Octroi levy on goods brought into municipal limits upheld as a valid nondiscriminatory tax simpliciter, not a trade restraint.

Octroi duty under the Rajasthan Municipalities Act, 1959, read with the Octroi Rules, 1960, applies to goods brought within municipal limits for consumption, use or sale there. Goods taken only for immediate transport outside the municipality, or temporarily detained for later export, are not chargeable if the required declaration is made. The levy was treated as a tax simpliciter within Entry 52 of List II, not as a prohibited restraint on trade. Articles 301 and 304(b) of the Constitution do not bar a nondiscriminatory revenue levy of this kind, so the challenge to the levy and connected notifications failed.

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Issues: Whether octroi duty was leviable on goods brought from outside Rajasthan though not manufactured or produced in the State, and whether the levy and the connected notifications and rules were unconstitutional as offending the freedom of trade and legislative competence.

Analysis: The levy of octroi under Section 104 of the Rajasthan Municipalities Act, 1959, read with Rule 9 of the Rajasthan Municipalities (Octroi) Rules, 1960, applies to goods brought within municipal limits for consumption, use or sale therein. Goods brought only for immediate transportation outside the municipality, or for temporary detention and later export, are not chargeable if the prescribed declaration is made. The levy was treated as a tax simpliciter falling within Entry 52 of List II, and not as a prohibited restriction on trade. Articles 301 and 304(b) of the Constitution of India do not bar such a levy, and a tax imposed for revenue purposes, without discriminatory effect, is within the State's competence.

Conclusion: The challenge to the octroi levy failed; the levy on the imported goods was held valid and the writ petitions were dismissed.

Ratio Decidendi: Octroi on goods brought into municipal limits for consumption, use or sale is a permissible State levy under Entry 52 of List II, and it does not violate Articles 301 or 304(b) when it operates as a nondiscriminatory tax simpliciter rather than a direct restraint on trade.

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