1998 Supreme(SC) 602

1998(5) Supreme 68
Supreme Court of India
(From Allahabad High Court)
S.B. Majmudar & M. Jagannadha Rao, JJ.
M/s. Acqueous Victuals Pvt. Ltd. -Appellant
versus
State of U.P. & Ors. -Respondents
Civil Appeal Nos. 2623-2625 of 1998
(arising out of SLP (C) Nos. 14533-35 of 1987)
Decided on 8-5-1998
Counsel for the Parties :
For the Appellant : Dr. Meera Agarwal, Ramesh Chandra Mishra, Advo­cates.
For the Respondent for State : A.K. Goel, Kavin Gulati, R.B. Misra, Advocates.
For the Respondent No. 3 in C.A. No. 2623/98 : Pramod Swarup, Ms. Pareena Swarup, Praveen Swarup, Advocates.
For the Respondent in C.A.No. 2623 and 2625/98 : Alok Singh, V.B. Joshi, Advocates.

Important Point
The company engaged in the business of bottling soft drinks would be liable to pay octroi duty on weight of bottles containing beverages brought within the municipal limits of a municipality for consumption along with the octroi duty on weight of beverages contained in these bottles only if the empty bottles are shown to have been not actually taken out of the municipal limits of the municipality for re-cycling and if any octroi duty had been paid by the company on the weight of bottles at the time of their entry, such duty could be subjected to claim for refund provided that it is shown by the company that the octroi duty on such empty bottles had not been passed on to the con­sumers or any other person so that the company is not found to be guilty of unjust enrichment by getting such refund.

Headnote:U.P. Municipalities Act, 1916-Sections 128(1)(viii) r/w 134 and 135 - Octroi Duty - Levy of by Municipality-Company engaged in business of bottling soft drinks-Soft drinks contained in bottles brought within municipal limits of concerned Municipalities for consumption-Weight of bottles containing beverages imported within municipal limits-Is subjected to charge of octroi duty along with weight of beverages contained in bottles only if empty bottles are not actually taken out of municipal limits for recycling-Octroi duty if paid by company at time of entry on weight of bottles-Liable to be refunded provided octroi duty on such empty bottles not passed on to consumers-Further, appropriate directions issued.

       Held : A conjoint reading of Section 128(1)(viii) and Sections 134 and 135 leaves no room for doubt that tax by way of octroi on goods brought within the municipal limits for consumption, use or sale could legitimately be imposed by the authorities concerned functioning under the Act. (Para 17)

       The aforesaid authoritative pronouncement of the Constitution Bench of this Court, therefore, sets at rest the controversy in the present case. If it is the case of the writ petitioner that during the relevant period from 1980 to 1987 it brought within the municipal limits of the four respondent-Municipalities beverages packed in bottles and the bottles were not sold within the municipal limits and after the beverages were taken out of these bottles, these very bot­tles were returned to the petitioner and were taken back to Bareilly, then for claiming the refund of the octroi paid on the weight of these bottles during the relevant period when the consignments entered the municipal limits from time to time, the writ petitioner had to follow the procedure laid down by the Municipality concerned under its rules for refund of taxes and had to comply with the statutory gamut of these rules. It had also to show that the burden of disputed octroi duty was borne by it and was not passed on to consumers of beverages contained in these bottles. In other words, it would not be guilty of unjust enrichment if refund was granted. If the refund claim on fur­nishing the relevant proofs was not ultimately granted, the remedy of appeal provided under the rules had to be followed. (Para 21)

       If the writ petitioner’s case on facts is found true, namely, that the bottles which contained beverages did not repose within the municipal limits in empty form after their contents were consumed by the consumers and were actually taken out of the municipal limits, it could not be said, as assumed by the High Court that the goods were used within the municipal limits. We must, therefore, hold that if the writ petitioner satisfies the authorities concerned that the bottles containing the original consignments after getting emptied within the municipal limits were actually taken out of the municipal limits for recycling, then the writ peti­tioner would be entitled to claim proportionate refund of the octroi duty assessed on the weight of such empty bottles only subject to the burden of such amount of duty not being shown to have been passed on to consumers of beverages or to anyone else. But that would require investigation of facts by the authorities concerned, if and when such claim for refund is lodged. (Para 23)

       Consequently held : As a result of the aforesaid discussion, therefore, we hold that if beverages in liquid form contained in bottles are brought within the municipal limits and after such beverages are taken out of these bottles, those very empty bottles are found to have been re-exported from the municipal limits without being sold therein, the octroi duty paid on the weight of such bottles earlier could be subjected to claim for refund by the exporter of such empty bottles if the relevant factual data is found to the satisfaction of the authorities before whom such claim is lodged. The first point is, therefore, answered by holding that if the writ petitioner proves to the satisfaction of authorities that very bottles in which beverages were imported in given contingency for sale and consumption within the municipal limits were actually taken out of municipal limits as empty bottles for re-cycling without writ petitioner losing title to these bottles in the meanwhile, the octroi duty paid at the time of their entry on the weight of bottles could be subjected to claim for refund subject to the rider that it is also shown by the writ petitioner that the octroi duty on such empty bottles had not been passed on to the consumers or any other person so that the writ petitioner will not be found to be guilty of unjust enrichment by getting such refund. This question has also to be examined by the authorities before whom claim of refund is lodged. (Para 27)

       Finally held : In the light of the decision on Point No. 1, Point No. 2 will naturally require consideration of the question as to what type of directions can be issued in the present case. It is obvious that the dispute centres round the levy of octroi on the weight of the contain­ers, namely, the bottles imported and brought within the municipal limits of four res­pondent-Municipalities between 1980 and 1987 and as there was already stay of recovery of octroi duty from the High Court on the weight of such bottles from 1983 pending the writ petitions till 1987, the writ petitioner had no occasion to put forth their claim for refund till then. It is of course true that for earlier period from 1980 to 1983 when there was no stay from any court, the writ petitioner could have lodged claims for refund but presumably because the writ petitioner thereafter raised this contention before the High Court and the writ petitions remained pending before the High Court for a number of years such claims were not lodged. Under these circumstances, the writ petitioner cannot be shut out from asking for refund on relevant consignments by submitting appropriate data. Conse­quently, on the peculiar facts of this case, we hold that it would be unfair and unequitable to prevent the writ petitioner from lodging any claims for refund of octroi duty paid on the weight of re-exported empty bottles during the relevant period from 1980 to 1987. If the writ petitioner’s claim for refund regarding the exported empty bot­tles covered by the concerned consignments is found justified during the period when there was stay against such recovery, nothing further would survive and the assessments for the same will close the chapter. However, if the claim is not justified then the question would survive for the authorities to proceed further for recovery of the unpaid octroi duty on the bottles covered by these consignments as they were till then restrained from claiming such duty. So far as earlier period of 1980 to 1983 is concerned, if the claim of the writ petitioner for refund is found to be justified on the facts concerning the given consignments and on the principle of unjust unrichment, the writ petitioner is not required to be non-suited, then the question of refund would survive for consi­deration and appropriate refund orders will have to be passed by the authorities. The writ petitioner shall be permitted to lodge such claims backed up by relevant material before the authorities concerned within the period of 12 weeks from today. (Para 28)

       When the relevant facts and figures are placed before the authori­ties supported by relevant documentary evidence and if the authorities concerned get satisfied about the same then only the question of refund for the period from 1980 to 1987 or the question of non-recovery of octroi duty on the weight of bottles covered by the con­signments for the relevant period would survive for consi­deration and if the authorities take any adverse decision in this connection on the diverse claims of the writ petitioner, it will be open to the writ petitioner to challenge such assessments by filing appeals under the rules and relevant provisions of the Act. Point No. 2 for consi­dera­tion is answered by issuing the aforesaid relevant directions. We may also mention, in this connection, that if such claims are lodged by the writ petitioner within the time aforesaid, then only they will be examined at the earliest and pre­ferably within the period of further 12 weeks from the lodging of such claims and after hearing the petitioner or his representative, appropriate assessment orders and consequential refund orders, if any, may be passed by the authori­ties concerned. (Paras 29 & 30)