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PETITIONER: BHASKAR TEXTILE M[LLS LTD;

       Vs.

RESPONDENT: JHARSUGUDA MUNICIPALITY & OTHER

DATE OF JUDGMENT11/01/1984

BENCH: MISRA, R.B. (J) BENCH: MISRA, R.B. (J) VENKATARAMIAH, E.S. (J)

CITATION:  1984 AIR  583            1984 SCR  (2) 401  1984 SCC  (2)  25        1984 SCALE  (1)72

ACT:      Octroi duty,  imposition of-Validity  of the imposition of Octroi  duty  under  section  131(1)(kk)  of  the  Orissa Municipal Act,  1950 to  a village  constituted as  a  Grama earlier under  Section 3  of the  Orissa Gram Panchayat Act, 1964 but  later included in an area of cl Municipality under Section 4  of the  1950  Act-Constitution  of  India,  1950, Article 19(1)g.

HEADNOTE:      The  appellant   Textile  Mills   is  a   company  duly incorporated under  the Indian Companies Act 1956 having its mills located  at Village Ektaji under the Jharsuguda police station in  district Sambalpur,  Orissa. The  company mainly carries on  spinning of  Cotton which  in the  manufacturing process is  transformed from loose fibres into finished yarn The area  under the  Ektaji village in which the appellant’s factory was  located was earlier constituted as a Grama by a declaration  made  under  Section  3  of  the  Orissa  Grama Panchayat Act  1964. On  or about  March 25, 1970 Jharsuguda Municipality passed  a resolution  for the  inclusion of the Ektaji and  other villages  within its  jurisdiction.  After considering the  objections and  representations against the inclusion of Ektaji village in the Municipal Limit and after following once  again the  other  statutory  requirement  of further notice  etc., the  State Government published in the Orissa Gazette  dated 12.8.1975 a notification approving the inclusion. Soon  thereafter on  September 1,  1975 the  said Jharsuguda Municipality  sent  a  letter  to  the  appellant directing it  to pay octroi duty at the rate of I percent ad valorem on  cotton as soon as it entered the Municipal check post for  the purpose  of its being spun into yarn. The levy of octroi  was challenged  by filing  a petition under Arts. 226 and  227 of the Constitution on various grounds, but the writ Petition was dismissed. Petition seeking permission for issuance of  a  certificate  under  Article  133(1)  of  the Constitution was  also dismissed.  Hence  the  appeal  after obtaining Special Leave of the Court.      Dismissing the appeal the Court. ^      HELD: 1.  Considering the  case  from  any  aspect  the imposition of  Octroi duty  under section  5 of  the  Orissa

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Municipal Act,  1950 does not suffer from any infirmity [413 H]      2. The levy, being neither an unreasonable one nor also excessive, cannot  . be  challenged on the ground that there is violation  of Article  19(1)(e) of the Constitution. [413 a] 402      3. It  is true that when a duly constituted Grama under sub-section (I)  of section 3 of the Grama. Panchayat Act is to go out of existence an order of the Magistrate cancelling the Notification in terms of sub-section (2) of Section 3 of the said Act is a pre-requisite. But in the instant case the Gram  Panchayat   never  challenged   the  Notification   of inclusion of the Village Ektaji in Jharsuguda’ Municipality. Rather on  the other  hand the  Gram panchayat was consulted before the  impugned notification dated 12th August 1975 was issued. [406 H; 407 A]      4. The  proviso to  sub-section 1  of Section  4 of the Orissa Municipal.  Act,  1950  has  no  application  to  the present case  and that  cannot be  taken to  be a ground for challenging the Notification for inclusion of Village Ektaji hl the  Jharsuguda  Municipality.  A  bare  perusal  of  the proviso clearly  indicates that the requirement is that two- thirds of the adult, male population of the town to which it refers should  be engaged  in non-agricultural  pursuits The proviso applies not to all the clauses of sub-section (I) of section 4  but it. applies only to clause (a) of sub-section (1) of  Section 4, because it is clause (a) of section 4 (1) which talks of town. [408 E-F]      5. The  contention that  the objection  raised  by  the appellant against  the inclusion  of the village in question into Municipality  has not  been considered by the State has no force.  The objection  is required to be made through the Magistrate  of   the  District.   Naturally   the   District Magistrate. while  forwarding the  objection  to  the  State Government made  his comment. The Revenue Divisional officer who intervenes  in the  channel of communication between the District Magistrate and the State Government had an occasion to process  the matter.  The State  Government while dealing with the  matter consulted  the Panchayat Raj Department and ultimately notified  in  terms  of  the  notification  dated August 12, 1975. [408H; 409A-B]      6. Section  131(1) of  the Municipal  Act  empower  the Municipal Council  to impose  various kinds  of taxes  which includes octroi as provided in Clause (kk) with the sanction of the  Government since  the goods  are  brought  into  the municipal limits at least for the purpose of use"-one of the three conditions laid down in clause (kk  -the imposition of Octroi is valid.      Burmah Shell  Oil Storage  & Distribution  Co.  v.  The Belgam Borough Municipality ’ [1963] Supp 2 SCR 216 referred to and held inapplicable. [409 D-E]      7:1. There is a statutory presumption under section 392 of the  Orissa Municipal  Act, 1950  that the publication of the rules or regulations or bye laws in the Gazette shall be evidence that  the rule  pr regulation  or bye law has, been mad as  required by  the section  Therefore the  court  will assume that the bye law has been made in accordance with law in the  absence of  anything  more  from  the  site  of  the appellant. 1410 F-G]      7 :2; The argument that even assuming that the bye laws when  initially   enforced  might   be  presumed  to  be  in accordance with  law in  the absence  of similar steps being taken at  the time  of extension  of bye  laws to  the newly added area,  the bye  laws are  not enforceable  in the  new

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areas is not correct as it has, proceed in utter oblivion of the provisions of section 5 of the Municipal Act. [410H; 411 A]      Vishakhapatanam Municipality  v. Kandregula Nukarajau & Ors. [1976]  1 S.C.R.  5.44; Atlas  Cycle Industries Ltd. v. State of Haryana and Anr. [1972] 1 S.C.R. 127; Bagalkot City Municipality v  Bagalkot Cement  [1963] 2  Supp S.C.R.  710; distinguished 403

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 487 of 1977.      Appeal by  Special leave  from the  Judgment and  order dated the  5th January,  1977 of  the orissa  High Court  in O.J.C. No. 810 of 1976.      V S  Desai, Parveen  Kumar and  Ashok  Mathur  for  the Appellant.      C.V. Murty,  K. PrabhaKar  Rao and  C.M. Murty  for the Respondents.      R.K. Mehta for Respondent No. 3.      B.D. Sharma for Respondent No. 2.      The Judgment of the Court was delivered by      MISRA J.:  The  present  appeal  by  special  leave  is directed against  the judgment  of the  High Court of Orissa dated 5th  January ]977  dismissing a  petition under ’Arts. 226 and 227 of the Constitution ’ for quashing imposition of octroi under s. 131(1)(kk) of the Orissa Municipal Act, 1950 (hereinafter referred  to as  the ’Act’)  and  for  .  ’.  a declaration. that the notifications dated 31st July 1973 and 12th August, 1975 issued by the State Government in exercise of powers  . .  vested under  s.4 of the Act are illegal and unenforceable and  for a further declaration that the octroi Bye-laws of  the Jharsuguda  Municipal Council are also void and inoperative.      Jharsuguda  Municipality,   respondent  No.   1,  is  a municipality incorporated  under the  Act. In March 1962 the State Government  ’accorded sanction  for the  imposition of octroi in  terms of  s.]3](]) of  the Act. ’ A set of octroi bye-laws were  framed by  the Municipal  Council in terms of s.388 of  the Act  and the  same were  also approved  by the State Government  in exercise  of powers  under s.390 of the Act on  19th March,  1968. octroi  was levied  for the first time  after  31st  March  1962  when  the  State  Government accorded sanction under s.131 (i)(kk) of the Act.      The appellant  is a company duly incorporated under the Indian   Companies Act,  1956 having  its mills  located  at village  Ektali  under  the  Jharsuguda  police  station  in District Sambalpur, Orissa. The said area of the village was included within  the Ektali  Panchayat. The  company  mainly carries on spinning of cotton which in the manu- . 404 facturing’ process  is transformed  from loose  fibres  into finished yarn.      The  area   under  the  Ektali  village  in  which  the appellants’ factory  was located was constituted, along with other villages  as a Gram by a declaration made under s.3 of the, Orissa’  Grama Panchayat  Act, 1964.  On or  about 25th March, 1970  Jharsuguda Municipality passed a resolution for the inclusion of Ektali and other villages in the Jharsuguda Municipality  and  thus  extending  the  area  of  the  said Municipality. Against  the proposed  extension the appellant made a  representation to the State Government inter alia on

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the ground  that he said, village Ektali could not under the relevant  rules   be  included  in  the  Municipality  under s.4(1)(c) of  the Orissa  Municipal Act, 1950 in view of the proviso to  s.4(1) which  contemplates  that  a  declaration shall not  be made  under this  sub-section unless the State Government are  satisfied that  two-thirds of the adult male population of  the town  to  which  it  refers  are  chiefly employed in  pursuits other than agriculture and that such a town contains  not  less  than  10,000  inhabitants  and  an average number of not less than 1000 inhabitants to a square mile of  the area of such a town. The appellant alleged that the male  population of  the said village Ektali was 2640 as per 1971  census report, out of which only 1586 were chiefly employed in  pursuits other  than agriculture  and thus two- thirds of  such male  population were  not employed  in non- agricultural pursuits.      The State  Government, however, by a notification dated 31st July  1973 declared  their intention under s.4(1)(c) of the Municipal  Act, 1950  to include  within the  Jharsuguda Municipality  the   local  area  of  a  number  of  villages including the  village  Ektali.  By  the  said  notification published in Orissa Gazette Extraordinary dated 22nd August, 1973 the Government invited objections within six weeks from the date of publication. The appellant did file objection to the said  notification. Objection  was also  filed by  Grama Panchayat of  Ektali to the effect that the Ektali Grama was duly constituted  , by  the State  Government  in  Community Development and  Panchayat Raj  Department  in  exercise  of powers under s.3(1) of the Orissa Grama Panchayat Act and in the absence  or any  notification under  s.3(1) and s.149 of the Grama  Panchayat Act,  village Ektali still continues to be a Grama.      The  objections   were   examined   by   the   District Magistrate, Sambalpur  and the Revenue Division Commissioner Northern Division,  . Sambalpur  and the same were rejected. On 12th August, 1975, notification under s.4(33(b) declaring the inclusion of the said villagsa 405 including the  village Ektali,  into Jharsuguda Municipality was issued.  Soon thereafter on Ist September, 1975 the said Jharsuguda Municipality  sent  a  letter  to  the  appellant directing it  to pay  octroi as per provisions of s.5 of the Orissa Municipal  Act. The  said octroi  was payable  at the rate of  1 per  cent ad  valorem on  cotton as  soon  as  it entered the  municipal check-post  for the  purpose  of  its being spun into yarn.      The levy  or octroi  duty was  challenged by  filing  a petition under  Arts. 226  and 227  of the  Constitution  on various grounds  viz.,(a) the inclusion of village Ektali in the area  of Jharsuguda  Municipality was  illegal and ultra vires the  provisions of  the Orissa  Municipal Act, and (b) the levy  of octroi duty at the rate of I percent ad valorem was arbitrary,  coercive and  violative of  Art. 301  of the Constitution  and,   therefore,  the  appellant  prayed  for quashing the notifications referred to above.      The writ petition was, however, dismissed by a Division Bench of  the Orissa  High Court  by  its  order  dated  5th January. 1977  The appellant filed an application under Art. 133(1) of  the Constitution  for the  grant of a certificate for leave  to appeal  to ’this Court, which was dismissed by the High  Court by  its order  dated 19th January, 1977. The appellant has  now filed  the present appeal after-obtaining special leave from this Court.      The  learned  counsel  for  the  appellant  raised  the following contentions: .

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    1.   In the  absence of  a notification  cancelling the           declaration constituting Ektali village as part of           Grama, it  was not  legally permissible  for  the-           State  Government   acting  ’   under  the  Orissa           Municipal Act  1 950 to include within the area of           the municipality the area of the said Grama.      2.   The mandatory requirements of proviso to sub-s.(l)           of s.4  of the Orissa Municipal Act, 1950 have not           beer satisfied.      3.   The objection  filed by  the appellant  under sub-           s.(2) of  s.4 has not been considered by the State           Government.      4.   (a)  The liability  to octroi  arises when  any of                the   three    alternatives   mentioned    in                s.]31(1)(kk)  of   the   Municipal   Act   is                satisfied viz., when the goods are brought 406                within   the   municipal   limits   for   (i)                consumption, (ii) use or (iii) sale.           (b)  The tax  already imposed within the limits of                the Municipality  of Jharsuguda  could not be                automatically made applicable to the extended                limits of  the municipality without obtaining                the sanction  of the  State Government  under                s.131(1) (kh) of the Act.           (c)  The rate  levied is  per se  unreasonable and                arbitrary. We take up these grounds seriatim.      Admittedly village  Ektali where  the  factory  of  the appellant is  located was  a part  of the  duly  constituted Ektali Grama  Panchayat prior to 1973, within the meaning of s.3 of  the Orissa  Grama Panchayat  Act. Sub-section (1) of s.3  authorises  the  State  Government  to  constitute  any village or  group of  contiguous villages  as a  Grama by  a declaration notified in the Gazette and assign to such Grama a name  which shall  be of  one of  the  villages  comprised within the  Grama.  Subsection  (2)  of  5.3  provided  that whenever the  State Government  deems it  fit so to do, they may cancel any notification in respect of a Grama under sub- s (1) on may alter the area comprised in a Grama by reducing or adding  to the  number of  villages comprised within such Grama by a declaration ’notified in the Gazette constituting such altered area or areas as a Grama or Gramas, as the case may be.      The  precise   contention  raised   on  behalf  of  the appellant is  that- there  was a declaration by notification for the.  constitution of  the Grama  within the  meaning of sub-s.(l), but there has been no notification as required by sub-s,(2) of  s.3 for  taking village  Ektali out  of  Grama Panchayat and,  therefore, village  Ektali continues to be a Grama and  the inclusion  of village  Ektali  in  Jharsuguda Municipality by notifications dated 31st July, 1973 and 12th August, 1975 will have no effect.      This contention  has considerable  force:  When-a  duly constituted Grama  is to go out of existence an order of the Magistrate cancelling the notification in terms of sub-s.(2) of s.3  of the  Grama Panchayat  Act is necessary. But there are circumstances which take away the force of the argument. The Grama  Panchayat never’  challenged the  notification of inclusion of the village Ektali in Jhar- 407 suguda Municipality.  From un-controverted  averment made in para 6  of the  counter-affidavit of  the State filed before the High  Court it  appears that  the  Grama  Panchayat  was consulted before the impugned notification. Therefore, we do not feel  persuaded to accept the contention at the instance

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of the appellant. This leads us to the second ground.      In  order  to.  appreciate  the  second  ground  it  is appropriate at  this stage to refer to the provisions of s.1 in so far as it is relevant for the purposes of the case:      "4.(1)    The State  Government  may,  by  notification                declare their intention      (a)  to  constitute   any  town,   together  with,   or           exclusive of,  any railway  station, village, land           or building  in the  vicinity of  any such town, a           municipality under this Act: or      (b)  .......................................      (c)  to include  within a  municipality any  local area           contiguous  to   the  same   and  defined  in  the           notification; or      (d)  ................      (e)  .............. .      (f)  ................      (g)  ................      (h) ................           Provided that  a declaration  shall  not  be  made      under this  sub-section unless the State Government are      satisfied that  two-thirds of the adult male population      of the town to which it refers, are chiefly employed in      pursuits other  than agricultural,  and that  such town      contains not  less than ten thousand inhabitants and an      average  number   of  not   less  than   one   thousand      inhabitants to  the square  mile of  the area  of  such      town, 408           (2) Any  inhabitant of  the town or local area, or      any, rate-payer  of the  municipality, in  respect  of,      which any  . .  such notification  has  been  published      under sub-section  (l) may,  if he  objects to anything      contained in  the notification, submit his objection in      writing to the State Government. through the Magistrate      of the  district within  six weeks from the date of the      publication  of  the  notification  and  the’  State  .      Government   shall    take    his    objections    into      consideration.           (3) ......."      The emphasis  of the appellant is that two-third of the adult  male  population  of  the  Grama  should  be  chiefly employed in  pursuits other than agricultural. The appellant has referred  to 1971 census figures. On the basis of these- census figures  it is  argued that  out of  the  total  male population of  2640 of  Grama Ektali  only 1586  adults were engaged in  non-agricultural pursuits hut the requirement of law was  that two-third  of the  male population should have been employed   in the non-agricultural pursuits which comes to  1760.      The  argument  proceeds  on  the  assumption  that  the proviso to s.4(1) applies. But a bare persual of the proviso clearly indicates that the requirement is that two-thirds of the adult  male population  of the  town to  which it refers should  be  engaged  in  non-agricultural  ’  pursuits.  The provision, to  our mind,  applies not  to all the classes of sub-s.(l) of  s.4 but it applies only to cl.(a) of sub-s.(l) of s.4,  because it is cl.(a) of s.4(1) which talks of town. Therefore,  the   proviso,  in  .  .  Our  opinion,  has  no application to  the present case and that cannot be taken to be a  ground for  challenging the notification for inclusion of village Ektali in the Jharsuguda Municipality. This takes us to the third ground.      The appellant had filed an objection under sub-s.(2) of s.4.  The  said  objection  was  examined  by  the  District

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Magistrate,   Sambalpur    and   the    Revenue   Divisional Commissioner (Northern  Division), Sambalpur: They overruled the  objection   treating  it   to  be  of  general  nature. Thereafter, the  Community Development  and the Panchati Raj (Grama Panchayat)  Department were  consulted to  agree with this proposal,  to which they agreed, and it was thereafter. that  the   Urban  Development  Department  issued  a  final notification dated  12th August,  1975 to  include the above village   into    the   municipal   limits   of   Jharsuguda Municipality. The  contention  of  the  appellant  that  the objection had not been considered by the State Government 409 cannot be  accepted in  as much as the objection is required to  be  made    through  the  Magistrate  of  the  district. Naturally, the  District  Magistrate  while  forwarding  the objection to  the State  Government made  his  comment.  The Revenue Divisional Commissioner intervenes in the channel of communication between  the District Magistrate and the State Government and  he, therefore,  had an  occasion to. process the matter.  The-State Government  while  dealing  with  the matter  consulted   the.  Panchayati   Raj  Department   and ultimately notified  in terms  of  notification  dated  12th August, 1975.  In the  circumstances it  cannot be  accepted that the  objection filed  by the  appellant  had  not  been considered by the State Government.      It was  next contended  that the  liability for  octroi arises when  ally of  the three  alternatives  mentioned  in s.131(1)(kk) of  the Municipal  Act are  satisfied,  namely, when the  goods are  brought within the municipal limits fol (i) consumption,  (ii) use, or (iii) sale. Section 131(1) of the Municipal  Act empowers  the Municipal Council to impose various kids  of taxes within the limits of the Municipality with the sanction of the  State Government. One of the taxes contemplated by  s.313 (l)  is octroi,  as provided  in  cl. (kk).  According to the appellant the goods are brought into the municipal  area not  for the  purpose  of  sale  or  for consumption but  for the purpose of manufacture of yarn. The appellant took  support from  Burmah  Shell  Oil  Storage  & Distribution  Co.   India  Ltd.   v.  The   Belgam   Borough Municipality in which this Court had an occasion to consider the word  ’Consumption’. This  Court took  the view that the word ’consumption’  in is primary sense means the act of con summing and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article, but in some  legal contexts,  the word  ’Consumption has a wider meaning and  that it  is .  not necessary that by the act of consumption the commodity must be ’ destroyed or used up. On the strength  of this  authority it  is con  tended that the goods were  brought into  the municipal limits neither . For consumption, nor  for sale.  Assuming the  contention to  be correct there  is no  escape from  the conclusion  that  the goods are  brought into  the municipal  limits at. least for the purpose  of use.  In this view of the legal position the imposition  of   octroi  by   the  Municipality   cannot  be challenged on this ground.      The next  ground of  attack is  based on  s.372 of  the Orissa Municipal Act. Section 392 pertinently reads: - H 410           "392. The State Government before making any rules      under sub-section  (2) of  section 81  and section 387,      and a  municipal council,  before making any regulation      or by-laws  under section  388, shall  publish, in such      manner as  the State  Government  deem  sufficient  for      giving information  to persons interested, the proposed      rules or  regulations or  by-laws  -  together  with  a

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    notice specifying  a date  on or  after which  the same      will be  taken into  consideration;  and  shall  before      making such  rules or  regulations or  by-laws, receive      and consider  any objection  or suggestion which may be      made -  by any  person with  respect to the same before      the date so specified.           Every such  rule or  regulation or by-law shall be      published in  the Gazette  in English  and in Oriya and      such publication  shall be  evidence that  the rule  or      regulation or  by-law has been made as required by this      section."      It is  contended that the mandatory requirements having not been  complied with the imposition of octroi is vitiated on this account.      The appellant  in para  3  of  the  Writ  petition  had alleged that  the bye-laws  ’were not published in the State Gazette either  in Oriya or in English. This allegation has, however, been  controverted by  the State Government in para ]8 of  the counter-affidavit.  It was  specifically  averred that  the  bye-laws  were  approved  and  confirmed  by  the Government in  Urban Development  Department vide. Order No. 1903/Legis-43-67/UD dated  nil published  in Orissa  Gazette for information  of the  general public on 23rd May, 1969 at pages 691 to 697. There is a statutory presumption under s.3 of the  Act that the publication of the rules or regulations or by-laws in the Gazette shall be evidence that the rule or regulation or  bye-law has  been made  as required  by  this section. In  view of  this statutory  presumption the  Court will assume  that the  bye-law has  been made  in accordance with law  in the  absence of  anything more from the side of the appellant.      As a  second limb  to this argument it was contended by the appellant  that even  assuming that  the  bye-laws  when initially enforced  might be  presumed to  be in  accordance with law, in the absence of similar steps being taken at the time of  extension of  bye-Jaws to the newly added area, the bye-laws are not enforceable in the new area. 411 This  argument  has  proceeded  in  utter  oblivion  of  the provisions of s.5 of the Municipal Act. It reads:           "5.  When   any  local   area  is  included  in  a      municipality, by a notification under clause (b) or (c)      of sub-section  (3) of section 4, all the provisions of      this Act  and of  any rules, by-laws, notifications, or      orders made  thereunder, which  immediately before such      inclusion were  in force  throughout such municipality,      shall be deemed to apply to such area, unless the State      Government,  in  and  by  the  notification,  otherwise      direct."      The learned  counsel for  the appellant,  however,  has placed strong  reliance upon  Visakhapatnam Municipality  v. Kandrequla Nukaraju  & Ors.  In that  case the question that fell for  consideration was  whether the  property tax which could lawfully  be levied  under the District Municipalities Act 1929  can be  levied after  the repeal  of that  Act, on property situated in the areas included within the municipal limits after  the constitution  of the municipality. Section 391(1)  of   the  Andhra  Pradesh  Municipalities  Act  1965 expressly repealed  the. District  Municipalities Act,  1920 from which  it must  follow that ordinarily no action can be taken under  the Act  of 1920  after April  1, 1966 when the repeal became effective on the coming into force of the Act. It was,  however, contended  in that  case that  cl.  la  of Schedule 9 of the Act keeps the repealed enactment alive for tax  purposes  and,  therefore,  the  municipality  had  the

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authority to  impose the  property tax under the Act of 1920 notwithstanding its  repeal by  the  new  Act.  This  Court, however, took  the view that the provisions contained in the Schedule are of a transitional nature. They were intended to apply during  the period  of transition  following upon  the repeal of  old municipal laws and the introduction of the li new law.  The object  of clause  12 of  Schedule  9  was  to authorise the  levy of  taxes which,  on the commencement of the Act,  Were levied  under the  repealed laws.  This Court further added  that the municipality might have been levying property tax  since long  on properties  situated within its limits,  but   until  April   1,  1966   the   villages   of Ramakrishnapuram and Sriharipuram were outside those limits. Qua the  areas newly  included within  the municipal limits, the tax  was being  imposed for the first time and therefore it was incumbent on the municipality to follow the procedure prescribed by  the first proviso to section 81(2). Residents and tax payers of those areas never had 412 an opportunity  to object  to the  imposition of the tax and that valuable  opportunity cannot  be denied  to them. It is obligatory  upon   the  municipality   not  only  to  invite objections to  the proposed  tax but  also to  consider  the objections received by it within the specified period.      For the  State, however,  reliance was  placed in  that case on  s.3(4) of  the Act to contend that the inclusion of the two  villages within  the municipal area attracts of its own force  every provision  of the  Act with effect from the dale on  which the  final notification  is published. by the Government under  s.3(3). In  support of  this contention it cited the  decision of  this Court in Atlas Cycle Industrial Ltd. v.  State of  Haryana & Anr. This argument on behalf of the State was, however, repelled and the Court observed :.           "Far from  supporting the  argument,  we  consider      that the  decision shows  how a  provision like the one      contained  in  Section  3(4)  cannot  have  the  effect      contended for  by the  appellant. In  the  Atlas  Cycle      case, section 5(4) of the Punjab Municipality Act, 1911      provided that  when any  local area was included in the      municipality, "this  Act and...all  . rules,  bye-laws,      orders, directions and powers made, issued or conferred      under this  Act and-  in  force  throughout  the  whole      municipality at the time, shall apply to such areas."."      But this Court took the view that since section 5(4) of the  Punjab   Act   did   not,   significantly,   refer   to notifications and  since section  62(1) of  the  Punjab  Act spoke of  "notification" for the imposition of taxes, it was not competent to the municipality to levy and collect octroi from the  company on  the strength  merely of  the provision contained in  s. 5(4) of the Punjab Act. That case, however, is distinguishable  and cannot  be of  much  assistance  for solving the  problem before  us. Section  5  of  the  orissa Municipal Act makes all the provisions of the Act and of any rules, by-laws,  notifications, or  orders made  thereunder, which  immediately  before  such  inclusion  were  in  force throughout  such  municipality,  applicable  to  such  area, unless the  State Government,  in and  by the  notification, otherwise direct.  . This  section, therefore,  includes not only the  provisions of the Act, rules and bye-laws but also includes notifications.  This distinguishes  the. .  present case from the Visakhapatnam Municipality’s case (supra). 413      For  the  appellant,  next  reliance  was  placed  upon Bagalkot City  Municipality v.  Bagalkot Cement.(1)  In that case also  at the  time of the imposition of the octroi duty

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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 in  that case  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. The  majority   view  was  that  the  expression  "municipal district" in  the bye-law referred to the municipal district as  existing  when  the  bye-law  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 bye-law  The bye-law had been made without  being published  to the  respondent, and if it was so read 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.  This  case  again  is distinguishable in  view of the wording of s.5 of the orissa Municipal Act: .      Lastly it  is urged that the octroi duty levied in this case by  the Municipality is unreasonable and excessive. The Municipality is  required to  provide certain  amenities not only for  the permanent  residents within  the municipality, but also even for casual visitors who may on occasions enter the  limits   of  the   municipality.  The  entry  of  large quantities of  goods within  the municipality  almost  daily from outside  necessarily creates  innumerable problems such as  provisions   of  water   supply,  lighting   facilities, facilities for  conservancy, sanitation, maintenance of good roads and  markets etc.  which the   Jharsuguda Municipality has done  and there  is no allegation to the contrary by the appellant. From  the material placed before us we are of the view that  the levy  is not  an unreasonable  one. It is not also  excessive.   .  The   imposition  of   octroi  cannot, therefore,  be  challenged  on  the  ground  that  there  is violation of Art. 19(1)(g) of the Constitution.      Considering the  case from any aspect the imposition of octroi duty,  in our  opinion,  does  not  suffer  from  any infirmity. 414      For the foregoing discussion the appeal cannot succeed. It is  accordingly dismissed.  In the  circumstances of  the case, however, we allow the parties to bear their own costs. S.R.                                     Appeal dismissed. 415