# V ALLABHDAS AND OTHE.RS v. MUNICIPAL COMMITTEE, AKO LA

- **Citation:** [1961] 3 S.C.R. 618
- **Court:** Supreme Court of India
- **Decided:** 1958-11-18
- **Case number:** Special Civil Application No. 201 of 1958
- **Bench:** J. L. Kapur, M. Hidayatullah, J. c. SHAH
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/v-allabhdas-and-othe-rs-v-municipal-committee-ako-la-2058
- **Pages:** 6

## Headnote

Octroi Tax-Legality of imposition-:" System of Assessment",
meaning of-C. P. & Berar Municipal Act, r922 (C. P. & Berar II
of I922), S. 67(2).
The Municipal Committee, Akola_, passed a resolution to
impose an octroi ta:: 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 whicq 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 tile "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 necessarily 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
3 S.C.R.
SUPREME COURT REPORTS
619
board of the Municipality and at other conspicuous places of the
Vallabhdas
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. &
v.
Berar Municipal Act, 1922, and the rules made thereunder.
Muni<ipal

## Text

618
SUPREME COURT REPORTS
[1961]
'96'
Judge nor the High Court has given a finding on that
Pioneer Motors point, it is necessary to remit the case to the High
(PYivate) Ltd.
Oourt with the direction that the appeal be reheard
v.
and that particular question be decided on the
. · Municipal Council, materials on the record. Nothing that has been said
Nagerco•l
in this judgment must be taken to be an expression of
Kapur J.
opinion on the merits of this plea taken by the appellant Trust.
January 27.
Appeal No. 502 of 1958, is therefore, allowed and
the case remitted to the High Court for decision. The
costs in this Court and in the High Court will abide
the decision of the appeal in the High Court.
Appeals nos. 499 to 501 dismissed.
Appeal no. 502 allowed. Case remitted.
V ALLABHDAS AND OTHE.RS
v.
MUNICIPAL COMMITTEE, AKO LA.
(J. L. KAPUR, M. HIDAYATULLAH and J. c. SHAH, JJ.)
Octroi Tax-Legality of imposition-:" System of Assessment",
meaning of-C. P. & Berar Municipal Act, r922 (C. P. & Berar II
of I922), S. 67(2).
The Municipal Committee, Akola_, passed a resolution to
impose an octroi ta:: 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 whicq 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 tile "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 necessarily 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
3 S.C.R.
SUPREME COURT REPORTS
619
board of the Municipality and at other conspicuous places of the
Vallabhdas
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. &
v.
Berar Municipal Act, 1922, and the rules made thereunder.
Muni<ipal
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. O. 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 ri;ispondent No. 1.
·
G. O. Mathur and R. H. Dhebar, for respondent
No. 2.
·~
1961. January 27. The Judgment ofUie Court was
delivere~ 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(l)(e) of the
C. P. & Berar Municipal Act (Act lI 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, Akoia. On
November 11, 1957, respondent No. 1 passed a resolution to impose an oct.roi 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. T.his 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
Committee, Akola
Kapur j.
620
SUPREME COURT REPORTS
[1961]
'96'
No. 1, the Municipal Committee, affixed on the Notice
Vallabhdas
Board of the Committee and published in the local
v.
newspapers the proposed rules for the imposition of
Municipal
the tax, but the objection of the appellants is that
Committee, A kola they did not publish along.with them the draft of the
[(apur ].
"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 J an.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, praying 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 Pl~ader 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 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
.J
' '
'r
\
3 S.C.R.
SUPREME COURT REPORTS
621
Government is empowered to make rules regulating
r¢r
the assessment of taxes and for preventing evasion bf
Vall•Mtl<M
assessment. Section 76 empowers the State Governv.
ment to make rules regulating the collection of taxes
MHicipal
and preventing evasion of payment. Section 85 em- Commiuee, Akol•
powers the State Government to make rules regula-
-
ting the refund of taxes. But it was argued on behalf
Kapur J.
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 \he 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,
I96I
ValJabhdaS
v.
Municipal
Comm·iUee, Akola
f{apur }.
622
SUPREME COUHT REPOHTS
[1961]
The real objection of the appellants was that the
system of assessment had not been pnhlishecl as required. The Rule relating to publicnLion under s. 67 is as
follows:-
" l. 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 office and at conspicuous
places in the town, and sh'Lll 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 sha,Jl also be
made by beat of drum throughont 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 a.nd
c0llection of the tax and after its public:ction in the
Gazette the notice has to be published by affixing
copies thereof to a no Lice board at the Municipal Office
and at conspicuous places in the town and has to be
published in the loc1il papers, if any, or it may circulate
the notice in print within the municipal limits. It is
admitted that in the Gazette dated J anuai'y 16, 1958,
the draft rules were published which contained the
articles to be t1ixed, the rate or rates at which they
were to he taxed and what articles were not to be
taxed. It also contained a brief statement of objects
and reasons for Ow impositi,m of the tax. This was
t
3 S.C.R.
SUPREME COURT REPORTS
623
followed by draft rules as to how taxation was to be
I96I
done. In short what was published in the Gazette
Vallabhdas
was admitted to conform to all the requirements of
v.
s. 67(2).
But the contention raised is that in the
Municipal
Jan-Sewak, a local Marathi newspaper, the rules Committee, Akola
which were published contained the articles to be
taxed, the rate or rates at which they were to be
Kapur J.
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 iherefore dismissed with costs.
Appeal dismissed.
80