# BANGALORE WOOLLEN, COTTON AND SILK MILLS CO. LTD., BANGALORE v. THE CORPORATION OF THE CITY OF BANGALORE BY ITS COMMlSSIONER, BANGALORE CITY

- **Citation:** [1961] 3 S.C.R. 698
- **Court:** Supreme Court of India
- **Decided:** 1961
- **Case number:** Civil Appeals Nos. 448 and 449 of 1957
- **Bench:** J. L. Kapur, M. Hidayatullah, J.C. Shah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bangalore-woollen-cotton-and-silk-mills-co-ltd-bangalore-v-the-corporation-of-2074
- **Pages:** 9

## Headnote

Municipality-Octroi-Resolution intending to levy and final
levy, if separate publication necessary-Notice technically defective,
if can be validated-Power to specify goods not mentioned in the
Schedule-Excessive delegation-Raw Cotton or Wool, nature ofCity of Bangalore Municipal Corporation Act, I949 (Act LXIX of
I949), SS, 38(I), 9J(e), 98(I), 98(2).
The City of Bangalore Municipal Corporation resolved to
levy octroi on cotton and wool and the resolμtion was notified in
the Official Gazette as required bys. 98(1) of the City of Bangalore Municipal Corporation Act. Objections were invited and the
appellants filed their objections to the tax. Final resolution in
regard to the tax was passed under s. 98(2) of the Act which was
published in local newspapers but not in the Official Gazette.
Notices were also sent to the appellants to the effect that after
considering their objections the Municipality had decided to levy
octroi on the goods at the rate already notified. The appellants
then filed applications in the High Court under Art. 226 of the
Constitution challenging the legality of the levy of octroi but the
High Court dismissed the applications. On appeal with a certificate of the High Court:
Held, that publication of the resolution in the Official
Gazette and invitation of objections under s. 98(1) whjch were
filed, were sufficient compliance with the provisions of the Act.
The notice stating that the tax had been resolved to be levied
instead of stating that it was intended to be levied was at the
most only technically defective but all such defects were
validated bys. 38 of the Act. It was not necessary first to pass
a resolution specifying the goods and then another resolution
showing the intention of the Municipality to tax those goods.
The goods and the rate of tax were specified and the resolution
was passed after following the procedure laid down in s. 98(1).
This amounted to substanti~I compliance with the provisions of
the Act.
The legislature has laid down the powers of the Municipality
to tax various goods and enumerated certain goods; Class VIII
in Part V of Schedule III read withs. 97(e) of the Act authorised
the Municipality to impose tax on other articles and goods. In
3 S.C.R.
SUPREME COURT REPORTS
699
the present case there was a resolution which sought to include
1961
the goods in dispute in the Schedule for the purpose of imposing
--
the tax.
·
Bangalore Woollen,
Bijay Cotton Mills Ltd. v. Their Workmen [1960] 2 S.C.R.
Cotton and Silk
982, distinguished.
Mills Co. Ltd.
The conferment of power upon the Municipality to specify c •
;·0 •
th
goods under Class VIH is in t~e nature of conditional delegation c:/;•~ang%0,:
and does not amount to excessive delegat10n.
Y
Baxter v. Ah Way (1909) 8 C.L.R. 626, followed.
Hamdard Dawakhana v. Union of India [1960] 2 S.C.R. 671,
held not applicable.
The High Court was right in holding that Cotton and Wool
do not cease to be raw materials for the purposes of the Act,
merely because they are ginned and pressed in bales. The resolution in the present case' covered the articles imported by the
appellants into the limits of the Corporation of Bangalore.
CIVIL APPELLATE
JURISDICTION:
Civil
Appeals
Nos. 448 and 449 of 1957.
Appeals from the judgment and order dated September 27, 1956, of the Mysore High Court in Writ Petitions Nos. 44 and 45 of 1955.
N. O. Chatterjee, D. N. Jl!ukherjee and B. N. Ghose,
'for the appellant in C. A. No. 448of1957.
V. L. Narasimhamoorthy, S. N. Andley, J.B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the
appellant in C. A. No. 449 of 1957.
G. R. Ethirajulu· Naidu, Advocate-General, Mysore,·•
B. · R. G. K. Achar and K. R. Ohoy,dhuri, for the
respondent.
1961. February 3. The Judgment of the Court was
delivered by
KAPUR, J.-These are two appeals brought against
two judgments and orders of the High Court of Mysore which arise out of two petitions filed by the
appellants under Art. 226 challenging the legality of
the imposition of octroi on wool

## Text

I96I
J< ebruary 3.
698
SUPREME COURT REPORTS
[1961]
BANGALORE WOOLLEN, COTTON AND
SILK MILLS CO. LTD., BANGALORE
v.
THE CORPORATION OF THE CITY OF
BANGALORE BY ITS COMMlSSIONER,
BANGALORE CITY.
(with connected appeal)
(J. L. KAPUR, M. HIDAYATULLAH and J.C. SHAH, JJ.)
Municipality-Octroi-Resolution intending to levy and final
levy, if separate publication necessary-Notice technically defective,
if can be validated-Power to specify goods not mentioned in the
Schedule-Excessive delegation-Raw Cotton or Wool, nature ofCity of Bangalore Municipal Corporation Act, I949 (Act LXIX of
I949), SS, 38(I), 9J(e), 98(I), 98(2).
The City of Bangalore Municipal Corporation resolved to
levy octroi on cotton and wool and the resolμtion was notified in
the Official Gazette as required bys. 98(1) of the City of Bangalore Municipal Corporation Act. Objections were invited and the
appellants filed their objections to the tax. Final resolution in
regard to the tax was passed under s. 98(2) of the Act which was
published in local newspapers but not in the Official Gazette.
Notices were also sent to the appellants to the effect that after
considering their objections the Municipality had decided to levy
octroi on the goods at the rate already notified. The appellants
then filed applications in the High Court under Art. 226 of the
Constitution challenging the legality of the levy of octroi but the
High Court dismissed the applications. On appeal with a certificate of the High Court:
Held, that publication of the resolution in the Official
Gazette and invitation of objections under s. 98(1) whjch were
filed, were sufficient compliance with the provisions of the Act.
The notice stating that the tax had been resolved to be levied
instead of stating that it was intended to be levied was at the
most only technically defective but all such defects were
validated bys. 38 of the Act. It was not necessary first to pass
a resolution specifying the goods and then another resolution
showing the intention of the Municipality to tax those goods.
The goods and the rate of tax were specified and the resolution
was passed after following the procedure laid down in s. 98(1).
This amounted to substanti~I compliance with the provisions of
the Act.
The legislature has laid down the powers of the Municipality
to tax various goods and enumerated certain goods; Class VIII
in Part V of Schedule III read withs. 97(e) of the Act authorised
the Municipality to impose tax on other articles and goods. In
3 S.C.R.
SUPREME COURT REPORTS
699
the present case there was a resolution which sought to include
1961
the goods in dispute in the Schedule for the purpose of imposing
--
the tax.
·
Bangalore Woollen,
Bijay Cotton Mills Ltd. v. Their Workmen [1960] 2 S.C.R.
Cotton and Silk
982, distinguished.
Mills Co. Ltd.
The conferment of power upon the Municipality to specify c •
;·0 •
th
goods under Class VIH is in t~e nature of conditional delegation c:/;•~ang%0,:
and does not amount to excessive delegat10n.
Y
Baxter v. Ah Way (1909) 8 C.L.R. 626, followed.
Hamdard Dawakhana v. Union of India [1960] 2 S.C.R. 671,
held not applicable.
The High Court was right in holding that Cotton and Wool
do not cease to be raw materials for the purposes of the Act,
merely because they are ginned and pressed in bales. The resolution in the present case' covered the articles imported by the
appellants into the limits of the Corporation of Bangalore.
CIVIL APPELLATE
JURISDICTION:
Civil
Appeals
Nos. 448 and 449 of 1957.
Appeals from the judgment and order dated September 27, 1956, of the Mysore High Court in Writ Petitions Nos. 44 and 45 of 1955.
N. O. Chatterjee, D. N. Jl!ukherjee and B. N. Ghose,
'for the appellant in C. A. No. 448of1957.
V. L. Narasimhamoorthy, S. N. Andley, J.B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the
appellant in C. A. No. 449 of 1957.
G. R. Ethirajulu· Naidu, Advocate-General, Mysore,·•
B. · R. G. K. Achar and K. R. Ohoy,dhuri, for the
respondent.
1961. February 3. The Judgment of the Court was
delivered by
KAPUR, J.-These are two appeals brought against
two judgments and orders of the High Court of Mysore which arise out of two petitions filed by the
appellants under Art. 226 challenging the legality of
the imposition of octroi on wool and cotton under
s. 98 of the City of Bangalore Municipal Corporation
Act (Act LXIX of 1949), which for the sake of convenience, will be termed the "Act ".
On March 31, 1954, a resolution was passed purporting to be under s. 98(1) of the Act by which it was
Kapur].
700
SUPREME COURT REPC''.'T'f:
[1961]
z96r
resolved to levy an octroi on cotton 1,nd wool as
-
follows:-
Bangalore WooUen,
Name oif the Articles
Rate of duty
Cotton and Silk
Mills co, Ltd,
l. Raw cotton and wool
Rs. 1/9/- per
cent. ad valorem
v,
(this includes both loose
Corpora1ion of the
and compressed, made in
City of Bangalore
India or foreign)
Kapur J.
2.
"
This was notified in the Mysore Gazette on April 3,
1954, and was' also published as required by s. 98(1)
of the Act. Objections were invited and it is admitted
that both the appellants filed their objections. Final
resolution under s. 98(2) was passed on December 21,
1954, and the resolution in regard' to octroi came into
force ·as from January 1, 1955. It may be mentioned
that the final resolution passed under s. 98 (2) of the
Act was not published in the Official Gazette but was
published in the local newspapers and a notice dat.ed
December 23, 1954, was also sent to the appellants to
the effect that after considering their objections the
Municipality had decided to levy an octroi on the
goods at the rate already notified.
The appellant in C.A. 448/57, filed a petition in the
High Court on March 15, 1955, under Art. 226 cha:-
lenging the validity of the imposition of the octroi on
the grounds :-
(1) that the tax was in contravention of s. 98(2)
of the Act in so far as a notice was not published in
the Official Gazette ;
(2) that the tax was in contravention of s. 130 of
the Act and
(3) that there was excessive delegation.
The appellant in C. A. 449/57, filed its petition on
March 17, 1955, in which besides challenging the
validity of the imposition of t!ie_ tax on grounds above
set out, it also challenged the vires of the imposition
on the grounds :-
1. that the levy of the octroi was in contravention
of Art. 276(2) of the Constitution by which a tax on
trade exceeding Rs. 250/- per annum could not be
imposed;
3 S.C.R.
SUPREME COURT REPORTS
701
2. that it was a contravention of Art. 301 which ,
1961
guaranteed freedom of inter-State trade and com- Bangal,;;;-Wool1'•,
merce, and
Cotton and Sillc
3. that it was in contravention of Art. 19(1)(g) of Mills co. Lid.
the Constitutiou.
v.
The High Court rejected all these objections and c ... poralion oflh•
the appellant has come to this court on a certificate C•ty of Bangalore
of the High Court under Art. 133(1) of the ConstiKapur J.
tution.
In order to decide the question of the legality of
the tax it is necessary to refer to the relevaut provisions of the Act. Section 97 enumerates the taxes and
duties which the Corporation is empowered- to levy
under the Act. Section 97(e) provides:
"97. The Corporation may levy-
.......................................
(e) an octroi on animals or goods or both brought
within the octroi limits for consumption or use
therein."
Section 98 which deals with the powers of control of 1
Government and the procedure for the levying of the
Municipal taxes provides :
Section 98 (1). "Before the Corporation passes
any resolution imposing a tax or duty for the first
time it shall direct the Commissioner to publish a
notice in the Official Gazette and in the local newspapers of its intention and fix a reasonable period
not being less than one month from the date of
publication of such notice in the Official Gazette
for submission of objections. The Corporation,
may, after considering the objections, if any, received within the period specified, determine by
resolution to levy the tax or duty. Such resolution
shall specify the rate at which, the date from which
and the period of levy, if any, for which such tax
or duty shall be levied.
(2) When the Corporation shall have determined
to levy any tax or duty for the first time or at a
new rate, the Commissioner shall forthwith publish
a notice in the manner laid down in sub-section {l)
specifying the date from which, the rate at which
and the period of levy, if any, for which such tax or
dut,r shall be levied.''
702
SUPREME COURT REPORTS
[1961)
1961
It was argued that instead of passing a resolution
Bangal,;;;-Woollen imposing the octroi dut,y, the Corporation should have
Cotton and Silk 'first published its " resolution " to impose the tax and
Mills Co. Lid.
that the Corporation could not at once pass " a resolu-
".·
tion " by which it imposed the tax. It published that
Curpora1•0• of th• resolution in the Official Gazette and also in accordance
City of Bangalore
'th th
·
· •
f
98(1) · d ·
· d b"
t"
_
w1
o er prov1s10ns o s.
an mv1te o iec ions
Kapur J.
which were filed.
The only defect, if defect it can be
called at all, was that instead of saying that it
" intended " to impose a tax, the notice which was
published said the tax " had been resolved to be
levied."
This is a technicality and is
of
II")
substance.
The next objection raised was that after the Corporation adopted the resolution imposing the tax which
was after considering all the objections the publication
was only in local newspapers and there was no publication in the Government Gazette and this, it was
submitted, was such a serious defect as to make the
imposition illegal and ultra vires. In support counsel
for the appellants relied on certain judgments w_here
publication in the Official Gazette was held to be a
condition precedent to the legality of the imposition
of the tax. These cases are Krishna Jute & Cotton Mills
v. The Municipal Council, V izianagram (1) ; M unicipaJ,
Council, Rajamundry v. Nidamarti Jaladurga Prasadarayudu (•).
Reference was made also to The Municipal Council, Anantapur v. Sangali Vasudeva Rao (3);
Manak Chand v. Municipal Council(') and State of
Kerala v. P. J. Joseph('). This question we are not
considering as we are referring this c'ase to a larger
Bench on certain constitutional points and shall refer
this question also in the sequel.
The second objection raised was that there was no
compliance with s. 130 of the Act. That section is as
follows:-
Section 130. " If the corporation by a resolution
determines that an octroi should be levied on animals or goods brought within the octroi limits of
(1) A.LR. 1926 Mad. 152.
(3) (1931) l.L.R. 55 Mad, 207.
(2) A.LR. 1926 Mad. 800.
(4) A.LR. 1951 Raj. 139.
I,;) A.LR. 1958 S.C. 296, 299.
3 S.C.R.
SUPREME COURT REPORTS
703
the city, such octroi shall be levied on such articles
1961
or goods specified. in Part V _Schedule ~II at su~h Bangalcw• w,,oll••·
rates not exceedmg those laid down m the said cotton and Silk.
Part in such manner as may be determined by the
Mills Co. Lid.
'
corporation."
~·
That is not a charging section but it imposes a limita- Co'.P°"""'" of the
tion on the power of the Municipality as to the rate C"y of Bangalore
at which a tax can be imposed. It was further argued
Kapur J.
that before a resolution under s. 98(1) could be passed
the goods sought to be taxed· had to be specified under
s. 130 read with Schedule III, Part V of the Act.
Clause 18 of that Schedule p,rovides that octroi on
animals and goods shall be levied at the rates not
exceeding the following.
Classes I to VII specify
articles on which octroi can be levied at the maximum
rate. Class VIII was as follows :
Octroi
Maximum rate
"Other articles which are not specified above and which may be
Rs. 2·0-0 per cent.
approved by the Corporation
ad valorem"
by an order in this behalf
That class empowers the Municipal Council to impose
octroi duty on other articles which are not specified
but which may be approved by the Corporation. In
other words the Corporation can choose other p.rticles
upon which tax can be imposed and the respondent
Corporation in the present case did resolve to impose
tax on raw cotton and wool and also fixed the rate
at Rs. 1·9-0 per cent. ad valorem. The submission
that as a result of the operation of s. 130 first a resolution had to be passed specifying raw cotton and wool
as goods on which octroi duty would be levied and
then the procedure under s. 98(1) and (2) had to -Oe
gone through is without substance. What the Corporation did was that it passed a resolution choosing
these goods to be goods on which octroi duty was to
be levied and by the same resolution it resolved that
the goods therein specified be taxed at .the rate
therein specified. There is no contravention of s. 130
even if the contention of the appellants was to be
taken most strictly. The goods were specified ; the
9Q
'
704
SUPREME COURT REPORTS
[1961]
'96'
rate of tax to be levied on the goods was also speci-
. BM1C•lo:-woo11
fied ; the resolution was passed to that effect and the
c.11 ... ••d su';'' other procedure laid down ins. 98(1) was then followed .
.lllf-ill• Co. Lid • . In our opinion it is not necessary that first a resolu .
.. :
tion should be passed specifying the goods and then
<;.r1:i''on •1111• another resolution should be passed showing the
"" _!!':._"lfalore intention of the Municipality to tax those goods.
Kafrwr J.
WhR.t has been done substantially complies with the
provisions of the Act.
.·1
It was next argued that the words of Class VI II in
Part V of Schedule III where the words used are
" other articles which are not specified above " and
which may be approved by the Corporation by order
in this behalf meant that the goods must be precisely
defined and included by name in the Schedule and
that the use of the word " in this behalf" meant
adding to the list of articles in Schedule III. Reliance
was placed on the interpretation of the word " in t.his
behalf" as given by this Court in Bijay Cotton Mills
Ltd. v. Their Workmen('). But that case has no
application to the facts of the present case because
the resolution was, as a matter of fact, passed for the
purpose of imposing an octroi duty on the goods in
dispute. The words used in Bijay Cotton Mills Ud. v.
Their Workmen(') were in another context and even
there a.II that was said was that a notification had to
issue making the Central Government the appropriate
Government. As we have said above in the present
ca.ee there was a resolution which sought to include
these goods in the Schedule for the purpose of imposing
the tax.
The excessive nature of delegation under Class VIII
in Part V of Schedule III was ·also urged but this was
not a. question which was raised in the High Court
nor is there any substance in the matter. The argument raised was that the power of the Municipa.l
Corporation to specify goods under Class VIII Wll8
excessive delegation which wa~ both uncanalised and
uncontrolled and reliance was placed on a ·judgment
of this Court in Hamdard Dawakoona v. Union of
India('); but that case has no application to the facts
(r) (196oj 2 S.C.R. 980.
(•) [1960] 2 S C.R. 671,
3 S. C.R.
SUPREME COURT REPORTS
705
of the present case. In the present case the Legisla-
'96~
tll'l'e has laid down the powers of the Municipality BfMfOlor• w..u..;
to tax various goods. It has enumerated certain Co#o• _, s.a
articles and animals and Class VIII read with s. 97(e)
MiUs Co. LI&
of the Act has authorised the Municipality to impose
":
tax on other articles and goods. This power is more ~po';':.":,t.:::.
in the nature of conditional delegation as was held in •Y• __
Baxter v. Ah Way(1) where it was held thatunders. 52(g)
K•Jnu J.
of the (Australian) Customs Act, 1901, a power given to
prohibit by proclamation the importation of certain
articles was not a delegation of legislative power but
conditional legislation because thP prohibition of
importation was a legislative a.ct of l' trliament itself
and the effect of sub-s. (g) of s. 52 was only to confer
upon the Governor-General in Council the discretion
to determine to which class of goods other than those
specified in the section and under what conditions the
prohibition shall apply. All that the Legislature has
done in the present case is that it has specified certain
articles on which octroi duty can be imposed and it
has also given to the Municipal Corporation the discretion to determine on what other goods and under
what conditions the tax should be levied. That, in
our opinion, is not a case which falls under the rule
laid down by this Court in Hamdard Dawakhana v.
Union of India(').
It was contended in C. A. 449/57 that the imposition of duty on raw cotton could not cover processed
cotton that is cotton which had been ginned, combed
and pressed. The High Court held that the cotton by
being ginned or pressed in bales does not cease to be
raw cotton and was to be regarded as raw for the
purpose of the Act. The same would apply to wool.
The notification levying the tax specifically stated
that raw cotton and wool included both loose and
compressed, i.e., compressed cotton and wool whether
it was Indian cotton or foreign cotton. It will not, in
our opinion, be a correct meaning to give to the
notification if it were "interpreted to apply only to
cotton which had been gathered from the fields and had
neither been ginned nor pressed." We agree with
(1) (1909) 8 C.L.R. 6>6.
(>) [1960] • S.C.R. 671.
706
SUPREME COURT REPORTS
[1961]
'96'
the High Court that this resolution covers the articles
Bangalor1 Wooll•• which the appollants in the two cases were impurtCotto• and 5;1~ 'ing into the limits of the Corporation of Bangalore.
Mills Co. Ltd.
The learned Advocate-General appearing for the
v:
respondent also relied on s. 38 of the Act which
Corporation of the provides :
City of Bangalore
Section 38 (1). "No act done, or proceeding taken
Kapur J.
under this Act shall be questioned merely on the
ground-
(a) ........................................................... .
(b) of any defect or irregularity in such act or
proceeding, not affecting the merits of the case."
This section validates all defects and irregularities in
in any act or proceedings which do not affect the
merits of the case. It was submitted that this section
is in another chapter, i.e., chapter 2 dealing with provisions common to the Corporation and the Standing
Committees. It may be that it is in another chapter
but the language of the section is wide and applies to
all defects or irregularities in any act or proceeding
done not affecting the merits of the case.
In our opinion the following points should be heard
by the Constitution Bench•:-
(1) Whether the imposition in the present case
offends Art. 276 or 301 of the Constitution ?
(2) Whether the failure to notify the final resolution of the imposition of the tax in the Government
Gazette is fatal to the tax ?
.
If the answer to these questions or any of them is in
the affirmative the appeal will have to be allowed.
But if the two questions are answered against the
appellants the appeals will fail as all other points
have been decided by us against the appellants. The
costs will follow the event unless the Bench hearing
the reference makes other order.
Referred to Constitution Bench for final disposal.
"'The decision of the Constitution Bench is reported infra.