JUDGMENT

Dr. A. S. ANAND, J.:—The controversy in this appeal, by special leave, directed against the judgment of the Division Bench of the Punjab and Haryana High Court, dated 2nd of June, 1989 in Writ Petition No. 3361 of 1984: (reported in AIR 1990 Punj & Har 99) is rather limited.

2. The appellant (hereinafter IOC) set up a pipeline terminal and LPG bottling plant at Suchi Pind in District Jullundhar. In 1983, the limits of the respondent, Municipal Corporation Jullundhar, (hereinafter the Municipal Corporation) were extended and depot of the appellant came to be included within the municipal limits. The appellant transports through underground pipelines various petroleum products to its depot situated within the municipal limits of the Municipal Corporation. These petroleum products are meant:

(i) either for use or consumption by the IOC within the limits of the Municipal Corporation; or

(ii) for sale by IOC through its dealers or by itself for consumption within the octroi limits, by persons other than the IOC; or

(iii) for sale by the IOC through its dealers or by itself inside the octroi limits and the vendee, after completion of sale take those products outside the octroi limits for sale, use or consumption; and

(iv) for export by the IOC from its depot inside the octroi limits to outside the municipal limits, to its dealers for sale, use and consumption by persons other than the IOC, outside the octroi limits.

3. The Municipal Corporation raised a demand on the IOC for octroi for the period September 7, 1983 to May, 1984. The demand was to the tune of Rs. 40,26,230.17. The IOC challenged the demand notice by filing a writ petition in the High Court of Punjab and Haryana. Since the IOC had approached the High Court without first exhausting the statutory remedies under the Punjab Municipal Act, the High Court allowed the appellant to file a statutory appeal under the Act against the demand notice before the Appellate Authority, Commissioner of Jullundhar Division and kept the writ petition pending. The High Court, however, directed the IOC to deposit arrears of octroi duty in order to avail of the remedy of statutory appeals and commanded the Appellate Authority to hear the appeals in accordance with law after condoning the delay in the filing of the appeals. Accordingly, after the deposit of the arrears of octroi duty, the appeals were filed before the Appellate Authority, Commissioner, Jullundhar Division, Jullundhar. The appeals, after a contest on merits, were dismissed by the Appellate Authority. The IOC thereafter amended the writ petition and also challenged the order of the Appellate Authority before the High Court.

4. In the writ petition, the IOC inter alia challenged the validity of S. 113 of the Punjab Municipal Corporation Act, 1976 on the ground that it had authorised the levy of octroi on articles and animals imported within the municipal limits of the corporation without any reference to the use, consumption or sale of the said goods as being beyond the power of the State Legislature. Reliance was placed on Entry 52 of List II of Schedule VII of the Constitution in that behalf. The IOC did not dispute its liability to pay octroi duty in relation to the first three categories noticed above but it only disputed the authority of the Municipal Corporation to impose and demand octroi duty on the petroleum products imported by the IOC within the limits of the Corporation which are only exported to its dealers at their sale points, situated outside the area of the Municipal Corporation. The IOC, in its writ petition, explained the procedure involved in the sale of the goods to its dealers, outside the municipal limits of the Municipal Corporation and pointed out that the dealers placed orders for unascertained petroleum products which were carried in the tank lorries either belonging to the IOC or engaged by the IOC for transportation and delivery of the petroleum products at the outlets of its dealers, located outsid