1961 (2) TMI 71 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the imposition of octroi without publication in the Official Gazette.
2. Compliance with Section 130 of the City of Bangalore Municipal Corporation Act.
3. Excessive delegation under Class VIII in Part V of Schedule III.
4. Contravention of Article 276(2) of the Constitution.
5. Contravention of Article 301 of the Constitution.
6. Contravention of Article 19(1)(g) of the Constitution.

Issue-wise Detailed Analysis:

1. Legality of the Imposition of Octroi Without Publication in the Official Gazette:
The appellants argued that the tax was in contravention of Section 98(2) of the Act because the final resolution was not published in the Official Gazette. The Court noted that the resolution was published in local newspapers and a notice was sent to the appellants. The Court considered this a technicality and of no substance, stating that the procedure substantially complied with the provisions of the Act. However, the Court decided to refer this question to a larger bench for further consideration.

2. Compliance with Section 130 of the Act:
The appellants contended that there was no compliance with Section 130, which limits the power of the Municipality regarding the rate of tax. The Court clarified that Section 130 is not a charging section but imposes a limitation on the rate of tax. The goods were specified, the rate of tax was determined, and the procedure under Section 98(1) was followed. The Court found no contravention of Section 130, stating that the resolution substantially complied with the Act's provisions.

3. Excessive Delegation Under Class VIII in Part V of Schedule III:
The appellants argued that the power to specify goods under Class VIII was an excessive delegation, uncanalised and uncontrolled. The Court rejected this argument, citing that the Legislature had laid down the powers of the Municipality to tax various goods, including the discretion to determine other goods for taxation. The Court referenced the case of Baxter v. Ah Way, which supported the view that such delegation was conditional legislation and not excessive.

4. Contravention of Article 276(2) of the Constitution:
The appellant in C.A. 449/57 argued that the levy of octroi was in contravention of Article 276(2) of the Constitution, which limits the tax on trade to Rs. 250 per annum. The Court decided to refer this constitutional question to a larger bench for determination.

5. Contravention of Article 301 of the Constitution:
The appellant in C.A. 449/57 also contended that the tax contravened Article 301, which guarantees freedom of inter-State trade and commerce. The Court referred this issue to a larger bench for further consideration.

6. Contravention of Article 19(1)(g) of the Constitution:
The appellant in C.A. 449/57 argued that the imposition of octroi violated Article 19(1)(g), which guarantees the right to practice any profession or to carry on any occupation, trade, or business. The High Court had rejected this objection, and the Supreme Court did not find merit in revisiting this decision, implying that the tax did not contravene Article 19(1)(g).

Conclusion:
The Court referred the following points to a Constitution Bench for final disposal:
1. Whether the imposition in the present case offends Article 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 Constitution Bench answers these questions in the affirmative, the appeal will be allowed. If not, the appeals will fail as all other points have been decided against the appellants. The costs will follow the event unless the Bench hearing the reference makes another order.