SUPREME COURT REPORTS [1961]

x96x taking a torch with him, access to the house of the

5 1 deceased being obtained by stealth by scaling over a Madh;:'•;.adesh wall. Then again, there was the mood of exaltation v. which the accused exhibited after he had put her out Ahmadullah of her life. It was a crime committed not in a sudden mood of insanity but one that was preceded by careful Ayyangar f. planning and exhibiting cool calculation in execution and directed against a person who was considered to be the enemy.

]anua,.y a7.

The appeal is therefore allowed, the order of acquittal passed against the respondent set aside and in its place will be substituted a finding that the respondent is guilty of mQJ.'der under s. 302 of the Indian Penal Code. In the normal course the proper punishment for the heinous and premeditated crime committed with inhuman brutality would have been a sentence of dee.th. But ta.king into account the fact that the accused ha.a been acquitted by the Sessions Judgea.n order which has been affirmed by the High Courtwe consider that the ends of justice would be met if we sentence the accused to rigorous imprisonment for life. It is needless to add that the State Government will take steps to have the accused treated in a.n asylum until he is cured of his illness, if this still continues.

Appeal allowed.

ARDESHIR H. BHIW ANDIWALA

ti.

THE STATE OF BOMBAY. (JAFEB IMAM, J. L. KAPUR, K. c. DAS GUPTA, RAGHUBAR DAYAL and

N. RAJAGOPALA AYYANGAR, JJ.) Factory-Sall Works, whether a factory-Premises, if include open land-Manufacturing process-Conversion of sea water into

salt-Factories Act, z948 (LXIII of I948), ss. 2(k) and (m), 92.

The appellant was convicted of an offence under s. 92 of the Factories Act, 1948, for working a salt works without obtaining a licence. The salt works extended over an area of about

250 acres. The only buildings on this land were temporary shelters for the resident labour and for an office; at some places there were pucca platforms for fixing the water pump wh•ll

3 S.C.R.

SUPREME COUHT REPORTS 593

required to pump water from the sea. The appellant contend I96r ed (i) that the salt works was not a factory as defined ins. 2(m) of the Act, (ii) that the word "premises" in the definition of A•deshi• factory did not include open land, and (iii) that in converting H. 8hiwandiwala sea water into salt the appellant was not carrying on any manuv. facturing process as defined in s. 2(k).

State of Bombay Held, that the salt works was a factory within the definition given in the Act and that the appellant was rightly convicted for working it without a licence. The word " premises" is a generic term meaning open land or land with buildings or buildings alone; the salt works came within the expression "premises" in the definition of the word " factory ". The extraction of salt from sea water was not due merely to natural forces but was due to human efforts aided by natural forces. The process of conversion of sea water into salt was a "manufacturing process " as defined in. cl. (k) of s. 2, inasmuch as salt was manufactured from sea water by a process of treatment and adaptation. By this process sea \.vater, a non.commercial article, was Cv .... verted into a different thing salt, a commercial article.

Kent v. Astley, L.R. (1869) 5 Q. B. 19, Redgrave v. Lee,

(1874) 9 Q. B. 363 and Nash v. Hollinshead, [rgor] r K.B. 700, distinguished.

Sedgwick v. Watney, Combe, Reid & Co. Ltd. [1931] A.C. 446, Grove v. Lloyds British Testing Co. Ltd. [1931] A.C. 466, Kaye v.

Burrows & Ors. and Hines v. Eastern Counties Farmers' Co-operative Association Ltd. [1931] A.C. 477, The State of Kerala v. V. M.

Patel, Cr. App. No. 42 of 1959, decided on 12-10-1960, In re: Chinniah, Manager, Sangu Soap Works, A.LR. 1957 Mad. 755, Paterson v. H11nt (1909) IOI L.T.R. 571, Law v. Graham, [1901] 2 K.B. 327, Ho.ue v. Truman, Hanbury, Buxton & Co. (1902) 86 L.T.R. 417, and JicNicol v. Pinch, [1906] 2 K.B. 352, referred to.

CRIMINAL

APPELLATE

JURISDICTION: Criminal Appeal No. 32 of 1956.

Appeal from the judgment a.nd order dated October 7 and 10, 1955, of the Bombay High Court in Criminal Appeal No. 817of1955.

Porus A. Mehta, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant.

N. S. Bindra, R.H. Dhebar and T. M. Sen, for the respondent .

1961. January 27. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.-This is an appeal by specia1Raghuba, Dayal leave by Ardeshir H. Bhiwandiwala against the order of the High Court of Bombay allowing an appeal

z96z by the State against the acquittal of the appellant

A deshir of an offence under s. 92 of the Factories Act, 1948 n. Bh; wandiwala (Act LXIII of 1948), hereinafter called the Act, v. for his working the Wadia Mahal Salt Works situate State of Bombay at Wada!&, Bombay,· without obtaining a licence

R h - under s. 6 of the said Act read with r. 4 of the rules ag ubar Dayal J. framed under the Act.

The main question for determination in this appeal is whether these Salt Works come within the definition of the word " factory " under cl. (m) of s. 2 of the Act. The answer to this question depends on the meaning of the word " premises " in the definition of the word "factory "and on the determination whether what is done at this Sa.It Works in connection with the conversion of sea water into crystals of salt comes within the definition of the expriission " manufacturing process" in cl. (k) of s. 2 of the Act.

The Salt Works extend over an area of about two hundred and fifty acres. Some of the other salt works, however, have even larger areas. The only buildings on this land consist of temporary shelters constructed for the resident labour and for an office.

At a few places, pucca platforms exist for fixing the water pump when required to pump water from the sea. When not required, this pump is kept in the office. With the exception of the constructions already mentioned, the entire area of the Sa.It Works is open. On the sea side, it has bunds in order to prevent sea water flooding the salt pans.

Clause (m) of s. 2 of the Act reads:

" ' factory ' means any premises including the precincts thereof-

(i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any pa.rt of which a manufacturing prooeBB is being carried on with the aid of power, or ls ordinarily so carried on, or

(ii) whereon twenty or more workers are working, or wiire working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, -

I..

but does not include a mine subject to the opera. >96r tion of the Mines Act, 1952, or a. railwa.y running Ardeshir shed." H. Bhiwanttiwala The relevant portion of the definition of" manufacturv. ing process" in cl. (k) of s. 2, reads : s1a1, of Bombay "'manufacturing process' means any process for- -- ") k' 1 · t' fi h Raghubar Dayal ]. (1 ma mg, a termg, repa1rmg, ornamen mg, ms - ing, packing. oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting a.ny article or substance with a view to its use, sale, tra.nsport, delivery or disposal ; or

(ii) pumping oil, water or sewage ; or ............ " It is contended for the appella.nt that the expression "premises" in the definition of the word "factory" means " buildings " and that "mere open land " is not covered by the word " premises " and as there are no buildings except temporary sheds on the Salt Works, the Salt Works cannot be said to be a " factory ". We do not agree with this contention. The word "premises " has now come to refer to either land or buildings or to both, depending on the context. The meanings of the word " premises " in various lexicons and dictionaries are given below :

(a) Wharton's Law Lexicon:

" Premises " is often used as meaning " land or houses".

(b) Cochran's Law Lexicon, IV Edition:

" Premises " means " houses or la.nds ".

(c) Black, H.C., Law Dictionary, IV Edition:

" Premises " as used in the estates means-

(i) lands and tenements ; an estate; land and buildings thereon; the subject-matter of the conveyance ;

(ii) a distinct a.nd definite locality and may mean a room, especially building or other definite a.rea;

(d) Ea.rl Jowitt, Dictionary of English Law:

" Premises" ....•.... from this use of the word, "premises" has gradually acquired the popular sense ofland or buildings. Originally, it was only used in this sense by laymen, and it was never so used ill well-dra.wn instruments, but it is now

z96z

Ardeskir H. Bhiwantliwala

State of Bombay

Raghubar Dayat J.

frequently found in instruments and in Acts of Parliament as meaning land or houses, e.g., the Public Health Act, 1875, s. 4, where "premises" includes messuages, buildings, lands, easements, tenements and hereditaments of any tenure ..... .

(e) Ballentine, J.A., Law Dictionary with Pronunciation, II Edition :

"Premises "-as applied to land, Webster's New International Dictionary defines the word as follows: The property conveyed in a deed ; hencP

in general, a piece of land or real estate ; some. times, especially in fire insurance papers, a building or buildings on land; the premises insured.

It is therefore clear that the word " premises " is a generic term meaning open land or land with buildings or buildings alone.

The expression " premises including precincts " it has been urged, clearly indicates that in the context of the definition of the word "factory'', premises meant only buildings as buildings alone can have precints and there can be no precincts of any open land. This expression " premises including precincts" does not necessarily mean that the premises must always have precincts. Even buildings need not have any precincts. The word "including" is not a term restrrcting the meaning of the word " premises " bnt is a term which enlarges the scope of the word " premises ". We are therefore of opinion that even this contention is not sound and does not lead to the only conclusion that the word "premises" must be restricted to mean buildings and be not taken to cover open land as well.

Sub-cl. (bb) of cl. (I) of s. 7 of the Act requires the occupier of a factory to mention in the written notice to be sent to the Chief Inspector before his occupying or using any premises as a factory, the name and address of the owner of the premises or building including the precincts thereof referred to in s. 93.

This sufficiently" indicates that the word " premises " is not restricted in Rcope to buildings alone. Of course, the building referred to in this cl<J.use is the

building which is referred to in s. 93 of the Act. z96z Sub-s. ( l) of s. 93 reads : Ardeshir "Where in any premises separate buildings a.re H. Bhiwandiwala leased to different occupiers for use as separate v. factories, the owner of the premises shall be res- State of Bombay ponsible for the provision and maintenance of -- common facilities and services, such as approach Raght:bar Dayal .T roads, drainage, water supply, lighting and sanitation." This a.gain makes it clear that "premises" refer to an entire area which may have within it several separate buildings.

Further, s. 85 empowers the State Government to declare that all or any of the provisions of the Act shall apply to any place wherein a manufacturing process is carried on with or without the aid of power or is so ordinarily carried on notwithstanding certain matters mentioned in the section. The word "place" is again a general word which is applicable to both open land and to buildings and its use in this section indicates that the Act can be applied to works carrying on a manufacturing process on open land.

There is thus internal evidence in the Act itself to show that the word "premises" is not to be confined in its meaning to buildings alone.

The High Court has rightly pointed out that the Act is for the welfare of the workers and deals with matters connected with the health, safety, welfare, working hours of the workers, employment of young persons and leave to be granted to workers and that, therefore, the legislature could not have intended to discriminate between the workers who are engaged in a manufacturing process in a building and those who are engaged in such a process on open land.

It is contended for the appellant that the various provisions of the Act cannot be applicable to salt works where the process of converting sea water into salt is carried on in the open. This is true as regards some of the provisions, but then there is nothing in the Act which makes it uniformly compulsory for every occupier of a factory to comply with every requirement of the Act, An occupier is to comply

x96x with such provisions of the Act which apply to the

A d h. factory he is working. It is admitted that the workers H. Bh:::n;; wala have a.t times to work a.t night; that some women v. workers are ernployed; that workers have to take State of l)ombay rest; that they have to take food at about mid.day;

-~ that they do require drinking water and that first.aid R•ghubar Dayal f. things a.re kept in the office room. It may be that the occupier ha.a ma.de adequate arrangements for such purposes but this does not mean that the provisions of the Act concerning suoh amenities shall not be applicable to salt works. Further, the Act has sufficient provisions empowering the State to exempt the occupiers from complying with certain provisions as a special case.

Section 6 of the Act empowers the State Government to make rules requiring the previous permission in writing of the State Government or the Chief

Inspector to be obtained for the site on which the factory is to be situated and for the construction or extension of any factory or class or description of factories. This provision of the Act together with the relevant rules framed in that connection, does not mean that every factory must have a building aud that necessary permission for its construction or extension is to be obtained. Of course, every factory must have a. site and previous permission of the State

Government or the Chief Inspector may be necessary before the site is to be used for the purposes of a factory.

Further, there is nothing in the definition of "manufacturing process" which would make it necessary that this process be carried on in a. building.

This definition really deals with the nature of the work done and not with where that work is to be done. The work can be done both in the building or in the open.

Lastly, learned counsel for the appellant relied on certain cases which a.re detailed below: In Kent v. Astley (1) it was hela that a slate quarry, a large open space extending over an area of 400 acres, the works of which were carried on in the open

(1) (1869) L.R. Q.B. 19.

air, the only buildings being sheds, was not a "factory" r96r within the meaning of30 & 31 Viet. c.103 (Factory Acts

A 4 ,. • b C kb C rU- ExtenSIOn Act, 1867), s. 3, su -s. 7. oc urn, .J., H Bhiwandiwal• said at page 23: v. " Therefore, if this work had been carried on State of Bombay within a building, I think that it would have fallen - within the scope of the statute, and that the justices Raghub•• Day•/ J. ought to have convicted ......... , and I do not think that in using the word ' premises ' the legislature intended to include sheds erected in the quarry merely as a protection against the weather; they are only accessories to the quarry and the quarrying processes; and the legislature has not yet declared that open air works shall be within the scope of the Factory Acts ...... But, except in cases which have been specially provided for, it has not as yet included works carried on in the open air, because they are less exposed to the evils incident to manufactures carried on in buildings." Mellor, J., said at page 24:

"The legislature has from time to time extended the Factory Acts to different trades and businesses.

Numerous slate quarries exist, and a large number of persons are employed in them: if the legislature intended to apply the Factory Acts to them, it would have been done by special enactment." Hannen, J., said :

"I agree with my Brother Mellor, that if the legislature had intended to apply the Factory Acts to quarries, they would have been expressly mentioned, and this omission leads strongly to the conclusion that it was not intended to interfere with persons employed in. quarries." It is not clear from t.hese observations alone why the slate quarries where work was carried on in the open air and not in building, was not held to be "a factory" on that account. This is, however, apparent when one considers that the Factory Act of 1833 was enacted to regulate the labour of children and young persons in the mills and factories of the United Kingdom and applied only to cotton, woollen, worsted, hemp, flu, tow. linen or silk mill or factory wherein

zg6z steam or water or any other mechanical power was

A•deshi• used to propel or work the machinery. in such mill or H. Bhiwandiwala factory. The other subsequent Acts simply extended

v. the scope of the Factory Act of 1833. The Act of St"'4 of Bombay 1844 was to amend the law relating to labour in R - factories and provided by s. LXXIII that " the aghwbar Dayal f. Factory Act as amended by this Act and this Act " would be construed together as one Act. The relevant portion of the definition of the word " factory " in this Act reads:

"The word 'factory ' notwithstanding any Provision or Exemption .in the Factory Act shall be taken to mean all Buildings and Premises situated within any part of the United Kingdom of Great Britain and Ireland wherein or within the Close or Curtilage of which Steam, Water, or any other mechanical Power shall be used to move or work any Machinery employed in preparing, manufacturing, or finishing, or in any Process incident to the Manufacture of Cotton, Wool, Hair, Silk, Flax, Hemp, Jute, or Tow, either separately or mixed together, or mixed with any other Material or any Fabric made thereof." This indicates that " premises " need not consist of buildings and that they mean something different from buildings.

The Acl; of 1850 was for the regulation of the employment of children in factories and provided that that Act would be construed together with the previous Acts as one Act.

There is nothing particular in the Factory Act of 1856 to refer to.

The Act of 1860 dealt with the employment of women, young persons and children in bleaching works and dyeing works under the regulations of the Factories Act; s. VII, which defines the words " Bleaching Works" and "Dyeing Works" reads, with regard to its relevant portion, thus :

" In the Construction of this Act the words 'Bleaching Works' and 'Dyeing Works' shall be understood respectively to mean any Building, Buildings, or Premises in which Females, Young

Persons a.nd Children, or a.ny of them, a.re employed, •96i a.nd in One or more of which Buildings or Premises k d AriUs/Mr a.ny Process previous to pac ing is carr1e on ... " H. Bhi,.aJtdiwo/a Section IX gives the exemptions and its releva.nt por. v. tion is : Sial• of B°"""'Y : " Nothing in this Act contained shall extend or - apply to ... or to any Premises, either open, inclosed, RagAu/lar D•y41 J. or covered, used or to be used bona fide exclusively for the purposes cif carrying on ...... " This makes it clear that "premises " can consist of open areas.

The 1867 Act is descdbed as " Fa.ctory Acts Extension Act, 1867 ", and according to s. 3, "factory " means: .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.

Any premises, whether adjoining or separa.te, in the same occupation, situate in the sa.me City, Town, Parish, or Place, and constituting One Tra.de Establishment, in, on or within the Precincts of which Fifty or more Persons are employed in any ma.nufa.cturing Process ;

" ••••••••••••••••••••••••••• p •••••••••••••••••••••••••••••••• It is clear from the series of legislation up to the decision in Kent'B case(') that the Parliament specifically enacted with respect to the places which were to be controlled by the respective Factory Acts and tha.t it was therefore that it was said tha.t if the legisla.ture ha.d intended to apply the Factory Act to the slate quarries, it would have extended the Act to them. As the various Factories and Mills which were covered by . the Factory Act of 1833 were such whioh could function only in buildings, the conception grew that nothing would come within the expression " factory " unless it had a building and unless the Factory Act definitely provided for the application of the Act to it.

The next case relied on is Redgrave v. Lee (•). The earlier decision was just followed in this.

The next case cited for the appellant is N aah v.

HoUinahead (•).

This case too is distinguishable as the fa.rm on which the workman was employed to drive a movable steam engine for the purpose of working a

(I) (t8~J L.R. S Q.B. 19.

I•) (1874) g Q.B. 363.

(3) [1901) 1 K.B. 700.

'96r mill for grinding meal in tended to be used for food for Ar.imli stock on the farm. and nnt for sale, was held to be H. Blti""'llil~ not a factory in view of the fact that the meal which v. was ground was not intended for the purpose of sale

SltJU ~1 BOHtbdy but was meant only for feeding the stock from the R - . farm. It was also observed that the consequences of ac'"'b•r Day.I f . .holding a farm to be a factory "would really produce a ludicrous result ". It is on the basis of this observation that the trial Court, in the present case, held that the application of the provisions of the Act to the Salt Works would lead to " ludicrous results". We have already stated that such is not the result of the application of the relevant provisions of the Factories Act to the Salt Works.

There is nothing useful for the present case, for our .purpose, in Weston v. Lonilnn County Council (1) and in Wood v. London County Council(").

It may now be mentioned that the Factories Act, 1937 (1 Edw. 8 & 1 Geo. 6, c. 67) specifically provides in sub-s. (7) of s. 151 t; hat "premises 8hall not be excluded from the definition of a factory by reason only that they are open air premises". Various clauses of .aub-s. (I) of s. 151 define "factory" to mean "any

premises in which certain type of work is carried on by way of trade or for purposes of gain." These provisions support the interpretation we are putting on the word "pn1mises" in cl. (m) of s. 2 of the Act.

We therefore hold that the Salt Works would come within the meaning of the expression "premises " in the definition of the word "factory " and would be a factory if the work carried on there comes within the definition of " manufacturing process".

The second contention for the appellant is that the process of converting sea water into salt does not amount to " manufacturing process " as no process for making, altering, packing, cleaning or otherwise treating or adapting any artwle or substance with a view to its use, sale, transport, delivery or disposal is carried on. It is also urged that no other process mentioned in cl. (k) of s. 2 is carried on in the Salt Works, that it is just the force of gravity and the solar energy which

• (1) [1941] 1 K.B. 6og.

(2) [1941] 2 K.B. 232.

do the necessary wGrk for the occupiers of th& Salt r,#r WQ!"ks to convert sea water into salt and. that no AriH 8 . human agency is employed in suoh conversion. This H. Bli.,:; walo contention found favour with the trial Court. The ,,.

High Court, however, did not agree with it and stated: s,.,, tif BooolWy

"In our opinion it is a. travesty of language to say - that although 47 workmen are working on theseR""'-'°"""' I works, salt is ma.de without the assistance of human agency ............ Now, in this case there is no doubt that the workmen employed on these salt works a.re dealing with the sea water in a. particular manner

and but for the dealing with it in that manner, salt as made on these works would not be ma.de. " We agree with the High Court that the conversion of sea water into salt is not due merely to natural forces, but is due to human efforts aided by natural forces.

The sea. water in the sea never becomes salt merely on account of the play of sun's rays on it. The natural force of gravity is utilised for carrying sea. water from the sea. to the reservoirs, thence to the tapavanis and from there to the crystallizing pans which a.re specially prepared by thumping the mud and ma.king the lay.er of the ground hard and water-tight. The solar energy is utilised in evaporating the water in the brine.

The human agency is employed for other processea carried on in the Salt Works.

The process of ma.king salt is described in the letter dated July 12, 1949, included in Exhibit 1, from the President, Salt Merchants and Shilotires Association, Bombay, to the Secretary, Department of Industry and Supply, Government of India., New Delhi, thus:

" A sa.lt work ma.inly consists of an open marshy area surrounded by mud embankment, the height of which is above the highest tide water mark in that locality to prevent inundation. In this embankment, sluice gates are provided with suitable places to take in and discharge the sea water and the waste water respectivelr,. The inner enclosed area. is divided into compartments for the storage of sea brine of different densities. When the salt is formed, it ill stored on the platform by the labourers engaged in the manufa.cur!l. It is then weighed, bagged &nd

z96z

A..US/lir H. Bhiwandiwala

Stai. of Bombay

RaghubaT Dayal J.

carried to Railway Station or to a port of shipment ........... .

For salt production the sea water is taken into the Reservoirs at high water tide twice during a month. The high tides take place on about nine or ten days in a month, five days during day time and four times at night.

Some of the labourers are detained for this work but they are also not required to be present the whole time, when tha evaporation is going on. Once the brine is let into the crystallising beds, its surface is not to be disturbed for four or five days. After this, the labourer has to be careful to see that the density does not exceed a certain limit and that the other kiuds of salt contained in the brine are not deposited, thus contaminating the sodium chloride (common salt) already formed. This they learn by experience.

Sifting and storing then begins. The labourer has also to refill the crystallizing beds with fresh brine.

Thus the labourers' work is intermittent and not continuous for any fixed hours. " It is clear therefore that labourers are employed for

(i) admitting sea water to the reservoirs by working sluice gates, sometimes at night also, or the pump;

(ii) filling crystallizing beds; (iii) watching he density of brine in the crystallizing beds; (iv) seeing that the density does not exceed certain limits and that salts other than sodium chloride (common salt) are not formed; (v) scraping and collecting salt crystals;

(vi) grading the salt crystals by "sieving" and

(vii) putting salt into gunny bags.

It follows that it is due to human agency, aided by natural forces, that salt is extracted from sea water.

The processes carried out in tlie Salt Works and described above, come within the definitiou of" manufacturing process" inasmuch as salt can be said to have been manufactured from sea water by the process of treatment and adaptation of sea water into salt. The sea water, a non-commercial article, has been adapted to salt, a commercial article.

The observations in Sedgwick v. Watney, C<>mbe, Reid & C<>mpany, Limited (1) at page 463, support the

(1) [1931) A.C. 446.

3 S.C.R.

SUfREME COURT REPORTS 605

view that the process undergone at the Salt Works is '96' the process. of treatment of sea water fo~ the purpose AYdesAfr of convertmg it into salt.

The hered1tament, the H. Bhiwadiroala subject of controversy in the case, was used in connecv. tion with the manufacture of "bottled beer " by the Slate of Bombay respondent. Brewed beer, which was not in a drink- - able condition, and therefore not saleable as draught Raghubar Dayal f. beer, was brought to the premises in tank wagons and pumped into large tanks. Carbonic acid gas was put into it. It was then filtered and put into bottles which were corked and labelled.

The bottles were then packed and removed for delivery. The question for decisiou was whether the hereditament was occupied and used for the purpose of distributive wholesale business. In that connection it was said :

" But the point is whether the treatment that the beer undergoes in these premises is a mere prelude to distribution. I am clearly of opinion that it is not. The finished article that is being prepared for

ditribution is bottled beer. It undergoes treatment, a treatment which changes its quality and makes it from an unpotable and unmarketable article into a potable and marketable one." In the present case, in the Salt Works, the finished article is "salt". It does not enter the Salt Works as "salt". It enters as brine which, under the process

carried out, changes its quality, and becomes salt, a marketable article.

The observations in Grovt v. Lloyds British Testing Go. Ltd. (1) at page 467 support the view that the conversion of sea water into salt amounts to adapting it for sale. It is stAted there :

" I think • adapting for sale' points clearly to something being done to the article in question which, in some way, makes it in itself a little different from what it was before." In Kaye v. Burrows & Others ancl. Hines v. Eastern Counties Farmers' Go operative .Association Ltd.'(') it was said at page 484: " The test is just as it was in the bottled beer case. You must look at what is the finished article

(1) [1931) A.C. 'f66,

(z) [19~1J A.C. '177

A1deshi1 H. Bhiwandiuiala v.

State of Bombay

to be turned out. If that finished article is only put into the condition of a finished article by the processes to which it has been subjected in the hereditament, then the processes will fall within the expression 'altering or adaptation for sale '. * * • RaghubarDayal J.

In both the cases of the rags and the seeds the finished article is different from the article in bulk which enters the hereditament, and that is, in our opinion, an adaptation for sale." In The State of Keraia v. V. M. Patel (1) this Court held the treatment of pepper and ginger to be a

"manufacturing process" where the work which was carried on in the premises of the firm was described thus:

" It consisted of winnowing, cleaning, washing and drying pepper on concrete floor. A similar process was also being applied to ginger, which was dipped in llme and laid out to dry in a warehouse on the premises." The case reported as In re: Chinniah, Manager, Sangu Soap Works(') is of no help to the appellant as there nothing definite was held about the process carried out to be a manufacturing process or not and what was stated was in connection with the word "manufacture" in general and not with reference to "manufacturing process."

Similarly the case reported as Paterson v. Hunt (3) is not of much help. It simply held that mere sorting of rags will not amount to adapting for sale.

In l this case reference was made to it being held in Law

v. Graham(') that washing the bottles before the beer • was put into them was not adapting the beer, or adapting the bottles or adapting the bottled beer for l the purpose of sale and in Hoare v. Truman, Hanbury, Ill Buxton & Co.(') that it was a case of adapting for sale when gas was used to force carbonic acid at high pressure into the beer for charging it with the acid and mixing it and so aerating the beer. The case is

(1) Cr!. <\pp. No. 42 of 1959.

P, ided on October 12, 1960.

(2) A.l.R. 1957 Ma<!. 755

I 3) (1909) 101 L.T.R. 571.

(4) [1901] 2 K.B. 327.

(5) (<902) 86 'L.T.R. 417.

distinguishable as sorting of rags brought about no r96r change in particular rags sorted out. They were just Ardeshir separated from other things with which they were H. Bhiwandiwala mixed and therefore the rags were in no way adapted v. to some different article.

This cannot be said in State of Bombay connection with the conversion of sea water into salt. R h b- 11 , . aguarDaya, The decisions in McNicol v. Pinch (1), State v.

Ohrestien Mica Industries Ltd.(') and G. R. Kulkarni

v. The State (3) are of no help in determining the point under consideration as there the word " manufacture " was interpreted according to the dictionary meaning and the context. In the present case, we are considering the definition of the expression " manufacturing process " and no dictionary meaning of the word " manufacture" and no interpretation of what constitutes " manufacture " for the purposes of other Acts can be of any guide. It may, however, be noted that even according to the meaning given to the word " manufacture", the conversion of brine into salt would amount to manufacture of salt as " the essence of making or of manufacturing is that what is made shall be a different thing from that out of which it is made "-vide McNicol v. Pinch(') page 361.

We are therefore of opinion that the process of converting sea water into salt carried on on the 11, ppellant's Salt Works comes within the definition of " manufacturing process " in cl. (k) of s. 2 of the Act.

Reference was made to the expression of opinion by the Chief Inspector of Factories in his letter to the Deputy Salt Commissioner, Bombay, in support of the appellant's contention that salt works as such do not come within the definition of the word " factory ".

It was stated in this letter that originally salt pans were considered to be amenable to the Factories Act a.nd a.s such salt pan occupiers were informed to get the pans registered and licensed. However, as some doubt was felt, the queRtion was re-examined and it had been found that salt pans would not be factories except where they were equipped with a building used

(1) [1906] 2 K.B. 352.

(2) I.L.R. r1956] Pat. 660.

(3) l.L.R. [1957] M. P. 13.

'96' in connection with the manufacture of salt. The

A;:;:;.;.

Deputy Commissioner for Salt was not satisfied with H. Bhiwandiwala this view and in his reply dated September 13, 1952, v. stated, after referring to theprovisionsof cl. (m) oh. 2

s1a1. 01 Bombay of the Act, that " by premises is meant building and

R , ba D 1 1 its adjuncts". No further correspondence between agnu ' aya h h ' ' h b b h h d d t ese aut ont1es as een roug t on t e recor an we do not know what had been the final view taken by the authorities in this connection. Further, such

a view expressed by any authority is of no help in deciding the questions before us.

It may also be mentioned that the representation made by the President of the Salt Merchants and Shilotires Association on July 12, 1949, to the Secretary to Government of India, Department of Industries & Supply, did not raise the contention that the salt works did not come within the definition of the word "factory" and merely represented that the provisions of the Act be not applied to the salt works in view of the matters mentioned in that representation.

Even the reply by the appellant's firm to the Inspector of Factories dated April 9, 1952, did not state that the salt works did not come within the definition of the word "factory" and simply stated that the provisions of the Indian Factories Act were considered redundant for which their Bombay Salt Association had already made a suitable representation to the Government of India. It was for the first time, .in the written statement filed by the appellant in the trial Court, that it was contended that the Salt Works would not come within the word " factory " in the Act. Omission of the accused or the Association of salt merchants to contend, at an earlier stage, that the salt works do not come within the definition of the word "factory " is also not of any relevance for our considering the questions before us. We ha. ve ma.de reference to it only in view of the reference ma.de by the appellants to an opinion expressed by the Chief Inspector of Factories in his letter to the Deputy Salt Commissioner dated September 13, 1952.

In view of the above, we are of opinion that the appellant's Sa.It Works do come within the definition

of the word "factory " and that the appellant has '96' been rightly convicted of the offence of working the

A~-;,. factory without obtaining a licence. We therefore H. BA:wn~:wol• dismiss the appeal. v.

Appeal di8missed. 51•1• of Bombay

THE PIONEER MOTORS (PRIVATE) LTD. v.

Raghubar Dayol ].

THE MUNICIPAL COUNCIL, NAGERCOIL.

(and connected appeals) (J. L. KAPUR, M. HrnAYATULLAH and J. C. SHAH, JJ.) Profession Tax-Provision for time before levy, if mandatory- Reasonableness-Commissioner'> powers, if can carry out executive powers of the Municipality-" Profession", definition of-Travancore District Municipalities Act, rn6 (Act XX ill of the Malayalam year III6), ss. I6, 78, 9I.

The imposition of "profession tax" by the respondent Municipal Council under the Travancore District Municipalities Act (Act XXIII of the Malayalam year n16) was challenged on the grounds, inter alia (1) that the requisite notification was not published by the Municipal Council but by its commissioner,

(2) that the period of thirty days which was given for filing objections to the imposition was insufficient in Jaw which required a period of "not Jess than a month ", and (3) that this was a mandatory provision under the proviso to s. 78 of the Act.

Held, tr.at under s. r6 the Commissioner being the executive authority of the Municipal Council was authorised to give effect to the resolutions of the Council and to perform all its executive duties.

The words "not being less than one month" in the proviso to s. 78 implied the necessity for one clear' month's notice excluding the first and last day of the month, but the use of the words

" reasonable period " before the word~ " not being less than one mont.h " showed that the time given must be reasonable. In view of the facts of the case the period allowed must be regarded as reasonable and to have complied with the provision which is directory in its later part.

Commissioner. of Income-tax v. Ekbal and Co. [1945] 13 I.T.R. 154 and Thompson v. Stimpson, [196o] 3 All E.R. 500, distinguished. Municipal Council, Cud<lapah v. The Madras and Soutlurn Mahratta Railway Ltd. (1929) I.L.R. 52 Mad. 779, The Borough Municipality of Amalner v. The Pratap Spinning, Weaving and Manufacturing Co. Ltd., Amalner, I.L.R. [1952] Born. 918 and Kalu

Karim v. Municipality of Broull (1927) I.L.R. 51 Bom. 764, referred to.

I96I

s. 302

Indian Penal Code

ARDESHIR H. BHIW ANDIWALA

THE STATE OF BOMBAY. (JAFEB IMAM, J.

L. KAPUR

K. c. DAS GUPTA

RAGHUBAR DAYAL

Factories Act

ss. 2(k)

s. 92

Factories Act, 1948

s. 2(k)

State of Bombay

s. 2

Porus A. Mehta

R. Ganapathy Iyer

G. Gopalakrishnan

N. S. Bindra

R.H. Dhebar

T. M. Sen

Ardeshir H. Bhiwandiwala

s. 92

Factories Act, 1948

s. 6

s. 2

s. 2

Sa.It Works

s. 2

Mines Act, 1952

H. Bhiwanttiwala

s. 2

Wharton

Cochran

Ardeskir H. Bhiwantliwala

State of Bombay

Raghubar Dayat

Public Health Act, 1875

s. 4

Ballentine

s. 7

s. 93

s. 93

s. 93

s. 85

Section 6

ExtenSIOn Act, 1867

s. 3

s. 7

H Bhiwandiwal•

Bombay

Raghub••

Mellor

Hannen

Mellor

United Kingdom

Great Britain

Factories Act

Acts Extension Act, 1867

s. 3

Factories Act

s. 151

s. 151

s. 2

s. 2

July 12, 1949

New Delhi

H. Bhiwandiwala

RaghubaT Dayal

RaghubarDayal

Chinniah

Sangu Soap Works

October 12, 1960

s. 2

Factories Act

September 13, 1952

Government of India

April 9, 1952

Factories Act

Bombay Salt Association

MUNICIPAL COUNCIL, NAGERCOIL

M. HrnAYATULLAH

J. C. SHAH

Travancore District Municipalities Act

s. 78

s. 78


3 S.C.R.

SUPREME COURT REPORTS 609

of the word "factory " and that the appellant has '96' been rightly convicted of the offence of working the

A~-;,. factory without obtaining a licence. We therefore H. BA:wn~:wol• dismiss the appeal. v.

Appeal di8missed. 51•1• of Bombay

THE PIONEER MOTORS (PRIVATE) LTD. v.

Raghubar Dayol ].

THE MUNICIPAL COUNCIL, NAGERCOIL.

(and connected appeals) (J. L. KAPUR, M. HrnAYATULLAH and J. C. SHAH, JJ.) Profession Tax-Provision for time before levy, if mandatory- Reasonableness-Commissioner'> powers, if can carry out executive powers of the Municipality-" Profession", definition of-Travancore District Municipalities Act, rn6 (Act XX ill of the Malayalam year III6), ss. I6, 78, 9I.

The imposition of "profession tax" by the respondent Municipal Council under the Travancore District Municipalities Act (Act XXIII of the Malayalam year n16) was challenged on the grounds, inter alia (1) that the requisite notification was not published by the Municipal Council but by its commissioner,

(2) that the period of thirty days which was given for filing objections to the imposition was insufficient in Jaw which required a period of "not Jess than a month ", and (3) that this was a mandatory provision under the proviso to s. 78 of the Act.

Held, tr.at under s. r6 the Commissioner being the executive authority of the Municipal Council was authorised to give effect to the resolutions of the Council and to perform all its executive duties.

The words "not being less than one month" in the proviso to s. 78 implied the necessity for one clear' month's notice excluding the first and last day of the month, but the use of the words

" reasonable period " before the word~ " not being less than one mont.h " showed that the time given must be reasonable. In view of the facts of the case the period allowed must be regarded as reasonable and to have complied with the provision which is directory in its later part.

Commissioner. of Income-tax v. Ekbal and Co. [1945] 13 I.T.R. 154 and Thompson v. Stimpson, [196o] 3 All E.R. 500, distinguished. Municipal Council, Cud<lapah v. The Madras and Soutlurn Mahratta Railway Ltd. (1929) I.L.R. 52 Mad. 779, The Borough Municipality of Amalner v. The Pratap Spinning, Weaving and Manufacturing Co. Ltd., Amalner, I.L.R. [1952] Born. 918 and Kalu

Karim v. Municipality of Broull (1927) I.L.R. 51 Bom. 764, referred to.

I96I

I96I The definition of "profession" as given in s. 81 includes business.

J:Jioneer Motors (Private) Ltd.

\",

CrvrL

APPELLATE JuRI8DICTION: Civil Appeals Nos. 499 to 502 of 1958.

Munidpal cuncil.

AppPals from the ju(lgment and decree dated July

.Vagmoil 13, 1956, of the forml'r Travancore-Cochin High Court in A. S. Nos. 94, !l5, 96 and 156 of 1952.

G. S. Pathak and G. C. Mathur, for the appelhmts (in C. A8. Nos. +!l!l to 501of58).

P. George and M. R. Krishna Pil/, ai, for the appellrtnts (in C. A.No. 502 of 58).

T. N. Subramania Iyer, R. Gaiwpathy Iyer and G. Gopalakrishnan, for the respondent.

1961. .January 27. The Judgment of the Court was _delivered by

Kapur J.

KAPUR, J.-These four appeals are brought against the judgments and decrees of the erstwhile High Court of Travancore-Cochin. The appellants were the plaintiffs in the respective suits out of which these appeals have arisen and the respondent was the defendant in all the suits. As rtll t.he suits involve a common question of law, it will be convenient to dispose of them by one judgment.

The facts of the cases are these. On September 9, 1943, the N agercoil Municipal Council the respondent, passed a resolution under A. 78 of the Travancore District Municipalities Act (Act XX III of the Malayalam year 1116), hereinafter called the Act.

J3y this resolution, it was resolved to levy a profession tax at the rates specified in the schedule. ; This was notified in the Government Gazette of September 26, 1943, under the name of the Commissioner of the respondent Council. In this notification, it was stated :-

" Any inhabitant of the local municipal town objecting to the proposal may submit his objection in writing to this office within 30 days of date of publication of this notification in the Government Gazette." This notification was also published in a local newspaper called the Abhimani. It does not appear, nor is there any assertion or allegation that any

objection was raised to this tax by th" appellants or 1961 any one else. On January 12, 1944, a reso::. tion under Pioneer M 010, s s. 79 of the Act was passed, by which the profession (Prioale) Ltd. tax became payable from the beginning of the second v. half of the Malayalam year lll9. A trust, KottarMunieipal Cou•ci Chetty Ninar Desikavinayaga Swamy filed a snit on February 10, 1946, challenging the legality of this tax.

C.A. 502 of 1958 has arisen out of that suit. Amongst other allegations, which are common to the other suits, which will be mentioned presently, the trust pleaded that it was not carrying on a profession within the meaning of the word used in the Act and that it was only a religious trust and had no profession. That suit was tried by the Munsif and was decreed.

An appeal was taken against that decree to the District Judge.

Three private limited companies carrying on business brqught three suits challenging the legality of the imposition of the tax out of which the other three appeals, i.e., Civil Appeals Nos. 499 to 501, have arisen. In these suits, it was alleged that the publication of the resolution was not in accordance with the provisions of s. 78 of the Act in so far as (1) it was not published by the respondent Municipal Council, but by the Commissioner; (2) the newspaper in which the advertisement was published was not selected by the Council ; (3) time given in the notification was fixed not by the Conncil, but by the Commissioner; and (4) the period prescribed in the notification, that is, "within 30 days", was not fixed by the Council and was not in accordance with the Act. The respondent Municipal Council denied these allegations and several issues were raised and the suits were decreed. The appeal which had been taken in the suit by the Trust was also decided in favour of that plaintiff. The result was that all the suits and the appeal were decided against the respondent Municipal Council. It took four appeals to the High Court. The decrees were reversed and the suits of the various plaintiffs were dismissed.

Against those judgments and decrees, these four appe, alil have been brought by the plaintiffs, in the various suits, who are now the appellants.

Nagercoil

Kapur].

I96I In Civil Appeals Nos. 499 to 501, Counsel for the

Pione"" Mot°"' appellants has raised two points (l) that the publica.- (Peivate Lid.) tion was not by the Council and (2) that the time given v. in the notification, i.e., "within 30 days " was not in Municipal Council, accordance with the law and as these were conditions

Nagercoil precedent to the legality of the resolution under s. 79

Kapur]. the resolution was ultra. vires and therefore the imposition of the tax was illegal. It is, therefore, necessary to examine the various provisions of the Act upon which the whole argument has proceeded.

Chapter VI of the Act deals with Taxation and Finance. In s. 77 are enumerated the various taxes which can be levied by Municipal Councils. Section 78 gives the procedure for the levying of the tax and

when quoted it is as follows:- '.' S. 78. Resolution of Oouncil determining to levy tax or tolla.-Auy resolution of a municipal council determining to levy a tax or toll shall specify the rate at which any such tax or toll shall be levied and the date from which it 13ha.ll be levied : Provided that before passing a resolution imposing a. tax or toll for the first time or increasing the rate of an f; lXisting tax or toll, the council shall publish a. notice in Our Government Gazette and at lea.st in one Malaya.lam o~ Ta.mil newspaper having circulation in the municipality of itB intention, fix a. reasonable period not being less than one month for submission of objections, and consider the objections, if any, received within the period specified." (Italics a.re ours).

After the various steps given in s. 78 have been ta.ken, a. Municipal Council has then to adopt the taxes proposed by means of a resolution under s. 79, which provides:-

" S. 79. Notifiwti<>n of new taxes 'And tolls.-When a municipal council shall have"determined subject to the provisions of Section 78 to levy any tax or toll for the first time or at a new rate the executive authority shall forthwith publish a notification in Our Government Gazette . and by beat of drum specifying the rate at which the date from which,

and the period of levy, if any, for which such tax or toll shall be levied." The functions of the executive authoritv, that is, of Pioneer Mol<>I'• the Commissioner of the Council are contained ins. 16 (Priva"J Ltd. v. of the Act, which is as follows :- Municipal Coum:;1, " S. 16. Functians of the Executive A uthority.-The Nagereoil executive authority of the municipal council shall-

(a) carry into effect the resolutions of the council;

(b) furnish to the council such periodical reports regarding the progress made in carrying out the resolutions of that body in the collection of taxes as . the council may direct; and

(c) perform all the duties and exercise all the powers specifically imposed or conferred on the executive authority by this Act, and subject, whenever it is hereinafter expressly so provided, to the sanction of the council, and subject to all other restrictions, limitations and conditions hereinafter imposed, exercise the executive power for the purpose of carrying out the provisions of this Act and be directly responsible for the due fulfilment of the purposes of this Act." Section 16, which contains the power of the executive authority, does not support the contention of the appellants, because it provides that the executive authority has to give effect to the resolutions of the council and has to perform a.II duties specifically imposed on the executive authority by the Act and can also exercise executive power for the carrying out of the provisions of the Act and can act without sanction, unless the Act otherwise requires. Therefore, when the Commissioner of the respondent council got published a. notification of the resolution under s. 78 of the Act to impose a tax, be was acting within his powers and the fixing of the time in which objection had to be ma.de was provided under the Act and was not exercise of authority by the executive which it did not possess.

The only serious question which a.rises for decision is whether the period of" within thirty days " given in the notification was compliance with the provisions of the Act or not. Jf it was not then is the period of

Kapur J.

SUPRFME COURT REPORTS [1961]

time mentioned a mandatory requirement, a breach of which makes the tax illegal?

Pioneer Motors

(Privat•J Ltd.

Counsel for the appellants in the first three appeals v. argued, and that argument was adopted by counsel 'lfunicipal Council, for the appellant in the fourth appeal, that the words

Nagmoil used in the first proviso to s. 78 required that a clear

Kapur]. period of one month had to be given for imiting objections and as " within thirty days" was nut a clear period of one month, the provisions of the section had not been complied with. In support of his contention that the provision as to time was a mandatory requirement, he particularly stressed three words and phrases used in that proviso: (1) "before passing a resolution"; (2) "shall publish"; and

(3) "fix a reasonable priod not being less than one month for submission of objections." The argument was that where these words are used, the effect was that the requirements. were mandatory and not merely directory. It was submitted that the words" before" and "shall" provided that what was mentioned in the proviso were conditions precedent for giving power to the Municipal Council to pass a resolution under s. 79 and when those two words were read along with "not being less than one month", it was a clear indication of the mandatory nature of the requirements of th!i section. Quite a number of cases were relied upon by Counsel and besides this it was also emphasised that sa. 78 and 79 concerned taxing matters and as the liability of the tax-payers a.rises after the tax is legally imposed, strict compliance with the provisions was necessary. It is not necessary to discuss all the cases on which reliance was placed.

The words "not being less than one month" do imply that clear one month's notice was necessary to be given, that is, both the first day and the la.st day of the month had to be excluded. To put it in the language used by Maxwell on Interpretation CJf Statutes, 10th Edition, p. 351 :-

" ... when ...... 'not less than ' so many days a.re to intervene, both the terminal days a.re excluded from the computation,"

3 S.C.R.

SUPREME COURT.REPOR'fS 615

That does not seem to have been done in the present 1961 case. But in order to decide whether this portion of Pioneer Motors the proviso is a mandatory provision, it is convenient (PrivalC) Ltd. to see the object for which it has been enacted. Under v. s. 78, the procedure is laid down for the levying of a Municipal Council, new tax, which has to be done by a resolution. But Nagercoil in the proviso, it is stated that before such a resolution can be passed, a notice to that effect has to be published in the official gazette and also in one Malayalam or Tamil newspaper having circulation within the municipality. Then comes the period for inviting objections. The object of notifying in the Gazette and Local Newspaper is both to give notice to the public and particulary to the persons who are likely to be taxed and to invite their objections. For this purpose, the proviso requires a reasonable. period of not less .than one month to be given. The object of the provision is to give reasonable time and opportunity and it is given as a guidance that reasonable time would be a month. The use of the words "reasonable period " before the words " not being less than one month " is significant. If sufficient time has been given for the invitation of the objections which only just falls short of the peiod mentioned in the proviso, then it would serve the object of the legislature. The provision in regard to time in the context must be hPld to be directory and not mandatory.

The cases under the Income-tax Act like the O<Ym- . missioner of Income-tax v. Ekbol. and Oo. (')where the notice under s. 22(2) of the Income-tax Act (which requires the furnishing of a return within such period not being less than thirty days) of 30 days only was held to be bad, because it was not a notice of thirty cle"'r days, were so decided because that notice is the basis of the jurisdiction to tax and a. legal notice is an obligation impoed in order to tax an individual and it is a mandatory provision. Similarly, cases under Bent Act will also not apply.

In Thompson v.

Stimpson (') the law required that not less than four

\I) [1945) I) l.T.R. 154.

(2) [1¢0) 3 All E.R. oo.

Kapur].

1961 weeks ' notice shall be given for vacation of premises

Pioneer Motors on a. weekly tenancy and only one week's time was

(Private) Ltd. given. It was held there that it was a bad notice. v.

It was further held that four weeks' notice wa.s a con.

Municipal Cuncil, dition precedent a.nd the words had been used which

Nagmo>I ha.d been interpreted in the past as providing for four

Kapur]. clear weeks a.nd also it wa.s construed a.s four clear weeks, so that there might be certainty in the matter.

In other cases, that were relied upon a.nd which related to taxing statutes, the Municipal Council, Gudd, apah v. The Madraa and Southern Mahratta Railway Ltd.(•), The Borough Municipal, ity of Amalner

v. The Pratap Spinning, Weaving and Manufacturing Go. Ltd., Amalner(•) a.nd Kalu Karim v. Municipality of Broach (S) ; it wa.s held that taxing statutes have to be strictly construed and requirements which are precedent to the imposition of the tax have to be complied with before ta.x can be legally imposed. In every case the words ha. ve to be construed in the • context taking into consideration the. language used and the object to be achieved. As we have said a.hove, the use of the words " not being less than one month " implies the giving of a clear month excluding both the first and the la.st day of the month. There is no dispute as to the meaning of that expression alone which has been so construed and the observations of Lord Parker in Thompsdn v. FJtimpsO'TI (') will apply. But the question t\lat arises in the present case is : what is the exact significance of these words when used in the context of the other words used in the proviso.

The power of the municipality to levy the tax does not depend upon a period prescribed for notice for objections. The power to tax is derived from the Statute ; the provisions relating to the length of notice inviting objections and publication are merely procedural. The object of the notification is to inform the future rate payers and to inviie objections .from them. The proviso itself uses words " reasonable time". Reading" reasonable time" and "not being less than one month" together, it is clear that the

(I) (1929) I.L.R. 52 Mad. 779.

(2) I.L.R. [1952) Bom. 9I8,

(3) (I927) I.L.R. 5r Bom. 764.

(t) [196o] 3 All E.R, 500.

--"'-

z96r time given must be reasonable and the legislature has only added a guide so that periods shorter than a Pioneet M olo, s month may not be fixed.

In the present case the (Private) Ltd . • whole ofthe period except one day has been fixed and

v. in view of the other ; facts' .it must be regarded as Municipal Counoil, reasonable and to have complied with the provision Natmoil which is directory in its later part.

Counsel for the appellants in C. A. 499/501/58 wanted to raise a further objection to the legality of the tax levied and that ground was hat the. appellants were not carrying on a profession as they were only engaged in motor business and trade. This question was never raised at any previous stage and was not ta.ken in the statement of the appellants' case.

Therefore, it cannot be allowed to be raised. Besides it is without any substance in view of the definition of profession as given in s .. 91 of the Act, which includes business. In our opinion, the High Court was right in so holding and the thre11 appeals Nos. 499 to 501 of 1958 are dismissed with costs, one hearing fee. . . . . Coming now to Civil AppeaLNo; 502 ofl958, in the plaint it was alleged that the. trµst 'Vt>&.. iJo. religious trust and was follo'Ving no profession and therefore it did not fall within the definHion of the 'iyol:d ".pro, fession" as used in, s. 91 oft.he Act.· The defendant joined issue and the matter was put in issue in the following form : ' "Is the taxation by defendant of plaintiff illegal and in contravention of the provisions of the District Municipalities Act?" Although no specific finding was given as regards the operation of s. 91, the suit was decreed and the question whether the trust followed a profession or not seems to have got lost at the subsequent stages of the proceedings, that is, in appeal in the court of the District Judge and in the High Court. It is this point which was urged by counsel for the trust ; his plea was that his case was not covered by s. 91, as being a religious trust it had no profession and was carrying on none. That is a matter which, in our opinion, should have been decided, and as neither the Dist.riot

Kapur].

'96' Judge nor the High Court has given a finding on that

Pioneer Motors point, it is necessary to remit the case to the High

(PYivate) Ltd.

Oourt with the direction that the appeal be reheard v. and that particular question be decided on the . Municipal Council, materials on the record. Nothing that has been said

Nagerco•l in this judgment must be taken to be an expression of

Kapur J. opinion on the merits of this plea taken by the appellant Trust.

January 27.

Appeal No. 502 of 1958, is therefore, allowed and the case remitted to the High Court for decision. The costs in this Court and in the High Court will abide the decision of the appeal in the High Court.

Appeals nos. 499 to 501 dismissed.

Appeal no. 502 allowed. Case remitted.

V ALLABHDAS AND OTHE.RS

MUNICIPAL COMMITTEE, AKO LA. (J. L. KAPUR, M. HIDAYATULLAH and J. c. SHAH, JJ.)

Octroi Tax-Legality of imposition-:" System of Assessment", meaning of-C. P. & Berar Municipal Act, r922 (C. P. & Berar II of I922), S. 67(2).

The Municipal Committee, Akola_, passed a resolution to impose an octroi ta:: and forwarded it along with the draft rules of-assessment and collection to the State Government. The State Government published a notification in the Gazette which contained the articles to be taxed, the rate or rates at whicq they were to be taxed and a brief statement of objects and reasons for the imposition of the tax. This was followed by draft rules as to how taxation was to be done. Thereafter the Municipal Committee affixed on its notice board and also published in the local newspapers the said proposed _rules but the draft rules in regard to the "system of assessment" were not published along with other particulars. It was alleged by the appellants that the Municipality by not publishing the draft rules of tile "system of assessment", failed to comply in full with the mandatory requirements of s. 67(2) of the Act rendering the imposition of tax illegal.

Held, that the words" system of assessment" did not necessarily mean the whole procedure of taxation, i.e. imposition, collection and procedure in regard to collection and refund. The notice and not the draft rules relating to assessment and collection were required under the Rules to be affixed on the notice

THE PIONEER MOTORS (PRIVATE) LTD

THE MUNICIPAL COUNCIL, NAGERCOIL

L. KAPUR

C. SHAH, JJ.

Travancore District Municipalities Act

s. 78

s. 78

s. 81

Jioneer Motors (Private) Ltd.

Munidpal cuncil

G. S. Pathak

G. C. Mathur

P. George

M. R. Krishna Pil/

T. N. Subramania Iyer

R. Gaiwpathy Iyer

G. Gopalakrishnan

Kapur

KAPUR

High Court of Travancore-Cochin

September 9, 1943

N agercoil Municipal Council

January 12, 1944

s. 79

February 10, 1946

s. 78

Nagercoil

s. 79

Chapter VI of the Act

s. 77

Section 78

S. 78

s. 78

s. 79

S. 79

Section 78

S. 16

Section 16

s. 78

s. 78

s. 79

Maxwell

Pioneer Motors

PrivalC) Ltd.

s. 78

Income-tax Act

s. 22(2)

Income-tax Act

Parker

s. 91

s. 91

s. 91

High

(PYivate) Ltd.

V ALLABHDAS

M. HIDAYATULLAH

J. c. SHAH

Berar Municipal Act

S. 67(2)

Municipal Committee, Akola

The Municipal Committee, Akola, passed a resolution to impose an octroi ta:: and forwarded it along with the draft rules of-assessment and collection to the State Government.

s. 67(2)


SUPREME COURT REPORTS [1961]

'96' Judge nor the High Court has given a finding on that

Pioneer Motors point, it is necessary to remit the case to the High

(PYivate) Ltd.

Oourt with the direction that the appeal be reheard v. and that particular question be decided on the . Municipal Council, materials on the record. Nothing that has been said

Nagerco•l in this judgment must be taken to be an expression of

Kapur J. opinion on the merits of this plea taken by the appellant Trust.

January 27.

Appeal No. 502 of 1958, is therefore, allowed and the case remitted to the High Court for decision. The costs in this Court and in the High Court will abide the decision of the appeal in the High Court.

Appeals nos. 499 to 501 dismissed.

Appeal no. 502 allowed. Case remitted.

V ALLABHDAS AND OTHE.RS

MUNICIPAL COMMITTEE, AKO LA. (J. L. KAPUR, M. HIDAYATULLAH and J. c. SHAH, JJ.)

Octroi Tax-Legality of imposition-:" System of Assessment", meaning of-C. P. & Berar Municipal Act, r922 (C. P. & Berar II of I922), S. 67(2).

The Municipal Committee, Akola_, passed a resolution to impose an octroi ta:: and forwarded it along with the draft rules of-assessment and collection to the State Government. The State Government published a notification in the Gazette which contained the articles to be taxed, the rate or rates at whicq they were to be taxed and a brief statement of objects and reasons for the imposition of the tax. This was followed by draft rules as to how taxation was to be done. Thereafter the Municipal Committee affixed on its notice board and also published in the local newspapers the said proposed _rules but the draft rules in regard to the "system of assessment" were not published along with other particulars. It was alleged by the appellants that the Municipality by not publishing the draft rules of tile "system of assessment", failed to comply in full with the mandatory requirements of s. 67(2) of the Act rendering the imposition of tax illegal.

Held, that the words" system of assessment" did not necessarily mean the whole procedure of taxation, i.e. imposition, collection and procedure in regard to collection and refund. The notice and not the draft rules relating to assessment and collection were required under the Rules to be affixed on the notice

board of the Municipality and at other conspicuous places of the

Vallabhdas town. In the instant case the publication of the Rules relating to the rates at which the tax had been imposed was sufficient compliance with the provisions of Section 67(2) of the C. P. & v.

Berar Municipal Act, 1922, and the rules made thereunder.

Muni<ipal

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 234/60.

Appeal from the judgment and order dated November 18, 1958, of the Bombay High Court at Nagpur in Special Civil Application No. 201 of 1958.

N. O. Chatterjee, M. N. Phadke, S. A. Sonhi and Ganpat Rai, for the appellants.

A. V. Viswanatha Sastri, B. R. Mandekar and A. G.

Ratnaparkhi; for ri; ispondent No. 1. G. O. Mathur and R. H. Dhebar, for respondent No. 2.

1961. January 27. The Judgment ofUie Court was

delivere~ by KAPUR, J.-This is an appeal against the jugdment and order of the High Court of Judicature of Bombay at Nagpur dismissing a petition under Arts. 226 & 227 of the Constitution challenging the legality of the imposition of the octroi tax under s. 66(l)(e) of the C. P. & Berar Municipal Act (Act lI of 1922) hereinafter termed the Act.

The appellants who were the petitioners in the High Court are some of the rate-payers of the town of Akola in the erstwhile State of Bombay and respondent No. 1 is the Municipal Committee, Akoia. On November 11, 1957, respondent No. 1 passed a resolution to impose an oct.roi tax on animals and goods brought within the limits of the Akola Municipality.

This resolution and the draft Rules of Assessment and Collection were later on forwarded by the Akola Municipality to the State Government for publication.

A notification dated January 3, 1958, was published in the Bombay Government Gazette on January 16,

1958. T.his Gazette Notification contained the draft rules, the schedule of goods liable to octroi duty and the rates to be charged. This was in accordance with the requirements of s. 67(2) of the Act. Respondent

Committee, Akola

Kapur j.

'96' No. 1, the Municipal Committee, affixed on the Notice

Vallabhdas Board of the Committee and published in the local v. newspapers the proposed rules for the imposition of Municipal the tax, but the objection of the appellants is that Committee, A kola they did not publish along.with them the draft of the

[(apur ]. "System of Assessment.". It is true that a pamphlet in Marathi language was distributed in the town of Akola and the proposals were also published in the local newspaper J an.Sewak. Objections to the proposals were filed by some of the rate-payers of the town of Akola and all of them were . considered and a resolution was passed by the Municipal Committee on March 3, 1958, and that is the resolution which was challenged in the petition filed in the High Court by a petition dated April 14, .1958, praying for the quashing of the resolution and for the issuing of a prohibitory order against the State Government against sanctioning the proposal sent by the Municipal Committee. on April 18, 1958, a rule was issued by the High Court to the opposite parties calling upon them to show cause why the order as prayed should not be made. This notice was served on the Special Government Pleader on May 9, 1958, and the Special Government Plader put in his appearance on June 17, .1958. On June 23, 1958, an interim injunction was issued, but previous to that on June 19, 1958, a final notification was issued by the Government approving of the proposal to impose the octroi tax. As a consequence of this the petition was allowed to be amended, but ultimately the High Court dismissed the petition and this appeal has been brought on a certificate of the High Court.

The sole question which has been debated before us is the legality of the imposition. The ground on which the legality is challenged is that there was no full compliance with the mandatory requirements of s. 67(2) of the Act. It is, therefore, necessary to deal with the relevant provisions of the Act. Chapter IX of the Act deals with Imposition, Assessment and Collection of taxes. Section 66 provides for the taxes which can be imposed and s. 67 deals with the mode of the imposition of the tax. By s. 71, the State

.J ' ' 'r

Government is empowered to make rules regulating r¢r the assessment of taxes and for preventing evasion bf Vall•Mtl<M assessment. Section 76 empowers the State Governv. ment to make rules regulating the collection of taxes MHicipal and preventing evasion of payment. Section 85 em- Commiuee, Akol• powers the State Government to make rules regula- - ting the refund of taxes. But it was argued on behalf Kapur J. of the appellants that as the mandatory provisions of s. 67 as to publication of the " System of Assessment " in accordance with the rules was not complied with, the imposition of the tax was illegal. Reliance was placed on certain judgments, but it is not necessary to discuss those cases because in the circumstances of this case they are of little assistance. The respondents, on the other hand, submitted that what was published was all that the section required and that \he word assessment there did not mean anything more.

As s. 67(2) has been mainly relied upon, it may be quoted. It provides:-

" 67(2) When such a resolution has been passed, the committee shall publish in accordance with rules made under this Act, a notice defining the class of persons or description of property proposed to be taxed, the amount or rate of the tax to be imposed and the system of assessment to be adopted." The scheme of s. 67 appears to be this: that when a Municipal Committee wishes to impose a tax it has to pass a resolution at a special meeting and then it has to publish its resolution for imposition of that tax so that the rate-payers may be able to place their objections against the imposition. This publication must appear in the Government Gazette and also locally as required by the rules. The Municipal Committee has then to consider the objections, if any, of the rate.payers and if the Committee does not consider it necessary to alter its original proposals, it has to send its proposals with the objections received and its decision thereon and any modifications of the original proposals to the State Government which, after considering the matter, may sanction them or refuse to sanction or sanction them with modifications,

I96I

ValJabhdaS

Municipal CommiUee, Akola

f{apur }.

SUPREME COUHT REPOHTS [1961]

The real objection of the appellants was that the system of assessment had not been pnhlishecl as required. The Rule relating to publicnLion under s. 67 is as follows:-

" l. A notice under section 67(2) of the intention. of the municipal committee to impose a tax, or under section 68(3) of the proposal of the committee to increase the amount of rate of any tax, shall be forwarded to the State Government through the Deputy Commissioner for publication in the " Madhya Pradesh Gazette. " The notice under section 67(2) shall be accompanied by draft rules for the assessment and collection of the tax.

After its publication in the Gazette the notice shall be published by affixing copies thereof to a notice board at the municipal office and at conspicuous places in the town, and sh'Lll also be published in the local papers, if any.

As an alternative to its publication in local papers, the committee may circulate the notice in print in vernacular within the municipal limits. .Proclamation sha, Jl also be made by beat of drum throughont the municipality notifying the intention of the committee and calling the attention of. the inhabitants to the notice in question and to the term of thirty days laid down in the law as that within which objections to the proposed imposition or increase must be submitted to the committee." According to this rule the notice under s. 67(2) has to be accompanied by draft rules for the assessment a.nd c0llection of the tax and after its public:ction in the Gazette the notice has to be published by affixing copies thereof to a no Lice board at the Municipal Office and at conspicuous places in the town and has to be published in the loc1il papers, if any, or it may circulate the notice in print within the municipal limits. It is admitted that in the Gazette dated J anuai'y 16, 1958, the draft rules were published which contained the articles to be t1ixed, the rate or rates at which they were to he taxed and what articles were not to be taxed. It also contained a brief statement of objects and reasons for Ow impositi, m of the tax. This was

followed by draft rules as to how taxation was to be

I96I done. In short what was published in the Gazette Vallabhdas was admitted to conform to all the requirements of v. s. 67(2).

But the contention raised is that in the Municipal Jan-Sewak, a local Marathi newspaper, the rules Committee, Akola which were published contained the articles to be taxed, the rate or rates at which they were to be Kapur J. taxed, but the draft rules in regard to "System of Assessment" were not published along with it.

The High Court has pointed out that what was done was a sufficient compliance with the provisions of s. 67(2) and that the words " System of Assessment" meant only the stage of the imposition of the tax and not other stages. as a whole. Sections 71, 76 and 85, as has been said above, deal with rules for assessment and for preventing evasion of taxes, rules for collection of taxes and rules for refund respectively.

Read together these provisions of the Act support the decision of the High Court that the words " System of Assessment " do not necessarily mean the whole procedure of taxation, i.e., imposition, collection and procedure in regard to collection and refunds. The rule also shows that what is to be affixed on the notice board and at conspicuous places of the town is the notice and not the draft rules relating to assessment and collection. In our opinion there has been a compliance with the provision of s. 67(2) and that the publication of the rules relating to the rates at which the tax had been imposed was sufficient to comply with the provisions of the Act and the rules made thereunder. It is unnecessary to deal with the efficacy of sub-ss. (7) and (8) of s. 67.

In our opinion the judgment of the High Court was right and the appeal is iherefore dismissed with costs.

Appeal dismissed.

High

(PYivate) Ltd.

Kapur J.

V ALLABHDAS AND OTHE.RS

M. HIDAYATULLAH

c. SHAH, JJ.

Berar Municipal Act

S. 67(2)

The Municipal Committee, Akola

s. 67(2)

Vallabhdas town

Section 67(2)

Berar Municipal Act, 1922

Bombay High Court at Nagpur

M. N. Phadke

S. A. Sonhi

Ganpat Rai

A. V. Viswanatha Sastri

B. R. Mandekar

A. G.

Ratnaparkhi

G. O. Mathur

R. H. Dhebar

KAPUR

Arts. 226 & 227

s. 66(l)(e)

Berar Municipal Act

Akola

Municipal Committee, Akoia

November 11, 1957

Akola Municipality

Akola Municipality

January 3, 1958

January 16,

1958

s. 67(2)

March 3, 1958

April 18, 1958

May 9, 1958

June 17, .1958

June 23, 1958

June 19, 1958

s. 67(2)

Chapter IX of the Act

Section 66

s. 67

s. 71

Section 76

Section 85

s. 67

s. 67(2)

s. 67

ValJabhdaS

s. 67

section 67(2)

section 68(3)

section 67(2)

s. 67(2)

J anuai'y 16, 1958

s. 67(2)

Municipal Jan-Sewak

s. 67(2)

Sections 71, 76 and 85

s. 67(2)

s. 67