Statutory octroi exemption for rail-borne sugarcane survived later municipal revisions, preventing recovery and related prosecution.

A statutory exemption from octroi on rail-borne sugarcane granted by the competent Government under the U.P. Municipalities Act, 1916 remained effective until validly withdrawn or modified by that authority. The later municipal bye-laws and revised schedule did not by themselves repeal, rescind, or override the exemption, because no express withdrawal was made. The exemption was construed as a general protection from octroi on rail-borne sugarcane, not as limited to a particular notification or levy character. The appellants were therefore not liable to pay octroi, and criminal proceedings founded on non-payment could not stand.

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Issues: Whether the exemption granted by the State Government under section 157(3) of the U.P. Municipalities Act, 1916 continued to protect rail-borne sugarcane from octroi notwithstanding the later octroi bye-laws and schedule, and whether the appellants were liable to pay octroi on the sugarcane brought by rail into the municipal limits.

Analysis: Octroi under section 128(1)(viii) of the U.P. Municipalities Act, 1916 was held to be a tax and not a terminal tax or fee. The exemption order of 1936 was construed as an exemption from octroi on rail-borne sugarcane generally, and not as one confined to a particular notification or to a levy of a different character. The later bye-laws and revised schedule did not repeal, rescind, or render inconsistent the earlier exemption, because an exemption under section 157(3) could be withdrawn or modified only by the State Government and the 1960 municipal notification did not expressly withdraw it. The earlier writ proceedings did not bar the present challenge, since the present question of the continued effect of the exemption was distinct.

Conclusion: The appellants were not liable to pay octroi on the rail-borne sugarcane, and the exemption remained operative on the relevant date.

Final Conclusion: The levy could not be recovered in the facts of the case, and the criminal proceedings based on non-payment of octroi were unsustainable.

Ratio Decidendi: A statutory exemption from octroi granted by the competent Government under section 157(3) of the U.P. Municipalities Act, 1916 continues to operate until validly withdrawn or modified by that authority and is not displaced merely because the municipal bye-laws or rate schedule are later revised.

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