IMPORTANT POINT
Zinc oxide imported within limit of Greater Bombay would be liable for levy of octroi in terms of item 26, Schedule H of the Bombay Municipal Corporation Act.

Headnote:Bombay Municipal Corporation Act-Sections 139(4) and 192(1) and Schedule H, item 26-Levy of octroi-Zinc oxide imported within limit of Greater Bombay-Appellant s plea that heading of Schedule H say articles used in construction alone could be subjected to levy of octroi and zinc oxide being not used for construction levy not justifiable-Not tenable-Zinc oxide stood enumerated in item 26 in Schedule-Heading of class of item not decisive and cannot affect taxability of zinc oxide-Levy of octroi on zinc oxide justified.
       Held : Schedule H contains the list of articles liable to payment of octroi. There are a number of articles contained in serial No. 1 to 60 which are enumerated in the Schedule. Against each article the maximum rate of octroi leviable is provided. The entries in the said Schedule are divided into different classes. The IXth class being miscellaneous. Insofar as zinc oxide is concerned it is included in serial No. 26 in class IV. Section 192 has to be read along with Schedule H. The said section provides that octroi is to be levied in respect of several articles mentioned in the Schedule. The articles which are mentioned in the Schedule are contained in Item Nos. 1 to 60. Zinc oxide is contained in Article 26. It is no doubt true that Schedule H has been divided into different classes. The sub-headings were meant only to provide a convenient index and no more. Heading is not decisive of the question whether an article mentioned in the Schedule can be subjected to tax or not. The heading of the class cannot affect the taxability of zinc oxide to octroi. (Paras 9, 10 & 11)
       There is one other reason why the judgment of the Single Judge was not correct. He had come to the conclusion that zinc oxide was used as a component of paint. It is not disputed that paint is used in the construction of buildings. Merely because only 0.25 per cent per value of zinc oxide is mixed with the paint used in the buildings cannot be regarded a ground for coming to the conclusion that zinc oxide is not an article used in the construction of buildings. If this reason of the learned Single Judge is correct it would mean that a pinch of salt which is added in preparing of food cannot be regarded as an item of food because of the small quantity which is used in the said preparation. What has to be seen for the purpose of imposition of levy of octroi is whether an item in question is enumerated in the Schedule or not. If the item is mentioned therein then irrespective of the heading under which it is contained the Corporation would be entitled to levy octroi on the import of the said item into Bombay. (Para 12)

ORDER

The only question which arises for consideration in these appeals is whether import of zinc oxide within the limit of Greater Bombay attract the imposition of octroi.

2. The appellant is in the business of import of zinc oxide into the Greater Bombay. The said item is then sold to rubber manufacturing industry. At the time of its import into Bombay octroi was sought to be leavied under Section 192 of the Bombay Municipal Corporation Act, under Item 26 of Schedule H.

3. On 10th May, 1978 the appellant objected to the levy of octroi on the import of zinc oxide saying that this article was not used in the construction of buildings, roads or other constructions. The contention of the appellant was that in Schedule H Item No. 26 fell under Class IV which referred to articles used in construction of buildings, roads and other structures and articles made of wood and cane. The contention of the appellant was that zinc oxide was used only by the manufacturers of rubber goods and, therefore, it could not be regarded as an item falling under that class and, therefore, no octroi could be levied.

4. When the respondent rejected the representation of the appellant a writ petition was filed in the High Court at Bombay. The Single Judge of the Bombay High Court came to the conclusion, on the basis of the affidavits which were filed before him, that only a negligible percentage of zinc oxide was used as a component of plaint and that was not sufficient to hold that zinc oxide was an article used in the construction of roads or buildings. He was further of the opinion that in order that an item should be taxable it must conform to the class indicated in Schedule H and inasmuch as zinc oxide could not be regard as an article used in the construction of buildings etc., therefore, no octroi could be levied thereon. In coming to this conclusion the learned Judge relied upon a decision by Vaidya J., Single Judge of the High Court in the case of Municipal Corporation of Greater Bombay v. Glaxo Laboratories (India) Pvt. Ltd.1.

5. The appellant then filed an appeal and the Division Bench allowed the same. It came to the conclusion that :

The fact that Schedule H is divided into what are termed classes; is also instructive. The word class has been deliberately used to indicate the classification of the articles covered by schedule H as far example, Animals and Metal and articles made of metal . The headings are only meant to provide a convenient index to assist the importer of an article or, for that matter, an officer of Municipal Corporation, to locate the article in the Schedule."

6. Then overruling to that view expressed by Vaidya J., in Glaxo Laboratories case while allowing the appeal it dismissed the writ petition which had been filed by the appellant.

7. Mr. R.S. Suri, learned counsel appearing for the appellant submits that the judgment under appeal has since been overruled by the Bombay High Court in Municipal Corporation, Greater Bombay v. Monopol Chemicals P. Ltd.2. He further submits that zinc oxide is not an item which can possibly fall under Class IV and therefore no octroi could be levied on the import of the said item into Bombay.

8. Section 139(4) of the Bombay Municipal Corporation Act is the charging section in so far as imposition of octroi is concerned. What is relevant for our purposes is Section 192(1) which reads as follows :

"192. (1) Except as hereinafter provided, a tax, at rates not exceeding those respectively specified in Schedule H, shall be levied in respect of the several articles mentioned in the said Schedule, or so many of them or such of them as the Corporation shall from year to year in accordance with Section 128 determine, on the entry of the said articles into Greater Bombay for consumption, use or sale therein. The said tax shall be called an "octroi".

9. Schedule H contains the list of articles liable to payment of octroi. There are a number of articles contained in serial No. 1 to 60 which are enumerated

Click Here to Read the rest of this document

1999 Supreme(SC) 1255

IMPORTANT POINT Zinc oxide imported within limit of Greater Bombay would be liable for levy of octroi in terms of item 26, Schedule H of the Bombay Municipal Corporation Act.

Cases Referred (1)

IMPORTANT POINT
Zinc oxide imported within limit of Greater Bombay would be liable for levy of octroi in terms of item 26, Schedule H of the Bombay Municipal Corporation Act.