B.P. Dharmadhikari, J.
1. Considering the nature of controversy and as requested by the parties, matters have been heard finally at the stage of admission by issuing Rule, and making it returnable forthwith.
2. Briefly stated, the petitioners before this Court are dealers within the meaning of said term as defined in Section 2[16A] of the Maharashtra Municipal Corporation Act, (Act No. LIX of 1949) (hereinafter referred to as âthe Corporation Actâ? for short). The Local Body Tax (LBT) is being charged on goods imported by them within city limits of respondent no.2 Nagpur Municipal Corporation. The tax is assessed on goods imported by them for use, consumption or sale within the city limits. As they are dealers whose annual turnover exceeds Rs. 50 Crores, the tax is being recovered from them. Other dealers whose annual turnover is less than Rs.50 Crores, are exempted from paying any tax on such goods.
3. Petitioners state that they are required to pay the local body tax at 8.5% and hence, their cost of production goes up proportionately. Other dealers who are not required to pay that tax, can therefore, legitimately sell their goods at lesser price, thereby creating unhealthy competition.
4. Prayers in both the petitions are identical. Main thrust is to urge that petitioners and other dealers are similarly situated and on the basis of annual turnover, classification cannot be made between them. That classification therefore, should be quashed and set aside. The provisions of Sub-rule (1) of Rule 3 of the Maharashtra Municipal Corporation (Local Body Tax) Amendment Rules, 2015 should be declared as unconstitutional as they are ultravires the provisions of Articles 14 and 19[1][g] of the Constitution of India, as also ultravires of the provisions of Section 152P and 152Q of the Maharashtra Municipal Corporation Act. There is also a prayer to quash and set aside the notification dated 01.08.2015, issued by the respondent no.1-State of Maharashtra effecting said amendment. Petitioners also seek a declaration that respondent no.2 Nagpur Municipal Corporation cannot impose and recover or collect from it any such tax. Petition has been amended on 24.08.2015 to seek a declaration that Rule 3 of Maharashtra Municipal Corporation (Local Body Tax) Rules, 2010 is ultravires.
5. We have heard Senior Counsel Shri S.P. Dharmadhikari and Senior Counsel Shri Sunil Manohar, for petitioners. Senior Counsel Shreehari Aney, Advocate General and Government Pleader Smt. B.H. Dangre, argued the matter on behalf of respondent no.1 State Government. Shri J.B. Kasat, learned Counsel represented respondent no.2.
6. Inviting attention to provisions of the Corporation Act, Shri Manohar, learned Senior Counsel submits that LBT needs to be imposed by respondent no.2 Nagpur Municipal Corporation. In absence of any such decision by Nagpur Municipal Corporation, the direction of State Government to levy and collect LBT in its municipal limits to respondent no.2 is, without jurisdiction and unsustainable. He further submits that Rules prescribing modalities for levy, collection or recovery of said tax can be framed only by the Nagpur Municipal Corporation, as contemplated in Section 127[3]. He invites attention to provisions of Section 152R to state that as per that Section, Sections 152B, 152D, 152E, 152F, 152I, 152J, 152K, 152K, 152L, 152M, 152M, 152O in Chapter XIA mutatis mutandi apply to levy and collection of LBT in Chapter XIB. Thus, levy of LBT has to be as per Section 152A on entry of goods. The same is to be paid by dealer, in terms of Section 152A[2]. The dealer whose turnover exceeds the prescribed limit in terms of Section 152B has to pay the tax, and purpose of this provisions is to grant exemption to dealers, but, to facilitate its imposition and recovery. Entry of goods cannot cease to be a taxable event and turnover of all dealer cannot substitute it. By way of abundant precaution he adds that the respondents could have thought of a tapering rate, by co-relating it with turnover, and levy can be made proportionately. He argues that turnover can not be the rational diiferencia to divide the dealers in two categories and to exempt maximum out of them, as it lacks nexus with the object and also overlooks the event of import of goods.
7. He has invited our attention to provisions of Section 152P to show that discretion is given to Corporation and it cannot be taken away by the respondent no.1 State. In terms of Section 152Q, Government may in the light of proposal moved by the Municipal Commissioner exempt certain categories of goods from LBT, but, there is no provision to exempt any dealer. Power of State Government to frame Rules under Section 152T is general power and it has to yield to special provision which empowers Corporation to frame Rules. He seeks support from (2000) 3 SCC 40 (Kunj Beharilal Butail and others .vrs. State of H.P. and others) and (2015) 9 SCC 209 (Petroleum and Natural Gas Regulatory Board .vrs. Indraprastha Gas Limited and others).
8. Our attention is also invited to provisions of Sections 456 and 456A of Corporation Act to contend that the powers given therein to State Government can be exercised only after failure of Corporation to make Rules. Overriding powers given to State Government by Section 456A is to be exercised sparingly, and subject to other provisions of the Act, like Section 127[3], 152A and 152T. Rule 3 of Local Body Tax Rules, 2010 dealing with limits of turnover for registration is, therefore, bad in law.
9. Taking up his next contention, Shri Manohar, learned Senior Counsel submits that by amendment w.e.f. 01.08.2015, an arbitrary classification has been brought into effect. The turnover of a dealer and import of goods cannot be co-related and thus, having annual turnover below Rs.50 Crores, cannot be straightway given exemption. Such an exemption or classification is not countenanced by Scheme of Corporation Act and is infact counterproductive because the cost of petitioners' product then definitely will be more than the cost thereof for exempted dealers. The amending Rules of 2015, are therefore, bad in law and unsustainable. He relies upon a judgment reported at AIR 1952 SC 75 (The State of West Bengal .vrs. Anwar Ali sarkar and another).
10. Our attention is invited to reply affidavit placed on record by the State Government. Learned Counsel points out that therefore, State Government has proceeded to show favour to alleged unorganized dealers as they are not maintaining accounts. By inviting our attention to the fact that VAT is payable by a importer dealer with turnover of Rs. 1 lakh, if he has sold or purchased the taxable goods worth not less than Rs. 10 thousand during that year. For others, it is Rs. 10 lakhs, if the value of taxable goods sold or purchased during the year, is not less than Rs. 10 thousand. These provisions contained in Section 3 are as amended by the Maharashtra Act No. 14 of 2005 and 32 of 2006. As per Section 63, an obligation is cast upon every dealer to maintain accounts. Section 74 vide its sub-section [3][m] also shows that such dealer has to get its accounts audited. If he fails to do so, he commits an offence. Section 74AB of the Income Tax Act, 1961 is also relied upon to urge that tax audit has been compulsorily for every person who carries on business, if his total sales, turnover or gross receipts exceed Rs. 1 Crore in any previous year and Section 271B prescribes penalty for a defaulter. Thus, dealers whose turnover is less than Rs.50 Crores, but, who are subject to VAT or/as also Income Tax Act, 1961 cannot be labeled as unorganized dealers or small dealers. Reason for exempting them is unreal and unsustainable. He points out that the State Government in reply affidavit disclosed its intention to give relief to all small and marginal traders from paying LBT. He states that government has carried out statistical exercise on the basis of information gathered from 25 Municipal Corporations, and found that 28% of total LBT received is, from just 1162 dealers, whose turnover is above Rs. 50 Crores. Total number of registered dealers was 8,09,553. The collection from dealers whose turnover ranged between Rs.5 Crores to Rs. 50 Crores, was just 19.21%, while those with turnover below Rs.5 Crores, contributed 53%. Shri Manohar, learned Senior Counsel argues that this yardstick is unsustainable, as it is contrary to Corporation Act and also to provisions of law relating to VAT and Income Tax Act. The burden could not have been placed only on shoulder of 1162 dealers. Because of this exercise, the LBT has lost its connection with import and has become a tax on rich dealers. The rich dealers because of their more business are required to pay 8.5% for the cost of imported goods as LBT. He takes hypothetical illustrations of a Car Dealer. He points out that certain brands have got more than 2 or 3 outlets in city. The dealer with annual turnover in excess of Rs. 50 Crores will be required to pay 8.5% on each car imported by him for sale within the city limits. Thus, he will be selling a car costing Rs. 10 lakhs at Rs. 10,85,000/-, while the other dealers would not be paying this amount of Rs.85,000/- as LBT. He also points out that because of this the customers will definitely go to other dealers and reputation or business acquired by a big dealer would be prejudiced. Judgments of Hon'ble Apex Court reported at (2013) 8 SCC 519 (State of Maharashtra and another .vrs. Indian Hotel and Restaurants Association and others), (1985) 1 SCC 641 (Indian Express Newspapers (Bombay) P.Ltd. And others .vrs. Union of India and others) and (1981) 1 SCC 107 (Maru Ram .vrs. Union of India and others) are pressed into service by him to show how in present matters, tax ceases to be a tax on import. To demonstrate absence of any basis/rationale for classification, support is taken from (2006) 12 SCC 753 (Vasu Dev Singh and others .vrs. Union of India and others).
11. He invites attention to Government notice dated 23.07.2015 for giving vide publicity to proposed amendment to LBT Rules. The objections or suggestions on the proposed amendment were invited before 31.07.2015, either through post or through e-mail. Petitioners submitted their objections through e-mail on 30.07.2015. That has not been looked into and mechanically on 01.08.2015 gazette notification bringing into force the amendment came to be released. Provisions of Section 152T enabled the State Government to make Rules, subject to condition of previous publication. This contention has been violated in present matter. Therefore, the amendment itself is liable to be quashed and set aside. Rule 3 which enables the State Government to discriminate between dealers on the basis of their turnover, is arbitrary and ultra vires to the parent Act.
12. Shri Aney, learned Advocate General submits that legal provisions contained in Section 127 empowers the State Government to direct the respondent no.2 Corporation to levy LBT. According to him reliance upon provisions of Section 149 of Corporation Act by petitioners to urge that it is for the Corporation to make Rules for the purpose of Section 127, is bad. Corporation gets that power only if provision is not made for that purpose in Corporation Act in the form of Rules. Here State Government has already made necessary Rules, and therefore, this power is not available. He invites attention to provisions of Chapter XIA to urge that it deals with recovery of cess inlieu of octroi and therefore, is not very relevant for adjudication for present controversy. Inviting attention to Section 152B[1], he states that tax is required to be paid by a dealer, and therefore, incidence of tax or liability is upon dealer. In view of this section, petitioners cannot urge that tax is on goods. Inviting attention to Section 152D, he adds that LBT is a tax on registered dealers.
13. Chapter XIB is contained in provisions relating to LBT only and Section 152 T therein allows the State Government to make Rules for the purpose of said Chapter. These Rules are specifically to implement Chapter XIB, and therefore, power given to State Government superimposes itself upon similar power in other Sections of the Corporation Act. By virtue of Section 152R, certain sections contained in Chapter XIA apply with necessary modifications as warranted by Chapter XIB, and therefore, Chapter XIA is itself subject to Section 152T. He points of that Section 152Q is not about exemption of goods from LBT, but, it is an arrangement to exclude certain categories of goods from the purview of LBT, upon submission of such proposal by the Municipal Commissioner. Section 152S allows the Municipal Commissioner to levy, collect and recover LBT, after assessing âsuch dealers for such period and in such manner as may be prescribed.â? This scheme, therefore, shows that the Municipal Corporation is bound by the Rules framed by the State Government under Section 152T. He adds that respondent no.2 Nagpur Municipal Corporation was levying octroi and hence, after addition of Section 127[2][aaa], w.e.f. 31.08.2009, every Corporation who is charging octroi or cess, is bound to comply with the directions of State Government calling upon it to impose LBT.
14. To further his arguments on special status given by the State Legislature to LBT Rules, he points out that even under Section 99, Corporation has been denied power to determine the rate of LBT tax. Under Section 99B, it is for the State Government to determine the rates and extent to which taxes referred to in Clause [aaa] of Section 127[2], shall be levied. Municipal Commissioner has only got a right to submit proposal. Section 99C specifically states that Section 99B does not apply when LBT is first levied, and Section 99D allows the State Government to revise the rate and extent of LBT. In this background, Section 456, which empowers the State Government to require Corporation to frame Rules or Section 456A, giving it special power to do so, have no relevance. He also points out that provisions of Section 457[7] to urge that Rules made under Section 454 may provide for the matters referred to in subsection [1] of Section 149, in respect of tax leviable under subsection [2] of Section 127.
15. LBT Rules 2010, have been amended in the year 2013 and in 2015 a proviso has been added to prescribe limit of Rs. 50 Crores for its imposition. The amendment and Rules are within the forecorners of law, and therefore, call for no interference. He adds that for tax matters, classification based upon turnover has been consistently accepted as valid and such classification is bound to cause some hardship some where. Such individual hardship, therefore, cannot be used to nullify the general measure adopted by the State Government.
16. Inviting attention to prayer clauses in Writ Petition, he states that the controversy is already decided against the petitioners by the Division Bench of this Court vide its judgment reported at 2014 [16] AIR Bombay Reports 324 (Municipal Labour Union Anant Bhuvan .vrs. State of Maharashtra and others). He adds that as law made by the State Government is valid, reasons which prompted State Government to enact it are irrelevant. Reply affidavit is pressed into service to urge that after due application of mind State has found LBT collected from 1162 dealers, whose turnover is in excess of Rs. 50 Crores, sufficient to meet its need.
17. To point out the validity of yardstick adopted by the State Government for the purpose of calculation, he has relied upon judgments reported at (1974) 4 SCC 422 (M/s. S. Kodar .vrs. State of Kerala); 1994 Supp [3] SCC 218 (Khadi and Village Soap Industries .vrs. State of Harayana and others) and (1997) 3 SCC 410 (Food Corporation of India .vrs. State of Kerala), To deny the challenge to classification as discriminatory and how in tax matters, the basis therefor has been evaluated, Shri Aney, learned Advocate General seeks to rely upon judgments reported at (1969) 1 SCC 681 (N. Venugopala Ravi Varma Rajah .vrs. Union of India and another); (1981) 4 SCC 675 (R.K. Garg .vrs. Union of India and others) and (1990) 2 SCC 502 (Kerala Hotel and Restaurant Association .vrs. State of Kerala and others), To point out extremely limited scope of interference available to writ court in such matters, he has pressed (1974) 4 SCC 428 (M/s. Murthy Match Works and others .vrs. The Asstt. Collector of Central Excise and another) and (2004) 5 SCC 155 (State of Gujarat and others .vrs. Akhil Gujarat Pravasi and others) into service.
18. In his brief reply, Shri Manohar, learned Senior Counsel has reiterated that present levy is not on import, but on dealer, or on his turnover. Dealer is required to pass it over to ultimate consumer and hence, his business is adversely affected. He also distinguishes judgments cited by learned Advocate General. 2014 [4] Mh,L.J. 99 (Suresh Sakhabapu Deshmukh .vrs. State of Maharashtra and others).and (2005) 9 SCC 53 (Ramakrishna Vivekananda Mission .vrs. State of W.B. and others) are relied upon by him to show the effect of noncompliance with condition of previous publication.
19. On 23.12.2015 learned Government Pleader produced a docket to show that the objections received till 30.07.2015, were looked into and objection of petitioners is received on 03.08.2015. Practically all facets of the matter have been looked into and hence, mere fact that similar objections raised by the petitioners have not been perused, does not make any difference. She seeks to rely upon judgment reported at 1980 [2] SCC 295 (Tulsipur Sugar Co. Ltd .vrs. The Notified Area Committee, Tulsipur), to buttress here contentions that no opportunity of hearing is necessary. Shri Manohar, learned Senior Counsel points out that e-mail was sent on 30.07.2015 and was received on that day only by the State Government. He has invited attention to the said e-mail produced as annexure with Writ Petition No.4915/2015, hence, on 23.12.2015, though we closed the matter for orders, we allowed learned Government Pleader time to verify the fact of receipt of e-mail till 04.01.2016.
20. On 4.1.2016, learned Government Pleader has tendered an affidavit pointing out that State had received total 16 objections, as also the objections from the Petitioners. The points raised by the Petitioners are overlapping with the other objections already looked into by the State and hence, omission on part of State to consider their objections has not prejudiced them. Shri Naik, learned counsel sought leave to rely upon the recent judgment of Hon'ble Apex Court which came to his knowledge after the matter was closed for judgment. However, as the writ petitions were already closed for judgment, we have rejected his request.
21. Registered turn over of Petitioner firm M/s Vidarbha Distillers in Writ Petition No. 4914/2015 is about Rs. 170/- Crores. Petitioner M/s Nagpur Distillers Pvt. Ltd. is a Company with registered registered turnover of Rs. 162/- Crores. Thus, there turnover being in excess of Rs. 50 Crores, the limit introduced w.e.f. 1.8.2015, they are required to pay LBT on goods imported by them. It follows that even before 1.8.2015, they were duty bound to pay it. Hence, even if the amendment and the classification amongst dealers is done away with, the liability of the Petitioners remains unaffected. If these writ petitions are allowed, then the other class viz. exempt dealers also become liable to pay LBT.
22. Moot question therefore is whether the amendment w.e.f. From 1.8.2015, exempting goods imported by the dealers whose turnover does not exceed Rs. 50 Crores, gives rise to any cause of action in Petitioners' favour.
23. First document which we get in this regard is the representation or objection dated 29th July or 30th July, 2015 sent by both the Petitioners opposing the move of the State Government to recover the LBT only from such dealers whose turnover is during the year is not less than Rs. 50 Crores. This is achieved by obliging only the dealers whose turnover is not less that 50 Crores to get registered under the LBT Rules, 2010 after 1.4.2015. The LBT amendment Rules, 2015 achieve this by adding a proviso to Rule 3 and substituting its clause âbâ? of Rule 17(1).
24. In Writ Petition No. 4914/2015, the prayers are restricted to first part of amendment i.e., registration of dealers with turnover of not less that 50 Crores. There is no express prayer to quash and set aside the deemed cancellation of registration of those dealers whose turnover has not exceeded Rs. 50 Crores. General prayer is to quash the entire notification dated 1.8.2015 i.e., LBT Amendment Rules, 2015. Thus, Vidarbha Distillers does not wish itself to be subjected to LBT and is not seeking a direction to subject other so called âexempt dealersâ? to it. Indirect effect of the prayers, if granted, would be abolition of LBT all together.
25. Position in Writ Petition No. 4925/2015 is identical, and hence, above observations apply to it. On 24.8.2015, Petitioner Company has added prayer clause â(E-1)â? seeking a declaration that Rule 3 of the LBT Rules, 2010 is ultra vires the provisions of Parent Act and beyond the powers of State Government. Ground therefor is, also added as ground âNâ? in the memo of writ petition. In said ground, the Petitioner urges that State can not been given power to determine the class of dealers who should pay LBT. They point out Section 149 and Section 152B of the Corporation Act to contend that such power to determine the class/es of persons liable to pay LBT or exempt therefrom, is with Respondent no.2 Nagpur Municipal Corporation. According to it, Section 152-T is only a machinery or procedure which does not authorize State Government to specify such class or classes. It is more than apparent that cause of action for such challenge is the LBT Amendment Rules, 2015. Even if this contention is presumed to be correct, that by itself does not confer any benefit upon the Petitioner who has been paying the LBT as it does not to be the âdealerâ? importing the goods within city limits.
26. Petitioners do not challenge the constitutionality or legality of the levy i.e., LBT on any ground whatsoever. The levy and the relevant Sections of the Corporation Act are already held valid by the Division Bench of this Court in its judgment Municipal Labour Union vs. State of Maharashtra (supra) delivered at Bombay on 1.10.2014. Thus, in these petitions in the backdrop of prayers made, Petitioners indirect effort to defeat the levy itself on such ground can not be countenanced. In this judgment, there was challenge to also Section 127(2)(aaa) of the Corporation Act and one of the contentions was State Government could not have been permitted to impose itself upon the Municipal Corporations in the matter. The later challenge is answered in favour of State in paragraph 53 while remaining challenges are rejected in paragraph 54 of this judgment. Section 127(2)(aaa) is also found valid. This provision shows an obligation upon the Municipal Corporations recovering octroi, to start levying LBT in lieu thereof, if the State Government so directs by a notification in official gazette. Here, it is not in dispute that Nagpur Corporation was already levying octroi and has been directed as prescribed, to impose LBT. In fact, petitioners submit that State Government could not have asked Nagpur Municipal Corporation to do it. Petitioners also do not argue that unless the dealers are classified, the LBT can not be levied.
27. Case law cited by the Petitioners needs consideration at this stage.
(A) Petitioners reliance on Kunj Behari Lal Butail v. State of H.P., (supra), paragraph 14 where Hon'ble Apex Court holds âthat a delegated power to legislate by making rules âfor carrying out the purposes of the Actâ? is a general delegation without laying down any guidelines; it cannot be so exercised as to bring into existence substantive rights or obligations or disabilities not contemplated by the provisions of the Act itself.â?
is misconceived, as here there is no prayer to set aside the LBT Rules, 2010. Therefore the support sought from Petroleum and Natural Gas Regulatory Board v. Indraprastha Gas Ltd., (supra), where Hon'ble Apex Court notes that â“
â51. In Indramani Pyarelal Gupta v. W.R. Natu, the Court has held that one of the tests to determine whether a statutory body is vested with a particular power is to see whether exercise of such power is contraindicated by any specific provision of the enactment bringing such statutory body into existence. In Tata Power Co. Ltd. v. Reliance Energy Ltd., it has been ruled that save and except for the exercise of regulatory power which is specifically recognized by the statute, it is not open to the regulatory body to exercise a power which is not incorporated in the statute.â?
has also to fail.
In Maru Ram v. Union of India, (supra), at page 126, the observation of Hon'ble Apex Court on concepts like partial eclipse, repugnancy, provisions which prevail in situations of irreconcilability and harmonious reading also can not save the situation for the Petitioners. Hon'ble Apex Court has, assuming that Rules under the Prisons Act to be valid and not to be dismissed as State law, adopted harmonious reading of Section 433A Criminal Procedure Code, and the Prison Rules as the way out. Petitioners point out from para 76 in Indian Express Newspapers v. Union of India, (supra), where it is stated by the Hon'ble Apex Court that â“
âii) The courts are prepared to invalidate bye laws, or any other form of legislation, emanating from an elected, representative authority, on the grounds of unreasonableness. uncertainty or repugnance to the ordinary law: but they are reluctant to do so and will exercise their power only in clear cases.â?
This observation or the exercise of moulding of the reliefs therein can not be used here.
(B) Hon'ble Apex Court in Vasu Dev Singh v. Union of India, (supra), has observed that â“
â147. The legislative objective and policy indisputably must be considered having regard to the Preamble and other core provisions of the Act. Section 3 of the East Punjab Urban Rent Restriction Act, 1949, although is a part of the Act, but the same cannot be said to contain an inbuilt policy so as to empower the Administrator to do all such things which can be done by the legislature itself.
148. By taking recourse to the Preamble, it cannot be said, as has been submitted by Mr Nariman, that the power to exclude the tenanted premises can be exercised without taking into consideration the legislative policy and the object of the Act. It may be true that by reason of Section 3 of the Act, no arbitrary power as such has been conferred in view of the fact that the Act applies only to certain classes of land and building but the same would not mean that the Administrator is free to take any action in any manner he likes. The action of the Administrator is indisputably subject to judicial review.â?
In the light of the conclusions reached above by us, these observations also can not help the Petitioners.
(C) Hon'ble Apex Court in State of Maharashtra v. Indian Hotel and Restaurants Assn., (supra), in para 121 concluded that the State failed to justify the classification between the exempted establishments and prohibited establishments on the basis of surrounding circumstances, or vulnerability. It also observes that the legislature is the best judge to measure the degree of harm and make reasonable classification but, when such a classification is challenged, the State is duty-bound to disclose the reasons for the ostensible conclusions. Its reason for intervention is recorded as â“
âIn our opinion, in the present case, the legislation is based on an unacceptable presumption that the so-called elite i.e. rich and the famous would have higher standards of decency, morality or strength of character than their counterparts who have to content themselves with lesser facilities of inferior quality in the dance bars. Such a presumption is abhorrent to the resolve in the Preamble of the Constitution to secure the citizens of India âequality of status and opportunity and dignity of the individualâ?. The State Government presumed that the performance of an identical dance item in the establishments having facilities less than three stars would be derogative to the dignity of women and would be likely to deprave, corrupt or injure public morality or morals; but would not be so in the exempted establishments. These are misconceived notions of a bygone era which ought not to be resurrected.â?
This reason obviously has no application, qua the establishments of dealers with a turnover less that or more than Rs. 50 Crores for the purposes of any tax or even LBT.
28. If the defect in reliefs sought is ignored, and this Court decides to look at the only cause of which the cognizance can be taken i.e., about alleged exemption of dealers whose turnover does not exceed Rs. 50 Crores from tax net and discrimination resulting therefrom, Even if exemption of those dealers is quashed assuming it to be discriminatory, Petitioners are not benefited thereby. They do not argue that LBT is either expropitiatory or confiscatory in nature. They were paying the tax without any demur till the State proposed to exempt the goods imported by the dealers whose turnover did not exceed Rs. 50 Crores. Petitioners have during arguments also suggested a tapering scale of LBT rate linked with turnover so that less tax burden is cast on dealers with small turnover and then, it goes on increasing proportionately. This is mentioned only to note that impugned decision to amend LBT Rules, 2010; or its implementation w.e.f. 1.8.2015, may not, by itself, change the nature of levy. Similarly, till the petitioners and the alleged exempted dealers were all paying LBT, petitioners never made a grudge that levy is not on import of goods but on dealers or their turnover. Hence, after the amendment as inserted by LBT Amendment Rules, 2015, the levy may not loose its relation with import and associate itself with the dealer or his turn over. Petitioners have referred to Article 19(1)(g) of the Constitution of India in their respective writ petitions, but no arguments having any bearing on said right or about reasonable restrictions in the background of the controversy, are advanced. The answer to these questions may depend on some facts as mentioned below.
29. Only plea that survives now is about the advantage to trade rivals who do not pay LBT on their imports and therefore are not required to pass it over to the consumers. Petitioners are required to pay it on all their imports and hence, their costs of production is more. We find that material placed on record is inadequate to comprehend the exact injury to the Petitioners or its extent. Their representation or objection sent to State Government on the proposed imposition of limit of Rs. 50 Crores hints at possible abuse of the amended provision by those 1162 registered dealers whose turn over exceeded Rs. 50 Crores by distributing the business by bifurcating the firms. In opening paragraph of this objection, they point out that there are about 15 Country Liquor and Indian made foreign Liquor Units in the City. Even if pleadings in both the writ petitions are clubbed together, facts disclosed show that petitioners are required to import rectified spirit, alcohol, bottles, caps and other raw material like packaging material, on which they end up paying LBT while the other units are not required to shoulder it. But this is the effect of levy of LBT upon the petitioners. Petitioners have not pointed out the resulting inequality or any unfair trade competition.
30. No data in respect of prices at which petitioner or these exempt dealers sold their product before 31.3.2015 or after 1.8.2015 is produced before us for appreciation. Petitioners also do not show that such exempt dealers have reduced their selling prices while the Petitioners could not do so. There is no attempt to demonstrate that market share of the brands produced by the petitioners has decreased. Except for expressing the apprehension that they would be required to sell at reduced rate, no actual reduction in price of commodity has been brought on record. Possibility of 1162 dealers spread over the State diverting their business, floating new firms etc. can not be valid ground to assail the levy or classification. The law permits tax planning and if, the 1162 dealers on whom the State depends, attempt within four corners of law to avoid it, it is for the policy makers to look at the issue. Standing or position of these Petitioners visavis the LBT has remained unaltered even after the impugned amendments. Thus in these writ petitions, no cause of action is being made out and no legal injury is being substantiated. Taking overall view of the matter, only issues of academic interests, if any, are being presented by them.
31. In absence of necessary data and pleadings, the challenge as posed is rendered only academic. It is settled law that in such matters, writ courts do not decide the issues only of the academic importance. In Arnit Das (2) v. State of Bihar (2001) 7 SCC 657, the Constitution Bench of the Hon'ble Apex Court has expressed â“
â5. In view of the findings recorded in an enquiry conducted under Section 32 of the 1986 Act, that on the date of the offence the accused-petitioner was not a juvenile for the purposes of the 1986 Act, which finding has been affirmed right up to this Court, it is of no consequence, insofar as this petition is concerned, as to whether the crucial date for purposes of the 1986 Act is the date of commission of the offence or the date when the accused first appears in the court in the enquiry proceedings. The reference, therefore, insofar as this petition is concerned, is only of an academic interest and we decline to answer an academic question only.
6. It is settled practice that this Court does not decide matters which are only of academic interest on the facts of a particular case. (See with advantage: Sanjeev Coke Mfg. Co. v. Bharat Coking Coal Ltd., R.S. Nayak v. A.R. Antulay and Dhartipakar Madan Lal Agarwal v. Rajiv Gandhi.)
7. In this view of the matter, we find that the issue referred to the Constitution Bench does not require our consideration in this case. The review petition, which itself has been referred to the Constitution Bench, is accordingly dismissed.â?
32. In Chander Sekhar Singh Bhoi v. State of Orissa, (1972) 1 SCC 63, at page 65, the Constitution Bench of Hon'ble Apex Court states that :
â9. It seems to us that the Courts ordinarily ought not to go into the question of the validity of an Act or a provision of an Act unless it has been brought into force. Till then, such a question would be academic. No body can be aggrieved by a provision of law which is dormant and which cannot be enforced. The Constitution has provided for an advisory opinion being given by the Supreme Court, when the question is of such a nature and of such public importance that it is expedient to obtain the opinion of the Supreme Court. The High Court should not have embarked upon an academic question. In view of this we are not inclined to go into the question whether the provisions of Chapter IV were rightly held to be intra vires by this Court. The respondents in the State appeals can raise this question if so advised when the notification is issued under Section 1(3) of the Act bringing Chapter IV into force. However, the appellant Chander Shekhar Singh was a party to the decision in State of Orissa v. Chander Sekhar, and that judgment is binding on him. He cannot ask us to review the judgment in this manner.â?
33. This Court in Ghodawat Pan Masala Products (I) Ltd. and another Vs. State of Maharashtra and others â“ (2002 (12) LJSOFT 88 = 2002 (6) Bom.C.R. 466) did not decide âcontention Bâ? before it and observed â“
â40. In our view, the question sought to be debated has become academic in view of our findings on Contention A; wherein we upheld the levy of luxury tax on Pan Masala containing tobacco on the ground that the Luxury Tax Act is within the legislative competence of the State legislature under Entry 62 of List II of VII Schedule to the Constitution of India. We, therefore, do not think it necessary to delve on this contention raised by the petitioners. The Apex Court, time and again, reiterated and warned the High Courts that while deciding the constitutional issues, the Court should restrict itself to the questions which are necessary for determination of the real issues necessary for deciding the case at hand and should avoid discussing or recording findings on academic issues. Respectfully following the said warning, we propose to refrain from dealing with and deciding this question and recording our finding on this issue. The view taken on contention (A), however, relies us of the necessity of going into this question.â?
34. We, therefore, find that the petitioners have failed to demonstrate that they are having any cause of action to file such writ petitions or that any of their legal rights is injured. We can not view them as affected persons. This finding has a bearing on their challenge to the impugned move as according to them the condition of previous publication mandated by Section 152T(2) of the Corporation Act in this matter is violated. We may, here note with advantage the case Bagalkot City Municipality v. Bagalkot Cement Co., (1963 Supp (1) SCR 710 = AIR 1963 SC 771) , where the Hon'ble Apex Court, by majority observes:
â6. As we have earlier said, a by-law is made under Section 48. That section provides that a by-law can be made only with the sanction of the Government. Sub-section (2) of that section requires that âEvery Municipality shall, before making any by-law under this section, publish ... for the information of the persons likely to be affected thereby, a draft of the proposed by-law.â?
There are provisions enabling persons to make objection to, or suggestions regarding, a proposed by-law and for these being considered by the municipality before it makes the by-law and thereafter by Government before it gives its sanction. It is, therefore, not open to much doubt that a by-law made without the previous publication of its draft to the persons mentioned would be an invalid by-law. Now who are these persons? They must be âpersons likely to be affected therebyâ?, that is, by the by-law, they must be persons whom the by-law when made is likely to affect by its own terms. Since however anyone can send goods to places within the âoctroi limitsâ?, â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... â¦.... have been made without publication to such persons. It is not said that the respondent was not one of them.â?
35. Here, We have already found that the petitioners are not affected in any way by the LBT Amendment Rules, 2015 brought into force from 01.08.2015. Petitioners got opportunity and also submitted their respective representation which is identical. Only debate is whether it was received by the State Government on 30.07.2015, as the objections were to be looked into on 31.07.2015. As the petitioners are not adversely affected by the amendment as brought into force, we find that this debate also is of not much relevance here.
36. Accordingly, We see no merit in the writ petitions, same are dismissed. Rule discharged with no order as to cost.