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Daman Municipal Council And Another v. M/S Paramount Traders And Others
Factual and Procedural Background
The respondents, who are importers and sellers of liquor, were subjected to octroi on the entry of liquor within the municipal limits of Daman. They challenged the levy through writ petitions filed under Article 226 of the Constitution before the Judicial Commissioner, Goa. The Judicial Commissioner, by judgment dated 10 February 1975, quashed the levy on two grounds: (i) the Daman Municipal Council lacked authority under the then-applicable Portuguese enactment, Reforma Administrative Ultramarina (RAU); and (ii) the notification imposing octroi, purportedly issued by the Chief Secretary, was not approved by the Governor.
The Municipal Council appealed. During the pendency of related litigation, the Judicial Commissioner again quashed the levy on 31 July 1979. Relying on that decision, various civil suits for refund of octroi were decreed by the trial court and upheld by the Bombay High Court on 8 February 1983. The present civil appeals challenge both the original writ decisions and the consequent refund decrees.
Legal Issues Presented
- Whether, under the RAU, the Daman Municipal Council could validly impose octroi only upon prior approval of the Governor/Lt. Governor, and if such approval was in fact obtained.
- Whether the notification dated 24 June 1965 (published 1 July 1965) imposing octroi, and the subsequent notification dated 16 May 1966 altering the rate, were legally issued and authorised.
- Consequently, whether the respondents were entitled to refunds of octroi collected pursuant to the impugned levy.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Court found that the Judicial Commissioner erred in concluding that the Municipal Council lacked power to levy octroi:
- The Municipal Council itself acknowledged that, under the RAU, it had no autonomous authority to impose octroi. Consequently, it passed a resolution on 12 November 1964 seeking the Governor’s approval.
- The Governor (more specifically, the Lt. Governor) granted approval, authorising the Council to collect octroi at the rates specified in the notification dated 24 June 1965. Publication of the notification with explicit reference to the Lt. Governor’s approval raised a presumption of regularity, which the respondents failed to rebut.
- An affidavit by Ulhas Datta Kamat on behalf of the Municipal Council before the Judicial Commissioner expressly asserted such approval; this remained unrebutted and was corroborated by the text of the notification.
- A later change in rates, resolved on 10 March 1966, likewise received Lt. Governor approval on 7 May 1966, followed by a notification on 16 May 1966. These facts were not contested.
- Given this documentary and affidavit evidence, the Court held that the foundational premise of the Judicial Commissioner—that no valid gubernatorial approval existed—was factually incorrect.
- Because the underlying levy was valid, the subsequent refund suits, premised entirely on the earlier quashing, also lacked foundation.
Holding and Implications
Appeals Allowed; writ petitions and refund suits dismissed.
The Supreme Court set aside the orders of the Judicial Commissioner and the Bombay High Court, thereby upholding the validity of the octroi imposed by the Daman Municipal Council. The immediate effect is that respondents cannot claim refunds of octroi already paid, and the Municipal Council’s authority to continue collecting octroi (as approved by the Lt. Governor) stands affirmed. No broader doctrinal precedent was articulated beyond reaffirming the presumption of validity accorded to duly published governmental notifications.
Order
Civil Appeal Numbers 1232/33 of 1977
1. These appeals are directed against the judgment and order of the Judicial Commissioner, Goa dated February 10, 1975 quashing the levy of octroi on entry of liquor within the municipal limits of Daman.
2. The respondents are carrying on the business, inter alia as importers and sellers of liquor. They filed writ petitions under Article 226 of the Constitution of India before the Judicial Commissioner challenging the validity of octroi imposed by the Municipal Council. The Judicial Commissioner allowed the writ petitions on the ground that the Daman Municipal Council had no authority to levy octroi under the Portuguese law called the Reforma Administrative Ultramarina (hereinafter referred to as the ‘RAU’) which was applicable at the relevant time. It was further held that the notification levying octroi issued by the Chief Secretary, Government of Goa, Daman and Diu was without authority of law as it was not approved by the Governor.
3. After hearing learned counsel for the parties, we are of the view that the learned Judicial Commissioner fell into error in quashing the levy of octroi imposed by the appellant-Municipal Council.
4. The Daman Municipal Council was conscious of the fact that under the RAU, it had no authority on its own to levy the octroi and as such it passed a resolution dated November 12, 1964 seeking approval of the Governor to impose octroi on entry of liquor within the limits of Daman Municipal Council. The Governor granted the said approval and authorised the Municipal Council to collect the octroi on the goods at the rates mentioned in columns I and II of the Notification dated June 24, 1965, published in the official Gazette on July 1, 1965. The Judicial Commissioner fell into error in quashing the levy of octroi on the ground that the Municipal Council did not have the jurisdiction to impose the octroi under the RAU. The Judicial Commissioner was oblivious of the fact that it was the Governor who had authorised the imposition of octroi and the Municipal Council only executed the mandate of the Governor.
5. The Judicial Commissioner recorded findings that the Notification dated June 24, 1965 as published in the Gazette on July 1, 1965, had not been issued by the Governor instead the same had been issued by the Chief Secretary who had no authority in law to do so. On the material on record, the finding of the Judicial Commissioner is incorrect. Ulhas Datta Kamat had filed an affidavit on behalf of the Municipal Council before the Judicial Commissioner wherein it had specifically been stated that the Lt. Governor had approved the proposal of the Municipal Council to impose octroi and the Notification dated June 24, 1965 expressly mentioned that the Lt. Governor had granted approval. Once the notification was published indicating that the Lt. Governor had granted approval for the levy of octroi, the presumption was that the octroi had been levied in accordance with law, however, this presumption was rebuttable. The respondents failed to place any material before the Court to rebut the presumption. On the other hand, as is stated earlier, there is ample evidence on record showing that the Lt. Governor had approved the imposition of octroi.
6. Subsequently, by a resolution dated March 10, 1966, the Municipal Council changed the rate of octroi and submitted the proposal to the Lt. Governor for approval which was accorded on May 7, 1966 and a Notification in that respect was issued on May 16, 1966. There is no counter to these assertions and even before us these facts have not been disputed. It is thus difficult to uphold the finding recorded by the Judicial Commissioner that the levy of octroi was not approved by the Governor.
7. For the reasons stated above, we allow the appeals, set aside the order of the Judicial Commissioner and dismiss the respondents writ petitions with no order as to costs.
Civil Appeal Numbers 10240/83, 10241/83, 10242/83, 10243/83, 10247/83, 10255, 10256, 10257, 10258, 10259, 10260/83 and 10270/83, 10244/83, 10248-10250/83, 10251/83 and 10252-54/83
8. The levy of octroi by the Municipal Council, Daman, was quashed by the Judicial Commissioner by his judgment dated July 31, 1979. Thereafter, the respondents filed suits for the recovery of octroi collected from them which had been declared illegal by the Judicial Commissioner. The suits were decreed. The Bombay High Court upheld the decrees by a common judgment dated February 8, 1983. These appeals have been preferred by the Municipal Council, Daman, against the common judgment of the High Court. The respondents' suits have been decreed in view of the judgment of the Judicial Commissioner dated February 10, 1975, declaring the imposition of octroi illegal. We have already set aside the judgment of the Judicial Commissioner in C.A Nos. 1232-33 of 1977 and the validity of the imposition of octroi by the Municipal Council, Daman, stands upheld.
9. In this view, the respondents' suit for refund of octroi duty collected by the appellant Municipal Council must fail. We accordingly allow the appeals, set aside the judgment and decree of the courts and dismiss the respondents' suits with no order as to costs.
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