G. H. SAIYAD v. SITABEN GOPALDAS — 1970 DIGILAW 143 (GUJ)

B. J. DIVAN, J. ( 1 ) THE appellant herein is an Octroi Inspector of the Ahmedabad Municipal Corporation and had filed a complaint against the first respondent for an offence alleged to have been committed by the first respondent the original accused under sec. 399 of the Bombay Provincial Municipal Corporation Act 1949 hereinafter referred to as the Act. The allegation against the accused in the complaint was that a requisition in Schedule I was issued under rule 11 of the Octroi Rules of the Corporation and yet the accused to whom this requisition was issued had failed to comply with that requisition and that thereby she committed an offence punishable under sec. 399 of the Act read with rule 11 of the Octroi Rules for failure in complying with the requisition. Under this requisition in Schedule I the original accused was called upon to furnish detailed information regarding the goods imported namely dry fruits country medicines etc. imported by the original accused in her capacity as the owner of a firm called Gandhi Chhotalal Mohanlal. The accused was requested to return the requisition form duly filled in and signed by her giving the facts about the goods imported. ( 2 ) AFTER the requisition form was issued on September 4 1967 it was duly served upon the original accused where after some correspondence took place and the authorities found that the accused had not complied with the requisition. The complaint in respect of the offence punishable under sec. 399 of the Act read with rule 11 of the Octroi Rules was filed in the Court of learned City Magistrate 8 Court Ahmedabad. Before the learned Magistrate four points were urged on behalf of the accused. The first point was that rule 11 of the Octroi Rules was not valid as it did not fall within the purview of sec. 457 of the Act read with sec. 149 (1) together with sec. 127 (2) of the Act. The second contention was that there was no delegation of power in favour of the Octroi Superintendent to form a particular opinion or to entertain the reasonable belief referred to in rule 11 of the Octroi Rules and therefore the requisition form issued was not a valid requisition contemplated by rule 11 of the Octroi Rules. The second contention was that there was no delegation of power in favour of the Octroi Superintendent to form a particular opinion or to entertain the reasonable belief referred to in rule 11 of the Octroi Rules and therefore the requisition form issued was not a valid requisition contemplated by rule 11 of the Octroi Rules. The third contention was that the learned City Magistrate could not take cognizance of this particular case as he was not a Special Magistrate as set out in sec. 422 of the Act. The fourth and the last contention of the learned advocate was that under Rule 11 of the Octroi Rules it was requisite that either the Municipal Commissioner or any other officer authorised in this behalf should form the opinion referred to in that rule or must have reason to believe as set out in that rule. It was contended that this opinion or reason to believe may be a subjective matter of opinion of the officer concerned but there must be objective facts on the basis of which the opinion can be entertained or there can be said to be reason to believe and it was contended that in the instant case there were no objective facts on which the officer concerned had formed his opinion but he had formed his opinion merely on suspicion and surmises. Out of these four contentions the learned City Magistrate who tried the case rejected the first three contentions but the fourth contention found favour with him and he accepted the same and acquitted the accused. Thereafter the original complainant applied for leave under sec. 417 of the Criminal Procedure Code to file an appeal. That leave was granted? and thereafter the present appeal has been filed. The very same four contentions were also urged before me at the hearing of this appeal on behalf of the respondent accused. Thereafter the original complainant applied for leave under sec. 417 of the Criminal Procedure Code to file an appeal. That leave was granted? and thereafter the present appeal has been filed. The very same four contentions were also urged before me at the hearing of this appeal on behalf of the respondent accused. ( 3 ) TAKING up the point which found favour with the learned City Magistrate the main contention on behalf of the accused was that under rule 11 of the Octroi Rules the Commissioner of the Municipal Corporation or any other officer authorised in this behalf should form the opinion or must have reason to believe that it is necessary in the interest of municipal revenue to issue a requisition notice as per Schedule I or in such a form as may be prescribed by the Municipal Commissioner and if such an opinion is formed or if there is such belief then the requisition notice contemplated by rule 11 can be issued. Relying upon the decision of Shelat J. in Berium Chemicals Ltd. v. Company Law Board A. I. R. 1967 S. C. 295 it was urged before me that there must be objective facts in existence and it is only in the light of those objective facts that the opinion can be formed or belief can be entertained. It was contended before me that it was not open to the Court to examine the sufficiency or adequacy of the grounds but if there are no grounds whatever or if the grounds are such as no reasonable person would believe or if the grounds have no rational connection with the subject matter in such cases the Court can hold that the opinion was not formed or that there was no reason to believe as contemplated by rule 11. At p. 323 of the report in Barium Chemicals case Shelat J. has observed in para 60:-THOUGH an order passed in exercise of power under statute cannot be challenged on the ground of propriety or sufficiency it is liable to be quashed on the ground of mala fides dishonesty or corrupt purpose. At p. 323 of the report in Barium Chemicals case Shelat J. has observed in para 60:-THOUGH an order passed in exercise of power under statute cannot be challenged on the ground of propriety or sufficiency it is liable to be quashed on the ground of mala fides dishonesty or corrupt purpose. Even if it is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers since the authority has to act in accordance with and within the limits of that legislation its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it did not apply its mind to the relevant facts. Again in para 63 at p. 324 of the report Shelat J. has observed:-THE words reasons to believe or in the opinion of do not always lead to the construction that the process of entertaining reason no believe or the opinion is land altogether subjective process not lending itself even to a limited scrutiny by the Court that such a reason to believe or opinion was not formed on relevant facts or within toe limits or as Lord Radeliffe and Lord Reid called the restraints of the statute as an alternative safeguard to rules of natural justice where the function is administrative. ( 4 ) THE learned Assistant Government Pleader drew my attention to the fact that in his cross examination the witness for the prosecution G. H. Saiyed the Octroi Inspector had stated that there are Octroi Nakas in every part of city where there is entrance from beyond the city and that the party is asked to fill in F form before goods are imported into City and that for goods imported by the firm of the accused in the year 1965 many notices were given to the firm for submitting bills and no bills were submitted and the fit was prosecuted for non compliance with the notice. Thus it is clear that before the requisition as per Schedule I was issued attempts had been made according to the Octroi Department to get the firm of the accused to produce bills so that the matter of the octroi of goods imported by the accused could be finalised. Under the scheme of the administration of Octroi Rules when a party importing the goods has not got with him the final bill or invoice in connection with the particular item of goods he fills in form F and he has to deposit a certain amount on the basis of the declaration in that form. But subsequently when the importer receives the final bill or invoice he has to produce that final document before the octroi authorities so that the exact amount of octroi in respect of the particular consignment can be adjusted and paid. In this particular case according to this Octroi Inspector many notices in connection with goods imported in the year 1965 were issued but the original bills were not submitted by the firm of the accused and hence the firm was prosecuted for non-compliance with the notices This factor of non-compliance with notices to produce the bills was present before the Octroi Department at the time when the Octroi Superintendent decided to issue the requisition notice as per Schedule I. One Natvarlal Ramdas Patel the manager of the firm of the accused was examined as the defence witness and in his cross examination this witness has stated that sometimes if the bills were not with the firm F form was filled in and the octroi amount was deposited and the goods were brought into the City limits. He denies that a notice was given to the firm for clearance of F form dated 15th January 1965. In spite of this categorical statement recorded in September 1968 this witness nowhere states that his firm had not been prosecuted for non-compliance with notice to produce the original bills. In this state of the record it must be held that notices to produce the original bills in respect of the goods brought into the limits of the City on F form had been issued to the firm of the accused but the firm did not comply with those notices and the original bills were not submitted by the firm and hence the firm was prosecuted. Under these circumstances in my opinion there was some material before the Octroi Superintendent for forming the opinion or entertaining the belief and it cannot be said that that opinion or belief was unreasonable or was not relevant or germane to the requirement of the Octroi Rules. Hence it is clear that objective facts existed and on the strength of those objective facts the opinion could be formed or a reasonable person could have reasonably believed in the interest of municipal revenue to issue the requisition notice in question. ( 5 ) IN support of this argument in this connection apart from the decision of Shelat J. in Barium Chemicals case Mr. Adhyaru for the respondent accused relied on the decision of the Supreme Court in Income Tax Commissioner Gujarat v. A. Raman and Co. A. I. R. 1968 S. C. 49 and the decision of the Privy Council in Ross Clunis v. Papadopoullos and others (1958) 1 W. L. R. 546. So for as the decision of the Privy Council is concerned this decision is considered by Shelat J. in Barium Chemicals case and the principles which are abstracted from that judgment in Barium Chemicals case are arrived at as a result of considering all the earlier decisions including this particular case of the Privy Council. Hence it is not necessary for me to consider in the course of this judgment the observation of the Privy Council in the Ross Clunis case. So far as the judgment in Income-Tax Commissioner v. A. Raman and Co. is concerned what has been observed by Shah J. in para 6 at p. 52 of the report is the same thing as what was held by Shelat J. in more elaborate terms in Barium Chemicals case. The Supreme Court in that case was dealing with the question of issuance of a notice under sec. 147 of the Income-Tax Act 1961 and Shah J. has observed:-THE High Court exercising jurisdiction under Article 226 of the Constitution has power to set aside a notice issued under sec. 147 of the Income-tax Act 1961 if the condition precedent to the exercise of the jurisdiction does not exist. 147 of the Income-Tax Act 1961 and Shah J. has observed:-THE High Court exercising jurisdiction under Article 226 of the Constitution has power to set aside a notice issued under sec. 147 of the Income-tax Act 1961 if the condition precedent to the exercise of the jurisdiction does not exist. The Court may in exercise of the powers ascertain whether the Income-tax Officer had in his possession any information the Court may also determine whether from that information the Income-tax Officer may have reason to believe that income chargeable to tax had escaped assessment. But the jurisdiction of the Court extends no further. Whether on the information in his possession he should commence a proceeding for assessment for reassessment must be decided by the Income-tax Officer and not by the High Court. The Income-tax Officer alone is entrusted with the power to administer the Act if he has information from which it may be said prima facie that he had reason to believe that income chargeable to tax had escaped assessment it is not open to the High Court exercising powers under Art. 226 of the Constitution to set aside or vacate the notice for reassessment on a re-appraisal of the evidence. IN view of what I have stated regarding evidence in the case it is clear that objective facts did exist on the strength of which the opinion contemplated by Rule 11 could be formed or a reasonable person could have reason to believe as required by rule 11 before issuance of a requisite notice as per Schedule I. In view of the clear pronouncement of the Supreme Court on the point it is not necessary for me to consider the decision of the Bombay High Court in In re Jayantilal A. I. R. 1949 Bombay 319 which was relied upon by Mr. Adhyaru for the respondent accused. Adhyaru for the respondent accused. With respect to the learned Magistrate therefore he was in error when he overlooked this evidence on record and merely concentrated to the following passage in the cross examination of the witness for the prosecution:-WE have given notice merely on doubt as firm is a big firm and so it might have evaded payment of the octroi and so we have given notice in I formif this passage were to be read in isolation it would mean that merely on suspicion and doubt this notice came to be issued by the Octroi Department. But when the entire deposition of G. H. Saiyed is read it is clear that it was not on mere doubt or mere suspicion without any material before the Octroi Department that the notice as per Schedule I came to be issued but there was a previous history of non-compliance with the notice for production of original bills and that also must have weighed with the authorities in forming the opinion or in entertaining the belief contemplated by rule 11 of the Octroi Rules. In these circumstances I have come to the conclusion that the learned Magistrate was in error in deciding in favour of the respondent accused on this particular aspect of the case. ( 6 ) AS regards the three points which were rejected by the learned City Magistrate Mr. Adhyaru urged the same three points before me and the first of those contentions is regarding the validity of rule 11 of the Octroi Rules. As the Octroi Rules clearly indicate they have been framed by the appropriate authority under sec. 457 (7) read with sec. 149 (1) of the Bombay Provincial Municipal Corporations Act 1949 (hereinafter referred to as the Act ). Sec. 454 of the Act is in these terms:-THE Corporation may add to Schedule A rules not inconsistent with the provisions of this Act which expression shall in this section be deemed not to include the said Schedule A to provide for any matter dealt with or for any of the purposes specified in the said Schedule A; and may subject to the same limitations amend alter or annul any rule in the said Schedule A. SEC. 453 of the Act lays down that the rules in the Schedule as amended from time to time shall be deemed to be part of the Act. Reading sec. 453 of the Act lays down that the rules in the Schedule as amended from time to time shall be deemed to be part of the Act. Reading sec. 453 and sec. 454 of the Act together it is clear that the Corporation may add to Schedule A rules which may be inconsistent with the contents of Schedule A to the Act but which are not inconsistent with the provisions of the main body of the Act. It has been laid down in sec. 457:-IN particular and without prejudice to the generality of the powers conferred by sec. 454 rules made thereunder may provide for or regulate all or any of the following purposes and matters namely :-XX xx xx xx (7) Municipal Taxes.- (a) The assessment and recovery of Municipal taxes; (b) the conditions on which refunds of municipal taxes shall be allowed; (c) in respect of a tax leviable under sub-sec. (2) of sec. 127 the matters referred to in sub-sec. (1) of sec. 149. SEC. 127 (1) of the Act lays down as under:- for the purpose of the Act the Corporation shall impose the following taxes namely:- (a) property taxes; (b) a tax on vehicles boats and animals. Sub-sec. (2) of sec. 127 lays down:-IN addition to the taxes specified in sub-sec. (1) the Corporation may for the purposes of this Act and subject to the provisions thereof imposes any of the following taxes namely:- (a) Octroi. xx xx xx xx xx. SEC. 149 (1) of the Act lays down the procedure to be followed in levying taxes referred to in sub-sec. (2) of sec. 127 of the Act. Therefore it is obvious that it is open to the Corporation to frame octroi rules under sec. 457 (7) read with sec. 149 (1) and 127 (2) of the Act. Mr. Adhyarus catenation before me was that the rules under sec. (2) of sec. 127 of the Act. Therefore it is obvious that it is open to the Corporation to frame octroi rules under sec. 457 (7) read with sec. 149 (1) and 127 (2) of the Act. Mr. Adhyarus catenation before me was that the rules under sec. 457 (7) did provide for assessment and recovery of municipal taxes the rates thereof the class or classes of persons articles or properties liable thereto and the exemptions therefrom if any to be granted and also for the system of assessment and method of recovery and the powers exercisable by the Commissioner or other officers in the collection of the tax the information required to be given of liability to the tax the penalties to which persons evading liability or furnishing incorrect or misleading information or failing to furnish information may be subjected and such other matters not inconsistent with the provisions of the Act as may be deemed expedient by the Corporation. There is a proviso to sec. 149 (1) of the Act. which provides in respect of the rules framed under sec. 457 (7) of the Act. This proviso is not material for the purpose of this judgment. Mr. Adhyaru contended that rule 11 of the Octroi Rules compels the person on whom a notice in form I is served by the municipal authority to furnish detailed information in form I of the Schedule. But he contended that the matters referred to in sec. 149 (1) of the Act did not provide for elaborate information from the importer or any other person concerned. Clause (c) of sec. 149 (1) merely refers to the information required to be given of liability to the tax and not to any other matter and clause (d) refers to the penalties to which persons evading liability or furnishing incorrect or misleading information may be subjected. Rule 11 of the Octroi Rules does not provide for any such penalty and according to Mr. Adhyaru there was no power in the Municipal Corporation to lay down under Rule 11 that the particular requisition notice as per Schedule I can be issued by the Municipal Commissioner or by other officers empowered in that behalf. In my opinion cl. (d) of sec. 149 (1) falls within sec. 457 (7) of the Act. There is no question of Sch. A being unnecessarily amended. In my opinion cl. (d) of sec. 149 (1) falls within sec. 457 (7) of the Act. There is no question of Sch. A being unnecessarily amended. Hence in my opinion this contention regarding the validity of Rule 11 was rightly rejected by the learned City Magistrate. The next contention of Mr. Adhyaru on behalf of the respondent accused was that under rule 11 of the Octroi Rules it was provided that either the Commissioner or any other officer authorised in this behalf must be of the opinion that it is necessary to issue a requisition notice as per Sch. I. Relying upon certain observations of Raju J. in Chatursing Govindsing and another v. State of Gujarat and another IV G. L. R. 908 Mr. Adhyaru contended that the opinion which was to be formed was only of the Municipal Commissioner and not of the Octroi Superintendent to whom the power was delegated by the Municipal Commissioner under sec. 69 of the Act. It appears that by Office Order No. 122 dated November 3 1953 the then Municipal Commissioner acting under sec. 69 (1) of the Act delegated the power to issue a requisition in form I under Rule 11 of the Octroi Rules. By Office Order No. 329 dated September 2 1958 the then Municipal Commissioner had also delegated the power to issue the requisition in form I to the Octroi Superintendent under Rule 11 of the Octroi Rules. Thereafter on May 17 1960 the Municipal Commissioner had issued a Correction Slip delegating the powers as per Schedule attached thereto and at serial No. 1 is mentioned the power to the Octroi Superintendent under Rule 11 of the Octroi Rules. Thus it is clear that in the beginning the power to issue the requisition as per the Schedule I was delegated to the Octroi Superintendent in 1953 and thereafter it was confirmed in 1958 and 1960. Nothing has been brought to my notice to show that the power to issue the requisition had subsequently been taken away from the Octroi Superintendent. Raju J. held in Chatursings case (supra) that sec. 164 of the Act vests the power of giving of a notice in the Commissioner only but this power is subject to the requirement that the premises are in his opinion without sufficient means of effectual drainage. Raju J. held in Chatursings case (supra) that sec. 164 of the Act vests the power of giving of a notice in the Commissioner only but this power is subject to the requirement that the premises are in his opinion without sufficient means of effectual drainage. He held that the function of forming the opinion that the premises are without sufficient means of effectual drainage had not been delegated. Mr. Adhyaru urged before me that though the power to issue notice might have been delegated the function of forming the opinion referred to in rule 11 had not been delegated to the Octroi Superintendent. With respect to Raju J. I am unable to follow his conclusion because it seems that a portion of the provision of sec. 69 (1) of the Act seems to have been over looked. Sec. 69 (1) of the Act provides for the delegation of powers of the Municipal Commissioner and there is an important provision in sec. 69 (1) of the Act namely to the extent to which any municipal officer is so empowered the word Commissioner occurring in any provision in the Act shall be deemed to include such officer. Therefore after the delegation of powers by the Municipal Commissioner to the Octroi Superintendent under Rule 11 of the Octroi Rules the reference to Municipal Commissioner must be deemed to include the Octroi Superintendent and therefore the function of forming the opinion that it is necessary to issue the required notice as per Schedule I had been delegated to the Octroi Superintendent. In my opinion the decision of Raju J. in Chatursings case can be distinguished as it was on a footing of per incuriam and hence this contention of Mr. Adhyaru also fails. ( 7 ) THE last contention of Mr. Adhyaru was that the learned City Magistrate had no jurisdiction to try this particular offence. He contended that under sec. 422 (1) of the Act the State Government has been empowered to create with the consent of the Municipal Commissioner one or more posts of Magistrates of the First Class for the trial of offences against the Act or against any rule regulation or by law made thereunder and to appoint any person to such post and to also appoint ministerial officers for the Court of any such Magistrate. The proviso to sub-sec. (1) of sec. The proviso to sub-sec. (1) of sec. 422 provides that notwithstanding the appointment of one or more Magistrates of the First Class under the section it shall be open to the District Magistrate subject to the rules for the time being in force under sec. 17 of the Code of Criminal Procedure 1898 regulating the distribution of business in the Courts of Magistrates of the First Class to make such distribution of the work of trial of such offences and of all other work before the Courts of Magistrates (including any appointed under the section) as may appear to him most conducive to efficiency. This argument of Mr. Adhyaru proceeds on the footing that the Court contemplated by sec. 422 (1) of the Act is the only Court which can try offences for breach against the Act or any rule or regulation made under the Act. This contention must be rejected because of sec. 427 (2) of the Act. That section is in these terms:-NOTWITHSTANDING anything contained in the Code of Criminal Procedure 1898 all offences against the Act or against any rule regulation or by law whether committed within or without the City shall be cognizable by a Magistrate of the First Class having jurisdiction in the City and no such Magistrate shall be deemed to be incapable of taking cognizance of any such offence or of any offence against any enactment hereby repealed by reason only of his being liable to pay any municipal tax or of his being benefited by the municipal fund. IT is therefore clear that under sec. 427 (2) of the Act the Legislature has conferred jurisdiction on the City Magistrates who exercise jurisdiction in the City to try offences against the Act or against any rule regulation or by law made under the Act. This contention of Mr. Adhyaru must therefore fail. In view of sec. 427 (2) of the Act I am of the view that the learned City Magistrate who had tried the case had the jurisdiction to try the case. ( 8 ) UNDER these circumstances I allow this appeal filed by the original complainant who is the Octroi Inspector convict respondent No. 1 original accused of the offence punishable under sec. 399 of the Bombay Provincial Municipal Corporations Act for breach of rule 11 of the Octroi Rules inasmuch as the notice in Schedule I was not complied with. ( 8 ) UNDER these circumstances I allow this appeal filed by the original complainant who is the Octroi Inspector convict respondent No. 1 original accused of the offence punishable under sec. 399 of the Bombay Provincial Municipal Corporations Act for breach of rule 11 of the Octroi Rules inasmuch as the notice in Schedule I was not complied with. I sentence the accused to pay a fine of Rs. 15/ (Rupees fifteen only) in default simple imprisonment for one week. .