1996 (1) TMI 431 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of the Kota Municipal Limits (Continued Existence) Validating Act, 1975.
2. Legality of the inclusion of villages Raipura and Ummedganj within the Kota Municipality limits.
3. Refund of octroi duty collected by the Kota Municipality.

Summary:

1. Validity of the Kota Municipal Limits (Continued Existence) Validating Act, 1975:
The Supreme Court examined the validity of the Kota Municipal Limits (Continued Existence) Validating Act, 1975, which was enacted to validate the inclusion of villages Raipura and Ummedganj within the Kota Municipality limits. The Court held that the Validating Act was bad in law because it did not cure the defects pointed out by the Full Bench of the Rajasthan High Court. The Court emphasized that for a validating statute to be effective, it must remove the cause of ineffectiveness or invalidity. The Court cited the case of Shri Prithvi Cotton Mills Ltd. vs. Broach Borough Municipality, stating that the legislature must possess the power to impose the tax and must remove the defects identified by the courts.

2. Legality of the Inclusion of Villages Raipura and Ummedganj:
The inclusion of the villages Raipura and Ummedganj within the Kota Municipality limits was challenged. The Court noted that the mandatory provisions of Sections 4 to 7 of the Rajasthan Municipalities Act, 1959, were not followed. The Full Bench of the Rajasthan High Court had held that these provisions were mandatory, and this judgment had become final. The Validating Act attempted to deem the villages as always within the municipal limits, but the Court held that a legal consequence cannot be deemed without deeming the facts from which it flows. Therefore, the inclusion was not legally valid.

3. Refund of Octroi Duty:
The appellants sought a refund of the octroi duty paid to the Kota Municipality. The Court directed the Kota Municipality to refund the amounts of octroi duty paid by the appellants subsequent to the year 1974-75 with interest at the rate of 8% per annum from the dates of payment till refund or realization. The refund was to be made on or before 15th July, 1996. The Court also awarded costs of Rs. 15,000/- to the appellants.

Conclusion:
The Supreme Court allowed the appeals, set aside the judgment and order under appeal, declared the Kota Municipal Limits (Continued Existence) Validating Act, 1975, to be invalid, and directed the refund of octroi duty with interest.