Supreme Court of India
THE DHARANGADRA CHEMICAL WORKSversusDHARANGADHRA MUNICIPALITY & ANOTHER
- Citation
- 1985 INSC 192
- Decided
- 3 September 1985
- Disposal
- Dismissed
- Bench
- V D TULZAPURKAR
Holding
The Municipal Octroi Rules and Bye‑laws 1965 are validly in force, the earlier Octroi Ordinance is impliedly repealed, and the enhanced octroi levy is lawful.
Summary
The appellant, Dharangadhra Chemicals, challenged the levy of octroi duty at an enhanced rate imposed by Dharangadhra Municipality under its Octroi Rules and Bye‑laws of 1965. The dispute centered on whether the municipal rules could be brought into force without a statutory exemption from the Saurashtra Terminal Tax and Octroi Ordinance of 1949, whether the rules framed under the repealed Bombay District Municipalities Act were saved by the Gujarat Municipalities Act, and whether a corrigendum issued in 1965 amounted to an unlawful modification. The Supreme Court held that the municipal rules were validly made and brought into force, that the earlier Ordinance was impliedly repealed by the later municipal legislation, and that the corrigendum merely corrected typographical errors. Consequently, the enhanced octroi levy was upheld. The appeal was dismissed.
Issues considered
- The municipal Octroi Rules and Bye‑laws 1965 could be brought into force without a prior exemption from the Octroi Ordinance No. 47 of 1949.
- Whether the rules framed under the Bombay District Municipalities Act, which was repealed by the Gujarat Municipalities Act, were saved under section 279 of the Gujarat Act.
- Whether the corrigendum issued on 10‑March‑1965 constituted a substantive modification beyond mere typographical correction.
- Whether the later municipal legislation impliedly repealed the earlier Octroi Ordinance.
Legislation cited
Subjects
OctroiImplied repealMunicipal taxationStatutory interpretationRepeal by implicationValidation ActCorrigendumGujarat ActBombay Act
Judgment
757
A
THE DHARANGADllRA CHEMICAL WORKS
v,
DllARANGADllRA MUNICIPALITY ,& ANOT!IER.
SEPTEMBER 3, 19$5
B
Bom)>ay Distrii:t l!unicipalii:.ies Act 190). sections 69, 61 1>n<!
«>2. Gujara~ Muo.icipaliti ..s 1\ct, 1963 section 279. 'file s.aurashtra
Termina.1 T"" ""d 9ctr.oi Oi;4irnt'!Ce 1949 & The DharaQga.dhra l:!un1-
cipalil:y .octrgi Rules and Octwi ))yia-Ja>;p, Ru!l.e 3 at)d ·Bye~law :3. C
Dharangacihra !1uni<Cipa1Hy - !&YY 1mci collection 9t octcoi
duty - W)).etner legal .and YaUd;
D
Repeal by implicatio)'.! - Mhe11 ,a\(ises - Effect 9f.
The Saur/l.Sl'ltra l'!!~Wil Tax .and Pct~oi Ordina)'.!!'!! ~o.. ~? of
1949 !las promulg$t!!d im4 brQ!lgbt .i11to f9rC!! ·:witl'l .ej'fect .tll'l,Jlll
3l .• ll.Hl49, t9 ""8i>le 1:1.le l)t.e~ GQyempent to 1.,vy .and C9li.,!!t
octr9,I. 4'1t:Y in sP"ciHe<i citie• l'JJ.d t\lW!IS ,"11<1 Pther lfl<:!li ar~
9f ·!:!!" Sµt!' and t9 P!ilis 9n tjie ,cluty 139 !!Ollei;~ to p)lose dti.,.s ii
arui tOWll'I, until Mµnicipaliti!'s t\:h..,:c!!iu li!!r!' C9!ll?t.i,tutaj <Jajer
•the Bolllbay District Mµni(!ipslities /\ct, :l90.l and !:h9.S!i! JMllnl.-
cipaUties made theii:: own ~s .and by.e.:.la>;p l'llil.l>.liDg t)lem ~
levy and col.lect octroi. Section 3 of the .0rdj,nance .emp<:>wer.e.d the
State GovernmeJlt to impose .octroi <iuty i.n towns and .clt.ies Bj>E)c;l.-
f ied in ,S.,hedule I thereto, a.nd tl'le town .9f Ubsr8J,18lld)lra eae •to F
he included therein suJ>.s!'quep,l:ly under a lllltifi!!!ltA.9n !'1:$. ,etfei;J:
from 26.12,49. ·
The respondent-11w)1.cipj!lity by its ),leso1<>ti9n liated 30.3.53
enhanced the prev,.iling raie of .octroi duty hY .5o% @.tb9ut comr
lying with the provisions 9f sectiQns .60 to 62 t>f ,Cllap,ter VH .of G
the Bombay District Municipalities Act, 190.l. The appe;I.la11t
challeQged the enhancement in the rate of octroi duty by filing a
writ petition, and also filed a suit for refund of the excess
amount recovered from it for the pei::iod endiQg .Sept/,m)ie.r 30, ·
1961. The High Court dismissed the petition and up)leld .the
enhancement, taking the view that while enhancing the !'ate .of H
158 SUPR!i:ME COURT REPORTS [1985j SUPP.2 s.c.R.
A
octroi, the Respondent-Municipality had followed the procedure
prescribed by the Bombay Act for imposing the octroi and that the
enhanced imposition was not under Ordinance No. 47 of 1949.
On appeal, this Court held that the enhanced imposition of
duty by the Respondent-Municipality was illegal as the mandatory
provisions of sections 60 to 62 of the Bombay Act, had neither
been complied with or could the enhanced levy be justified under
Ordinance No. 47 of. 1949, because the State Government alone had
the power thereunder to impose the duty or prescribe its rate and
not the Respondent-Municipality. To get over the effect of this
Court's decision a validating Act being Gujarat Act No. 6 of 1978
c was passed whereunder the imposition of octroi levy and collec-
tion thereof prior to 30.4.65 was validated.
During the pendency of the writ petition in the High Court,
the Respondent-Municipality proceeded to frame its own octroi
Rules and Bye-laws under the Bombay Act after COfilPlying with all
the procedural steps. The Respondent-Municipality passed a Reso-
)) lution on 17 .12. 63 approving the draft Rules and Bye-laws. The
Divisional Commissioner sanctioned the draft Rules and Bye-laws.
However, on March 10, 1965 the State Government issued a Corri-
gendum to the sanction that had already been accorded with a view
to rectify certain printing or typographical errors that had come
to the notice of the Respondent-Municipality. Thereafter, the
Respondent-Municipality passed a General Board Resolution dated
29.3.1965 resolving to bring into force these Rules and Bye-laws
called: "The Dharangadhra Municipality Octroi Rules and Octroi
Bye Laws" with effect from 1.5.65, and the requisite Notification
was published.
By the aforesaid Octroi Rules and Bye-laws, 1965 the
Respondent-Municipality increased the octroi rates by .12.1/2% on
all the goods brought within the Municipal limits of Dharangadhra
and also made some changes in the classification of goods so
brought in; and issued bills of octroi payable every month.
Feeling aggrieved by this action of the Respondent-Municipality,
the Appellant filed a writ petition in the High Court challenging
the levy of octro1 at the enhanced rate, which was dismissed~
In the appea.i.. lo this Court it was con.tended on behalf of
the appellants: llJ That since the exemption from the operation
of the Octroi Ordinance No. 47 of 1949 as contemplated by Rules 3
H as well as Bye-law 3 was not granted by the State Government, the
Municipal Octroi Rules and Octroi Bye-Laws 196) could not be said
'
DHARANGADllRA CHEMICALS v •. MUNICIPALITY 759
to have come into force, and the kespondent-Municipalfty had no A
authority or power to bring them into force with effect from
1. 5. 65, and therefore, the levy to the extent of the enhanced
rate was bad in law. (2) 'fhat the impugned Octroi Rules and
Bye-Laws were framed by the Respondent-%ml.cipality under the
Bombay Act, and sanction thereto had also been accorded by the
Divisional Commissioner under the Bombay Act on.22nd April 1964, ll
but since the Bombay Act was repealed by Section 279(i) of the
Gujarat Act with effect from 1.1.65, and since these Octroi Rules
and Bye-Laws were not brought into force before the repeal of the
Bombay Act they would have no force of law as sub-section (2) of
section 279 of. the Gujarat Act does not save them, because under
clause (vi) of sub-section (2) of section 279 only such Rules and C
Bye-Laws framed under the Repealed Act which were immediately in
force prior to l.l.65 would stand saved. (3) That the Corrigendum
to the Octroi Rules and Bye-Laws issued by the Gujarat Government
on 10.3.6~ was not by way of purely correcting typographical or
printing errors but virtually amounted to a mOdification of the
Rules and Bye-Laws without following the procedure de novo and, D
therefore, the impugned Octroi Rules and Bye-Laws could not be
said to be valid and could not be brought into force •.
Dismissing the appeal,
HELD: 1.(a) lt cannot be ·disputed that the subject matter
dealt with by the Ordinance and the Government Rules framed E
thereunder was levy and collection of· octroi duty and the subject
matter dealt with by the Bombay Act and the Municipal Rules mld
Bye-laws framed thereunder is also levy and collection of octroi
duty. Both the pieces of legislation, validly enacted and.inten-
ded to ope=ate within the Municipal limits of the Respondent-
Municipality, dealt with the same subject matter. In such a F
situation of there is repugnancy between the two pieces of legis-
lation, to such an extent that both cannot stand together and
operate simultaneously; the later will have the effect of
impliedly repealing the former. [766 A-CJ
Repeal by implication is not ordinarily favoured by the G
Courts. But the principle, on which the rule of implied repesl
rests, is that if the provisions of a later enactment are so
inconsistent with or repugnant to the provisions of an earlier
one that the two cannot stand together, the earlier is rapealed
by the later enactment is applied. [766 DJ
H
Kutner v. Phillips,[1891] 2 Q.JI. 267 at 272. Zawrbai
s.c.R.
Aloaidaa v. 'lbe State of llolllbay [1955] l 799 referred to.
7o<J SUPREJ1E COURf Rt:PORTS [l985J SUPP.2 s.c.R.
A In the instant case, the two pieces of legislation are so
inconsistent with or repugnant to each other that both cannot
stand together and such repugnancy arises from (a) the conferal
of power to levy <!ut.y OD two different booies, na-'l<!ly, th" State
Government wider the Ordinao.CP,, and. the Mimicipality under the
approprillte Act, and obviously the exercise of the power
~ concurrently by both the bodies would be incongruous "I'd entirely
destructive of the object for .which the power was cont.erred, and
(b) the enhiinced rate of duty prescribed by the Municipal Rules
.and Bye-laws. Having regard to such repugnancy obtaining between
the two peices of legislation dealing with the same subject
matter the later in point ,of ti.Jl)e will have lobe effect of
displacing the former by necessary implication. That such .implied
C repeal or dtsplacement was within the contemplation of the legis-
lative authority :which issued the Ordinance ol' 1949 is &llplY
clear if r~gard is had to the object with llhl.ch the Or!iinance
came to be ·promul,gated to enable the Staw Government to levy and
collect octroi duty, in the StatP. of Saurashtm and to pass ou
the duties so collected by it tho•<' tnws and cities until l'luni-
cipalities therein were constituted under the appropriate Act eru1
lJ those Municipalities made their own Rule.s and Bye-laws enabliflg
them to levy and collect octroi and other usual Municipal taxes.
[767 IHIJ
2.(a) The Municipal Octroi Rules and Bye-laws were validly
made by the respondent Municipality on 17 .12.63 by following the
E procedure prescribed by the Bombay Act, whereafter these were
forwarded to the Divisional Collllllissioner who made some sugges-
tions which were accepted by the respondent-lluQ.icipality and
ultimately by order dated .22.4.64 sanctioned the Rules and
Bye-l.aws. Up to this stage .everything was validly done under the
Bombay Act :Prior to its repeal on l..1.65. Under clause (vi) of
F .slib-section (2), any order made ,and ruch was in force illlllediate-
ly before the COlllJleilcement .of the Gujarat Act has been saved,
inasmuch as .it :was ,provided that such order shall be deemed to
have been made IJllder the Gujarat Act and will continue to operate
until modified or rescinded by another order passed under the
Gujarat .Act. UJO E-<;j
G
,(cb) What is ,s.,ved by the order of sanction dated 22.4.64
are the sanctioned !Rules and Bye~Laws. Clause (vi) µses both the
expressions, 'order' and '!Rule and l!ye-law' separately and
distinct from each other but sueh separate or distinctive use is
conceivably QB.de tc cover different .situations. ln a case where
.II the order that is saved happens to 'be an .order sanctioning .rules
.and !Bye-laws, the two ;wilil have ,to be regarded as psrt .and psrcel
DHARANGADHRA CllEMICALS v. MllNlCIPALlrY (:t'ULZAf>URKAR, J .• j 761.
A
of a single instrwnent .which is saved in its entirety. What is
saved wider clause (vi) of su!rsection (2) of section 279 are the
sanctioned Municipal Octroi Kules and Bye-laws 1965. {77l Bl
3.The.material on record clearly shows that the Corrigend\Dll
dated l0.3.1965 was issued with a view to rectify .typographical
ll
errors or mistakes that bad crept in the ty,ped .·copies of the
Kules and Bye-laws forwarded to ,the Divisional Coumissioner which
bad come to the .notice of the Respondent-Municipality. Even the
Olllission .of sub-rule (5) .of Rule 5 in the .copies forwarded appea-
rs to be an inadvertant typographical mistake. {772 El
ClVIL APP<:LLAT<: JURISDICTION : Civil Appeal 111>· .1225 of
1972.
From the Judgment and Order dated iche 2l.st January, 1971 of
the Gujarat High Co11rt in Special Civil Application No. 786 of
1965 .• D
s.11. Seth, Kamal Mehta, K.S. Nansvati and Mrs. A.K. Verma
for the Appellant.
Soli J. Sorabjee, P.M. Raval, M.P• Goswami aad li•N· Salve
for Respondent No.1.
S.T. Desai, Girish Chandra and R.N. -Poddat for Respondent
No.z.
The Judgment of the Court was delivered by
IULZAPUBKAR, J. 'This litigation in which the Appellant· has
F
challenged the levy of Octroi Vuty imposed by the i{espondent
Municipality under .its Octroi Rules ,and Bye-laws framed .under the
llombay District Municipal Act, 1901 (1'S adopted by tbe Gov.ernment
of Saurashtra) and continued under the Gujarat Municl.pa11t1es Act
1903 · .(as adapted and .applied to the State of S81Jrashtra) .bas a
cbequered history.
G
Briefly stated the facts leading .to the present appeal are
the.se. The Appellant is a Company registe~.ed under the Indian
Companies Act carrying on business of manufacturing Soda Ash in
its factory at l)barangadhra within the Municipal .limits of the
Respondent-Municipality. Origlcnslly the Respi>ndent-Municl.pality
H
being a llistrkt Munk1pal1ty was governed by the pti>vl.st<>ns .of
762 SUPREME COURT REPORTS [1985] SUPP.2 s.c.R.
A the Bombay District Municipal Act, 1901, as adapted and applied
to the State of Saurashtra, (for short the Bombay Act) but with
effect from 1.1.1965 it is governed by the Gujarat Municipalities
Act, 1963 (for short the Gujarat Act).
An Octroi Ordinance called the Saurashtra Terminal Tax and
B Octroi Ordinance No. 47 of 1949 was promulgated by the Rajpramukh
and brought into force with effect from 31.8.1949. The object of
the Ordinance was to enable the State Government · to levy and
collect octroi duty in specified cities and towns and other local
areas of the State and to pass on the duty so collected by it to
those cities and towns until Municipalities therein were
constituted under the Bombay Act and those Municipalities made
c their own Rules and llye-laws enabling them to levy and collect
octroi and other Municipal taxes. To achieve this object s. 3 of
the Ordinance empowered the State Government to impose octroi
duty iti towns and cities specified in Schedule I thereto, in
which Schedule the town of Dharangadhra came to be included
subsequently under notification with effect from 26.12.1949.
Section 4 of the Ordinance authorised the State Government to
D make Rules for the imposition and collection of octroi duty but:
under the ·Rules so framed the Municipality of the concerned city
or town was to he the collecting machinery. After the inclusion
of the Dharangadhra town in the Schedule I octroi was being
levied in that town by the State Government under its Rules but
the same was being collected thrqugh the machinery of Respondent
E Municipality.
It appears that the Respondent Municipality by its
Resolution dated 30.3.1953 enhanced the prevailing rate of octroi
duty by 50% without complying with the provisions of sections 60
to 62 of Chapter VII of the Bombay Act. The appellant challenged
F this enhancement in the rate of octroi duty by filing a writ
petition \No. 769 of 1962) in the High Court of Gujarat and also
filed a suit for refund of the excess amount recovered from i-t
for the period ending September 30, 1961 arter serving a
statutory riotice on the respondent Municipality. The High Court
dismissed the writ petition and upheld the enhancement on the
G view that while enhancing the rate by its Resolution dated March
30, 1953 the Respondent Municipality had followed the procedure
prescribed by the Bombay Act for imposing the octroi and that the
enhanced imposition was not under the Ordinance No. 47 of 1949.
On appeal, this Court by its judgment dated 20.9.1972 held that
the enhanced imposition of duty by the Respondent Municipality
II was illegal as the mandatory provisions of ss. 60 to 62 of the
DHAl<ANGA!JliliA CHEMICALS v. i'lUNIClPALITY [TULZAPURKAR, J. J 763
Bombay Act had not been comPlied with nor could the enhanced levy A
. be justified under Ordinance No. 47 of 1949 because the State
Gov~rnraent alone had the power thereunder to i.mjlose the duty or
prescribe its rate and not the Kespondent Municipality. To gee
over the effect of this Co.urt' s decision a Validating Act being
GuJarat Act No. 6 of 1~78 was passed whereunder the impositio~ of
octroi levy and collection thereof prior to 30.4.1965 ·was
validated. We are not, however, concerned with the Validating Act
inasmuch as that Act has nothing to do with t~e imposition of
levy for the period on and after l.S.1965 with which the present
appeal is concerned.
It appears that. during the pendency of the aforesaid writ c
petition in the Gujarat High Court the Respondent-Municipality
proceeded to frame its own Octroi Rules and :Bye-laws under the
Bombay Act and after c6mplying with all the procedural steps,
such as publishing the draft Rules and Bye-laws, inviting and
considering objections thereto, etc. the Respondent-Nunicipal_ity ·
I)
passed a Resolution on 17.12.1963 approving the said draft Rules
and Bye-laws whereafter these were forwarded through the Collec-
tor· to the DivisiOnal Commissioner, Rajkot;. the Divisional
Commissioner made some suggestions to the Respondent-Municipality
which were accepted by it; ultimately by his order dated
22.4.1964 the Divisional Commissioner sanctioned the draft Rules
and liye-laws; .however, on March 10, 1905 the State G9vernment (as
in the meantime the post of the Divisional Commissioner was
abolished) issued a Corrigendum to the sanction that had already
been accordea with a view to rectify certain printing or
typographical errors that had come to the notice of the Respon-
dent-Municipality ana thereafter the Respondent-Municipality
passed a General Board Resolution dated 29.3.1965 resolving to
bring into force these H.ules a~ Bye-laws called "The Dharanga- F
dhra Municipality Octroi Rules and Octroi Bye Laws"" with effect
from 1.5.1965. The requisite Notification bringing these into
force on and from 1.5.1965 was isSued under s. 103 of the Gujarat
Act. It may be stated that in the meantime the Bombay Act had
been repealed by the Gujarat Act whicl1 had come into fore€ with
effect from 1.1.1965.
By the aforesaid Octroi Rules and Bye-laws, 1965 the
Kespondent Municipality increased the octroi rates by 12-1/2% on
all the goods brought within the Municipal liml.ts of Dharangadhra
and also made some changes in the classification of goods so
brought in; pursuant thereto it issued bills of octroi payable H
every month. Feeling aggrieved by this action of the Respondent
Municipality the Appellant filed a writ petition (No. 786 of
764 SUPR!!.Mt: COURT !(EPORTS [l985J SUPP.2 s.c.R.
A
1965; on 20.7.1965 in the Gujarat High court challenging the ievy
of octroi at the en:.anced rate under the said Octroi Rules and
llye·-laws on several grnu;;,cs and sought an order restraining the
Respondent,-Municipuity frw. levying and collecting an~/or
' enforcing tne recovery theteo! 1a any manner. 'Ihe High Court by
its Judi;ment and order dated tl•e 21st January 1971 negatived all
the grounds of cMllenge and dismissed the writ petition but by
its order dated 8.W.1971 granted a certificate of fitness for
appeal to· this Court under Art. 133 (l)(a) and (b) of the
Constitution and hence the instant appeal by the appellant.
Though the levy of octroi duty at the enhanced rate under
the impugned Octroi Rules and Bye-laws 1965 was challenged on
c several grounds in the High Court, counsel for the Appellant in
this appeal has raised only three contentions on the basis of
which the invalidity of those Octroi Rules and Bye-laws has been
pressed into service before us, namely:
(i) Since the exemption from the operation of the
Octroi Ordinance No. 47 of 1949 as contemplated by
0
Rule 3 as well as by Bye-law 3 was not granted by the
State Government the Municipal Octroi Rules and Octroi
Bye-laws 1965 could not be said to have come into
force and the Respondent Municipality had no authority
or power to bring them into force with effect from
1.5.1965 and therefore, the levy to the extent of the
enhanced rate is bad in law.
(ii) That the impugned Octroi Rules and Bye-laws were
framed by the Respondent Municipality under the Bombay
Act and sanction thereto had also been accorded by the
Divisional Commissioner RaJk.ot under the Bombay Act on
F
l2nd April 1964 but since the Bombay Act was repealed
by s. l79\l) of the GuJarat Act with effect from
1.1.1965 and since these Octroi Rules and Bye-laws
were not brought into force before the repeal of the
Bombay Act they would have no force of law as sub-s.
(2) of s •. 279 of the Gujarat Act does not save them
G
because under clause (Yi) of sub-s.(2) of s. 279 only
such Rules and Bye-laws framed under the Repealed Act
which were immediately in force prior to 1.1.1965
would stand saved.
(iii)That the Corrigendum to the Octroi Rules and Bye-
u laws issued by the Gujarat Government on 10.3.1965 was
DHl\RANGADHRA QlliMICAlS v. MUNICIPALITY [TULZAPURKAR, J.J 765
not by way of purely correcting typographiCal or prin- A
tini errors but virtually amounted to a .modification
(like inserting Sub-Ru,J.e (5) in &.le 5) of the Rules
and Bye-laws without following. the procedure de ~'
and, therefore, the ~mpugned Gctroi i<.ules and bye-laws
could not: be said to be valid- and could not be brougi1t
into force.
in out view there is no substai1ce in any oi these cvn.ce;;:.. tio:;.13 ar&.
we proceed' to give Our reas-ons for our View in cegarci t.o each
presently.
A..c; re·gards the first contentiOil rai8ed by c:vuns{!l tor t~1e G
appeliant it will be necessary to see what Rule ) &mi i>y..-law 3
of tlie Municipal Octroi Rules and Bye-laws, 1965 provide; both
are in identieal language and purport to deal wittl the commence-
ment of these Municipal Rules and Bye-laws and state these Rules
and Bye-laws:
))
''shall come into force after an exemption is granted
hy the. Government from the Saurashtra Tewninal Tax and
Octro1 Ordinance No. 47 of 1949 and the Rules framed
thereunder whi.ch are at pre6ent in force.··
Counsel pointed out that admittedly prior to 1.5.1965 when these
Municipal Rules and !lye-laws were purportedly brou;;ht into force E
no exemption from the Octro1 Ordinance No. 47 of 1949 and the
Rules framed thereunder was granted by the State Government as
contemplated by ttle aforesaid provision which could and ought to
have been done by issuing a Government Notification withdrawing
or deleting the Dharangadhra town and its Municipality from
Schedule I to that Ordinance.- Counsel urged that in view of tP.e F
cl~e l~nguage of tne above provision the granting of such
exemption must be regarded as a condition precedent to the coming
into force of these Municipal Octroi Rules artd Bye-Laws and since
the condition precedent was not complied with these Rules could
not be said to have come into force and the levy at the enhanced
rate would be bad in law. Counsel urged that the High Court has G
erro~eously treated the insertion of Rule 3 and Bye-law 3 which
relate tu the c.ommencement of these Rules and Bye-laws to be a
mere surplusage.
In our view- the coatention proceeds upoa a misconception: of
th•.: legal pO:>l.tioa in. the ID.a.tt~!' aild· ignores the Objec:. with li
wa.icil the Ordinance of 1949 had been promulgated as also the
766 SUPREME COURT REPORTS [l985j SUPP.2 s.c.R.
A
object of inserting Rule 3 and Bye-law 3 in the Municipal Octroi
Rules and Bye-laws 1965. It cannot be disputed that the subject
matter dealt with by the Ordinance and the Govenunent Rules
framed thereunder was levy and collection of octroi duty and the
subject matter dealt with by the Bombay Act and the Municipal
Rules and Bye-laws framed thereunder (and said to be continued
B
under the Gujarat Act) is also levy and collection of octroi
duty; in ·other words both the pieces of legislation, validly
enacted and intended to operate within Municipal limits of the
Respondent-Municipality, deal with the same subject matter. In
such a situation if there is a repugnancy between the two pieces
of legislation, to such an extent that both cannot stand together
and operate simultaneously, the later will have the effect of
c impliedly repealing the former.
It is true that repeal by implication is not ordinarily
favoured by the Courts but the principle on which the rule of
implied repeal rests has been stated in Maxwell on 'Interpreta-
tion of Statutes' (Twelfth Edition) at page 193 tubs:
D
"If, however, the provisions of a later enactment are
so inconsistent with or repugnant to the provisions of
an earlier one that the two cannot stand together the
earlier is abrogated by the later". (vide Kutner v.
Phillips) [1891] 2 Q.B. 267 at 272.
E
In Zaverbhai Amalclas v. The State of Bombay [1955 J 1 s.c.R. 799,
this Court has approved the above principle in the context of two
pieces of legislation, namely, The Essential Supplies (Temporary
Powers) Act, 1946 as amended by Act LI! of 1950 ( a Central Act)
and Bombay Act No. XXXVI of 1947 the provisions whereof in the
context of enhanced punishment were repugnant to each other. The
F
Court held that the question of punishment for contravention of
orders u.~der the Essential Supplies (Temporary Powers) Act both
under the Bombay Act and the Central Act constituted a single
subject matter and in view of Art. 254(1) of the Constitution Act
LU of 1950 (Central enactment) must prevail. The Court quoted
with approval Lord Goddar's observations in Smith v. Benabo
[1937] 1 K.B. 518, namely "It is a well settled rule of construc-
G
tion that if a later statute again describes an offence created
by a previous one, and imposes a different punishment, or varies
the procedure, the earlier statute is repealed by the later
statute." After quoting these observations the Court went on to
say:
"It is true, as already pointed out, that on a questi-
H
on under Art. 254(1) whether an Act of Parliament
DHARANGAD!IRA CHEMICALS v. MUNICIPALITY [TULZAPURKAR, J.] 767
A
prevails against a law of the State, no question of
repeal arises;· but the principle on which the rule of
implied repeal rests, namely, that if the subject
matter of the later legislation is identical with that
of the earlier, so~that they cannot both stand togeth-
er, then the earlier is repealed by the later enact- B
ment, will be equally applicable to a question under
Art. 254(2) whether the further legislation by Parlia-
ment is in respect of the same matter as that of the
State law. We must accordingly hold that section 2 of
Bombay Act No. XXXVI of 1947 cannot prevail as against
sec, 7 of the Essential Supplies (Temporary Powers) c
Act No. XXXIV of 1946 as amended by Act No. LII of
1950."
The aforesaid principle of implied repeal has been approved and
applied in a couple of other decisions of this Court, particular-
ly in T. Baral v. Henry Ah Hoe and Another [1983] 1 s.c.R. 905. D
In the instant case the two pieces of legislation are so
inconsistent with or repugnant to each other that both cannot
stand together and such repugnancy arises from (a) the conferal
of power to levy duty on two different bodies, namely, the State
Government under the Ordinance and the Municipality under the E
apporpriate Act and obviously the exercise of .the power con-
currently by both the bodies would be incongruous and entirely
destructive of the object for which the power was conferred, and
(b) the enhanced rate of duty prescribed by the Municipal Rules
and Bye-laws - a situation. similar to enhanced punishment
·provided by a later enactment. Having regard to such repugnancy
obtaining between the ·two pieces of legislation dealing with the F
same subject matter the later in point of time will have the
effect of displacing the former by necessary implication. That
such implied repeal or displacement was within the contemplation
of the legislative authority which issued the Ordinance of 1949
will be amply clear if regard is had to the object with which the
Ordinance came to be promulgated. The avowed object of the
Ordinance was to enable the State Government to levy and collect G
octroi duty in towns and cities of the erstwhile State of
Saurashtra and to pass on the duties so collected by it to those
towns and cities until Municipalities therein were constituted
under the appropriate Act and those Municipalities made their own
Rules and Bye-laws enabling them to levr and collect octroi and
other usual Municipal taxes; clause (9) of the Ordinance made H
express provision for making over such collections to concerned
768 SUPREME COURT REPORTS [1985] SUPP.2 s.c.R.
A towns and cities. That such was the object of the Ordinance has
been clearly stated by this Court in Mulcbaud Odhavji v. Rajkot
Borough Municipality, A.I.R. 1970 S.C. 685. In other words the
. .
Ordinance and the Government Rules framed thereunder were a stop
gap measure, being transitional in character which would auto-
matically cease to operate no Sooner the concerned Municipality
B (here Dharangadhra Municipality) made. and published its own
Octroi Rules and Bye-laws under the appropriate Act:
To counter Act the inference of implied repeal, strong.
reliance was placed by Counsel for the appellant on the language
used in Rule 3 and Bye-law 3 which state that these Rules shall
come into force after the exemption from the Ordinance and the
C Rules the~eunder has been granted and according to Counsel such
language negatives any suggestion of implied repeal. In our view
Rule 3 as well as Bye-law 3 proceed on a mistaken assumption of
law that the exemption from the Ordinance and the Rules framed
thereunder was necessary before the Municipal Rules and Bye-laws
could be enforced. Once the Municipal Rules and Bye-laws are
validly made and also validly brought into force by following the
D requisite procedure prescribed in that behalf under the appro-
priate Act the earlier Government Rules would stand pro-tanto
repealed notwithstanding what is contained in Rule 3 or Bye-law
3. The legal effect of such a provision (as is contained in Rule
3 or Bye-law 3) would not be and is not to restrain or prevent
the municipalities from bringing into force its Rules and
·i:: Bye-laws by following the prescribed procedure. The real aim and
object of Rule 3 or Bye-law 3 seems to be to prevent double
taxation. If the insertion of Rule 3 or Bye-law 3 was because of
a wrong belief or assumption made in the matter of the legal
position the Court has to disregard such belief or assumption,
for, it is well settled that "the beliefs or assumptions of those
F who frame Acts of Parliament cannot make the law" (vide Lord
.Radcliffe in Inlaod Revenue v. Ilolidell O'Mabooey & Co. Ltd. 1952
All England Law Reports 531 at 544). Therefore, the Municipal
Rules and Bye-laws 1965 having been validly brought into force
after following the prescribed procedure in that behalf, the
government Rules under. the Ordinance got impliedly repealed.
G
Counsel for the appellant also raised the question as to
whether the Municipal Rules and Bye-laws being subordinate piece
of legislation could repeal either expressly or by implication
the Ordinance promulgated by Rajpramukh and the Rules framed
thereunder by the State Government and urged that the Municipal
11 Rules or !Sye-laws could not do so; he further urged that for
DHARANGADHRA CHEMICALS v. MUNICIPALITY (TULZAPURKAR, J.] 769
A
effecting such repeal the Municipal I\Ules and Bye-laws, 1965
should have at least been raised to the stat\ls of parent legisla-
tion by dee'lling them to have been incorporated in the Statute as
is done···in some cases like .the town Planning Acts which provide
that as soon .as a final· town planning scheme comes.into force it
shall be ·deemed ..to have been incorporated. in. the Att :itself. The
B
contention. as formulated really 11\isses the vital aspect that the
effective charge and leVY. of the .octroi. is imposed by the Rules
and not by the paren.t legislation, be .it an Ordinance or the
appropriate MunicipaJ. Act. The parent. legislation .me~ely confers
power on the. specified body or authority t.o frame .Rules for the
purpose of. leVYing and collecting ?Ctroi duty. Under the
Ordinance of 1949 it was the State Government on whom such power
c
had been conferred while under the appropriate Act such power has
been conferred, on the concerned Municipality; in either case the,
leVY and collection.of. the duty is by means ot' subordinate legis,.:
lation and .if such subordinate legislation is validly enacted by
following the prescribed procedure under the parent le.gislatiqt)
there is .no reason why .such subordinate legislation ·shouid ·not
have the effect of .impliedly· rep~ling the ~rli~r subordinate
legislation and no question.of one ·named body or authority being
lower than the other can arise; iil. ...other words the. stS:tus or
character of the Rule making body would be irrelevant. 'rn this'
view of the· matter there would be no· nece;~ity of . raising th~
Municipal Rules and Bye-laws .t.o highe~.. stat;,s · to th.e parent
Legi.slation as contended by . the Couns'll f\)r. the appellant. The E
first contention therefore fails. · · ··
. Having thus rejected the first.contention' of .. the appellant
for the reasons. indicated above it is UIIDecess.ary ·tor us : t,o
consider the effect of deletion of Rule. 3. and .Bye-law 3" from
these Oc.troi Rules· and By.,:...laws done: by th~· respondi.nt Muni~i: F
pality and ·which d~letion ·was .sanctioned by.· the State GOvernment.
on 13.4.1966. as such action was clearly taken ex major eauteia .
and the operation. o{ .these Rules and Bye-laws. cannot on' :chat.
account be ,postponed but ·these.. will have to be regarded as
having
come int9 force with.effect from 1.5.1965. · '·· ·
G
.The. second contention relates. to t,he effect . ot .. i:he· l~epe~i_-·'oi
the Bombay Act under s. 279(1). of the Gujarat Act. The quest'fon
is what has been saved.under sub-s. (2) of s; .279 after effecting
such repeal. Counsel for the appellant referred to .cliuse (vi) of
S\lb-S. (2) which runs thus: . ' ..
H
"(2) Notwit.hstandfog the repeal of the said Acts,-
770 SUPREME COURT REPORTS [1985] SUPP.2 s.c.R.
A (vi) any appointment, notification, notice, tax, fee,
order, scheme, licence, permission, rule, bye-law, or
form made, issued, imposed, or granted in respect of
the said boroughs or districts and in force immediate-
±l_ before the date of the commencement of this Act
shall in so far as they are not inconsistent with the
l! provisions of this Act be deemed to have been made,
issued, imposed or granted under this Act in respect
of the borough and shall continue in force.until it is
superseded or modified by any appointment, notifica-
tion, notice, tax, fee, order, scheme, licence,
permission, rule, bye-law, or form made issued,
imposed or granted under this Act;"
c
Relying upon the words "and in force immediately before the date
of the commencement of this Act" occurring in the above provision
counsel urged that the Municipal Octroi Rules and Bye-laws in
question -had been merely framed and at the most had been
sanctioned under the repealed Act (the Bombay Act) but these had
not been brought into force immediately before the date of the
D commencenient of the Gujarat Act, namely, 1.1.1965 and, therefore,
could not be said to have been saved under the aforesaid provi-
sion. Counsel pointed out that the aforesaid clause (vi) uses
both the expressions "order" and "Rule and Bye-law" separately
and therefore, Rules and Bye-laws cannot be confused with the
order of sanction passed herein by the Divisional Commissioner on
E 22.4.1964. It is not possible to accept this contention for more
than one reason. In the first place admittedly the Municipal
Octroi Rules and Bye-laws were validly made by the respondent
Municipality on 17.12.1963 by following the procedure prescribed
by the Bombay Act, whereafter these were forwarded to the Divi-
sional Commissioner made some suggestions which were accepted by
F the respondent Municipality; and ultimately by his order dated
22.4.1964 the Divisional Commissioner sanctioned these Rules and
Bye-laws. In other words up to this stage everything was validly
done under the Bombay Act prior to its repeal on 1.1.1965. Under
clause (vi) of sub-s. (2) any order made and which was in force
imnediately before the commencement of the Gujarat Act has been
G saved, inasmuch as it is provided that such order shall be deemed
to have been made under the Gujarat Act and will continue to
operate until modified or rescinded by another order passed under
the Gujarat Act. If the Divisional Commissioner's order sanction-
ing the Rules and !!ye-laws is thus saved that order cannot be
looked at divorced frcim what was sanctioned thereunder; what was
H sanctioned would be a part and parcel of the order of sanction.
DHARANGADHRA CHEMICALS v. MUNICIPALITY [TULZAPURKAR, J.] 771
To say that merely the order of sanction dated 22.4.1964 is saved A
and not the Rules and Bye-laws is to view the order of sanction
in the air. In substance what is saved are the sanctioned Rules
and Bye-laws. It is true that clause (vi) uses both the expres-
sions 'order' and 'Rule and Bye-law' separately and distinct from
each other but such separate or distinctive use is conceivably
made to cover different situations. In a case where the order ·B
that is saved happens to be an order sanctioning Rules and
Bye-laws the two will have to be regarded as part and parcel of
single instrument which.is saved in its entirety. In other words
what is saved under clause (vi) of sub-s. (2) of s. 279 are the
sanctioned Municipal Octroi Rules and Bye-laws, 1965.
c
Secondly the question could be considered under s. 7(b) of
the Bombay General Clauses Act, 1904. Section 7 deals with the
effect of repeal and reads thus:
"7. Where this Act or any Bombay Act or Gujarat Act
made after the comDl<mcement of this Act, repeals any D
enactment hitherto made or hereafter to be made, then
unless a different intention appears, the repeal shall
not-
(a) xx xx xx
(b) affect the previous operation of any enactment so E
repealed or anything 'duly done or suffered
thereunder;"
The Divisional Commissioner's . order according sanction is
obviously saved thereunder but even Rules and Bye-laws could be
covered by the ·expression "anything duly done" occurring in F
clause (b) above inaslllllCh. as the expression "anything duly done"
would be comprehensive enough to take in not only the things done
but also the effects or legal consequences flowing therefrom. In
M/ s Universal Imports Ageucy and Another v. 1be au.et Controller
of Imports and Exports & Others, [1961] l s.c.R. 305, while
interpreting the expression "things done" occurring in para 6 of G
the French Establishments' (Application of Laws) Order,. 1954,
this Court has taken the view that such expression is comprehen-
sive enough to take in not only things done but also the effects
or the legal consequences flowing therefrom. In so interpreting
the said expression the Court followed the English decision in
1be Queen v. Justice of the Vest ll1diog of Yorkshire, [1876] l H
Q.B.D. 220, where the notice was given by a Local Board of Health
772 SUPREME COURT REPORTS [1985] SUPP;2 s.c.R.
, of-intention to make a rate under the PUblic Health Act, 1848,
A and the amending Acts but before the notice had expired these
Acts were repealed by the Public Health Act, 1875 which contained
a saving- of "anything duly done" under• the repealed enactments,
but the Local Board, in ignorance of the repeal, made a rate
purporting to be under the repealed Act, and it was held that as
B the notice was given before the repealing Act the making of the
rate was also saved by the words "anything duly done" under the
· repealed enactments. This Court pointed out that the . English
'decision was illustrative of the point that it is not necessary
that an impugned thing in itself should have been done before the
C Act was repealed but it would be enough if it was ·integrally
connected with and was a legal consequence of a thing done before
the said repeal. Therefore, it is not possible to accept the
·contention that merely the, order of sanction was saved and not
the Municipal Octroi Rules and Bye-laws, 1965•
D As regards the last contention it is difficult to accept
.that the Corrigendum dated 10.3.1965 amounts to modification of
the Rules and Bye-laws. The material on record clearly shows that
corrigendum was issued with a view to rectify typographical
errors or mistakes that had crept in the typed copies of the
E Rules and Bye'-laws forwarded to the Divisional Commissioner which
had come to the notice of the Responent-Municipality. Even the
omission of sub-rule (5) of Rule 5 in the copies forwarded
appears to be an inadvertant typographical mistake. Besides, so
far as the· Rules are concerned the High Court has rejected the
F contention on the basis that the corrigendum even if it is held
to amoiint to modification in regard to sub-rule (5) of Rule 5 the
same cannot be held to be outside the powers of the Govei:'nment.
·The contention is, therefore, rejected.
,.
G In the _result the· appeal fails and is dismissed. There will
·be-no.order as to costs.
Appeal dismissed.
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