N. Balaraju And Others v. The Hyderabad Munici...

Chandra Reddy, C.J:— The object of all these petitions is to prevent the Hyderabad Municipal Corporation from levying octroi duty on some of the commodities that are brought into the city.

2. All the petitioners, except those in Writ Petitions Nos. 1351 of 1957, 74, 174, 176, 676 and 789 of 1958 and 193/59 are excise contractors, who have taken contracts for the sale of toddy and sendhi under the group system in auctions held in the year 1956. Under the terms of the contract, toddy and sendhi were to be sold in the Secunderabad abkari limits in certain places. These petitioners were allotted for tapping toddy and sendhi trees situated in several districts of the quondam Hyderabad State including those which were merged in the States of Bombay and Mysore. They were also given necessary permits to import and transport to the depots situated within the municipal limits of Secunderabad. They started business on 1st October, 1956 and the toddy and sendhi were carried in lorries to their depots from the place of tapping in various districts. When these articles reached the octroi barriers erected at the entrance to the Hyderabad municipality, they were stopped and asked to pay octroi duty. The petitioners questioned the power of the municipality to levy octroi but, as the authorities concerned insisted on payment, they are alleged to have paid it under protest as the goods could not be moved without complying with the demand.

3. It is said that subsequently representations were made both to the municipality and Excise officials in that behalf but without any effect. The Minister in charge of Revenue Department also seems to have been moved but without success. Thereupon, this Court has been approached invoking its jurisdiction under Art. 226 of the Constitution for various reliefs.

4. At the outset, the vires of the Hyderabad Municipal Corporation Act, Act II of 1956 (hereinafter referred to as the Act) is challenged. It is urged that it was not within the competence of the Legislature to have enacted this measure and that, in any event, the proviso to Art. 304 of the Constitution has been violated in that the previous sanction of the President was not obtained. Before we deal with this contention, it is useful to set out the circumstances under which octroi duty came to be imposed.

5. The legislature of the erstwhile Hyderabad State enacted a law relating to Municipal corporations in the twin cities of Secunderabad and Hyderabad in the shape of the Hyderabad Municipal Corporations Act, 1956. That Act contains Chapter VIII, which confers powers on the Municipality to impose, inter alia, a tax in the form of octroi. Octroi is defined in clause 37 of Section 2 thus:

“Octroi means a cess levied on goods at the time of their entry into the limits of a city for purposes of consumption, use or sale therein.”

Section 252 of the Act recites:

“Except hereinafter provided, octroi, at rates not exceeding those respectively specified in schedule shall be levied in respect of the several articles mentioned in the said schedule or of so many of them as the Corporation shall from year to year in accordance with Sec. 186 determine when the said articles are imported from any place into the city.”

Section 253 says:

“The Commissioner shall cause tables of octroi for the time being leviable, specifying the rates at which and the articles on which the same are leviable to be printed in the official gazette, and local daily newspapers and to be fixed in a conspicuous position at every place at which the same octroi is levied.”

Section 254 exempts articles belonging to Government from octroi and refund of octroi on articles becoming the property of the Government. Sec. 255 provides for the refund of the duty in regard to articles imported for immediate exportation.

6. Pursuant to Sec. 252, the legislature has annexed Schedule H giving a list of articles, which are liable for the payment of octroi. Among these articles are included wines and spirits, beer, fruit juice and all beverages. In exercise of the powers conferred by Section 585 read with Section 197 of the said Act, a draft of the Hyderabad and Secunderabad Octroi Rules was published on 28-7-1956 for the information of persons likely to be affected and it was intimated therein that the draft would be taken for consideration after the 27th of August 1956 and objections thereto were invited.

7. After the expiry of the period, this draft was confirmed and rules were made conformably to the provisions of the Act and schedule H of the Act. It may be noted that there is no variation even in the rates of levy. By another notification issued on 17-8-1956 the rules were to come into operation from 1st September, 1956. That also appended a list of articles that were subject to octroi duty.

8. Under the heading ‘edible’, a number of articles are enumerated, item (n) being “fruit juice and beverages”. It was decided by the Municipality as far back as July 1956, there should be a single agency for the collection of octroi for both Hyderabad and Secunderabad and one cordon for both cities as octroi limit for collection. This received the approval of the Government.

9. The question arose as to what are the articles that were comprehended within the expression ‘beverages’ mentioned in Schedule H and also in the rules as published earlier. The Government, by their letter dated 4th October, 1956, clarified the matter by saying, inter alia, that the word ‘beverages’ in item (n) of sub-bead ‘Edible’ included toddy and sendhi and that, therefore, octroi might be collected on those articles also. It is in accordance with this that toddy and sendhi were subjected to octroi duty.

10. We shall now proceed to examine the relevant articles of the Constitution. Art. 304, which is alleged to have been infringed in the passing of the Act, reads as follows:

“Notwithstanding anything in article 301 or article 303 the Legislature of a State may by law

(a) impose on goods, imported from other States or the Union territories, any tax to which similar goods manufactured or produced in that State are Subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced and

(b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest:

Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the legislature of a State without the previous sanction of the President.”

11. The petitioners seek to bring the impugned statute under the proviso to clause (b) on the argument that the impost of octroi is a restriction on the freedom of trade and, as such, attracts the proviso. Admittedly, the previous sanction of the President was not obtained in this behalf. But the assent of the President was given to this measure in February 1956. There is no dispute about the subsequent assent of the President, but the point presented is that this would not cure the defect and, consequently, it should be struck down.

12. Freedom of trade and commerce is guaranteed under Part XIII of the Constitution in which Art. 301 occurs. Art. 301 enshrines the principle of freedom of trade and commerce. That Article says that

“Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free”.

It guarantees intra-State and inter-State trade and commerce i.e, it provides safeguards for carrying on trade as a whole concerned with the passage of commodities either within or outside State limits. The underlying idea of this Article is the preservation of the commercial unity of the country.

13. Article 302 authorises the Parliament to impose restrictions upon this freedom of trade between the State and another or within any part of the territory of India if so required in public interest. Art. 303 prohibits discrimination being made between one State and another by virtue of any entry relating to trade and commerce in any of the lists in the seventh schedule. Such discriminatory measures could be passed, if it was necessary for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. Sec. 304 is another such enabling measure.

14. Now the question that calls for decision here is whether the levy of octroi duty is a restriction within the ambit of clause (b) of that Article. It is urged that it operates as a restriction within the purview of clause (b) of that Article and, consequently, the proviso is attracted to it. For this position, reliance is placed on a judgment of the Rajasthan High Court in Surajmal Baj v. State of Rajasthan, AIR 1954 Raj 260.

15. It was ruled in that case that the imposition of octroi duty would constitute a restriction on freedom of trade granted under Art. 301 since there would be impediment to the movement of goods into the municipal limits unless the tax was paid and that freedom implied that there should be no kind of restriction on trade and commerce. The learned judges thought that their conclusion derived support from a pronouncement of the House of Lords in Jamas v. Commonwealth of Australia, 1936 AC 578.

16. The question that fell for consideration in the latter case was whether certain regulations restricting inter-State trade were invalid in view of Section 92 of the Australian Constitution which provided that, on the imposition of uniform duties of customs, trade, commerce and intercourse among the States, whether by means of internal carriage or ocean navigations shall be absolutely tree. What was impeached there was the Dried Fruits Act, 1928–1935 of the Parliament of the Commonwealth of Australia as also the regulations made under that Act which had prevented the appellant, who was a grower and processor of dried fruits in the State of South Australia from sending his dried fruits out of South Australia in fulfilment of various inter-State contracts, which he had made.

17. Disagreeing with the view of the High Court of Australia, their Lordships held that the Dried Fruits Act, 1928–1935 was invalid because the Act and the regulations made thereunder either prohibited inter-State trade entirely if there was no licence or partially prohibited it if a licence was granted in accordance with the Act and, as such, violated Section 92 of the Commonwealth of Australia Constitution Act, the purpose of which if has already been set out. In examining the scope of the expression “absolutely free” this is what their Lordships said (at page 627):

“Free in itself is vague and indeterminate. It must take its colour from the context. Compare, for instance, its use in free speech, free love, free dinner and free trade. Free speech does not mean free speech; it means speech hedged in by all the laws against defamation, blasphemy, sedition and so forth; it means freedom governed by law, as was pointed out in W.A McArthur Ltd. v. Queensland, (1920) 28 C.L.R 530. Free love, on the contrary, means licence or libertinage, though, even so, there are limitations based on public decency and so forth. Free dinner generally means free of expense, and sometimes a meal open to any one who comes, subject, however, to his condition or behaviour not being objectionable. Free trade means, in ordinary parlance, freedom from tariffs.

Free in Section 92 cannot be limited to freedom in the last mentioned sense. There may at first sight appear to be some plausibility in that idea, because of the starting point in time specified in the section, because of the sections which surround Sec. 92 and because the proviso to Sec. 92 relates to customs duties. But it is clear that much more is included in the term, customs duties and other like matters constitute a merely pecuniary burden; there may be different and perhaps more drastic ways of interfering with freedom, as by restriction or partial or complete prohibition of passing into or out of the State.”

Their Lordships remarked that the word ‘absolutely’ did not add really anything to the word ‘free’ but was merely employed rhetorically perhaps with the object of excluding the risk of partial or veiled infringements.

18. It is the passage extracted above that was regarded as strengthening the opinion of the learned Judges in AIR 1954 Raj 260. In our judgment, these remarks do not convey the idea that freedom of trade does not involve imposition of taxes. It could not be forgotten that Sec. 92 talks of the imposition of uniform duties of customs. In this context, we cannot also overlook the observations of their Lordships that customs duties and other like matters constitute merely a pecuniary burden. Their Lordships stated that

“the true criterion seems to be that what is meant is freedom as at the frontier or, to use the words of Sec. 112, in respect of ‘goods passing into or out of the State’.

The following passage occurring at page 631 is also significant and, in our opinion, tends to dispel the notion that freedom of trade implies freedom from all taxation.

“In every case it must be a question of fact whether there is an interference with this freedom of passage. Their Lordships are of opinion that this construction is not inconsistent with any decided case, with the doubtful exception of McArthur's case, (1920) 28 C.L.R 530. As a matter of actual language, freedom in Section 92 must be somehow limited and the only limitation which emerges from the context, and which can logically and realistically be applied, is freedom at what is the crucial point in inter-State trade, that is at the State barrier.”

We feel that this only connotes that trade, commerce or intercourse must be free from purposeful impediments and does not mean that they should be free from all taxes or regulations. In our view, any measure, which operates to curtail trade directly as distinguished from restriction envisaged in Cl. (b) is unconstitutional (?) Any Act which affects trade or commerce indirectly cannot be treated as a restriction for the purpose of clause (b). We find it difficult to postulate that the levy of a tax in the shape of octroi duty or in some other form in anyway interfered with trade, commerce or intercourse as it does not prevent the transportation of the goods from one State to another or within the four corners of a State. That restriction should be the direct legal effect of the law and not the ulterior economical effect.

19. There is ample authority for the above opinion of ours. In State of Bombay v. R.M.D Chamarbaugwala, 1957 SCJ 607 at p. 629 : ((S) AIR 1957 SC 699 at p. 716) the Chief Justice of India accepted the principle that freedom of trade, commerce or intercourse was infringed only when a legislative act resulted in restricting trade, commerce or intercourse directly and immediately. Referring to the observations of Lord Porter in Commonwealth of Australia v. Bank of New South Wales, 1950 AC 235, the Chief Justice of India said:

“His Lordship deduced two general propositions from the decided cases namely (1) that regulation of trade, commerce and intercourse among the States was Compatible with absolute freedom and (2) that Sec. 92 was violated only when a legislative or executive act operated to restrict trade, commerce and intercourse directly and immediately as distinct from creating some indirect or consequential impediment which might fairly be regarded as remote. The problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, His Lordship pointed out, not so much legal as political, social or economic considerations.”

20. It may be mentioned here that Section 92 of the Commonwealth of Australia Constitution Act is similar to Art. 301 of the Constitution.

21. In Atma Ram Budhia v. State Of Bihar*, AIR 1952 Pat 358, a Special Bench of the Patna High Court ruled that the tax imposed by Part III of the Bihar Finance Act was not beyond the legislative power of the State Legislature and was therefore valid. It was laid down there that these provisions do not contravene any of the fundamental rights guaranteed under Articles 14, 19, 23 or Part XIII of the Constitution of India and that the Act had not in anyway affected the right of free trade or business which the citizens enjoyed under Art. 19(1)(g) of the Constitution. Sarjoo Prosad, J., who delivered the leading opinion of the Court said:

“Taxation is not a restraint on trade unless it is discriminatory in its character and is levied with the object of helping one person or party against the other.”

Further down in the judgment, it is said:

“For the purposes of the present discussion, it would be enough to say that the real test in such cases should be to examine whether the legislation is directly in respect of any of the rights mentioned in Art. 19. It is only then that the question whether that legislation is saved by appropriate saving clauses of Article 19 will arise. It, on the other hand, the legislation is not directly in respect of these subjects but by the operation of the statute incidentally or remotely some of the rights are affected or infringed, the application of Art. 19 does not at all arise.”

22. These observations apply with equal force to Art. 304 of the Constitution as the rights conferred by Chapter XIII are similar to those in Art. 19, the former relating to the field of commerce, trade and intercourse, while the latter deals with the freedom of an individual in several spheres of life.

23. Another Bench of the same Court in Bengal Immunity Co. v. State Of Bihar*, AIR 1953 Pat 87 applied this doctrine to the Bihar Sales Tax Act. It was, inter alia, decided in the latter case that the Act in its true nature and character was not an enactment with reference to freedom of trade or commerce and consequently it was not repugnant to Art. 304 of the Constitution.

24. The Travancore-Cochin High Court has also expressed the same opinion. It was held in A.V Fernandez v. State, (S) AIR 1955 Trav Co. 126 that the Travancore Cochin General Sales Tax Act was not open to challenge under Art. 303(1) of the Constitution and that the restriction on the freedom of trade and commerce had not resulted from the provisions of the impugned Act.

25. Another Bench of the same Court in Parameswaran v. Sub Magistrate Koothattukulam, AIR 1958 Kerala 52 had laid down that the Travancore-Cochin Vehicles Taxation Act had not in anyway interfered with the freedom of trade, commerce and intercourse, since it was only a fiscal enactment coming under Entry 57 of List II of the Seventh Schedule, and as such it did not require the prior sanction of the President.

26. The effect of Guruviah Naidu v. State of Madras, 1957-2 Mad L.J 469 : (AIR 1958 Mad 158) is also the same. See also Emperor v. Munna Lal*, AIR 1942 All 156.

27. It is clear from the several decided cases that taxation does not cause interference with the right guaranteed under Art. 304 of the Constitution and it is not a restriction within the scope of clause (b). A taxing measure, which deals directly with the imposition of tax on goods and does not profess to Jay any restriction on trade or commerce is not governed by Art. 304(b). For these reasons, we express our respectful dissent from AIR 1954 Raj 260.

28. It looks to us that Art. 304 has drawn a distinction between a tax measure imposing certain restrictions and other kinds of legislation placing genera limitations upon freedom of trade. If really clause (b) has reference to fiscal enactments, clause (a) becomes redundant since that also deals with taxing measures. That shows that they concern two distinct and different kinds of restrictions. The restrictions contemplated by clause (b) are those which have a direct impact on the right guaranteed under Art. 301 of the Constitution working interference on trade and commerce and not the indirect consequence following upon taxation.

29. It is apparent from the Constitution that taxation is regarded as a distinct matter for the purpose of legislative competence. A perusal of the various entries in the Union list as well as the State lists discloses this. Items 1 to 81 in list I enumerate general topics, while items 82 to 97 deal with powers of taxation. Similarly, items 1 to 44 of list II i.e, the State list bear on general subjects, while items 45 to 63 and 66 concern the taxing authority of the States. In this situation, we are unable to accede to the theory propounded for the petitioners that the enactment is governed by Art. 304(b). We are also of opinion that the two rulings cited by Sri Ramachandra Rao, counsel for some of the petitioners, viz., Anantakrishnan v. State of Madras, AIR 1952 Mad 395 and McCulloch v. State of Maryland, (1857) 4 Law Ed. 579 are not of much avail to the petitioner.

30. In the first of them, Section 3 of the Indian Stamp Act (Act I of 1899) which enacted that the instruments mentioned in Schedule I should be chargeable with duty of the amount indicated in the schedule as the proper duty thereof subject to certain exceptions and item 30 of Schedule I were called in question by a person, who wanted to be enrolled as an advocate. By reason of item 30, an Advocate to be entered on the roll of any High Court had to pay a sum of Rs. 500/-. This amount was enhanced to Rs. 625/- by the Madras Stamp (Amendment) Act (Act VI of 1922).

31. The point raised there was whether this was repugnant to Art. 19(1)(g) of the Constitution which declared the right of every citizen ‘to practise any profession or to carry on any occupation, trade or business’. This argument did not find favour with, the Bench of the Madras High Court and it was held that the impugned provision was quite valid and that it was not in any way opposed to the fundamental right of the petitioner therein. It is in solving that problem that the following remarks relied on by the learned counsel for the petitioners were made by Venkatarama Ayyar, J, one of the Judges constituting the Bench:

“As already pointed out, there is a difference between profession tax and income-tax. The power of levying a tax on income is absolute and if the legislature chooses to levy a tax of fifteen annas in the rupee on that income, courts will have no jurisdiction to declare it unconstitutional on the ground that it is unreasonable. But a right to carry on business is a fundamental right protected by the Constitution and it stands to reason that a tax on such a right should not be such as to destroy it—as for example—a professional tax equal or nearly equal to the income earned in the previous year. It might well be contended that there is in such cases a limitation on the powers of taxation, implicit in the Constitution itself, that it should not be exercised in such a manner as to take away with one hand what has been given by the other. If this is the correct position, it will follow that, while the levy of income-tax cannot be questioned on the ground that it is so unreasonable and excessive as to be prohibitive of the right to carry on trade. Any question whether a tax in a particular case is so unreasonable as to amount to a destruction of the rights, will, of course be a matter for determination by courts, in the same manner as question of reasonableness of restrictions under Art. 19, sub-clauses 3 to 5.”

We do not think that the rationale underlying the passage has any application to a situation like this. The learned Judges there were not concerned with, the question whether a tax measure is attracted by clause (b) of Art. 304. Secondly, all that is stated there was that when there is a limitation upon the power to tax, that power should not be so exercised as to destroy fundamental rights. That is not the position here.

32. There is no question of limitations set by the statute upon the power of taxation having been disregarded, as the cesses levied were within the limits set by the schedule. Nor would it be urged that the taxes here are so excessive or prohibitive as to destroy the right to carry on trade. Chief Justice Rajamannar, who gave the leading opinion of the Court, observed that if the taxation was only for legitimate revenue purposes, it would not become invalid merely because it might adversely affect any of the fundamental rights. So, that judgment is not in point and does not carry the petitioners anywhere.

33. In the second one, the question was whether the State of Maryland could tax a branch of the Bank of the United States which was established in the city of Baltimore. The Bank of the United States had constitutionally a right to establish its branches or offices of discount and deposit within any State. Notwithstanding this, by virtue of the provisions of an Act to impose a tax on all banks, or branches thereof in the State of Maryland, not chartered by the legislature, the State sought to tax that branch.

34. This right of the concerned State was challenged in the Baltimore County Court. When the matter went before the Supreme Court ultimately, the plea of the Bank that the impost on that branch was violative of the Constitution of the United States was upheld. The opinion of the Supreme Court was that the Act incorporating the Bank of United States was a law made in pursuance of the Constitution and, as such, is a part of the Supreme law of that land, that the branches proceeding from the same stock and being conducive to the complete accomplishment of the object were equally constitutional and, therefore, the State of Maryland was restrained from exercising any power which in its nature might be incompatible with and repugnant to the constitutional laws of the Union.

35. It was laid down that the States had no power ‘by taxation or otherwise’ to retard, impede, burden or in any manner control the operations of the constitutional laws enacted by the Congress to carry into effect the powers vested in the national Government. In the result the law passed by the legislature of Maryland imposing a tax on the Bank of the United States was struck down as unconstitutional and void. The position here does not resemble that envisaged in (1837) 4 Law Ed. 579 as the question of any repugnancy between the State Laws and Union Laws does not arise here. Nor did a controversy involved in this enquiry present itself before the Supreme Court.

36. Even on the assumption that Art. 304(b) takes in legislation of the kind involved in this enquiry, we do not think that the Act is open to attack on the ground of non-compliance with the proviso. Under the proviso, bills dealing with subjects tailing under clause (b) should first receive sanction before they are moved or introduced and, in this case, such an ingredient is absent. That however does not render this enactment void in this case, since the presidential, assent has been obtained. That is the effect of Art. 255 of the Constitution. It is convenient to read that Article here, omitting unnecessary portions:

“No Act of Parliament or of the Legislature of a State and no provision in any such Act, shall be invalid by reason only that some recommendation or previous sanction required by this Constitution was not given, if assent to that Act was given

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(c) where the recommendation or previous sanction required was that of the President by the President.”

This Article covers precisely cases that come within the mischief of the proviso. If that Article does not govern the proviso to Art. 304, it becomes otiose. To accept that argument will be to ignore the definite terms of Art. 255 of the Constitution and to give inadmissible weight to it.

37. The corner-stone of the argument on behalf of the petitioners that Art. 255 would not come to the rescue of measures or bills which are introduced without the prior sanction of the President is the remark in a passage in a judgment of their Lordships of the Supreme Court in Saghir Ahmed v. State of U.P, 1954 SCJ 819 : (AIR 1954 SC 728). The observations called in aid are the following:

“If this view is adopted in regard to Article 301 of our Constitution, it can plausibly be argued that the legislation in the present case is invalid as contravening the terms of the Article. The question of reasonable restrictions could not also arise in this case, as the Bill was not introduced with the previous sanction of the President as required by the proviso to Section 304(b). It is true that the consent of the President was taken subsequently but the proviso expressly insists on the sanction being taken previous to the introduction of the bill”

Torn out of the context, the last two sentences may appear to give support to the contention of the petitioners. But this has to be considered in the light of what has been said by their Lordships both in the earlier paragraph as also at the end of the judgment. It is clear from the previous paragraph that their Lordships were only setting out the several contentions that have been or could be raised in that case. Said their Lordships earlier:

“We have thus indicated only the points that could be raised and the possible views that could be taken but as we have said already, we do not desire to express any final opinion on these points as it is unnecessary for purposes of the present case.”

Thus, it is plain that no final opinion was expressed by the Supreme Court in that case.

38. Subsequently, the Supreme Court in 1957 SCJ 607 at p. 623 : ((S) AIR 1957 SC 699 at p. 712) decided that Art. 255 saves an enactment despite non-fulfilment of the condition laid down by the proviso. The following remarks contain the principle in that regard:

“It is conceded that the bill which became Act XXX of 1952 and amended the 1948 Act in the manner hereinbefore stated was introduced in the legislature of the State without the previous sanction of the President and consequently the condition precedent to the validity of the resulting Act as laid down in the proviso had not been complied with, but it is submitted, we think correctly that the defect was cured under Art. 255, by the assent given subsequently by the President to the impugned Act.”

39. The rule stated in Balmukund v. Gadi Narayana, AIR 1943 Nag 312 which discusses the applicability of Section 109 of the Government of India Act, 1935, which is in pari materia with Art. 255 of the Constitution, accords with our conclusion here. The underlying idea of the proviso to Art. 304 seems to be that legislations, which affect adversely trade and commerce, should be considered by the President, as the aim and object of Chapter XIII is to establish commercial unity of the country and that it should not be left to individual States to enact measures indiscriminately, which will have the effect of curtailing inter-State trade. It is for this reason that the proviso was inserted, so that the Central Government may be apprised of the intention to enact such measures. This object could also be achieved by reserving it for the consideration of the President subsequently and this is illustrated by Art. 255, which speaks in clear and unequivocal terms.

40. At this stage, it is convenient to deal with another contention, namely, that the rules and bylaws framed in respect of all matters prescribed under the Act should not only be laid before the legislative assembly but prior sanction of the President should be obtained as well before they are made. The foundation for this argument is a judgment of a Bench of Bombay High Court in State of Bombay v. R.M.D Chamarbaugwala, (S) AIR 1956 Bom 1, where Chief Justice Chagla observed in the course of the judgment that, where restrictions within the purview of Part XIII of the Constitution were introduced by rules after the President had given his assent to an enactment, the rules would be ultra vires the Legislature since the Presidential fiat is not there in regard to that also.

41. We do not consider this ruling as having any bearing on this enquiry. The learned Judge has, made it clear that, if the legislature had indicated its policy and given a mandate to the Government and the rules were framed in pursuance of the mandate, then it could be said that the President applied his mind to the policy underlying the rules. If the policy is indicated in the enactment itself, then the rules would not suffer from such an infirmity. Moreover in that case, it was the rules that laid the restrictions.

42. Such a situation does not obtain here for the reason that the rules do not contain any restrictions which are not traceable to the enactment itself. Schedule H, which is a part of the statute has made provision for all these matters and there is nothing new in these rules. To say that the rules made under an Act should also comply with the proviso to Art. 304(b) is to incorporate something into it, which is not warranted by the language of the Article. Thus, there is no force in this submission either.

43. The next point that requires consideration is whether this Act is within the legislative competence of the erstwhile Hyderabad State. What is maintained on behalf of the petitioners is that entry 52 of list II clothes the State Legislature with power to pass laws authorising the imposition of tax on the entry of goods into a local area for consumption, use or sale therein, while the impugned enactment enables the Municipality to levy cesses. This argument is based on the definition of octroi duty in Sec. 2(37) of the Act, which reads:

“Octroi means a cess levied on goods at the time of their entry into the limits of a City for purposes of consumption, use or sale therein.”

Octroi duty being only a cess could not come within the sweep of entry 52, continues the learned counsel. He seeks to gather support for the theory that tax and cess are different things from a ruling of the Madhya Bharat High Court in Gwalior Sugar Co. Limited v. State of Madhya Bharat, AIR 1954 Madh B 196, where the learned Judges pointed out the distinction between cess and licence fee. A cess is a tax levied for a specific purpose often with a prefixed word defining the object. A licence, on the Other hand, involves a permission to trade subject to compliance with certain conditions and cess is not a licence fee. We do not see how this judgment renders any assistance to the petitioners. The learned Judges have defined ‘cess’ as a tax imposed for a particular purpose.

44. That apart, entry 52 itself empowers the imposition of a tax on the entry of goods into the local area for consumption, use or sale therein. This can have reference to taxes or cesses of the same nature as octroi duty. The meaning of ‘cess’ as given in the Chambers Twentieth Century Dictionary is a tax, a local rate. Thus, cess is a tax confined to local area for a particular purpose. Cess and tax are interchangeable words so far as taxing power is concerned.

45. That no such distinction was sought to be made by the Constitution as suggested by the counsel for the petitioners is borne out by Art. 277 and Art. 266. Art. 277 so far as it is relevant for this enquiry says:

“Any taxes, duties, cesses or fees which immediately before the commencement of this Constitution were being lawfully levied by the Government of any State or by any municipality or other local authority or body for the purposes of the State, municipality, district or other local area may, notwithstanding that those taxes, duties, cesses or fees are mentioned in the Union list, continue to be levied and to be applied to the same purposes until provision to the contrary is made by Parliament by law”. Again “taxation” is defined as including the imposition of any tax or impost, whether general or local or special and tax shall be construed accordingly.

46. The expression “tax” is used in a very wide sense and embraces cesses. The legislature has not employed in the instant case the word as connoting anything different from a tax. It could not be posited that the levy of octroi duty is not an imposition coming within the definition of taxation in clause 28 of Art. 366.

47. The same concept is given expression to by the Supreme Court in Commissioner of Hindu Religious Endowments v. Lakshmindra Thirtha Swamiar 1954 SCJ 335 at p. 358 : (AIR 1954 SC 282 at p. 295). This is what Mukherjee, J. says:

“Art. 277 also mentions taxes, cesses and fees separately. It is not clear, however, whether the word ‘tax’ as used in Art. 265 has not been used in the wider sense as including all other impositions like cesses and fees; and that at least seems to be the implication of clause 28 of Art. 266 which defines taxation as including the imposition of any tax or impost, whether general, local or special. It seems to us that though levying of fees is only a particular form of the exercise of the taxing power of the State, our Constitution has placed fees under a separate category for purposes of legislation and at the end of each one of the three legislative lists, it has given a power to the particular legislature to legislate on the imposition of fees in respect to every one of the items dealt with in the list itself.”

48. It may be mentioned that entry 49 in list II of the relevant schedule of the Government of India Act refers to this form of taxation as a cess on the entry of goods into a local area for consumption. Presumably, the Constitution makers introduced the word ‘tax’ in the present item to make it more comprehensive.

49. In Daulat Ram v. Lahore Municipality, AIR 1941 Lah 40 Din Mohammad, J., after referring to the definition of cess in Murray's Oxford Dictionary as a tax levied for a specific object, remarked that it was impossible to distinguish tax from cess or duty and that though the draftsmen had used three different terms in different parts of the Government of India Act, they did not convey different ideas thereby.

50. There remains the question whether the erstwhile Legislative Assembly had in any way encroached upon the field reserved for the Union Parliament in enacting the impugned measure. What is argued by Sri Sanyasiraju for some of the petitioners is that the offending Act authorises the levy of duty which is nothing but an excise duty or an import duty. It is said that the impost on commercial goods falls within the purview of entry No. 41, which refers to ‘trade and commerce with foreign countries, import and export across customs frontiers and definition of ‘customs frontiers’, entry 42 which deals with inter-State trade and commerce and entry 83 which deals with duties of customs including export duties.

51. He also attempted to substantiate this proposition by citing to us certain passages from Chapter XIV of Cooley's Constitutional Limitations, which discusses the powers of taxation of a State. Those passages are not of any help to the petitioners. The author there discusses several aspects of the powers of the State to impose taxes, which power rests upon necessity and is inherent in every sovereignty.

52. To take up (first entry 83 of list I, it is concerned only with customs and export duties and has nothing to do with taxes to be collected on goods imported into a local area. Octroi duty falls exclusively within the intendment of entry 52 of List II and is unconcerned with item 83 of List I. This view of ours is reinforced by a pronouncement of the Supreme Court in Ram Krishna Ramanath Agarwal, Kamptee Firm v. Secretary, Municipal Committee, Kamptee 1950 SCJ 148 : (AIR 1950 SC 11). It was decided there that octroi duty as imposed by the Municipality on tobacco under Sec. 66(1) of the Central Provinces Municipalities Act fell within the ambit of entry 49 of list II of the Seventh Schedule to the Government of India Act, which is the same as the present item 52 and that such a levy could not be regarded as an excise duty.

53. In Murli Manohar v. State of Uttar Pradesh, (S) AIR 1957 All 159, the validity of a cess or tax imposed by the State Government on sugar can entering the premises of sugar factories in Utta Pradesh was assailed on grounds, inter alia, that was beyond the competence of the State Legislature the reason offered in support of this ground being that a cess of that nature was an excise duty within the meaning of entry 45 of list I of the Seventh Schedule to the Government of India Act, which is in the same terms as entry 48 of the Union List. This argument was negatived on the ground that it was not an excise duty on sugar.

54. Nor is the submission that a measure like the impugned Act, falls within the scope of items 41 and 42 of List I admissible. Those two entries deal with topics regulating matters indicated in them. These entries do not confer any power on the Union Parliament to make laws for the imposition of taxes. The aim and object of those two entries is altogther different from that of entry 52 of List II. As already pointed out in another context, a glance at the several entries in the different legislative lists would establish that taxation was not intended to be included in the items which deal with general subjects and that it was a distinct matter for the purpose of legislative powers. This is brought out forcibly, if we may say so with respect, by Venkatarama Ayyar, J. in Sundara Ramier and Co. v. State of Andhra Pradesh, 1958-9 STC 298 : (AIR 1958 SC 468) thus:

“The above analysis — and it is not exhaustive of the entries in the lists—leads to the inference that taxation is not intended to be comprised in the main subject in which it might on an extended construction be regarded as included, but is treated as a distinct matter for the purposes of legislative competence.”

On this discussion, it follows that the constitutionality of the Hyderabad Municipal Corporations Act would not be questioned on any ground and that it is a valid piece of legislation. That being the position, the further argument of Sri Sanyasiraju that there is overlapping between the entries of respective lists and in that position the Central list should prevail should be rejected as being utterly devoid of substance. Nor is his contention that entry 52 is vague and misleading and is only a repetition of the items in list I and is attributable to unskilful draftsmanship of the Constitution-makers deserve any serious consideration.

55. We shall next examine the reliability of a contention founded upon an order alleged to have been passed by the then Revenue Minister. The complaint made on behalf of some of the petitioners is this. On a petition submitted to the Revenue Minister questioning the legality of the impost on the ground that as the toddy contractors paid rentals as also tree tax, it would be unjust drat the petitioners should be saddled with the additional burden contrary to the terms of the contract entered into with the Government, he endorsed on 13th October, 1956 that the levy of octroi duty on Sendhi and toddy was illegal, that it should not be recovered from the petitioners and, if necessary, the duty must be met from the Government treasury and that if any amount should have been recovered from the excise contractors, the amount so recovered should be adjusted towards the rental on production by the contractors of the receipts of such payments.

56. This endorsement is sought to be invested with the character of an enforceable order creating a right in the petitioners to compel Government to direct the Municipality to cancel the levy or itself to meet the burden. We do not fancy how such an alleged endorsement could have any of the results that are ascribed to it. On their own showing, no order was communicated by the Government to the petitioners exempting them from the payment of octroi duty, which means that no effect was given to that opinion for some reason or other. That implies that the endorsement was in the nature of an opinion by a Minister and would not have the postulate of a decision with regard to their rights.

57. There are also other difficulties in the way of giving weight to this contention. Art. 166 of the Constitution recites that all executive actions of the Government of a State shall be expressed to be taken in the name of the Governor. Clause 2 of that Article says:

“Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor.”

That Article provides for making rules for the allocation of portfolios amongst the various Ministers. Therefore, the allocation of distinct subject to different Ministers is only for the sake of convenience and any order passed by any Minister shall be deemed to have been made by the Governor on the advice of his Council of Ministers.

58. Art. 166, which was applicable to Part-A States was made applicable to Part B States by reason of Art. 238 of the Constitution, with the result that all principles enshrined in Articles 166 and 167 are attracted to Part VII, which deals with Part B States except to the extent modified in the latter part. By reason of Art. 166 read with Art. 238, the Rajpramukh was empowered to make rules for the conduct of governmental business of a State. Rules were made by the Rajpramukh of the erstwhile Hyderabad State pursuant to the relevant provisions of the Constitution for the distribution of Governmental functions amongst the various ministers in exercise of the powers conferred under Art. 166 read with Art. 238 of the Constitution of India.

59. Rule 3 says that the Rajapramukh on the advice of the Chief Minister shall allot among his Ministers the business of the Government by assigning each department of the Secretariat to the charge of a Minister or Ministers. Under Rule 6, certain cases could be brought before the Council of Ministers either by the direction of the Rajpramukh or the Chief Minister or the Minister-in-charge of the case with the consent of the Chief Minister. Rule 7 provided for bringing before the Council of Ministers the following cases:

(c) any proposal affecting the finances of the State or for re-appropriation within a grant in which the Minister in charge of the finance Department has not concurred.

Rule 10 recites that no department shall without previous consultation with the Finance Department authorise any orders (other than orders pursuant to any general delegation made by the Finance Department) which either immediately or by their repercussions, will affect the finances of the State or which in particular either

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(c) in any way involve any relinquishment of revenue. Sub-Rule 2:

No proposal which requires previous consultation with the Finance Department under sub-rule 1, but in which the Finance Department has not concurred, may be proceeded with unless a decision to that effect has been taken by the Council of Ministers.

60. Rules 11, 13 and 14 are also important and they are set out hereunder:

“(11) Without prejudice to the provisions of Rule 5, the Minister in charge of a department shall be primarily responsible for tendering to the Rajpramukh advice as to the disposal of the business appertaining to that department.

(13) All orders or instruments made or executed by order or on behalf of Government shall be expressed to be made by or by order of the Rajpramukh.

(14) Save in cases where an officer has been specifically empowered to sign an order or instrument of the Government of Hyderabad every such order or instrument shall be signed by either a Secretary, an additional Secretary, a Joint Secretary, a Deputy Secretary, an Under Secretary or an Assistant Secretary to the Government of Hyderabad and such signatures shall be deemed to be the proper authentication of such order or instrument.”

61. If the matter is considered in the light of these rules, it is abundantly clear that the order in question could not be issued by the Revenue Minister by himself independently and that it will be ineffectual for various reasons. Indisputably, if effect were to be given to that order, it would affect the finances of the State and, as such, it had to be brought before a Council of Ministers. Otherwise it could not be issued without the previous consultation of the Finance Department as indicated by rule 10.

62. According to Rule 11, the Minister could only tender advice to the Rajpramukh in regard to matters, which are within his sphere, and, by reason of Rule 13, all orders or instruments made or executed by order or on behalf of Government should be expressed to be made by or by order of the Rajpramukh, embodying the same conception as Art. 166 of the Constitution. Rule 14 has empowered the Secretaries or other persons enumerated therein to sign orders on behalf of the Government. Thus, an individual Minister could not issue orders in his own name independently of the Secretariat even in regard to matters that are within the port-folio allotted to him.

63. The object of Articles 166 and 238 is to prescribe the mode in which the business of the Government should be carried on as between the Governor and the Ministers and Secretaries of the Government in Part A States and the Rajpramukh, his Ministers and Secretaries in Part B States. In both the categories of States, in theory, the responsibility rested on the Governor or the Rajpramukh as the case may be for carrying on the administration. He is the Executive head of the State and whatever functions were to be performed by the Governor they were to be performed in the name of the head of the State.

64. Therefore, whenever the Government of a State, either Part A or Part B State, acts, its acts were to be expressed in the form of an order and that order was to be issued by the Secretary or some other officer authorised in that behalf in the name of the Governor or the Rajpramukh. It is true, that, under the concerned rules, the Minister in charge of the port-folio may be mainly responsible for tendering advice to the Rajpramukh for the disposal of the business relating to the subjects allotted to him but whether the advice was accepted by the Rajpramukh or not could not be investigated by a Court. Until that advice is accepted by the Rajpramukh and is given effect to by the issue of an order in conformity with the terms of Art. 166, it does not become an order of Government and could not be operated.

65. This opinion is shared by Rajagopalan and Rajagopala Ayyengar, JJ. in Poineer Motors Ltd. v. Majeed Mirania Motor Service, 1956-2 Mad L.J 430 : (AIR 1957 Mad 48). There learned judges decided that the decision by a Minister in the exercise of revisional powers conferred by Sec. 64-A of the Motor Vehicles Act as it stood prior to Act 39 of 1944 but not communicated to the parties would not amount to an order of the Government and it acquired that quality only when it was embodied in a formal order issued in the form as laid down by Art. 166.

66. The following observations occurring at p. 442 (of Mad LJ): (at p. 57 of AIR) are quite apposite in this context:

“The order of the Minister is not final, for another Minister may call for the file and bring up the matter before the Council, for he is entitled to do so, as every Minister assumes responsibility for that order. Again, the Secretary might disagree with that order and have the matter brought up for reconsideration by the Minister….the Governor may call for the file and have the matter brought up before the Council of Ministers. All these matters might take place before the stage of finality is reached at the ministerial level and it is only when the Secretary of the Department or those under him named in rule 12 affix their signatures to the order, that the Governor's assent to the issue of that order is taken to be signified, so that it is only then that it becomes an order of the Government.”

The situation here is analogous to that in that case. The present is an a fortiori case for the reason that here the orders have not been even communicated.

67. This position is contested by Sri Subbarayudu for some of the petitioners on the reasoning that, under the laws prevailing in the Hyderabad State the Revenue Minister could take decisions and pass orders, that they came into operation the moment they were noted on the file and that the order passed in the instant case being a judicial one affecting the rights of the parties, it will take effect whether it is communicated or not. In support of the first branch of the argument, he drew our attention to some of the cases disposed of by the erstwhile Hyderabad High Court in which orders of the Revenue Minister were sought to be quashed viz., Trimbak Prasad v. State of Hyderabad, AIR 1952 Hyd 10 Rachamma v. The Hyderabad State, ILR (1954) Hyd 632 : (AIR 1954 Hyd 210) and Mir Liaqat Hussain v. Minister for Revenue, Government of Hyderabad, I.L.R 1956 Hyd 243.

68. In these cases, the decisions of the Revenue Minister were attacked on some ground or other. But they have no bearing on the present enquiry. For one thing, under the enactments under which the orders were passed by the Revenue Minister, he was specifically authorised to make those orders and further it might also be that under the then rules the order could be issued in the name of an individual Minister and the problem was not posed in those cases whether an individual Minister could issue orders in his own name and without reference to the concerned Secretaries or the Rajpramukh.

69. We do not also know whether the orders actually went in the name of the Rajpramukh. Whatever that be, the rules extracted above do not warrant the proposition that orders could issue in the name of an individual Minister and without reference to the Government. Moreover, as already pointed out, in this case it remained only in the stage of noting and had not taken a final shape, namely, of its being embodied in an order.

70. The ruling relied on by Sri Subbarayudu for the proposition that an order to be effectual need not be communicated viz., Dattatreya v. State of Bombay, AIR 1952 SC 181 is not relevant here. In that case, the legality of an order of detention under the Preventive Detention Act was contested, inter alia, on the ground that there was no valid order of confirmation and that a confidential communication from the Home Department could not be regarded as an order under Section 11(1) of the Act.

71. The objection raised on behalf of the detenu was overruled on the ground that the order was not a nullity even though it has not been expressed to be made in the name of the Governor. It cannot be overlooked that, in that case, the order under Sec. 11(1) purporting to be that of the Government of Bombay was signed by an officer, who was competent to sign according to the rules framed by the Governor. The only infirmity was that it did not issue in the name of the Governor.

72. It was pointed out that Art. 166(1) of the Constitution was confined to cases where the executive action is required to be expressed in the shape of a formal order or notification or any other instrument. That ruling could have no application to the instant case for the reasons that it was a mere opinion expressed by a Minister, that it was never communicated and that it did not purport to be that of the Government nor signed by the Secretary.

73. We are also unable to see how such an opinion could be regarded as a judicial or quasi-judicial one. There is no provision either in the Hyderabad Municipal Corporations Act or in the Hyderabad Abkari Act empowering the Revenue Minister either to direct the Municipality to desist from levying or collecting octroi duty or to direct the Government to meet the demand made by the Municipality in that regard.

74. Our attention was not drawn to any statutory provision in any enactment clothing the Revenue Minister with such power. If effect were to be given by the Government to a note made by one of the Ministers, certain rights might flow from it. But it could not have the characteristics of a judicial cider. None of the attributes of a judicial order are present in the instant case. It is only an opinion expressed by a Minister on the administrative side. Even if such an opinion is enforceable, such of the petitioners to whose benefit the noting might enure, could request the Government for a rebate of the rentals and, if that is not complied with, they could resort to such remedies as are open to them. Moreover, this court cannot give a direction either to the Rajpramukh or to the Government as constituted to give effect to the noting of a single Minister. We are not shown any instance where a duly constituted Government was compelled by a Court to accept the advice or opinion of one of the Ministers. This is not the forum for agitating such matters.

75. If it is a term of the contract as suggested by him that the Government should pay octroi duty, he could enforce it in ordinary courts of law. Further, the terms of the contract have not been placed before us which could lead to any such inference. It follows that this contention is also inadmissible and has to be rejected.

76. We will next deal with the argument that toddy and sendhi, being the property of the Government, are exempt from octroi duty by virtue of Section 254 of the Act. In our opinion, this submission is devoid of substance. Merely because Government receives rentals for granting lease for the sale of liquor in the State or receives tree tax for permitting palmyra and date trees to be tapped, the toddy or sendhi does not become the property of the Government.

77. By selling contracts in public auction for the tale of liquor, the Government merely realises the abkari revenue but has no proprietary right in the toddy or sendhi. Government merely confers a right on the contractor by the issue of a licence to sell toddy or sendhi at a particular place. It is for the grant of this licence or privilege that the rentals are paid. The Government does not acquire any right in the toddy or sendhi extracted from the palmyra or date trees and their position cannot be equated to that of the owners of the toddy or sendhi.

78. Indisputably, the Government is not entitled to the sale proceeds. They surely belong to the contractors who pay the rentals, the tree tax remuneration to the tappers and the transport charges and who appropriate the realisations to themselves. The various sections of the Abkari Act or the Land Revenue Act to which our attention was drawn do not either individually or cumulatively establish the proposition that ownership in the goods is in the Government. If the proprietorship of the toddy and sendhi vests in the Government, the whole price realised must be remitted to the Government treasury the contractors being entitled only to some remuneration for having undertaken to sell toddy and sendhi by way of commission or fixed wages. Surely, that is not the position here.

79. The petitioners would not be willing to concede the right of the Government to take away the sale proceeds. By obtaining these contracts, the contractor only gets his licence to carry on trade in toddy and sendhi on payment of rentals and tree tax and the various amounts he pays are for granting him the permission.

80. Even if it is assumed that it is the property of the Government, that is not sufficient to entitle the contractor to get the benefit of Section 254 of the Act.

81. Another requisite should exist before that section is invoked, namely, that the article is used or intended to be used solely for public purposes and not to be used or intended to be used for the purpose of profit. Surely, it could not be postulated that toddy and sendhi are used for public purposes and not for the purpose of profit.

82. Whether it is sold for the benefit of the Government or for the benefit of the contractors, it is for the purpose of profit. It cannot be posited that the importation of toddy and sendhi is for a public purpose. The sale of liquor to individual members of the public for a price could not come within the connotation of public purpose. For these reasons, we are unable to give effect to this argument also.

83. It is convenient to dispose of here the complaint made by Sri Ramchandra Rao for some of the petitioners that, although the toddy and sendhi were brought into the city for use in the shops outside the city limits, octroi duty was levied on that also. It is said that a portion of the toddy and sendhi transported into the city was for sale at Uppala and Ramanadhapuram and consequently they could not be subjected to octroi.

84. If the facts are well-founded, the argument is a substantial one. Under Section 255 of the Act if any commodity is brought into the city for immediate exportation, it is exempt from tax under the conditions indicated therein and if octroi has been paid upon the article and it has been exported afterwards from the city, the full amount of the octroi so paid, by force of Section 256 of the Act, would be refunded.

85. That being the position, the goods whose ultimate destination is a place outside the Municipal-limits of Hyderabad and Secunderabad will not be liable to octroi duty and if cess has already been paid, it will have to be refunded. We are assured by the learned counsel for the Municipality that in all cases where such collections were made they will be refunded to the contractors if the authorities concerned are approached and if it is proved that in any case the toddy or sendhi was not sold within the limits of Hyderabad or Secunderabad.

86. Another contention pressed upon us is that it was not within the competence of the Hyderabad Municipality to collect octori duty on goods meant for consumption in Secunderabad Municipality. If at all it is only that Municipality in which the commodity has to be sold that could legitimutery make such an impost.

87. This argument overlooks the existence of Section 100 of the Act which so lar as it is relevant for this, enquiry says:

“The Corporation may from time to time with the sanction of the Government enter into an agreement with a local authority or with a combination of local authorities for the levy of octori or toil or any other tax by the Corporation on behalf of the bodies so agreeing and in that event the provisions of this Act shall apply in respect of such levy as if the area of the city were extended so as to include the area subject to the control of such local authority or such combination of local authorities”.

‘Local authority’ is defined in S. 2(3) as including a Municipal Corporation, City and Town Municipalities etc. Section 2(6) says: “City means the area declared by the State Government by notification to be the city of Hyderabad or the City of Secunderabad as the case may be”. Thus, S. 100 confers power upon the two Municipalities to reach an agreement for the creation of a single agency for the collection of octroi. It is pursuant to this section that the two corporations entered into an agreement for the collection of octroi on behalf of each otiier.

88. We have already adverted to the resolution of the concerned Municipality for the creation of a single agency for the collection of octroi for the twin cities of Hyderabad and Secunderabad and one cordon for both the cities as octroi limit for the collection. A machinery was also set up for this purpose and for the distribution of the income between the two cities.

89. It is, therefore, futile to contend that it is not within the province of the Hyderabad Municipality to collect duty on goods meant for consumption in Secunderabad. The only feasible mode of realising the octroi revenue, for the two cities of such cordons will facilitate the evasion of the payment of duty. We do not think that there is anything illegal or unjustifiable in the action taken by the authorities of the Hyderabad Municipality in that behalf.

90. The next question we have to address ourselves is whether toddy and sendhi are included within the term “beverage”. What is urged on behalf of the petitioners is that the expression “beverage” is ejusdem generis with fruit juice i.e of the same kind. It is said that beverage refers only to drinks of the same kind as fruit juice. To accept this interpretation would be to render the word “beverage” nugatory. The words ‘fruit juice’ include juices extracted from kinds of fruits and it would be unmeaning to construe “beverage” as fruit juice.

91. In our opinion, the word beverage is a word of wide import and takes in drinks of every description. Beverage means every liquid used for drinking purposes. One of the meanings given in Chambers Dictionary is a liquor for drinking, a mixture of cider and water, a drink. In our judgment it does not admit of such doubt that beverage embraces within its connotation toddy and sendhi.

92. The various passages in the judgment of the Supreme Court in State of Bombay v. Balsara, 1951 SCJ 478 at p. 490 : (AIR 1951 SC 318 at p. 325) clearly indicate that expression includes toddy and sendhi. At p. 489 (of SCJ): (at p. 325 of AIR) Fad Ali, J., who spoke for the Court said this:

“Thus, according to the Dictionary, the word ‘liquor’ may have a general meaning in the sense of a liquid, or it may have a special meaning, which is the third meaning assigned to it in the extract quoted above, viz., a drink or beverage produced by fermentation or distillation. The latter is undoubtedly the popular and most widely accepted meaning, and the basic idea of beverage seems rather prominently to run through the main provisions of the various Acts of this country as well as of America and England relating to intoxicating liquor, to which our attention is drawn. But, at the same time, on a reference to these very Acts, it is difficult to hold that they deal exclusively with beverages and are not applicable to certain articles which are strictly speaking not beverages”.

His Lordship added:

“…I consider the appropriate conclusion to be that the word liquor covers not only those alcoholic liquids which are generally used for beverage purposes and produce intoxication but also all liquids containing alcohol”.

Thus, it is plain that the expression “beverage” is used in a general sense as applicable to all kinds of drinks. As pointed out by the Supreme Court in The State Of Bombay v. Ali Gulshan , (S) AIR 1955 SC 810 apart from the fact that the doctrine of ejusdem generis should be confined with narrow limits and general or comprehensive words should receive their full and natural meaning unless they are clearly restrictive in their intendment, it is requisite that there must be a distinct genus, which must comprise more than one species before it can be applied. Our conclusion on this topic is that toddy and sendhi are subject to octroi duty as they come within the purview of schedule H.

93. Another point that was sought to be made was that it was outside the jurisdiction of the Government to have issued directions to the Municipality to levy octroi on toddy and sendhi and that has vitiated the levy and collection of the duty. The directions complained of are to be found in the letter dated 11-9-1956. It is said that the procedure adopted by the Government was illegal in this regard and that it had gone into the root of the whole matter. This argument is sought to be buttressed by referring to Mahadayal Premchandra v. Commercial Tax-Officer, AIR 1958 SC 667.

94. There a Commercial Tax-Officer, without applying his mind in making an assessment, requested for the instructions of the Assistant Commissioner. Instructions to assess the appellant were given by the Assistant Commissioner but the Commercial Tax Officer did not agree with the opinion contained in the instructions and he indicated to the Assistant Commissioner his opinion and asked for his valued opinion.

95. Thereupon, the Assistant Commissioner directed the Commercial Tax Officer to assess the appellant in accordance with his opinion. The Commercial Tax Officer made the assessment without giving any satisfactory reasons. It was held that the order impugned showed that the Commercial Tax Officer merely voiced the opinion of the Assistant Commissioner without exercising his own judgment. It is in this context that the Supreme Court remarked.

“This was hardly a satisfactory way of dealing with the matter. If the Assistant Commissioner had been dealing with the same he could have by all means given in the assessment order which he made his reasons for doing so and these reasons would have been open to scrutiny in further proceedings taken by the appellants either by way of appeal or otherwise.”

“The procedure adopted was to say the least unfair and was calculated to undermine the confidence of the public in the impartial and fair administration of the Sales Tax Department concerned.”

We do not think that has any analogy here. In that case, the judgment was that of the assessing authority, namely, the Commercial Tax Officer and he had to apply his mind to the facts of the case and arrive at a conclusion. Contrary to his own conviction he had merely accepted the opinion of the Assistant Commissioner and had not given satisfactory reasons therefor. The position here is altogether different. Here the Government merely clarified the matter.

96. Apart from that, under Section 677 of the Act, the Government has ample authority to call upon the Municipality to perform its functions properly. Sec. 677, so far as it is relevant for this enquiry, enacts:

“If on receipt of any information or report obtained under Sec. 675 or 676 or otherwise, the Government is of opinion

(a) that any duty imposed on any Municipal Authority by or under this Act has not been performed or has been performed in an imperfect, inefficient or unsuitable manner.

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the Government may by an order direct the Corporation or Commissioner within a period to be specified in the order to make arrangements for the performance of the duty”.

97. The wording of the section makes it plain that if the Government thinks that the Municipality is remiss in the discharge of its duties, it is entitled to issue directions for the proper performance of the duty or obligation. Sec. 252 casts a duty on the Municipality to levy octroi on the articles mentioned in schedule H at the rates specified therein.

98. That section is couched in mandatory language and, therefore, the Municipality is bound to make the impost without making any discrimination between one article and another. It follows that the Government was quite within their jurisdiction to issue instructions requiring the Corporation to conform to Section 252 of the Act.

99. It was lastly complained that while octroi duty is imposed on the basis of the cost price of the other commodities, a different basis was adopted for toddy and sendhi, namely, the price fixed by the Government for the sale of these articles. It may be that normally the tax is so calculated with regard to other articles. But then the basis is furnished for such computation by the invoices produced by the persons carrying the articles into the city.

100. So far as toddy and sendhi are concerned, such invoices cannot be produced and it is difficult to determine the cost price of each pot or container of toddy or sendhi. It is true that definite amounts are paid by the renter in the form of rentals and tree tax. But it is difficult to say in advance what quantity of toddy or sendhi is going to be extracted from the various trees that are allotted to a particular renter and to make apportionment with regard to each pot or container of toddy or sendhi.

101. No material has been placed before us which would enable us to make a computation in that behalf and the learned counsel for the Municipality also expressed his inability to afford us any basis for this purpose. It is true that the Government may fix the sale price on some basis. They might take into account the approximate cost of the commodity in the shape in which it is to be sold and also the reasonable rate of profit for the renters. But we have no information in that behalf.

102. If the renters were aggrieved by the method adopted by the Municipality in that respect, they would have requested the authorities concerned to call for particulars and make the assessment on the basis of that information or, at any rate, they could have approached the Government for that purpose.

103. Be that as it may, in such cases, a remedy is provided under Section 282 of the Act. It says:

“(1) Subject to the provisions hereinafter contained, appeals against any rateable value or tax fixed or charged under thus Act shad be heard and determined by the Judge.”

The expression ‘Judge’ is defined in Sec. 2(27) of the Act as, in the City of Hyderabad the first Judge of the Court of Small Causes and in the city of Secunderabad the District Judge and shall include a Sub-Judge to whom such Judge may transfer in accordance with the provisions of this Act an application or appeal for disposal. It is, therefore, open to an aggrieved party to pursue the remedy provided by that section especially when we have no means of arriving at the cost price. For these reasons, we cannot give effect to this contention also.

104. In these circumstances, all the Writ Petitions are dismissed with costs. Advocate's lee is fixed at Rs. 100/- in each to be apportioned between the Municipality and the Government. These petitions have to be dismissed on another ground also, namely, that this court in exercise of jurisdiction under Art. 226 of the Constitution would not grant declaration or direct the refund of the amount collected from the petitioners, for in such an eventuality, any person seeking such relief, should have recourse to the ordinary courts of law.

105. The second appeal also is dismissed with costs as the point raised in this appeal is covered by our decision in the Writ Petitions.

AD/D.H.Z

106. Petitions and appeal dismissed.