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PETITIONER: CITY OF NAGPUR CORPORATION

       Vs.

RESPONDENT: M/S KHEMCHAND KHUSHALDAS & SONS & ORS.

DATE OF JUDGMENT:       12/08/1996

BENCH: MAJMUDAR S.B. (J) BENCH: MAJMUDAR S.B. (J) BHARUCHA S.P. (J)

CITATION:  JT 1996 (7)   156        1996 SCALE  (5)758

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T S.B.Majmudar, J      City of Nagpur Corporation has brought in challenge the order passed  by the  High Court  of Bombay, Nagpur Bench in Writ Petition  No.1224 of 1980 by obtaining special leave to appeal against  the said  judgment. Respondents  herein  had moved  the  said  writ  petition  challenging  the  impugned notification dated 10th December 1979 issued by the State of Maharashtra sanctioning  the octroi  rates proposed  by  the appellant Corporation  under Section  115 read  with Section 114(1)(e) of  the  City  of  Nagpur  Corporation  Act,  1948 (hereinafter referred  to as  ’the said  Act’) on the ground that as  the State  of Maharashtra  had not framed any rules fixing the  maximum rates  of octroi  tax under  Section 114 sub-section (3)  of the  said Act, the impugned notification was of  no legal  effect. The  aforesaid  challenge  to  the impugned notification  was upheld by the High Court and that is how the appellant Corporation is in appeal before us. Background facts      A  few  relevant  background  facts  leading  to  these proceedings  deserve   to  be   noted  at  the  outset.  The respondents, original writ petitioners before the High Court are manufacturers  of  incense  sticks  (agarbatties).  They carry on their manufacturing activities within the limits of the appellant-Municipal  Corporation. Through a notification dated 10th  December 1979 issued by the State of Maharashtra the appellant  Corporation sought  to revise  the  rates  of octroi duties on various items including aromatic chemicals, perfumery and  natural oils  in which  the respondents  were dealing and  which were  raw materials  for the  purpose  of their business  of manufacturing  incense sticks They had to import within  the octroi limits the said raw materials from outside.  According   to  the   respondents   the   impugned notification sought  to revise  upwards the  rates of octroi duty on  these articles which went beyond the  maximum rates of octroi  fixed by  the State  Madhya Pradesh  under C.P. &

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Berar municipalities  Act, 1922  (hereinafter referred to as the 1972 Act’) and  was, therefore, ultra vires and illegal. This  contention of the respondents was accepted by the High Court. We  may now  have  a  look  at  the  relevant  events preceding the issuance of the impugned notification.      The C.P.  & Berar Municipalities Act came into force in 1922. On 5th September 1973 a notification was issued by the then local  Government under  Section 66  sub-Section (2) of the 1922  Act regulating  the imposition  of octroi and also imposing maximum amounts of rates for the said tax. The said notification  applied   to  the  local  area  which  now  is comprised in the appellant-Corporation. On 3rd February 1926 a further  notification was  issued framing Imposition Rules for Terminal Tax under Section 66(1)(o) of the 1922 Act. The said terminal  tax was  impossible  on  the  goods  imported within the  limits of  the local  municipality which was the predecessor  of   the  appellant-Corporation.   One  further notification under  Section 66(2)(e)  of the  1922  Act  was issued by  the then  local Government  on  29th  April  1950 laying down  the  maximum  rates  of  octroi  tax.  On  21st February 1951  rules were promulgated under Section 66(1)(c) of 1922  Act for  levy of octroi as per Section 66(e) of the 1922 Act.  These octroi rules came into force from 1st March 1951 in  the local  area then comprising the Nagpur city. On 2nd March 1951 the City of Nagpur Corporation Acts 1948 came into force.  It is  not in  dispute between the parties that the  said   Act  governs  the  controversy  raised  in  this litigation. In  supersession of  the octroi  rules framed on list February  1951 a  fresh notification  was issued by the appellant-Corporation framing  Octroi Imposition Rules under Section 114(1)(e)  of the said Act and the said rules having obtained  the   requisite  sanction   from  the   State   of Maharashtra came into force from 1st June 1966. Octroi -duty s thereafter  being levied  by the  appellant-Corporation as per the  rates imposed  on the notified goods covered by the said rules  of 1.6.1966. These rules were further amended by notification dated 20th April 1974. These amended rules came into  force   from  15th  May  1974.  Upto  that  stage  the respondents writ  petitioners had  no grievance. However the said rules  came to be further amended by notification dated 10th December  1979 by  which original  octroi rules  framed under Section  114(1)(e) in the year 1966 came to be further amended. These  amended  rules  came  into  force  from  1st January 1980. The respondent-writ petitioners felt aggrieved by this  latter amendment  to the  octroi rules  brought  in force pursuant  to the said notification dated 10th December 1979.      The  High   Court  took  the  view  that  the  impugned notification of  10th December  1979  issued  under  Section 114(e).  read   with  Section   115  of  the  said  Act  was inoperative as  it  sought  to  impose  octroi  on  the  raw material imported  by the  respondents at  rates which  went beyond the  ceiling posed  on these  rates by the then local Government under  1922 Act  and which  ceiling had  remained operative even  after the  repeal of  the  1922  Act.  Rival Contentions. Rival Contentions      Mr. Mohta,  learned senior  counsel appearing  for  the appellant submitted that the High Court had erred in holding that the  imposition of  maximum rates of octroi by the then local Government  being the  Madhya Pradesh Government under Section 66(2)  of the  1922 Act  enured beyond its repeal by virtue of Section 3 sub-Section (2) of the said Act at least from 1966  when the appellant Corporation in exercise of its statutory powers  had imposed  new rates  of octroi  as  per

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Section 114(1)(e)  read with  Section 115  of the  Act after getting them sanctioned by the State Government. That as the said imposition  was under  the said  Act unless any ceiling was imposed  qua such imposition by the State in exercise of its powers  under Section  114 sub-Section (3), the rates as imposed by  the appellant-Corporation from time to time from 1966 onwards  held the  field without being subjected to any ceiling. That  the  High  Court  had  wrongly  assumed  that imposition of  ceiling of such rates by the State Government under Section  114 sub-Section (3) was a condition precedent to the  exercise of  statutory powers of the Corporation and the State  Government under Section 114(e) read with 115. It was also contended that the Division Bench of the High Court in "Pare  Brothers", Nagpur  v. Corporation  of the  City of Nagpur and  others  1975 Mh.L.J. 86 had taken the view which supported the  appellant’s contention  and the said decision was  wrongly   not  followed   by  the  High  Court  on  the supposition that  it no  longer remained good law in view of the decision of this Court in Municipal Corporation Jabalpur and another  v. Shri  Soorji Bhanji Keniya (1973) 3 SCC 519. Mr. Mohta  submitted that  in the case before this Court the imposition of  octroi tax  rates was  under  1922  Act  and, therefore, the  ceiling imposed  under Section  66(2) of the 1922 Act  remained inoperative  qua those rates. That such a situation did  obtain in the present case as the Corporation did exercise  its statutory  powers under  the said  Act  by getting issued  the notification  of 1966  which  later  got amended in  1974 and  then in  1979. Mr.  Mohta,  therefore, submitted that  the decision,  of this  Court  in  Municipal Corporation Jabalpur  (supra) did  not in  any was adversely affect the  ratio of  the decision  of the Division Bench of the High  Court in "Parekh Brothers" (supra). Even otherwise the latter  decision laid down correct law and ought to have been followed by the High Court in the present case.      Mr.  Agarwal,   learned  counsel   appearing  for   the respondent-writ petitioners on the other hand submitted that this Court  in the  decision in  Municipal  of  Corporation, Jabalpur  (supra) had clearly ruled that the ceiling imposed on the  octroi rates  by the then local Government being the Madhya Pradesh  Government under  Section 66 sub-Section (2) of the  1922 Act  remained operative  by virtue of Section 3 sub-Section (2)  of the  City of  Jabalpur  Corporation  Act which was in pari material with Section 3 sub-Section (2) of the said  Act and  consequently the High Court was justified in following  the ratio  of the  said decision  and that the decision of  the Division Bench of the High Court in "Parekh Brother" (supra)  which took a contrary view was rightly not followed by the High Court.      Having given  our anxious  consideration to these rival contentions we find that the High Court with respect was not justified in  taking the view that the impugned notification in any  way conflicted  with the  maximum  octroi  rates  as prescribed by  the  rules  promulgated  by  the  then  local Government being  the Madhya  Pradesh Government or that the said maximum  rates still held the field after the advent of the said Act and the exercise of the statutory powers by the Corporation and the State Government under the said Act.      In order  to appreciate  the correct  contours  of  the controversy raised for our decision, it will be necessary to have a  look at  the statutory background governing the said controversy. Statutory background      The pre-cursor  of the  City of Nagpur Corporation Act, 1948 which governs the rights and obligations of the parties in the present case was the C.P. & Berar Municipalities Act,

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1922.  The   local  area  within  the  jurisdiction  of  the appellant Corporation  was then  governed by  the said  Act, Chapter IX of the 1922 Act dealt with Imposition, Assessment and Collection  of Taxes’.  Section 66(1)  of the  1922 Act. amongst  others,  authorised  and  empowered  the  Municipal Committee time  to time and subject to the provisions of the salt Chapter  to impose  in the  whole or in any part of the Municipality, amongst  others, the  tax of octroi on animals or goods  brought within  the limits of the municipality for sale, consumption or use as laid down by Section 66(1)(e) of the said  1922 Act.  The said  Section also provided in sub- Section (2)  that the  local Government  may by  rules  made under this  Act, regulate the imposition of taxes under this section and  impose maximum amounts or rates for and tax. It is not  in dispute  between the  parties that the then local Government being  the Madhya  Pradesh Government in exercise of its  statutory powers under Section 66(2) of the 1922 Act had imposed such maximum rates of octroi duty which could be levied by the Municipal Committee which was then running the municipal administration in the area which is now within the jurisdiction of  the  appellant-Corporation.  These  maximum rates as  imposed by  the then  local Government  being  the Madhya Pradesh  Government under  Section 66(2)  of 1922 Act did hold  the field  till the  advent of the present City of Nagpur Corporation  Act, 1948,  that is,  the said  Act.  As noted earlier  the said  Act came  into force  on 2nd  March 1951. By  that time  the notification  issued under  Section 66(2) dated 29th April 1950 by the then local Government was holding the  field. After coming into force of the said Act, the aforesaid  notification imposing maximum rates of octroi leviable   on various  goods brought within the local limits of the  appellant Corporation continued to operate by virtue of Section  3 sub-Section (2) of the said Act which reads as under:      "3. (1) ...........................      (2) Every appointment, rule, bylaw,      form,  notification,  notice,  tax,      scheme,    order,     licence    or      permission made,  issued,  imposed,      sanctioned  or   given  under   the      Central   Provinces    and    Berar      Municipalities Act, 1992, shall, so      far   as    it   relates   to   the      Municipality of  Nagpur and  so far      as  it   is   in   force   at   the      commencement   of    and   is   not      inconsistent  with,  this  Act,  be      deemed to  have been  made  issued,      imposed, sanctioned  or given under      the provisions  of  this  Act;  and      shall  unless  previously  altered,      modified,   cancelled,   suspended,      surrendered or  withdrawn,  as  the      case may  be, under this Act remain      in force for the periods if any for      which  it   was  so  made,  issued,      imposed, sanctioned  or given under      the provisions  of  this  Act,  and      shall  unless  previously  altered,      modified,   cancelled,   suspended,      surrendered or  withdrawn,  as  the      case may  be, act  remain in  force      for the  period, if  any, for which      it was  so made,  issued,  imposed,      sanctioned or given. "

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Statutory power  to impose  octroi tax  is conferred  on the appellant-Corporation by  Section 114  of the said Act. That Section  is  found  in  Part  IV  Chapter  XI  dealing  with ’Taxation’. Section 114(1)(e) of the said Act. reads under:      "114. (1)  For the purposes of this      Act, the Corporation shall impose -      (a) ... ... ...      (b) ... ... ...      (c) ... ... ...      (d) ... ... ...      (e) a  cess  on  animals  or  goods      brought within  the City  for sale,      consumption or use therein."      This  imposition   is  compulsory   imposition  by  the Corporation.  Sub-section   (3)  of   Section  114  is  also relevant. It reads as under :      "114. (1) ... ... ... ...      (2) ......................      (3) The  State Government  may,  by      rules made under this Act, regulate      the  imposition,   assessment   and      collection  of   taxes  under  this      section and specify maximum amounts      of rates  for  any  tax  and    for      preventing  evasion  of  assessment      and payment of taxes." The procedure for imposing the taxes as envisaged by Section 114 is  laid down by Section 115 which with its sub-sections reads as under :      "115. The  Corporation  may,  at  a      special meeting,  bring  forward  a      resolution    to     propose    the      imposition of any tax under section      114.      (2) When such a resolution has been      passed   the    Corporation   shall      publish  in   accordance  with  the      rules  made   under  this   Act,  a      notice,  defining   the  class   of      persons or  description of property      proposed to  be taxed,  tile amount      or rate  of the  tax to be imposed,      and the  system of assessment to be      adopted.      (3) Any  person resident within the      City and  objecting to the proposed      tax may,  within thirty  days  from      the publication of the said notice,      submit his  objection in writing to      the Corporation and the Corporation      shall at a special meeting take his      objection into consideration.      (4) If  the Corporation decides, to      amend it  proposals or any of them,      it shall publish amended proposals,      along with a notice indicating that      they are  in modification  of those      previously published for objection.      (5) Any  objections  which  may  be      received to  the amended  proposals      within thirty  days shall  be dealt      with in  the manner  prescribed  in      sub-section (3)      (6) The  Corporation shall  forward      its final  proposals to  the  State

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    Governments  which   shall   either      refuse to  sanction them  or return      then for  further consideration, or      sanction them  without modification      or  with   such  modification   not      involving an  increase of  the rate      to be proposed as it thinks fit.      (7) Such sanction, if- any shall be      published in  the Gazette  and  the      tax shall  then cone  into force on      such date  as may  be specified  in      that notification.      (8)   A    notification   of    the      imposition  of  a  tax  under  this      section   shall    be    conclusive      evidence  that  the  tax  has  been      imposed  in   accordance  with  the      provisions of this Act."      In the  background of  the aforesaid relevant statutory provisions we may now proceed to consider the question posed for our decision. Consideration of the question      A mere  look at  the provision  of Section  3(2) of the said Act  shows that so long as the appellant Corporation in exercise of  its independent  statutory powers under Section 114(1)(e) of  the said  Act had  not imposed  fresh rates of octroi duty on various articles brought within its municipal limits for  consumption, sale  or use,  the maximum rates as imposed under  Section 66(2)  of the 1922 Act could continue to operate. but once the field was occupied by the appellant Corporation’s exercise  of statutory  powers  under  Section 114(1)(e) read  with Section  115 of  the said Act and their sanction by  the State Government, the earlier maximum rates fixed by  the then  local Government  being  Madhya  Pradesh Government under  Section 66(2)  of 1922 Act would obviously become inconsistent  with the  rates that  would be fixed by the Corporation  under the  said  Act  in  exercise  of  its independent powers  under Section  114( e)  and also  by the rates as  amended  from  time  to  time  by  the  appellant- Corporation in  exercise of  the very  same power. Hence the old maximum  rates would  go  out of the protective coverage of Section  3 (2) of the said Act. That actually happened in 1966 when  for  the  first  time  the  appellant-Corporation imposed new  octroi rates  on various articles under Section 114(1)(e) of  the said  Act. A  conjoint reading  of Section 114(1)(e) and  Section 115  with it  sub-sections leaves  no room for  doubt  that  the  appellant-Corporation  had  full statutory authority  empowering it  to impose octroi duty at appropriate rates after following the procedure laid down by Section 115  and that  could be  done after  considering the objections to  be invited against the proposed imposition of rates of  octroi,  It  is  not  in  dispute  that  the  said procedure was  followed by  the appellant-Corporation before the 1966  notification imposing  new octroi rates was issued and which  rates were  later amended  in the  years 1974 and 1979. In  this connection it is profitable to have a look at the notification  issued by  the  State  of  Maharashtra  in exercise of  its powers  conferred  by  sub-Section  (6)  of Section 115  of the said Act sanctioning the proposal framed by the appellant-Corporation as detailed in the notification for imposition  of a cess on animals or goods brought within the City  of Nagpur  for sale,  consumption or  use therein, under clause  (e) of  sub- section  (1) of  Section 114 read with section  115 of  the City of Nagpur Corporation Act and in supersession of those sanctioned under the Madhya Pradesh

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Government Notification  No.886-871 -  MXIII, dated the 21st February  1951.   The  said  notification  recites  that  in exercise of  the powers  conferred  by  sub-section  (7)  of Section 115  of the  City of  Nagpur Corporation  Act, 1948, Government also  directs that  the said  tax shall come into force with  effect from  1st day of June 1966. Clause (2) of the said  notification lays  down that  a cess  thereinafter called as  "Octroi Duty"  shall be  levied  on  animals  and goods, specified  in the  Schedule thereto  annexed, brought within the  octroi limits  of the  City of  Nagpur for sale, consumption or  use at  the rates  mentioned against each in the  Schedule   annexed  subject   to  conditions  specified thereinafter. Clause  (5) thereof  lays down  that  when  an article is  mentioned in  the Schedule  specifically and  is also included  in a  general category,  the  duty  shall  be levied at the rate mentioned for the specific item. When any article is not specifically mentioned and may come under two or more  headings in  the schedule, the duty shall be levied at the highest rate fixed for such heading.      In view  of the  aforesaid, octroi  rules sanctioned by the State  of Maharashtra  under Section 115 of the said Act it becomes  obvious that  all earlier rules regarding octroi as sanctioned by the erstwhile State of Madhya Pradesh along with the  ceiling as imposed by the said State under Section 66(2) of  the 1922 Act got eclipsed and ceased to operate as they obviously became inconsistent with the new octroi rules framed by  the appellant-Corporation  and sanctioned  by the State of Maharashtra under the said Act. In other words the field of  octroi imposition  got completely  occupied by the statutory exercise  availed of  under the  new  Act  by  the appellant-Corporation as  well as  the State of Maharashtra. So far  as this  aspect  is  concerned  there  is  not  much controversy between  the parties.  However it  is vehemently contended by  the learned  counsel for  the respondents that under such-Section  (3) of  Section 114  of the said Act the State is enjoined to impose maximum rates of tax which could be levied  by the  Corporation and as that has not been done by the  State, the  earlier imposition of maximum amounts of rates of  tax as done by the then local Government being the Madhya Pradesh Government under the corresponding provisions of Section 66(2) of the predecessor Act of 1922 continued to operate. It  is not  possible to  agree. A  mere  glance  at Section 114(3) shows that imposition of maximum rates of tax by the  State Government  is an enabling provision and it is not a condition precedent to the exercise of taxing power by the Corporation  under Section 114(1) read with Section 115. Both these  powers and  functions are  independent  of  each other and  operate in  their own fields subject to the rider that if  the State  Government  chooses  to  impose  maximum amounts of  rates of  any tax  imposed  by  Corporation,  in exercise  of  State’s  powers  under  Section  114(3),  that ceiling would  get engrafted  on the rates of tax as imposed by the  Corporation under  Section 114 read with Section 115 of the  Act. But  so long  as that ceiling is not imposed by the State  Government the  rates of  taxes  imposed  by  the Corporation would  operate unrestricted  and uninhibited  by any such  ceiling. The  High Court with respect was in error when it  took the  view that  imposition of  such ceiling of rates of  taxes under  Section 114(3)  by the  State  was  a condition precedent  to the exercise of powers of imposition of taxes  by the Corporation under Section 114 (e) read with Section 115.  For coming  to the  said conclusion  the  High Court had  equally erred in reading too much in the judgment of this  Court in Municipal Corporation, Jabalpur (supra) as we will  presently point out. It is difficult for us to read

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the provisions  of Section 114(3) as mandatory requiring the States  Government   to  necessarily   regulate  impositions assessment and collection of all the taxes impossible by the Corporation under  Section 114, of the said Act. The several clauses in  sub-Section (3)  must be  read distinctively and the powers  which are  given to  the State  Government under sub-Section (3)  must be  read  as  independent  powers  for making rules with regard to the assessment and collection of the taxes,  A power  to make rules prescribing maximum rates of taxes  could be  independently  exercised  by  the  State Government but  there is  nothing in the Section which would make it  obligatory for  it to  first  specify  the  maximum amounts of  rates of  tax before  it exercises  its  another independent power  of making  rules for  imposition of a tax under Section  115 of  the said  Act read  with Section  114 thereof. We  cannot agree  with the  contention  of  learned counsel for  respondents that  the power  to make  rules for imposition of tax conferred on the Corporation and the State Government under Section 114(1) and Section 115 must be read as being  subject to  the imposition of maximum rates of any tax  under  Section  114(3)  or  that  the  two  powers  are interlinked intertwined  or interdependent. If Mr. Agarwal’s contention was  right Section  114(1) would  have been  made expressly subject  to Section  114 sub-Section  (3). But the legislature in its wisdom has not done so. If the contention of Mr.  Agarwal, learned  counsel  for  the  respondents  is accepted it  would amount  to rewriting  Section 114(1)  and Section 115  and making  them subject  to sub-Section (3) of Section 114. Such an exercise is clearly contra-indicated by the aforesaid  statutory settings  and is  impermissible. We may in  this connection mention that a Division Bench of the Bombay High  Court in  the case of "Parekh Brothers" (supra) had taken the same view which we are inclined to take on the construction of  the aforasaid  relevant provisions  of  the said Act. We wholly concur with the said view.      Now  remains   the  question   whether  this  Court  in Municipal  Corporation,   Jabalpur  (supra)  had  taken  any contrary view  on this  aspect. In  the  case  of  Municipal Corporation, Jubalpur (supra) this. Court was concerned with the question  whether the  rates of  octroi as  fixed by the municipality  under   the  Central   Provinces   and   Berar Municipalities Act,  1922 could  go beyond the maximum rates as prescribed  under the  very same-Act  by the  State under Section 66(2). The answer of the High Court in that case was that the ceiling of maximum rates as prescribed by the State under  the   very  same   Act  would  govern  the  rates  of Corporation under  the same  Act. The  said decision  of the High Court  was confirmed  by this Court. It is obvious that if the  Municipal Corporation  functioning  under  that  Act imposed rates  of octroi  which went  beyond the  prescribed maximum rates  imposed by the State under the very same Act, the ceiling  of maximum  rates as  fixed by the State had to operate and  would restrict  within that limit, the rates of octroi fixed  by the Corporation. If in the present case the State of Maharashtra had fixed maximum rates of octroi under Section 114(3)  then obviously  the rates of octroi as fixed by  the  Corporation,  under  Section  114(1)(e)  read  with Section 115 had to be restricted to the said maximum ceiling but in  the present  case admittedly  no  such  ceiling  was imposed by  the State  of  Maharashtra  prescribing  maximum octroi rates  for the  appellant-Corporation in  exercise of the  States   powers  under   Section  114(3).  We  fail  to appreciate how  the aforesaid,  decision of  this  Court  in Municipal  Corporation;  Jabalpur  (supra)  can  be  of  any assistance to  the respondents  in the present case. In this

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connection it is pertinent to note that this Court had noted that in  the case  before it the Corporation had not imposed directly any  tax under  Section 120(1) of the 1948 Acts but land purported  to impose the tax as authorised by the rules made by  the Municipality  on May  14, 1943.  under the 1922 Act. These  rules prescribed the ad valorem rate of Rs.2/5/6 per cent  and continued  to remain  in force  by  virtue  of Section 3(2)  of the 1948 Act. But even as the taxes imposed under  1922   Act  would   continue  to  be  in  forces  the notification issued  by the  State Government  under Section 66(2) of  1922 Act  would also continue to be in force under Section 3(2),  read with  Section 120(3) of the 1948 Act. It was also  noted  that  the  said  notification  had  clearly prescribed the  maximum octroi  for these goods at two annas per maund.  Hence side  by side  there were  two orders with regard to  the imposition  and levy  of octroi  on the  same goods. In  the case  of conflict  between  the  two,  it  is obvious that  the maximum  rates  prescribed  by  the  State Government would  hold the  field. As  noted earlier  on the facts  of   the  present   case  there  are  no  two  orders simultaneously operating  in the  same field  in  connection with levy  of octroi. The notification of 1966 under Section 115 read with Section 114(1)(e) as amended from time to time has operated  on its own without being in any way cut across or superimposed  by any  maximum rates of octroi as fixed by the State of Maharashtra in exercise of its statutory powers under Section  114(3). Consequently in the absence of such a statutory ceiling operating in the field, the rates as fixed by the  Corporation and  as sanctioned  by the  State  under Section 115  remained fully  operative  without  having  any ceiling  overhead.  Such  was  not  the  case  in  Municipal Corporation, Jabalpur’s  case (supra)  as noted  earlier. In fact in  the very  same judgment in para 15 of the Report it has been  clarified by  this Court that if after 1965 octroi was levied  at a  higher rate,  merchants would be liable to pay octroi  at that  rate, meaning  thereby if  after coming into operation  of the  Madhya Pradesh Municipal Corporation Act, 1956 the City of Jabalpur Corporation had exercised its powers of  levy of  octroi under the said latter Act of 1956 that would have operated on its own subject to imposition of any ceiling  of maximum  rate if  at all  fixed by the State under the  1956 Act.  Consequently it  must be held that the ratio of  this Court’s  decision in  the case  of  Municipal Corporation, Jabalpur (supra) is not at all attracted on the facts of the present case. On the other hand the decision of the Division  Bench of  the Bombay High Court in the case of "Parekh Brothers"  (supra) which meets our approval squarely got attracted  for resolving  the controversy in the present case. The High Court was, therefore, with respect wrong when it took the view that the aforesaid decision of the Division Bench in  "Parekh Brothers"  (supra) was not longer good law in view  of this  Court’s decision  in the case of Municipal Corporation, Jabalpur  (supra), In  view  of  the  aforesaid discussion the  conclusion is inevitable that the appellant- Corporation  was  fully  justified  in  imposing  octroi  on articles at  the rates specified in the notification of 1966 as subsequently  amended in  1974 and  1979 and the impugned notification of  10th December  1979 issued  by the State of Maharashtra under  Section 115  of the  said Act operated on its own without having any ceiling imposed about the maximum rates under  Section 114(3).  The said  provision about  the imposition of  maximum rates by the State being directory in nature and  not mandatory  or compulsory  for the  State. So long as  the State  did not  choose to  exercise its  powers under Section 114(3), there was no whittling down or cutting

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across of  the rates  of octroi  as imposed by the very same State by  the impugned notification of 1979 and the rates of octroi as  mentioned therein  could be  legally and  validly enforced by the appellant-Corporation.      In the  result this  appeal is  allowed.  The  impugned judgment of  the Division  Bench of  the High  Court is  set aside and  the writ  petition filed  by the  respondents  is dismissed in  the  facts  and  circumstances  of  the  case, however, there will be no order as to costs all throughout.