IMPORTANT POINT
Effect of Section 22 of SICA is to be considered only when there was demand for recovery.

JUDGMENT

Arijit Pasayat, J.-The challenge in this appeal is to the judgment rendered by a Division Bench of the Bombay High Court dismissing the writ petition filed by the appellant. Challenge was to the levy of octroi by respondent No. 1 Talegaon Dabhade Municipal Council (hereinafter referred to be "Municipal Council") which was established under the Maharashtra Municipal Council Nagar Panchayat and Industrial Townships Act, 1965 (in short "the Act"). The respondent No. 1- Municipal Council proposed to levy octroi in terms of the Maharashtra Municipalities (Octroi) Rules, 1968 (in short the "Rules").

2. The appellant used to import raw material and components into the octroi limits of the Municipal Council. The appellant took the stand that the three items i.e. plastic powder, plastic components and glass refills were covered under the Residuary Entry 86 of the Rules. The stand of the appellant was that it had paid octroi on the three items under protest under Rule 15(1) of the Rules. It requested the concerned Superintendent for determination under Rule 15(3) the correct amount of duty payable. It also prayed for a direction to respondent No. 1-Municipal Council for refund of difference between the octroi levied and the octroi due under Entry 86 of the Rules. As the Municipal Council failed to refund the octroi, a writ petition was filed in the High Court under Article 226 of the Constitution of India, 1950 (in short the "Constitution") by the appellant herein.

3. The High Court held that in view of the decision of this Court in Municipal Corporation for the City of Thane & Ors. Vs. Asmaco Plastic Industries & Ors. (1999) 1 SCC 372, Entry 53(c) applies to plastic goods and plastic powder and the glass refills were covered by Entry 49. Accordingly, the writ petition was dismissed. Direction was given to the appellant to pay the difference of octroi payable and paid at different rates along with the interest depending on the period in view of what is provided in Section 166 of the Act.

4. Learned counsel for the appellant submitted that the view of the High Court is clearly untenable as the decision in Asmaco s case (supra) is distinguishable. In that case, taking into account the type of articles involved, this Court held that the heading of an Entry was really of no consequence. But if one looks at the concerned Entry 49 in the background of the concerned items, the heading becomes important. Reference was also made to Entry 14(a), 14(b) to contend that it cannot be laid down as a rule of universal application that in matters of levy of octroi, the headings of Entries are not relevant. It was also submitted that the appellant has become a sick industry and the proceedings are pending before the Board for Industrial and Financial Reconstruction (in short the "BIFR"). It was, therefore, submitted that no recovery in respect of concerned amount can be directed. Finally, it was submitted that there is a power for remission of interest and the direction of the High Court to pay interest has to be varied leaving the matter open to Municipal Council to consider whether interest is chargeable. In any event, the amendment to Entry 49 shows that prior to the amendment residual Entry was applicable. The High Court proceeded on the basis that amendment to Entry 49 was really of no consequence as the unamended Entry also covered the articles.

5. In reply learned counsel for respondent No. 1- Municipal Council submitted that with reference to Entry 56 that even if for the sake of argument it is conceded and not accepted that Entry 49 does not cover glass articles, Entry 56 clearly takes care of those articles. Entry 56 excludes "articles used for building construction" to which reference is made in Entry 49. Therefore, in any event, in view of Entry 56, the levy is in order. So far as the recovery is concerned, it is submitted that only on ad hoc basis duty was levied, but no final assessment, as contemplated under the Rules, has been made. T