JUDGMENT

SABYASACHI MUKHARJI, J.:- Leave granted.

2. This is an appeal from the judgment and order of the Division Bench of the High Court of Karnataka dated 24th March, 1988*.

* Reported in ILR (1968 ) Kant 2487

3. There was a notification under S. 98(2) of the City of Bangalore Municipal Corporation Act, 1949 dated 4th March, 1975 levying octroi, inter alia, on food drinks (including milkfood) brought into the municipal limits of Bangalore for sale, consumption or use. On 8th October, 1976, representation was submitted on behalf of the petitioners, HMM Limited, protesting against levy of octroi on "Horlicks" milkfood powder brought into the municipal limits in bulk containers (large steel drums). for being packed at the packing station in Bangalore in Unit containers (glass bottles) and thereafter exported outside the municipal limits. In respect of the quantity of the goods which were exported outside the municipal limits after being bottled, the petitioners sought refund of the octroi duty as there was no use or consumption or sale of the said milkfood within the municipal limits. The respondent corporation rejected the claim on the ground that R. 24 of the Byelaw 45 framed by the Municipal Corporation had not been complied with and as such refund could not be given. The petitioners again sought on 4th February, 1978, refund of octroi duty for the period 1974-75 to December, 1977 amounting to Rupees 13,39,652.92 enclosing computation of the duty collected for the aforesaid period. Again, the refund was refused by the respondents in March, 1978. Petitioners thereafter filed writ petition in the High Court of Karnataka challenging the levy/ retention of octroi duty on "Horlicks" exported out of the municipal limits and seeking refund thereof. From 1st April, 1979, levy of octroi on milkfood was totally abolished in Karnataka. Learned single Judge of the High Court on 1st February, 1984, allowed the writ petition and directed that the amount of octroi duty collected for the period commencing three years prior to the filing of the writ petition be verified within 3 months and refunded within 45 days thereof. Learned single Judge noted that the case of the petitioners was that it was engaged in the manufacture and sale of a malted milk product marketed under the brand name "Horlicks", The petitioner used to manufacture the said product in its two factories situated at Nabha in the State of Punjab and Rajahmundhry in the State of Andhra Pradesh and marketed these throughout the country through its bottling and marketing centres situated in different parts of the country. One such centre was situated in the city of Bangalore to which it brought its said product in bulk, then rebottled the same in small bottles of different capacities like 800 gms, 450 gams and 250 gams. It was the case of petitioners that small portion of, the product, rebottled in small bottles, alone was sold within the city of Bangalore to its dealers and the rest was exported to its agents situated in different parts of the State and other nearby places of the country also. In this connection, it may be mentioned that Rr. 24 to 27 of the relevant bye-laws were as follows:

"24. On all articles on which octroi duty has been paid and which are subsequently exported beyond the octroi limits without breaking bulk, refunds shall, subject to the following rules, be granted at the rates 49 originally charged at the time of import; provided that no such refunds shall, except in the case of timber imported and re-exported in log be granted unless such goods are exported within three months from the date on which octroi was levied.

25. Any person claiming refund under the above bye-laws shall produce the goods to be exported at the Central Octroi Office, together with the original receipt for octroi duty paid thereon, and an application for refund prepared in triplicate in the form prescribed in Schedule V. He shall fill up columns 1 to 10 of the application signing and datin