JUDGMENT - Mrs. SUJATA MANOHAR, J.:---The petitioners are a company registered under the provisions of the Companies Act, 1956 having their registered office at Calcutta. The petitioners have a factory at Pune. The 1st respondent is a Municipal Council established under section 8 of the Maharashtra Municipalities Act, 1965. The area where the petitioners' said factory is situate is under the jurisdiction of the 1st respondent Municipal Council. By a notification dated 11th October, 1982 the said Municipal Council has been converted into a Municipal Corporation under the Bombay Provincial Municipal Corporation Act, 1949. At all times material to the present petition, the respondent was a Municipal Council under the provisions of the Maharashtra Municipalities Act, 1965.

2. The petitioners manufacture hydraulic equipment such as punches, shears, mobile fabricators, N.B.C. open throat presses and hydraulic cylinders in the factory at Pune. The raw material required for the manufacture of these items consists of steel plates, C.I. castings, hydrolic punches etc. This raw material is imported by the petitioners into the limits of the respondent Council from outside and the petitioners are liable to pay octroi in respect of the material so imported.

3. Under section 142 of the Maharashtra Municipalities Act, 1965 it is provided as follows:

"A Council, if it thinks fit, instead requiring payment of octroi due from any person, mercantile firm or public body to be made at the time when the animals or goods in respect of which the octroi is leviable are introduced within its octroi limits, may at any time direct that an account-current shall be kept on behalf of the Council of the octroi so due from such person, firm or body. Such account shall be settled at intervals not exceeding one month, and such person, firm or public body shall give such information or details and make such deposit or furnish such security as the Council or any officer authorized by it in this behalf shall consider sufficient to cover the amount which may at any time be due from such person, firm or body in respect of such dues. Any amount so due at the expiry of any such interval shall, for the purposes of Chapter X, be deemed to be, and shall be recoverable in the same manner as, an amount claimed on account of any tax recoverable under the said chapter."

The petitioners were given the benefit of the facility under section 142 of the said Act. They were granted an account-current bearing Account No. 127 for the payment of octroi duty on the material imported within the limits of the respondent-Municipal Council. According to the petitioners, they have accordingly paid all octroi duty on all the goods so imported and have submitted a monthly statement of payments made in the prescribed form as required under the Maharashtra Municipalities (Octroi) Rules, 1968. According to the petitioners, they have, right from the year 1973 onwards, regularly submitted, the monthly statements and have made payments of octroi dues as per the statements. According to the petitioners, at no time the correctness of the monthly statements submitted by the petitioners was questioned by the respondent- Council.

4. On 23rd July, 1982 the Octroi Inspector of the respondent visited the factory of the petitioners and sought to verify the octroi account of the petitioners right from May, 1973 up to March,1982. The petitioners thereafter received a letter dated 7th August, 1982 from the respondents setting out, inter alia, that on checking of accounts for the period 1973-74 upto March, 1982 it is found that a sum of Rs. 26,747.04 is payable by way of octroi. The petitioners were called upon to pay this amount within 7 days, failing which recovery proceedings would be taken under the provisions of sections 150, 151 and 152 of the Maharashtra Municipalities Act, 1965. On 30th August 1982 a bill for the said amount was served on the petitioners along with a covering letter of the same date. By thei

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