JUDGMENT - Dr. D.Y. CHANDRACHUD, J.:---Rule, returnable forthwith. Respondent waives service. By consent, petition is taken for final hearing.

2.The Court of Small Causes at Pune felt that "this case seems to be uncommon arising out of common incidents". From the record, the facts before us are not within the realm of controversy. Therefore, the exercise involved in the present petition is to apply the law relating to octroi duty as settled by the Supreme Court to the facts as they have emerged. In this petition, the 1st petitioner, which is a Municipal Corporation established under the Bombay Provincial Municipal Corporations Act, 1949 ("the Act") challenges the decision of the learned Additional District Judge, Pune in a statutory Appeal arising out of the provisions of the Act. The learned Addl. District Judge by his impugned order dated 7-12-1999 confirmed the view which was taken, in the first instance, on 30-9-1996 by the Court of Small Causes at Pune to which the hearing of statutory appeals in tax matters under the Act had been entrusted.

3.Before the formation of the 1st petitioner into a Municipal Corporation under the Act, it was a Municipal Council functioning under the Maharashtra Municipalities Act, 1965. The assessment and collection of octroi was governed by the Maharashtra Municipalities Act, 1965. The respondent has its factories at Pimpri and Chinchwad in which vehicles and spare parts are manufactured. Under section 142 of the Maharashtra Municipalities Act, 1965, a provision has been made by which the facility of keeping "an account current" could be granted to an importer of goods within the limits of the Municipal Council instead of requiring him to pay octroi duty on every occasion that octroiable goods are introduced within the octroi limits. Section 142 of the Act provides that upon the grant of such a facility, the accounts shall be settled at intervals not exceeding one month and the person to whom the facility is granted shall "give such information or details and make such deposit or furnish such security" as the Council may consider sufficient to secure its dues. The purpose of an account current is thus to ensure a certain degree of convenience to regular importers of goods within the octroi limits of the Council so that the inconvenience and delay attendant upon the payment of octroi duty every time that consignments arrive into the octroi limits, is obviated. In the case of the 1st respondent, the facility of maintaining an account current was allowed by the erstwhile Municipal Council and was continued after the Municipal Corporation was formed. In the course of the evidence that was recorded before the trial Court, it has come on record that the procedure involved is that upon the grant of the facility, a memo was given at the octroi Naka whenever goods came within the limits of the Municipal Council. A debit memo was prepared by the officers at the octroi check post. The 1st respondent would prepare a monthly statement on the basis of the debit memos and, octroi duty would be paid on the basis of the statements so prepared of the consignments imported over a period of one month. The statements were verified by the officers of the Municipal Council. Octroi duty was initially paid in advance every month on the basis of estimated imports and at the end of the month, a reconciliation was carried out. There would thus be a process of making credits and debits in the account maintained in relation to the Current Account facility.

4.The period for which the dispute in the present case relates is October 1984 to March 1985. The dispute between the parties relates to two areas and these are, briefly stated, thus:--- (i) the 1st respondent brought in within the Octroi limits material consisting of forgings which was duly subjected to the payment of Octroi duty upon importantion within the octroi limits. There is no dispute between the parties that the octroi duty was in fact paid when the material wa

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