  by  the Akola Municipality to the State Government for  publication. A  notification dated January 3, 1958, was published in  the Bombay Government Gazette on January 16, 1958.  This Gazette Notification  contained  the draft rules,  the  schedule  of goods  liable  to octroi duty and the rates to  be  charged. This was in accordance with the requirements of s. 67(2)  of the Act.  Respondent 620 No. 1, the Municipal Committee, affixed on the Notice  Board of  the Committee and published in the local newspapers  the proposed  rules  for  the imposition of  the  tax,  but  the objection  of the appellants is that   they did not  publish along  with them the draft of the " System of Assessment  ". It  is  true  that  a  pamphlet  in  Marathi  language   was distributed in the town of Akola and the proposals were also published  in the local newspaper Jan-Sewak.  Objections  to the  proposals were filed by some of the rate-payers of  the town  of  Akola  and  all of  them  were  considered  and  a resolution was passed by the Municipal Committee on March 3, 1958, and that is the resolution which was challenged in the petition  filed in the High Court by a petition dated  April 14,  1958, p raying for the quashing of the  resolution  and for  the  issuing of a prohibitory order against  the  State Government  against  sanctioning the proposal  sent  by  the Municipal  Committee.  On April 18, 1958, a rule was  issued by the High Court to the opposite parties calling upon  them to  show cause why the, order as prayed should not be  made. This notice was served on the Special Government Pleader  on May  9, 1958, and the Special Government Pleader put in  his appearance  on June 17, 1958.  On June 23, 1958, an  interim injunction  was  issued, but previous to that  on  June  19, 1958,  a  final notification was issued  by  the  Government approving  of the proposal to impose the octroi tax.   As  a consequence of this the petition was allowed to be  amended, but  ultimately  the High Court dismissed the  petition  and this  appeal has been brought on a certificate of  the  High Court. The  sole question which has been debated before us  is  the legality  of  the  imposition.   The  ground  on  which  the legality is challenged is that there was no full  compliance

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with the mandatory requirements of s. 67(2) of the Act.   It is,   therefore,  necessary  to  deal  with   the   relevant provisions  of  the Act.  Chapter IX of the Act  deals  with Imposition, Assessment and Collection of taxes.  Section  66 provides for the taxes which can be imposed and s. 67  deals with  the mode of the imposition of the tax.  By s. 71,  the State 621 Government  is  empowered  to  make  rules  regulating   the assessment   of   taxes  and  for  preventing   evasion   of assessment.   Section  76 empowers the State  Government  to make rules regulating the collection of taxes and preventing evasion  of  payment.  Section 85 em- Con powers  the  State Government  to  make rules regulating the refund  of  taxes. But  it was argued on behalf of the appellants that  as  the mandatory  provisions  of s. 67 as to publication of  the  " System of Assessment " in accordance with the rules was  not complied  with,  the  imposition of  the  tax  was  illegal. Reliance  was  placed on certain judgments, but  it  is  not necessary   to   discuss   those  cases   because   in   the circumstances  of this case they are of  little  assistance. The respondents, on the other hand, submitted that what  was published  was  all that the section required and  that  the word assessment there did not mean anything more. As  s. 67(2) has been mainly relied upon, it may be  quoted. It provides:-               "  67(2)  When  such  a  resolution  has  been               passed,   the  committee  shall   publish   in               accordance  with rules made under this Act,  a               ’notice  defining  the  class  of  persons  or               description of property proposed to be  taxed,               the  amount or rate of the tax to  be  imposed               and the system of assessment to be adopted." The  scheme  of  s.  67 appears to  be  this:  that  when  a Municipal Committee wishes to impose a tax it has to pass  a resolution  at a special meeting and then it has to  publish its resolution for imposition of that tax so that the  rate- payers  may  be able to place their objections  against  the imposition.  This publication must appear in the  Government Gazette  and  also locally as required by  the  rules.   The Municipal Committee has then to consider the objections,  if any,  of  the  rate-payers and if  the  Committee  does  not consider  it necessary to alter its original  proposals,  it has  to send its proposals with the objections received  and its  decision thereon and any modifications of the  original proposals  to the State Government which, after  considering the  matter,  may  sanction them or refuse  to  sanction  or sanction them with modifications, 622 The real objection of the appellants was that the system  of assessment  had  not seen published as  required.  The  Rule relating to publication under s. 67 is as follows :-                     " 1. A notice under section 67(2) of the               intention of the municipal committee to impose               a tax, or under section 68(3) of the  proposal               of  the  committee to increase the  amount  of               rate  of  any tax, shall be forwarded  to  the               State    Government   through    the    Deputy               Commissioner  for publication in the "  Madhya               Pradesh  Gazette.  " The notice under  section               67(2)shall  be accompanied by draft rules  for               the  assessment  and collection  of  the  tax.               After  its  publication in  the  Gazette  the,               notice  shall be published by affixing  copies               thereof  to  a notice board at  the  municipal

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             office and at conspicuous places in the  town,               and  shall  also  be published  in  the  local               papers,  if  any.  As an  alternative  to  its               publication in local papers, the committee may               circulate  the notice in print  in  vernacular               within  the  municipal  limits.   Proclamation               shall also be made by beat of drum  throughout               the  municipality notifying the  intention  of               the committee and calling the attention of the               inhabitants  to the notice in question and  to               the  term of thirty days laid down in the  law               as   that  within  which  objections  to   the               proposed   imposition  or  increase  must   be               submitted to the committee." According  to this rule the notice under s. 67(2) has to  be accompanied by draft rules for the assessment and collection of  the  tax and after its publication in  the  Gazette  the notice  has to be published by affixing copies thereof to  a notice  board  at the Municipal Office  and  at  conspicuous places  in  the town and has to be published  in  the  local papers,  if  any, or it may circulate the  notice  in  print within  the  municipal limits.  It is admitted that  in  the Gazette  dated  January  16,  1958,  the  draft  rules  were published which contained the articles to be taxed, the rate or  rates at which they were to be taxed and  what  articles were  not to be taxed.  It also contained a brief  statement of objects. and reasons for the imposition of the tax.  This was 623 followed  by draft rules as to how taxation was to be  done. In  short what was published in the Gazette was admitted  to conform  to  all  the requirements of  s.  67(2).   But  the contention raised is that in the Jan-Sewak, a local  Marathi newspaper,  the  rules which were  published  contained  the articles  to be taxed, the rate or rates at which they  were to  be taxed, but the draft rules in regard to "  System  of Assessment " were not published along with it. The  High  Court has pointed out that what was  done  was  a sufficient  compliance with the provisions of s.  67(2)  and that the words " System of Assessment " meant only the stage of  the  imposition  of the tax and not other  stages  as  a whole.  Sections 71, 76 and 85, as has been said above, deal with  rules  for assessment and for  preventing  evasion  of taxes,  rules for collection of taxes and rules  for  refund respectively.   Read  together these provisions of  the  Act support  the  decision of the High Court that  the  words  " System  of  Assessment " do not necessarily mean  the  whole procedure  of  taxation, i.e.,  imposition,  collection  and procedure  in  regard to collection and refunds.   The  rule also  shows that what is to be affixed on the  notice  board and at conspicuous places of the town is the notice and  not the  draft rules relating to assessment and collection.   In our  opinion there has been a compliance with the  provision of  s. 67(2) and that the publication of the rules  relating to  the  rates  at  which  the  tax  had  been  imposed  was sufficient to comply with the provisions of the Act and  the rules  made thereunder.  It is unnecessary to deal with  the efficacy of sub-ss. (7) and (8) of s. 67. In our opinion the judgment of the High Court was right  and the appeal is therefore dismissed with costs. Appeal dismissed. 624