ORDER Arun Mishra, J. In these two writ petitions common question arises for consideration whether Municipal Council, Umaria can impose export tax at a higher rate than prescribed by the State Government in rules called Terminal Tax (Assessment and Collection) on the Goods exported from M.P. Municipal Limits, Rules, 1996 and whether the taking out of liquor in the facts and circumstances of the case amounts to export making the transaction exigible to export tax, hence the petitions are being decided by this common order. Facts are being taken from WP No. 5215/99. Export tax on liquor has been imposed at the rate of 2%; petitioners were issued demand notices by Municipal Council, Umaria; Lal Narayan Singh petitioner in WP No. 5215/99 took a contract for sale of country liquor for Umaria group of shops for the year 1-4-1999 to 31-3-2000. Petitioner submits that as per condition of licence, the petitioner has to take the stock of country liquor from the Umaria Warehouse after depositing of the amount. Petitioner is entitled to transport the stock from the Warehouse to his shops situated outside Municipal Limits. Petitioner submits that after depositing the excise duty at the rate of Rs. 24 per proof ltr. the petitioner gets the permit to transport the stock from the Warehouse to his shops. Municipal Council passed a resolution on April 29th, 1999 whereby export tax at the rate of 2% was imposed on the stock which is taken for sale outside the Municipal limits. Resolution is Annexure P/2 on record. It appears that Municipal Council, Umaria took the shelter of the rules for collection of terminal tax on export of all kinds of Burnable Woods, Building Woods, Mines Coal and Wooden Coal Rules, 1984 and decided to impose the tax on liquor at the rate of 2% purporting to exercise the power u/s 127(1) read with sections 129 and 130 of M.P. Municipalities Act, 1961. Petitioner submits that no export tax is exigible as taking out of liquor from the Municipal Limits does not amount to export. Procedure of imposing the export tax has not been properly followed. In the return filed by respondent Municipal Council in WP No. 5215/99 it has been contended that Municipal Council is having the power u/s 127(1) to impose various taxes as detailed therein under clause (XVI) of section 127(1). Procedure of imposing the export tax has not been properly followed. In the return filed by respondent Municipal Council in WP No. 5215/99 it has been contended that Municipal Council is having the power u/s 127(1) to impose various taxes as detailed therein under clause (XVI) of section 127(1). The State Government exercising its power u/s 127(2) of the Act framed Umaria Municipalities Terminal Tax on Export of all kinds of Burnable Woods, Building Woods, Mines Coal and Wooden Coal Rules, 1984. The State Government further framed M.P. Municipalities Terminal Tax on Goods or Animals imported into or exported from the limit of Municipal Council Rules, 1991. State Government vide notification (Annexure P/2) dated 15th December, 1995 further fixed the terminal tax permitting the Municipalities to impose terminal tax on the export or import of the goods at the rate stated therein. The State Government laid down the rate of tax on Alcohol as per Annexure R/3 at the rate of 3%. The imposition is only 2% as such action of Municipal Council is justified. The facts in WP No. 538/2001 are same except the contract was given to the petitioner for the year 1-4-2000 to 31-3-2001 for retail sale of country made liquor. Learned counsel for petitioners relies on The Terminal Tax (Assessment and Collection) on the Goods exported from M.P. Municipal Limits, Rules, 1996 (for short "the Rules of 1996") which came into force on March 7th, 1997. Learned counsel submits that on liquor the rate prescribed is 1%. Thus, action of Municipal Council in taking the shelter of Rules of 1984 is not permissible. It is also the submission raised by the learned counsel for the petitioner that the petitioner is given the liquor by the Government within the Municipal Limits of Umaria and he used to take it out of the Municipal Limits under the condition of licence. The transaction does not amount to that of export. He presses into service the decision of the Apex Court in Mafatlal Industries Ltd. Vs. Nadiad Nagar Palika and Another, . Shri R.S. Jha, learned Dy. The transaction does not amount to that of export. He presses into service the decision of the Apex Court in Mafatlal Industries Ltd. Vs. Nadiad Nagar Palika and Another, . Shri R.S. Jha, learned Dy. Advocate General appearing for the State submits that in case there are any rules specifically framed as per the requirement of sections 127 and 129 by the Municipal Council and they have been approved by the State, same have to prevail; the rules of 1996 came into force with effect from 7th March, 1997 from that date the rules of 1996 have to prevail. Learned counsel appearing for the Municipal Council Shri Pankaj Jaiswal and Shri Manoj Rajak submits that Municipal Council is having the powers under the Rules of 1984 to impose the export tax at the rate of 2% and the Municipal Council has taken a decision as per Annexure P/2 to extend the Rules of 1984 with respect to the liquor also, thus the action is in accordance with law. The first question to be examined is whether the action of the Municipal Council for prescribing the rates at 2% on export of liquor is permissible. Rules of 1996 framed by State of M.P. came into force from 7th March, 1997. These rules specifically prescribe the rate on all sorts of liquor at the rate of 1%. Rule 9 of the Rules provides that from the date of commencement of these rules, the M.P. Municipalities Terminal Tax on the Goods and Animals Imported into or Exported out of the Municipal Limits (Assessment and Collection) Rules, 1991 shall stand repealed. Under sub-rule (2) rule (1) of the rules prescribes that these rules shall come into force in Municipal Corporation, Municipal Council and Nagar Panchayat under clause XVI of sub-section (1) of section 127. These rules shall come into force from the date of publication of these rules in M.P. Rajpatra. Sub-rule (2) of rule (1) of Rules of 1996 is quoted below:- (2) These rules shall come into force in a Municipal Corporation, Municipal Council and Nagar Panchayat on such date on which such Municipal Corporation under clause (o) of sub-section (2) of section 132 of M.P. Corporation Act and Municipal Council or Nagar Panchayat under Clause (xvi) of sub-section (1) of section 127 of M.P. Municipalities Act, 1961, impose the terminal tax on goods exported from the municipal limits. Provided that where the Corporation or Council has already imposed the said tax, these rules shall come into force from the date of publication of these rules in the M.P. Rajpatra. Power under sub-section (1) of section 127 of M.P. Municipalities Act is subject to general or special order of State Government in this behalf. Sub-section (6) of section 127 of the Municipalities Act also makes it clear that in addition to tax specified in sub-section (2) of section (1) subject to any general or special order may impose any of the taxes mentioned in sub-section, clause (n) of sub-section (6) of section 127 provides for imposition of terminal taxes on goods or animals exported from the limits of the Council. Thus, the power of Municipal Council is not unfettered it cannot violate the general or special order issued by the State Government. In the instant cases statutory rules framed in the year 1996 by State Govt. contain general provisions. Reliance on the rules of 1984 by Municipal Council is not permissible for the reasons under rules of 1984 Terminal Tax can be levied on export of all kinds of burnable woods, building woods, mines coal and wooden coal from the limits of Municipality as provided under rule 5 of the Rules. Rule 5 of the Rules of 1984 makes it clear that the terminal tax shall be levied on coal and woods. The procedure prescribed u/s 127 was followed with respect to those articles mentioned specifically in the rules of 1984. The 1984 Rules were framed in exercise of powers conferred by clauses (a) and (b) of sub-section (2) of section 127 and sub-section (1) of section 355 and sub-section (5) of section 356 of M.P. Municipalities Act; the Rules of 1984 are totally inapplicable to the liquor. Thus, it cannot be said that simply by passing a resolution it was open to Municipality to impose tax in question; at higher rate than prescribed under the Rules of 1984 which have not been amended, hence no such tax on liquor could be imposed under Rules of 1984. While passing the impugned resolution P/2 the procedure prescribed u/s 129 was not followed. State Government has not approved by any general or special order the imposition of tax at the rate of 2%; the resolution P/2 was not at all referred to the State Government for its approval. While passing the impugned resolution P/2 the procedure prescribed u/s 129 was not followed. State Government has not approved by any general or special order the imposition of tax at the rate of 2%; the resolution P/2 was not at all referred to the State Government for its approval. It runs contrary to the statutory rules of 1996 already in force which cannot be superseded by a resolution but only by rules framed by Municipality with approval of Government. In Chief Municipal Officer, Nagar Panchayat, Kymore (MP) Vs. Eternit Everest Ltd. and Another etc., this Court laid down that Municipal Council exercises legislative function while imposing export tax; the same statutory function cannot be undermined or be superseded by issuing of any circular or exercising the statutory power by any authority under the Rules. It was also laid down that State Government could have framed the rules, therefore, the State Government framed rules in the year 1996 and published them in the Gazette dated March 7th 1997. These rules become binding on Municipalities. In the instant cases the decision was taken by the Municipal Council in contravention of the rules of 1996. The action could be taken by Municipal Council within the purview of rules of 1996. Thus, it is held that decision of the Municipal Council to collect the tax at the rate of 2% export of liquor is in contravention of the rules of 1996. As per Rules, the export tax could be realised only at the rate of 1%. Next submission for consideration is whether the transaction amounts to export. It is not in dispute that for the first time the petitioner purchases the liquor within the Municipal Limits of Umaria. He had not brought it from somewhere outside the Municipal Limit and then repacked it and taken it out. Ownership was acquired by the petitioners for the first time from the State Government within limits of Municipal Council, Umaria. Thus, it cannot be said that it was a case of mere physical entry within the Municipal Limit and then taking it out. In Mafatlal Industries (supra), there Lordships considered the question that mere physical entry of goods into the octroi limits would not attract levy of "octroi" unless goods are brought in "for use of consumption or sale". Thus, it cannot be said that it was a case of mere physical entry within the Municipal Limit and then taking it out. In Mafatlal Industries (supra), there Lordships considered the question that mere physical entry of goods into the octroi limits would not attract levy of "octroi" unless goods are brought in "for use of consumption or sale". Use and consumption would involve conversion of the commodity into a different commercial commodity by subjecting it to some processing. In Mafatal Industries (supra) the question for consideration was imposition of the octroi duty. The "octroi" is defined in clause 16 of section 2 of the Gujarat Municipal Act, 1963 to mean "a tax on the entry of goods brought in the limits of municipality for consumption, use or sale therein". Export tax was not the matter for consideration. In para 17, there Lordships considered the decision in HMM Ltd. and another Vs. The Administrator, Bangalore City Corporation, Bangalore and another, in which the facts were that "Horlicks" milkfood powder was brought into the "octroi" limits in bulk containers and packed at the packing station in unit containers and thereafter exported outside those limits. On the above facts, the Apex Court held that in the process of putting powder from drums to the bottles for the purpose of exporting or taking out of the municipal limits, the Horlicks powder was neither used nor consumed and, therefore, "octroi" could not be levied or collected. The facts are totally different in the instant cases. In the instant case the question is of "export tax" not of "octroi". Petitioners, for the first time, acquired the liquor under the licence within the municipal limits and took it out for the first time. In my opinion export tax is clearly exigible in such circumstances as transaction amounts to export of goods from the limits of Municipality. In Man Mohan Tuli Vs. Municipal Corporation of Delhi and Others, the Apex Court considered the question of imposition of terminal tax. In my opinion export tax is clearly exigible in such circumstances as transaction amounts to export of goods from the limits of Municipality. In Man Mohan Tuli Vs. Municipal Corporation of Delhi and Others, the Apex Court considered the question of imposition of terminal tax. Para 24 which is relevant is quoted below:- Thus, our conclusions are as follows:- (1) The High Court was wrong in interpreting section 178 of the Act so as to justify imposition of terminal tax even on goods which merely passed through the territory of Delhi, although their destination is not Delhi but places beyond Delhi; (2) The High Court was wrong in holding that merely because the goods after having been unloaded in the godown of appellant Tuli are sorted, reloaded in different trucks and thereafter pass through the territory of Delhi, they become exigible to terminal tax. (3) The High Court was wrong in interpreting Rule 26 literally and holding that exemption could be granted only if the goods are exported immediately which means within a very short time irrespective of any other consideration. In view of our interpretation of section 178, rule 26 must be interpreted in the light of the object of section 178 and terminal tax can be leviable only if it is proved that the goods remained at the godown for an indefinite and unexplained period which could not be said to be reasonable as discussed by us in the circumstances. (4) Where the goods are carried by trucks into the territory of Delhi and unloaded there and are also meant for Delhi and soon thereafter may be rebooked by the receiver of the goods to some other place, terminal tax would be leviable because in this case there are two separate transactions:- (1) by which the goods are meant for Delhi, and (2) by which after having reached and having been unloaded at Delhi they are rebooked and reloaded for some other place and which, therefore, is a fresh and different transaction. In such a case, terminal tax would be leviable at the entry point in the territory of Delhi. In the facts and circumstances of instant case and considering the fact that petitioners had taken out goods outside Municipal limits, it amount to export and transaction is exigible to export tax. In such a case, terminal tax would be leviable at the entry point in the territory of Delhi. In the facts and circumstances of instant case and considering the fact that petitioners had taken out goods outside Municipal limits, it amount to export and transaction is exigible to export tax. What follows from the decision of Manmohan (supra) is also that export tax is payable by the petitioners; they cannot escape the liability but have to pay at the lesser rate of 1% as specified in the Rules of 1996. Thus, the Municipal Council, Umaria is directed to make the refund to the petitioners of the difference of the tax collected at the higher rate to the petitioners. If there are any outstanding dues against the petitioners, the amount may be adjusted by the Municipal Council against such dues. It is made clear that decision shall not in any manner affect the other concluded transactions. The writ petitions are partly allowed to the extent indicated above. Cost of writ petitions to be borne as is incurred by parties.