Judgment ( 1. ) PETITIONERS are challenging the resolution of Municipal Corporation, sagar, dated 27-10-1997 for recovery of Export Tax on Bidis, Tendu-patta, tobacco products/masale in W. P. No. 1326/1998, W. P. No. 2566/2002 and w. P. No. 2576/2002. In W. P. No. 2566/2002 and W. P. No. 2576/2002 the order passed by the Commissioner on 17-4-2002 has also been assailed whereas in w. P. No. 2906/1998 quashment is sought of resolution of Municipal Council damoh dated 5-2-1998 levying Export Tax on Bidis and consequent notice for recovery thereof. ( 2. ) M/s Chhota Bhai Jetha Bhai Patel and Co. in W. P. No. 1326/1998 have averred that petitioner is a partnership firm involved in manufacture of bidis. Petitioner No. 2 is Bidi and Tobacco Merchant Association, Sagar and it a registered society. Petitioners submit that process of manufacture of Bidi is carried by the workers inside their homes in villages adjacent to Sagar. They take the raw material from manufacturers and rolls Bidis. Rolled Bidis are brought to Sagar to the Offices of manufacturers and export out side Sagar to the branches and centers situated out side in the course of sale. Municipal corporation, Sagar has been established under the provisions of M. P. Municipal Corporation Act. It is further averred that the State Government, urban Administration Department, issued a notification (P-2), dated 15-12-1995 regarding imposition of Export Tax by Local Authorities. Rates have also been proposed in the schedule in the notification. State Government made the rules in exercise of powers under Section 132 (1) (4) of M. P. Municipal corporation Act, 1956 and Section 127 (1) (4) of M. P. Municipalities Act, 1961 for prescribing the rates of Terminal Tax on import of goods within the limits of the Municipal Corporation or Municipalities for use of sale and transaction. Notification is P-3. The State Government imposed local body tax as provided in Section 132 (1) (f) w. e. f. 1-5-1997. Rules (P-5) were published in the Gazette dated 29-4-1997. Rule 3 of these rules deals with the rate of tax. This levy is kept in abeyance. Notification is P-3. The State Government imposed local body tax as provided in Section 132 (1) (f) w. e. f. 1-5-1997. Rules (P-5) were published in the Gazette dated 29-4-1997. Rule 3 of these rules deals with the rate of tax. This levy is kept in abeyance. State Government issued another notification on 7-10-1997 cancelling its earlier notification including notification dated 15-12-1995 for imposition of Export Tax/import Tax by Municipalities and Municipal Corporation and it was stated in the Notification (P-6) dated 7-10-1996 that local body tax has been abolished and the Export Tax can now be levied by the municipal Corporations and Municipalities and State Government has no objection in such imposition. ( 3. ) THE Municipal Corporation, Sagar resolved in its special meeting dated 27-10-1997 considering the notification (P- 6) issued by the State government for imposition of Export Tax at the rates specified in the list. This tax has been imposed w. e. f. 15-11-1997 on Bidis, Cigarettes, Betel and all types of Masale used in betel at the rate of 0. 50%. Demand notices were issued for recovery of Export Tax. Petitioners assails the validity of the imposition of export Tax as without authority of law. ( 4. ) PETITIONERS submit that process of manufacture of Bidis is undertaken by labourers engaged outside the limits of Municipal Corporation, Sagar and rolled bidis are brought at Sagar office by the labourers and then it is sent to the branches and centers of the Manufacturers in the course of sale within and outside State. Petitioners further submit that State Government is under an obligation to comply with the provisions of Section 132 (9) requiring it to prescribe maximum and minimum tax imposable by a Corporation under section 132. It is all the more obligatory under Sections 132 and 133 which provide a procedure for imposition of tax. State Government has shirked from its control. The power to impose tax is unguided and arbitrary. State Government has imposed local body tax and terminal tax on goods and thus, imposition of Export Tax results into multiple taxes which seriously effect the rights of the petitioners. The resolution of Corporation is without authority of law. Petitioners further relied upon a decision of T. C. Ltd. Vs. State of Karnataka, 1985 Suppl. 1scc 476, that imposition of any fee on tobacco and its products by Corporation is ultra vires. The resolution of Corporation is without authority of law. Petitioners further relied upon a decision of T. C. Ltd. Vs. State of Karnataka, 1985 Suppl. 1scc 476, that imposition of any fee on tobacco and its products by Corporation is ultra vires. The State Government and the corporation have no. authority to impose any tax on export of Bidis. ( 5. ) IN W. P. No. 2576/2002 inter alia it is alleged that after passing of the resolution (P-6) by Municipal Corporation, Sagar on 27-10-1997, the state Government has issued an order (P-8) on 24-8-2001 in which it is provided that Municipal Corporations and Municipalities are competent to impose the taxes mentioned under Sections 132 and 133 of the Municipal corporation Act and Sections 127 and 129 of Municipalities Act. The only restriction is that such taxes have to be levied subject to general or special order issued by the State Government. The State Government has decided that for a period of three years, no export tax be levied on Bidis by local bodies. It is the further averment that Municipal Corporation has appointed Om Prakash kesharwani, Contractor for collection of Export Tax who is demanding the export Tax in illegal manner. In the list issued on 7-4-2000, Bidis have been deleted by Municipal Corporation, Sagar. Thus, levy of Export Tax is illegal. ( 6. ) IN W. P. No. 2906/1998 relating to Municipal Council, Damoh, it is averred that Municipal Council passed a resolution on 1-4-1998 for imposition of Export Tax on Bidis at the rate of 0. 50%. Similar grounds have been taken to assail the levy of Export Tax on Bidis. It is averred that the action is violative of Section 129 (1) of the Municipalities Act and also Section 127 (9) of the Act. ( 7. ) IN the return filed by the respondent No. 1 in W. P. No. 1326/1998, Municipal Corporation, Sagar, it is contended that the State government has notified the rates. The imposition is in compliance of provisions of Section 132 of Municipal Corporation Act. Resolution dated 27-10-1997 has been properly passed by the Municipal Corporation, Sagar. It can not be said that power has been exercised in an unguided manner. Respondent Nos. 2 and 3, State Government and Director, Public Administration, in return contended that no relief has been claimed against them. State government has prescribed the rates in percentage. Resolution dated 27-10-1997 has been properly passed by the Municipal Corporation, Sagar. It can not be said that power has been exercised in an unguided manner. Respondent Nos. 2 and 3, State Government and Director, Public Administration, in return contended that no relief has been claimed against them. State government has prescribed the rates in percentage. It is not the case of multiple taxation. Contractor for the year 2002-2003 has filed an application for intervention and has taken the similar stand-as that of Corporation. ( 8. ) IN W. P. No. 2576/2002 in the return filed by the respondent No. 4 it is contended that Export Tax has not been paid by the petitioner w. e. f. 15-11-1976 and he has defaulted and is in huge arrears. The Export Tax on; bidis is consistently in force. There is no ground not to pay the Export Tax. From P-9, Bidi has been omitted owing to the interim order passed by this court in W. P. No. 1236/1998. Notification issued in exercise of power can not override the rules. ( 9. ) THE stand of the respondents in W. P. No. 2906/1998 of municipal Council, Damoh, is that in other Writ Petition Nos. 3469/1995, 3161/1993 and 27/1995 imposition of Export Tax has been upheld by this Court as per judgment dated 9-1-1996. Respondent Nos. 2 and 3, State Government and Director, Urban Administration, have also supported the action of the municipal Council and contend that the levy is just and proper. State Government has clarified by Memo dated 7-10-1997 that there is no prohibition by the State Government to impose Export Tax. State Government has no objection if the Export Tax is levied by the local bodies. ( 10. ) SHRI A. G. Dhande, learned Senior Counsel, for the petitioners in W. P. Nos. 1326/1998 and 2566/2002 contends that rules for Export Tax, framed by State Legislature in the year 1996 are no more in force and M. P. Local Bodies Tax Rules, 1997 were enacted and later on Local Bodies Taxes have been withdrawn as per P-7. The Municipal Corporation has not framed any bye-laws/rules under Section 132 (6) (n) and 132 (6) (o ). The Export Tax rules have been repealed hence it was necessary to frame the bye-laws. The procedure for framing bye-laws has not been followed. Passing of resolution dated 7-10-1997 is not enough. The Municipal Corporation has not framed any bye-laws/rules under Section 132 (6) (n) and 132 (6) (o ). The Export Tax rules have been repealed hence it was necessary to frame the bye-laws. The procedure for framing bye-laws has not been followed. Passing of resolution dated 7-10-1997 is not enough. Imposition of tax by resolution dated 27-10-1997 is bad in law. Learned Counsel fairly states that the reference of I. T. C. Ltd. Vs. State of Karnataka (supra), is not available as the decision has been overruled by the Apex Court in I. T. C. Vs. The Agricultural Produce Market, air 2002 SC 852 . Thus, he submits, though the tax can be imposed on Bidis but it has to be in accordance with the provisions of Sections 132 and 133 of, the Municipal Corporation Act. It is also the submission of learned Counsel for the petitioner that it is not a case of sale in the market area as such levy is bad in law. Thus, the power has been exercised in unguided manner and in the absence of guidelines, imposition of taxes is not permissible. ( 11. ) SHRI H. S. Shrivastava, learned Counsel for the petitioner in W. P. No. 2906/1998, submits that the rules on terminal Tax Assessment and Collection on the goods exported from M. P. Municipal Limits Rules, 1996 framed under M. P. Municipal Corporation Act and M. P. Municipalities Act are no more in force. The imposition is not in accordance with Section 127 (6) (n)/ (o)and Section 129 of the Municipalities Act. The Export Tax which was levied was withdrawn w. e. f. 2-5-1997 and local body tax was imposed. It is incumbent upon the Municipalities to pass the resolution every year in accordance with section 129 of the Municipalities Act. That having not been done, it can not bo said that levy is in force, it was earlier imposed, collection is bad in law. Objections were not invited before imposition of Export Tax. It is not the case of Export as the Bidis are manufactured out side the limits of Council and then exported out. Word re-export has not been used. The local bodies tax has been abolished and instead 10% additional surcharge on Commercial Tax has been imposed out of which 30% has to go to Panchayat and 70% to Urban local Bodies. Word re-export has not been used. The local bodies tax has been abolished and instead 10% additional surcharge on Commercial Tax has been imposed out of which 30% has to go to Panchayat and 70% to Urban local Bodies. Thus, the imposition of Export Tax has no rhyme and reason and is oppressive. ( 12. ) SHRI R. S. Jha, Deputy Advocate General, appearing for the state of Madhya Pradesh submits that imposition is in accordance with law and it is open to the Councils/corporations to levy tax. Shri Atulanand Awasthy and Shri B. K. Rawat appearing for Municipal Corporation, Sagar and municipal Council, Damoh, have also supported the levy of tax. Similar is the stand taken by Shri Alok Aradhe appearing for intervenor Contractor in the matter of Municipal Corporation, Sagar. ( 13. ) IN order to appreciate the controversy, it is relevant to have a look into the circulars, rules and the provisions in the respective acts of municipal Corporation and Municipalities Act. Section 132 of the Municipal corporation Act deals with the Taxes to be imposed under the Act. Clauses (n) and (o) of sub- section (6) of Section 132 are relevant. The provisions runs as under:-"132 (6) In addition to the taxes specified in sub- section (1), the corporation may, for the purpose of this Act, subject to any general or special order which the State Government may make in this behalf, impose any of the following taxes, namely :- (n) a terminal tax on goods or animals exported from the limits of the Corporation; and (o) any other tax which the State Government has power to impose under the Constitution of India, with the prior approval of the State Government. " Section 133 of the Municipal Corporation Act is quoted below:-"133. Imposition of Taxes and Fees.- (1) The Corporation may, by a resolution, at the time of final adoption of the budget estimates for the next financial year, subject to the provisions of this Act and subject to such limitations and conditions, as may be prescribed by the State Government in this behalf- (a) impose any of the taxes or fees specified in this Act; or (b) increase the rates of taxes or fees already imposed. (2) The resolution as referred to in sub-section (1) shall contain- (a) in case of imposition of any tax or fees, the provisions under which such tax or fee is being imposed, class of persons or description of property to be taxed, the amount or rate of tax or fee being imposed, system of assessment and collection to be adopted and the date from which imposition of such tax or fee shall take effect; (b) in case of increase of rate of any tax or fee, the prevailing rate of such tax or fee, the proposed increased rate of such tax or fee and the date from which increase of rate of such tax or fee shall take effect. (3) The resolution, as passed, shall be conclusive evidence of the imposition of a new tax or fee, or increase of rate of any tax or fee, as the case may be : provided that if the Corporation decides to have supplementary taxation during the financial year, it may do so from such date as the Corporation may resolve, subject to the provisions of this act and subject to such limitation and conditions, as may be prescribed by the State Government in this behalf. (4) Nothing contained in this section shall apply to tax mentioned in clause (a) of sub-section (1) of Section 132, which shall be charged and levied in accordance with Section 135. " A similar provision is made in Section 127 of M. P. Municipalities Act, 1961, which deals with the taxes to be imposed under the Act. Clauses (n) and (o)of sub-section (6) of Section 127 are relevant. The provisions run as under:-"127 (6 ). In addition to the taxes specified in sub-section (1), the council may, for the purpose of this Act, subject to any general or special order which the State Government may make in this behalf, impose any of the following taxes, namely :- (n) a terminal tax on goods or animals exported from the limits of the Council; and (o) any other tax which the State Government has power to impose under the Constitution of India, with the prior approval of the State Government. " Section 129 of the Municipalities Act is quoted below:- "129. " Section 129 of the Municipalities Act is quoted below:- "129. Imposition of Taxes and Fees.- (1) The Council may, by a resolution, at the time of final adoption of the budget estimates for the next financial year, subject to the provisions of this Act and subject to such limitations and conditions, as may be prescribed by the State Government in this behalf- (a) impose any of the taxes or fees specified in this Act; or (b) increase the rates of taxes or fees already imposed. (2) The resolution as referred to in sub-section (1) shall contain- (a) in case of imposition of any tax or fee, the provisions under which such tax or fee is being imposed, class of persons or description of property to be taxed, the amount or rate of tax or fee being imposed, system of assessment and collection to be adopted and the date from which imposition of such tax or fee shall take effect; (b) in case of increase of rate of any tax or fee, the prevailing rate of such tax or fee, the proposed increased rate of such tax or fee and the date from which increase of rate of such tax or fee shall take effect. (3) The resolution, as passed, shall be conclusive evidence of the imposition of a new tax or fee, or increase of rate of any tax or fee, as the case may be: provided that if the Council decides to have supplementary taxation during the financial year, it may do so from such date as the Council may resolve, subject to the provisions of this Act and subject to such limitations and conditions, as may be prescribed by the State Government in this behalf. (4) Nothing contained in this Section shall apply to tax mentioned in clause (i) of sub-section (1) of Section 127, which shall be charged and levied in accordance with Section 127-A" It is clear from clauses (n) and (o) of sub-section (6) of Section 132 of municipal Corporation Act and clauses (n) and (o) of sub-section (6) of section 127 of Municipalities Act that under clauses (n) and (o), terminal tax on export of the goods and animals from the limits of Municipal Corporation/municipal Council can be imposed by the Municipal Corporation/municipal Council. However, such power is subject to general or special order of the State Government in this behalf. ( 14. However, such power is subject to general or special order of the State Government in this behalf. ( 14. ) THE State Government on 15-12-1995 authorised all the municipalities to levy Export Tax under Section 127/129 of the Municipalities act. Rates were also specified on Bidis, Cigarettes, Pans and all types of Masale etc. at the rate of 0. 50% of the value of the goods. The State Government took a decision for the imposition of Local Bodies Tax w. e. f. 21-4-1997 and specified the rates for collection of local body tax under Section 132 (1) and Section 127 (1) (4) at the rate 2% on Bidi, Tendu leaves etc. On 2nd May, 1997, the State government issued a memorandum cancelling the notification dated 15-12-1997 which was issued enabling the Municipalities to recover the Export Tax. Local Bodies Tax Rules, 1997 were also framed which came into force w. e. f. 1st May, 1997. Ultimately, local body tax was withdrawn and the State Government issued an order (P-6) on 17-10-1997 that as the Local Body Tax has been withdrawn and owing to imposition of Local Body Tax, the memo dated 15-12-1995 (P-2) in W. P. No. 1326/1998 was cancelled, hence, it has become necessary to impose the entry tax in the levy form as provided under Sections 132 and 127 and in case the Municipalities/municipal Corporation want to impose the Export Tax, State Government has no objection. Thereafter, municipal Corporation, Sagar, took the decision on 27-10-1997 as per resolution (P-7 in W. P. No. 1326/1998) and Municipal Council, Damoh took the decision to impose the Export Tax as per resolution No. 4 (P-5 in W. P. No. 2906/1998) dated 5-2-1998. ( 15. ) THE State Government also framed the rules called Terminal tax Assessment and Collection on the Goods Exported from M. P. Municipal limits Rules, 1996, on 21st February, 1997, published in Gazette dated 7th march, 1997. Rules have been framed in exercise of powers conferred under section 433 read with clause (o) of sub-section (2) of Section 132 and Section 133 of M. P. Municipal Corporation Act, 1956 and Section 355 read with clause (xvi) of Section 127 and Section 129 of M. P. Municipalities Act to regulate the assessment and collection of Terminal Tax on the goods which are exported from the limits of Municipal Corporation, Municipal Councils and Nagar panchayats. The proposed rate is prescribed in the Schedule on Bidis, cigarette, all sorts of Masale, betel leaves etc. , the rate on the basis of price of goods is 0. 50%. ( 16. ) THE submission of learned Counsel for the petitioner is that levy is violative of the provisions of Section 132 of Municipal Corporation Act. Sub-section (6) of Section 132 provides that in addition to tax specified in sub-section (1), the Corporation may, subject to any general or special order which the State Government may make in this behalf, impose terminal tax on goods exported from the limits of Corporation. Similar power is given to the municipal Councils in clause (n) of sub-section (6) of Section 127 of the municipalities Act. So far as regards to the special or general order is concerned, the order (P-6) dated 7-10-1997 in W. P. No. 1326/1998 has to be taken to be general order of the State Government by which it is specified that State government has no objection for levy of such Export Tax. The Terminal Tax assessment and Collection on the Goods Exported from M. P. Municipal limits Rules, 1996, have not been repealed. They are still in force. These rules shall come into force in the Municipal Corporations, Municipal Councils and nagar Panchayats on such date on which such Municipal Corporation, municipal Council impose the Terminal Tax on the goods exported from the municipal limits. Provided that where the Corporation or Council has already imposed that said tax, these rules shall come into force from the date of publication of these rules, in the M. P. Gazette. "terminal Tax" means the terminal tax on goods exported from the Municipal limit in accordance with the sanction of State Government under clause (o) of sub-section (2) of section 132 of the Madhya Pradesh Municipal Corporation Act, 1956 and the tax described in clause (xvi) of sub-section (1) of Section 127 of Madhya pradesh Municipalities Act, 1961. "municipal Limit" means a larger urban area notified under sub-section (2) of Section 7 of the M. P. Municipal Corporation Act and smaller urban area or transitional area notified under subsection (2) of Section 5 of the M. P. Municipalities Act. "municipal Limit" means a larger urban area notified under sub-section (2) of Section 7 of the M. P. Municipal Corporation Act and smaller urban area or transitional area notified under subsection (2) of Section 5 of the M. P. Municipalities Act. "schedule" means the rate determined subject to the maximum rate described in the schedule appended to these rules under Section 133 of the M. P. Municipal Corporation act or Section 129 of the M. P. Municipalities Act, 1961. Every person, businessman, establishment and the license holder under the M. P. Krishi Upaj mandi Adhiniyam, 1972 shall be responsible to collect the terminal tax on the goods at the rate specified in the Schedule on sale for the purpose of export, as per Rule 3 of the rules. Rules 5,6 and 7 prescribes a procedure for recovery of Export Tax. Rule 8 prescribe a punishment that if any person contravenes any of the rules shall be punishable which may extend to five hundred rupees. The rules framed in the year 1991 for imposition of the Export Tax have been repealed on Rules of 1996 being enacted. ( 17. ) THE submission raised by the learned Counsel for the petitioners that State Government has not prescribed the maximum and minimum rate of tax specified in Section 132 of the Municipal Corporation Act and Section 127 of the Municipalities Act is not acceptable as the Export Tax Rules of 1996 prescribes the proposed rate and imposition is not exceeding the rate prescribed in the Schedule to the Rules of 1996. Thus, there is no violation of the provisions of sub-section (9) of Section 132 of the Municipal Corporation act and sub-section (9) of Section 127 of the Municipalities Act. That apart, division Bench of this Court in M. T. Cloth Market Merchants Asso. Vs. Municipal Corporation, Indore, 1982 JLJ 409 = 1983 MPLJ 384, held that it is not obligatory under sub-section (9) of Section 132 for the Government to prescribe any maximum or minimum with respect to the amount or to the rate of taxes specified in sub-sections (1) and (2) of Section 132. When these limits are prescribed, the Corporations power of taxation must be exercised within the limits but omission to prescribe the maximum and minimum limits do not take away the power of the Corporation to impose the taxes. When these limits are prescribed, the Corporations power of taxation must be exercised within the limits but omission to prescribe the maximum and minimum limits do not take away the power of the Corporation to impose the taxes. Whatever that may be, in the instant case the Rules of 1996 which are statutory prescribes the rate and the Municipal Corporation and Municipal Council have not exceeded that limit. Thus, imposition is not bad on the ground urged. ( 18. ) NEXT submission of the learned Counsel for the petitioners is that as per Section 133 of the Municipal Corporation Act and Section 129 of municipalities Act, it is necessary to pass the resolution at the time of final allocation of the budget year to year for imposition of such tax. In the writ petitions, there is no averment made that provision has not been made in the budget estimates for recovery of Export Tax. In any of the writ petitions it is not averred that Council/corporation has not made such provision at the time of final adoption of budget estimate for next financial year. In the absence of that averment, petitioners can not be allowed to raise this question. Even otherwise, stand taken in the return by the Municipal Corporation/council is that they are continuing with the Export Tax recovery. It is not the case of new tax or increase of the rate of any tax but the tax which was imposed by the municipal Corporation, Sagar in the year 1997 and by Municipal Council, damoh in the year 1998 in exercise of legislative function is being continued. It is not the case that Municipal Council/corporation have passed any resolution till date for withdrawal of Export Tax on Bidis, cigarettes, Masale used in betel etc. Thus, making of the provision in the budget itself may be enough. Thus, in my opinion levy when has been continued and not withdrawn, it is enough to make a provision in the budget and when budget is passed by the corporation/council for the next year, that has to be taken to be the resolution. In case of new tax being imposed or increase in rate, it has to be passed specifically not otherwise. The resolutions passed in the year 1997 and 1998 are being continued as such the submission raised by the learned Counsel for the petitioners is not sustainable. ( 19. In case of new tax being imposed or increase in rate, it has to be passed specifically not otherwise. The resolutions passed in the year 1997 and 1998 are being continued as such the submission raised by the learned Counsel for the petitioners is not sustainable. ( 19. ) IT is also the averment made in the writ petitions that State government/corporation are not empowered to levy the Export Tax on Bidis. The interim stay was granted by this Court on the strength of decision of the apex Court in I. T. C. Ltd. and others Vs. State of Karnataka and others (supra ). The said decision has been specifically overruled by the Apex Court in I. T. C. Vs. Agricultural Produce Market Committee (supra ). It is held that:- "193. In keeping with the conclusions of the majority, expressed in the judgments of Sabharwal, Ruma Pal and Brijesh Kumar, jj. , it is held that:- (1) ITCs case [1985 Suppl. (1) SCC 476] was not correctly decided. (2) The State Legislature are competent to enact legislation providing for the levy and collection of a market fee on the sale of tobacco in a market area. Consequently, the Market Acts enacted by the States are valid. (3) The State legislations and the Tobacco Board Act, 1975, to the extent that they relate to the sale of tobacco in market areas, can not co-exist and the former prevail over the latter. " Thus, in my opinion, State Government and consequently Municipal Corporations and Municipal Councils are empowered to levy the tax on tobacco, Bidis etc. ( 20. ) IT is also the submission raised by the learned Counsel for the petitioners that by-laws have not been framed and the passing of resolution is not enough. The power is being exercised in unguided and arbitrary manner. It is not acceptable as Rules of 1996 are in force which are statutory and is not necessary to have any by-laws and the resolution has been passed which is in accordance with the rules and the general order (P-6) issued by the State government. ( 21. ) NEXT it is submitted in W. P. No. 2576/2002 by Shri Ashok lalwani, learned Counsel, that the State Government as per order (P-8) has taken the decision not to levy the Export Tax on Bidis for 3 years. ( 21. ) NEXT it is submitted in W. P. No. 2576/2002 by Shri Ashok lalwani, learned Counsel, that the State Government as per order (P-8) has taken the decision not to levy the Export Tax on Bidis for 3 years. This decision has been taken under Section 132 and 133 of the Municipal Corporation Act and Sections 127 and 129 of the Municipalities Act. Order (P-8) is binding on the Municipal Councils/corporations. ( 22. ) THE above submission though attractive is devoid of substance similar question was raised in Chief Municipal Officer, Kymore Vs. Eternit everest Ltd. , AIR 2000 MP 129 , wherein Division Bench of this Court held that the tax can not be levied except under the authority of law and the municipal Council in exercise of its legislative function under Section 127 read with Section 129, levied the export tax by Notification dated 12-7-1991. Therefore, it was a legislative function of the Municipal Council and no legislative function can be undermined or be superseded by issuing of any circular or exercising the statutory power by any authority under the Rules. The legislative power can only be undone by the Legislative Act and not by the subordinate authority. Under Section 127, the State Government has been given a power to issue a circular of a general application and the Municipal council has to levy the tax subject to these circulars issued by the State government. At the time when the levy was imposed on 12-7-1991, there was no such circular in existence. The circular was issued subsequently by 15-12-1995 and it could not undo the legislative function already exercised by the municipal Council by issuing a notification dated 12-7-1991. Once the legislative function has been exercised by the Municipal Council and the levy has been imposed, the State Government could have only undone the levy by another legislative enactment as contemplated under sub-section (2) of Section 127 of the Act as it stood at that time by framing proper Rules which they have now framed under Section 355 read with Section 127 (1) (xvi) of the Act known as the Export Tax Rules, 1996. The proviso to sub-rule (2) of Rule 1 of the 1996 Rules, says that where the Corporation or Council has already imposed the said tax, then these rules shall come into force from the date of publication of these rules, in the "madhya Pradesh Rajpatra". These rules were published in the M. P. Gazette on 7-3-1997, therefore, the rate of tax shall come into force with effect from 7-3-1997 and the notification dated 15-12-1995 would not override the notification dated 12-7-1991. Therefore, the notification dated 12-7-1991 shall hold the field till it was lawfully superseded, i. e. , with effect from 7-3-1997. The Municipality is entitled to charge export tax at the old rate upto 6-3-1997 and thereafter at reduced rate w. e. f. 7-3-1997, i. e. , at the rate of 0. 20%. Thus, order that Municipality could not recover tax at old rates after publication of subsequent notification was liable to be set aside. This Court held that:- "19. It is settled proposition of law that the tax can not be levied except under the authority of law and the Municipal Council in exercise of its legislative function under Section 127 read with 129, levied the export tax by Notification dated 12-7-1991. Therefore, it was a legislative function of the Municipal Council and no legislative function can be undermined or be superseded by issuing of any circular or exercising the statutory power by any authority under the Rules. The legislative power can only be undone by the Legislative Act and not by the subordinate authority. Under Section 127, the State Government has been given a power to issue a circular of a general application and the municipal Council has to levy the tax subject to these circulars issued by the State Government. At the time when the levy was imposed on 12-7-1991, there was no such circular in existence. The circular was issued subsequently on 15-12-1995 and it could not undo the legislative function already exercised by the municipal Council by issuing a notification dated 12-7-1991. 20. In this connection, it may be relevant to mention here that under Section 127; if the State Government wanted to supersede notification dated 12-7-1991 then it could have framed the Rules in exercise of its general power to frame rules. 20. In this connection, it may be relevant to mention here that under Section 127; if the State Government wanted to supersede notification dated 12-7-1991 then it could have framed the Rules in exercise of its general power to frame rules. Therefore, the state Government having realised that by executive fiat, they could not nullify the notification issued by the Municipalities, they withdrew the notification dated 15-12-1995 on 2-5-1997 and framed the Rules known as 1996 Rules which were published in the Gazette dated 7-3-1997 as aforesaid. Therefore, the contention of the learned Counsel for the appellant is that the view taken by the learned Single Judge on the facts of the present case that the notification dated 15-12-1995 amounts to reducing the rates of export tax from 15-12-1995 in the case of notification dated 12-7-1991, does not appear to be correct approach in the matter. The contention of learned Counsel is correct. As we have already mentioned above, that the legislative enactments can not be subjugated or superseded by exercise of power by the state Government under the statutory provision or by executive instructions. Once the legislative function has been exercised by the Municipal Council and the levy has been only undone the levy by another legislative enactment as contemplated under sub-section (2) of Section 127 of the Act as it stood at that time by framing proper Rules which they have now framed under section 355 read with Section 127 (1) (xvi) of the Act, known as the Rules of 1996 (referred to above ). The proviso says that where the Corporation or Council has already imposed the said tax then these rules shall come into force from the date of publication of these rules, in the "madhya Pradesh Rajpatra". These rules were published in the M. P. Gazette on 7-3-1997; therefore, the rate of tax shall come into force with effect from 7-3-1997 and the notification dated 15-12-1995 would not over-ride the notification dated 12-7-1991. Therefore, the notification dated 12-7-1991 shall hold the field till it was lawfully superseded, i. e. , w. e. f. 7-3-1997. The Municipality, Kymore, is entitled to charge export tax at the old rate upto 6-3-1997 and thereafter at reduced rate w. e. f. 7-3-1997, i. e. , at the rate of 0. 20%. Therefore, the notification dated 12-7-1991 shall hold the field till it was lawfully superseded, i. e. , w. e. f. 7-3-1997. The Municipality, Kymore, is entitled to charge export tax at the old rate upto 6-3-1997 and thereafter at reduced rate w. e. f. 7-3-1997, i. e. , at the rate of 0. 20%. Thus, in this view of the matter, the view taken by the learned Single Judge does not appear to be correct and we hereby set aside the order of the learned Single Judge and dismiss both the writ petitions. It will be open for the Municipal council to recover the tax at the rate prescribed by them as per notification dated 12-7-1991 upto 6-3-1997 and thereafter from 7-3-1997, they will charge the export tax at the rate prescribed under the 1996 Rules, which have come into force with effect from 7-3-1997. " I am bound by the decision of the Division Bench of this Court and in my opinion legislative powers have already been exercised for imposition of tax by Municipal Corporation, Sagar in October, 1997 and Municipal Council, damoh in February, 1998, the same can not be taken away by exercise of powers by the State Government under the statutory provisions or by the executive instructions as per P-8 which is the view taken in Chief Municipal officer, Kymore Vs. Eternit Everest Ltd. (supra ). ( 23. ) RELIANCE has been placed by learned Counsel for petitioners on a decision of the Apex Court in Poona City Municipal Corporation Vs. Dat-tatreya, AIR 1965 SC 555 , and Municipal Council, Khurai and another Vs. Kamal Kumar and another, AIR 1965 SC 1321 . The decision in AIR 1965 SC 555 (supra) is on a totally different footing. In the instant case, the provision of Section 127 (6) of the Municipalities Act and Section 132 (6) of the municipal Corporation Act empowers levy of such tax and the Apex Court has held in the later decision of I. T. C. Ltd. Vs. Agricultural Produce Market committee (supra), that State is empowered to levy such a tax and the tax which can be levied by the State, can be levied by the Corporation under Section 127 (6) (o) of the Municipalities Act and Section 136 (6) (o) of Municipal Corporation Act. Agricultural Produce Market committee (supra), that State is empowered to levy such a tax and the tax which can be levied by the State, can be levied by the Corporation under Section 127 (6) (o) of the Municipalities Act and Section 136 (6) (o) of Municipal Corporation Act. The State has also framed the rules for recovery of Export Tax on Bidi, cigarette and Masale used in betel and has also specified the rates. Thus, the decision are of no avail to the petitioners. ( 24. ) YET another submission of learned Counsel for petitioners be now adverted to that transaction in question does not amount to export. The learned Counsel have placed reliance on decision of Apex Court in Man mohan Tuli and others Vs. Municipal Corporation of Delhi and others, AIR 1981 SC 991 . It was held by the Apex Court that true interpretation of Section 178 does not justify imposition of terminal tax on goods which merely pass through the territory of Delhi although their destination is not Delhi but places beyond Delhi. Merely because the goods after having been unloaded in the godown situated in Delhi are sorted, reloaded in different trucks and thereafter pass through the territory of Delhi, they do not become exigible to terminal tax. Terminal tax and octroi are similar kinds of levies which are closely interlinked with (1) destination of the goods, (2) the user in the local area on arrival of the goods. Where the goods merely pass through a local area without being consumed therein the mere fact that the transport carrying the goods halt within the local area for transhipment or allied purposes would not justify the levy of either the terminal tax or octroi duty. This is because the halting of the goods is only for an incidental purpose to effectuate the journey of the goods to the final destination by unloading, sorting and reloading them at a particular place. There is a very thin margin of difference between a terminal tax and octroi. In the case of the former (terminal tax) the goods reach their final destination and their entry into the area of destination immediately attracts payment of terminal tax irrespective of their user. In the case of octroi, however the tax is levied on goods for their use and consumption. In the case of the former (terminal tax) the goods reach their final destination and their entry into the area of destination immediately attracts payment of terminal tax irrespective of their user. In the case of octroi, however the tax is levied on goods for their use and consumption. But at the same time, the goods while halting at a local area should leave for their destination within a reasonable time which may depend on circumstances of each case and if the goods are kept within the area for such a long and indefinite period that the purpose of reaching the final destination lying in a different area is frustrated or defeated, they may be exigible to terminal tax. This further laid down that where the goods enter into a local area which is also the destination of the goods either temporarily or otherwise, the terminal tax would be leviable. ( 25. ) IN The Central India Spinning and Weaving and Manufacturing co. Ltd. , The Empress Mills, Nagpur Vs. The Municipal Committee, Wardha, air 1958 SC 341 , CP. and Berar Municipalities Act and Terminal Tax Rules (Wardha) were considered. The Municipal Committee was authorised by section 66 to impose a terminal tax on goods or animals imported into or exported from the limits of the municipality. The question was whether the goods passing in transit through the municipal limits, without the municipal limits was liable to the terminal tax. It was held that by giving to the words "imported into or exported from", their derivative meaning without any reference to the ordinary connotation of these words as used in the commercial sense, the decided cases in India have ascribed too general a meaning to these words which from the setting, context and history of the clause was not intended. To construe the words "import" and "export" as meaning "bring in" or "take out of or away from" and cover the goods in transit by the words "imported into" or "exported from", would make rail borne goods passing through a railway station within the limits of a Municipality liable to the imposition of the tax on their arrival at the railway station or departure therefrom or both which would not only lead to inconvenience but confusion, and would also result in inordinate delays and unbearable burden on trade both inter State and intra State. It is hardly likely that was the intention of the legislature. Such an interpretation would lead to absurdity which has, according to the rules of interpretation, to be avoided. The word "export" has reference to taking out of goods which had become part and parcel of the mass of the property of the local and will not apply to goods in transit for the purposes of being transported out of it. If the intention was to tax such goods then the word used should have been "re- exported" which means to export (imported goods) again. "re-exportation" means the exportation of imported goods. Thus, means the "exportation" of "imported" goods. Thus, strength of above decision that the Bidis are rolled by the labourers in the outside area. They are brought to the head-office in Municipal limits and then they are put to sale in other areas within the State and other States. Thus, it is not a case of export as the goods are brought in transit to the Municipal limits and taken out thereafter in the course of sale. ( 26. ) COMING to the facts of the instant cases. It is clear that Bidis are rolled by the labourers who may be outside the Municipal limits. Such Bidis are brought by the labourers to the Registered Offices of the petitioners situated within the Municipal limits. The property crosses under the course of sale for the first time the municipal limits when goods are taken out in the course of sale for being sent to the purchasers. Thus, in the instant case, it can not be said that goods are taken out in the "course of transit" beyond the municipal limits. Possession and ownership of goods is acquired by the manufacturer for the first time within the Municipal limits. They are put in course of sale first time within the Municipal limits of Sagar/damoh then they are sent out. It can not be said to be the case of "re-exportation" or that of goods being taken in the "course of transit" within and out side the Municipal limits. The decisions of the Apex Court in Man Mohan Tali case (supra) and the Empress Mills, Nagpur (supra) are of no help to the petitioners but on the contrary, it is made out from decisions that such transaction has to be treated as that of "export" on the strength of aforesaid decisions. The decisions of the Apex Court in Man Mohan Tali case (supra) and the Empress Mills, Nagpur (supra) are of no help to the petitioners but on the contrary, it is made out from decisions that such transaction has to be treated as that of "export" on the strength of aforesaid decisions. As the goods are not merely passing through the local area, the final destination is the Municipal limit and the Bidis/goods are sold within the Municipal limits. Bidis may be retained for long indefinite period and the sale may be effected within the local municipal limits, which goods may not even be required to be taken out in the instant transaction of "manufacture". Thus, it is the case where export is being made in its real sense. It is not the case of taking the goods to the destination but owners reside within the Municipal limits and they sale the goods within the Municipal limit and when they send it out of Municipal limits, it is the case of export. ( 27. ) LASTLY, it is submitted that it is an oppressive tax as 10% surcharge has been added on Commercial Tax and part of that goes to local bodies, i. e. , 30% to the Gram Panchayats and 70% to the Urban Local Bodies. That by itself can not come in the way of the Municipal Corporations, Municipal councils not to levy the export tax on goods. ( 28. ) RESULTANTLY, I find no merit in the writ petitions. They are dismissed. In the facts and circumstances of the case, costs on parties. Writ Petitions dismissed.