Judgement

SHELAT, J. : The appellant Municipal Committee is for the village Khurai a notified area under the Central Provinces and Berar Municipalities Act, 1922. The Committee is entitled to levy and collect under the said Act and under the Rules made thereunder octroi duty inter alia on foodgrains brought into the municipal limits for sale. On March 8, 1954, respondents 1 and 2 applied for refund of octroi duty on the ground that they had exported from the municipal area foodgrains of which particulars were given in the schedule attached thereto. The appellant Committee replied that they would not be entitled to the refund unless they filed with their application the receipts of duty issued by the Committee at the time when it was paid on the, importation of the said foodgrains. It may be mentioned that it was not the case of the Committee in the said reply that the, said goods were not exported by respondents 1 and 2 by rail or that they were not the same goods which were imported into the area and which were purchased by respondents 1 and 2 and on which duty would be payable by the cultivator from whom respondents 1 and 2 had purchased the said foodgrains. The Committee simply refused to pay the refund as the respondents failed to produce the said receipts. In the appeal filed by respondents 1 and 2 before the Additional Deputy Commissioner, that officer held, on a construction of Rules 27 and 34, that it would be the person who had paid the duty when the goods were brought into the municipal area who alone could claim the refund if the goods exported by him were the same on which the duty was paid. The Board of Revenue before whom respondents 1 and 2 filed a revision application against the Deputy Commissioner s said order held that the word refund in Rule 27 meant that the person who had paid the duty could alone be entitled to claim the refund and that respondents 1 and 2 not being such persons could not apply for it. On that ground alone the Board rejected the revision application. Respondents 1 and 2 thereupon filed a writ petition in the High Court of Madhya Pradesh for quashing the said orders of the Deputy Commissioner and the Board of Revenue.

2. The admitted facts before the High Court were, (1) that respondents 1 and 2 had purchased the said foodgrains from certain cultivators; and (a) that those cultivators had in fact paid octroi duty when they brought the said foodgrains for sale within the municipal area. The contention of respondents 1 and 2 before the High Court was that as persons who had exported the said goods they were entitled to the refund of the duty paid by their vendors, the said cultivators, and that the Board misconstrued the rules and was in error in refusing the refund to them. A learned Single Judge of the High Court held that under Rule 9 (c) a declaration had to be made if the goods were intended for consumption or use within the municipal area or if they were intended for immediate export. He observed that Rule 9, however, did not provide for any such declaration if the goods brought into the municipal area were intended for sale. He then observed that R. 27 dealt with refund of octroi on the exportation of dutiable goods outside the municipal limits and the exporter thereunder was entitled to a refund of 7/8th of the duty paid on such goods. He held that the duty having admittedly been paid on such goods by the said cultivators and respondents 1 and 2 having purchased and exported those very goods, they were entitled to the refund. On this basis he quashed the orders of the Deputy Commissioner and the Board and allowed the writ petition. In the Letters Patent appeal filed by the appellant Committee, a division bench of that High Court agreed with the Single Judge on his construction of R. 27 but as the Board had considered only one question, namely, whether respondents 1 and 2 not having themselves paid the duty were not entitled to claim the refund, remanded the case for dealing with th