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1984 Supreme(Bom) 281
Bombay High Court
GINWALA,PATEL
Khandelwal Traders, Akola - Appellant
Versus
Akola Municipal Council - Respondent
Decided On : 09/27/1984
B.A. Udhoji, V.S. Sohoni, for Petitioner; L. Mohta, for Respondent.
Goods imported within the octroi limits for the purpose of export are not liable to octroi, and the importer is entitled to a refund of the octroi paid on such goods if they are subsequently exported without being consumed or used within the octroi limits.
Headnote:
OCTROI - REFUND - GOODS IMPORTED FOR EXPORT - CHANGE OF OWNERSHIP - NO CONSUMPTION OR USE WITHIN OCTROI LIMITS - REFUND OF OCTROI PERMISSIBLE - MAHARASHTRA MUNICIPALITIES (OCTROI) RULES, 1968, RULES 25(3)(D), 28(2)(D).
Fact of the Case:
The petitioner, a partnership firm dealing in bailing hoops and other commodities, sought a writ of mandamus against the respondent Municipal Council to forbear from claiming octroi on goods in transit from one octroi limit to another and which were neither consumed nor used within the municipal area, and to refund the tax illegally collected amounting to Rs. 809.59.
Finding of the Court:
The court found that the petitioner had imported the goods within the octroi limits for the sole purpose of export and had followed the prescribed procedure for claiming refund of octroi. The court held that the sale of the goods within the octroi limits not for use or consumption therein but for export would not make the importer or the exporter liable to pay the octroi and they would be entitled to refund the amount already deposited after such export.
Issues: 1. Whether the petitioner was entitled to a refund of octroi paid on goods imported within the octroi limits but subsequently exported without being consumed or used therein. 2. Whether the change of ownership of the goods within the octroi limits before export barred the petitioner's claim for refund.
Ratio Decidendi: The court held that the petitioner was entitled to a refund of octroi paid on goods imported within the octroi limits but subsequently exported without being consumed or used therein. The court relied on the Supreme Court's decision in Burmah Shell Oil Co. v. Belgaum Borough Municipality (AIR 1963 SC 906) and Hiralal v. Broach Municipality (AIR 1976 SC 1446), which held that octroi is a tax on goods brought within the octroi limits for consumption or use therein, and that goods imported for the purpose of export are not liable to octroi. The court also held that the change of ownership of the goods within the octroi limits before export did not bar the petitioner's claim for refund, as the sale of the goods was not for use or consumption within the octroi limits but for export.
Final Decision: The petition was allowed, and the respondent Municipal Council was directed to refund to the petitioner the sum of Rs. 809.59 within three months.
GINWALA, J. :- The petitioner which is a partnership firm and deals in bailing hoops and other commodities, seeks a writ of mandamus against the respondent Municipal Council (hereinafter referred to as "the Council"), ordering it "to forbear from claiming octroi on goods which are in transit from one octroi limit to another and which are neither consumed nor used within the municipal area" of the respondent and "to refund the tax illegally collected" amounting to Rs. 809.59.
2. The case of the petitioner is that on 25-3-1975, 1-4-1975 and 2-5-1975 it imported within the octroi limits of the Council three consignments of iron bailing hoops consisting of 500, 300 and 550 bundles and were deposited in the bonded warehouse maintained by the Council. It exported 300 bundles out of the first consignment, 100 bundles out of the second and all the bundles of the third consignment on 25-3-1975, 1-4-1975 and 2-5-1975 respectively after carrying out all the formalities and depositing the amount of octroi as required by the relevant Rules of the Maharashtra Municipalities (Octroi) Rules, 1968 (called the Rules).
3. Similarly on 8-1-1973, 30-1-1973 and 6-2-1973, it had imported three consignments consisting of 300 bundles of iron hoops. 5 drums of lubricating oil and 100 bundles of iron hoops respectively. It temporarily detained these goods with itself for eventual export after making the requisite declaration and depositing the octroi thereon. It exported 280 bundles out of the first consignment and the whole of the second and third consignments on 9-5-1973 and 11-2-1973 respectively after obtaining the necessary permission.
4. The petitioner applied for refund of the amounts of octroi deposited in respect of the goods exported by it. However, the Council by its letters dated 24-8-1973 and 6-2-1976 has rejected the claim of the petitioners for refund.
5. The petitioner has given the particulars of the abovesaid goods in paragraphs 6.01 to 7.03, 9.01 and 9.02 of the petition and the two statements annexed to the application for amendment of the petition. The Council has not refuted them in its return.
6. The petitioner contends that the refusal on the part of the Council to refund the octroi paid or deposited in respect of the goods which though were imported within the octroi limits but had been ultimately exported out of such limits, is illegal and unconstitutional inasmuch as no octroi can be levied and collected on goods unless they come to repose or are sold to ultimate consumer within such octroi limit or the goods are consumed or used within such limits. It contends that the Council cannot refuse to refund simply because the goods were sold within the octroi limits to persons who had ultimately exported them without consuming or using them within such limits. According to the petitioner, the change of ownership within the octroi limits can have no bearing on the liability of the goods for levy of octroi if they are not used or consumed within the limits but are exported out of it. The petitioner further contends that even if it is assumed that the goods had been sold by it to others within the octroi limits, the ownership had not passed to such buyers and for all practical purposes it remained to be the exporter. It submits that having taken all the steps required under the Rules for claiming refund on export of the goods, the Council ought to have refunded the amount.
7. The petition is resisted by the Council on the sole ground that it had rightly rejected the claim for refund as the goods had changed hands within the octroi limits and that the importer and exporter were not the same person. For this purpose, it relies on Rule 25(3)(d) of the Rules. It further contends that the terms and conditions on which the goods were sold to the persons to whom they were exported being questions of fact cannot be investigated in this writ petition.
8. In order to understand the rival contentions of the parties, it may be convenient at this
