State control over municipal taxation extends to stopping continued levy of a sanctioned octroi tax under supervisory powers.

A municipal taxing power made subject to the State Government's general or special orders was construed as a continuing power, so the word "impose" covered the actual and continued levy of an already sanctioned octroi tax. On that reading, the Government could prohibit future operation of the tax by order even after the municipality had completed the statutory procedure and obtained sanction. The challenge based on discrimination failed because the record showed a general prohibition on milk octroi, and the mala fides allegation failed for want of supporting facts.

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Issues: (i) Whether the State Government could, under section 59 of the Bombay District Municipal Act, 1901, prohibit the continued imposition of an octroi tax after the municipality had completed the statutory procedure and obtained sanction. (ii) Whether the Government order was invalid for discrimination or mala fides.

Issue (i): Whether the State Government could, under section 59 of the Bombay District Municipal Act, 1901, prohibit the continued imposition of an octroi tax after the municipality had completed the statutory procedure and obtained sanction.

Analysis: The statutory scheme in sections 59 to 62 distinguished between the making of rules for tax levy, the Government's sanction, and the actual imposition of the tax. The opening words of section 59 made the municipality's power subject to any general or special orders of the Government. The power to impose tax was treated as a continuing one, and the expression "impose" was construed to refer to the actual levy and continuation of the tax, not merely the initial rule-making or acquisition of power to levy. Section 73 dealt with a different subject, namely suspension of levy in specified circumstances, and did not exhaust the Government's control under section 59. Section 74 and section 47 also showed a broader scheme of Government supervision over municipal taxation.

Conclusion: The State Government was competent to issue an order prohibiting the continued imposition of the tax, and the order was valid.

Issue (ii): Whether the Government order was invalid for discrimination or mala fides.

Analysis: The challenge based on discrimination failed because the material showed a general prohibition against levying milk octroi by municipalities, and no sufficient basis was shown for unequal treatment. The mala fides allegation was unsupported by facts; even if an earlier stated ground of the Government was questionable, that did not establish bad faith. The later uniform action across municipalities also negatived the plea of mala fides.

Conclusion: The challenges based on discrimination and mala fides failed.

Final Conclusion: The impugned Government order was upheld, and the municipal challenge to the prohibition on octroi on milk failed in full.

Ratio Decidendi: Where a municipal taxing power is made subject to the State Government's general or special orders, the expression "impose" can include the continued levy of an already sanctioned tax, enabling the Government to prohibit its future operation by appropriate order.

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