Octroi levy upheld as a fiscal tax, not a trade restriction, and toddy and sendhi remained taxable beverages.

Octroi duty was held not to be a restriction on trade, commerce or intercourse under Article 304(b) because a fiscal impost does not directly and immediately curtail the movement of goods; any indirect economic burden is insufficient, and presidential assent under Article 255 cured any defect in sanction. The Hyderabad Municipal Corporations Act was within State legislative competence under the taxing entry for goods entering a local area, and was not invalid for want of prior presidential sanction. Toddy and sendhi were treated as "beverages" within the octroi schedule and were not exempt as Government property. The Revenue Minister's note and Government directions did not create an enforceable exemption or displace the levy, so the octroi challenge failed.

---

---

Issues: (i) Whether octroi duty is a restriction on the freedom of trade, commerce or intercourse under Article 304(b) of the Constitution so as to require previous sanction of the President. (ii) Whether the Hyderabad Municipal Corporations Act, Act II of 1956 was beyond legislative competence or invalid for want of presidential sanction. (iii) Whether toddy and sendhi fall within the expression "beverages" in the octroi schedule and whether they are exempt as Government property. (iv) Whether the Government's directions and the Revenue Minister's note displaced the levy or created an enforceable exemption.

Issue (i): Whether octroi duty is a restriction on the freedom of trade, commerce or intercourse under Article 304(b) of the Constitution so as to require previous sanction of the President.

Analysis: Article 301 guarantees freedom of trade, commerce and intercourse, but the freedom is not freedom from all taxation. The levy of octroi is a fiscal impost and does not, by its direct legal effect, prevent the movement of goods into or within the State. A taxing measure is not a restriction within Article 304(b) unless it operates directly and immediately upon trade; indirect or consequential economic burden is insufficient. Even assuming Article 304(b) applied, Article 255 cures the defect where presidential assent is subsequently given.

Conclusion: Octroi duty is not a restriction within Article 304(b), and the measure was not invalid for want of prior presidential sanction.

Issue (ii): Whether the Hyderabad Municipal Corporations Act, Act II of 1956 was beyond legislative competence or invalid for want of presidential sanction.

Analysis: Entry 52 of List II authorises taxes on the entry of goods into a local area for consumption, use or sale therein. Octroi is a local tax of that kind, and the Constitution treats taxation, duties, cesses and fees as cognate fiscal imposts rather than distinct constitutional prohibitions. The Act therefore fell within State legislative competence. The challenge based on lack of prior sanction also failed because Article 255 validates an Act when presidential assent has in fact been given.

Conclusion: The Act was within legislative competence and was not invalid on the ground of absence of prior presidential sanction.

Issue (iii): Whether toddy and sendhi fall within the expression "beverages" in the octroi schedule and whether they are exempt as Government property.

Analysis: The word "beverage" is of wide import and includes drinks of every description, including toddy and sendhi. The attempt to confine it by ejusdem generis failed because the context did not disclose a narrow genus. The claim of exemption as Government property also failed, because the Government did not acquire proprietary title in the goods merely by granting licences, leases or collecting rentals and tree tax; in any event, the articles were not used solely for public purposes.

Conclusion: Toddy and sendhi are covered by "beverages" in the schedule and are not exempt as Government property.

Issue (iv): Whether the Government's directions and the Revenue Minister's note displaced the levy or created an enforceable exemption.

Analysis: The Minister's note was only an internal opinion and never matured into a communicated governmental order expressed in the constitutional form required for executive action. It could not by itself create enforceable rights against the municipality or bind the Government to cancel the levy. The Government was competent to issue directions to ensure performance of the statutory duty to levy octroi, and the grievance, if any, lay in the statutory appeal or ordinary civil remedies.

Conclusion: Neither the Minister's note nor the Government's directions invalidated the octroi levy or created an enforceable exemption.

Final Conclusion: The statutory levy of octroi on toddy and sendhi was upheld, the constitutional and competence challenges failed, and the writ petitions and connected appeal were dismissed.

Ratio Decidendi: A fiscal impost does not become a prohibited restriction on trade under Article 304(b) unless it directly and immediately curtails the movement of goods, and a State law enacted within the taxing entry remains valid where presidential assent has been obtained under Article 255.

---