Document Fragment View

Matching Fragments

13. All bye-laws made under the Act will have to be published under Section 200 of the Act. Bye-laws come into force only when they are confirmed by the State. By a notification dated November 3, 1942, octroi came to be levied in Rohtak district in exercise of powers conferred by Sections 188 and 199 of the Act. Bye-laws were also made prescribing the routes. On December 11, 1948, the following bye-law came to be notified "The limits of the Sonepat Municipality for the purpose of collection of octroi without refunds shall be the boundaries of the Municipality of Sonepat as fixed from time to time."

25. The relevant facts of the first writ petition may be noted. On November 3, 1942 a notification was issued under Section 62(10) of the Punjab Municipal Act (hereinafter called "the said Act") which stated that the Municipal Committee of Sonepat had imposed a tax called 'octroi' on the articles mentioned in the schedule to the notification when imported into the octroi limits of Sonepat municipality. On February 11, 1948 it was notified that the limits of Sonepat municipality for the purpose of collection of octroi would be the boundaries of the municipality as fixed from time to time. On September 15, 1966 an notification was issued in pursuance of the provisions of Section 5(1) of the said Act whereby the intention of including the areas specified in the schedule thereto within the municipal limits of Sonepat was declared and the inhabitants of the municipality and of the local area in respect of which the notification was published were invited to submit objections in writing to the proposed inclusion. The area upon which the factories of the petitioners are situated was proposed to be included within the municipal limits of Sonepat. On November 3, 1966 the petitioner filed objections to the inclusion of the proposed areas within the municipal limits of Sonepat. The petitioner stated that it understood that the proposed inclusion was intended to increase the income of the Sonepat municipality by bringing the different industries around Sonepat within its limits thereby making them pay all municipal taxes. Such additional taxes would add considerably to the cost of production of the petitioners' bicycles and the octroi alone would be Rs. 1.30 per bicycle manufactured. The petitioner was "already groaning under the heavy Central and State taxes. If saddled with additional local taxes, the burden will became unbearable"

. The petitioner therefore asked that the purposed inclusion of the industrial area within the municipal limits of Sonepat should be dropped. On August 11, 1967 a notification was issued under Section 5(3) of the said Act by the Governor of Haryana. (This was because the State of Haryana had been created on November 1, 1966 by bifurcation of the State of Punjab.) The notification under Section 5(3) included within the municipal limits of Sonepat the area upon which the factories of both the petitioners stood. On and from August 18, 1967 octroi was levied upon materials imported by them into the municipal limits of Sonepat

26. In 1968 the Manufacturers' Association of Sonepat, of which the petitioners were members, made a representation, consequent upon which the Sonepat municipality reduced the rate of octroi chargeable upon cycles, tyres, tubes and parts imported, inter alia, by the petitioners

27. In 1967 the petitioners filed writ petitions in the High Court of Punjab and Haryana for writs of mandamus restraining the municipality of Sonepat from levying against and collecting from them any octroi in respect of raw materials, components and parts imported by them into their factories situated in the industrial area of Sonepat. The High Court having dismissed the writ petitions, appeals were filed in this Court. This Court based its judgment (Atlas Cycle Industries Ltd. v. State of Haryana upon the provisions of Section 5(4) of the said Act, as it then read. Section 5(4), as it then read, spoke of rules, bye-laws, orders, directions and powers. It did not mention notifications. Notifications under the said Act were the only authority and mandate for the imposition and charge of taxes. Notifications were not made applicable to included areas under Section 5(4). Therefore, the appeals were allowed and the Sonepat municipality was restrained from levying against and collecting from the petitioners any octroi in respect of raw materials, components and parts imported by them into their factories