( 1 ) WHAT do the words consumption and use mean occurring in the provisions of the definition of the term octroi in Sec. 2 (16), in sec. 99 (i) (iv) of the Gujarat Municipalities Act, 1963 ? (hereinafter referred to as the Act ). This is the principal question which is arising for consideration in this petition.

( 2 ) THE Facts : The petitioner-Company is manufacturing textile goods and for the purposes of carrying on manufacturing activity it brings into the octroi limits of Nadiad Town cotton, man-made fibre, machinery, machinery parts, colours, chemicals and such other articles. On the articles brought within the octroi limit, the petitioner pays octroi duty as per the rates prescribed in the Schedule to the rules and the bye-laws framed by Nadiad Municipality under the relevant provisions of the Act. Out of the articles so manufactured the petitioner-Company takes out some articles outside the octroi limits for the purposes of processing the some. Processing work is done in some other units of the petitioner-Company situated in different towns. Mainly grey cloth pieces of the length of 100 metres are taken out for such processing work. After the processing is over the goods are brought back to Nadiad town in the same length, i. e. , about 100 metres.

( 3 ) AFTER the goods are brought back, the cloth pieces of 100 metres are cut into different sizes of suitable length of 20, 30 or 40 metres so as to meet with the requirement of the excise rules and the demand in the market. While cutting the cloth to particular size, the requirements of the consumers are also kept in view. After the process of cutting the cloth in different sizes is over, the sale takes place. According to the petitioner negotiations for sale takes place at Bombay. Arrangement for sale is also finalised at Bombay. The Bombay office of the petitioner-Company remains in direct touch with Nadiad units. As per the instructions of the Bombay office the goods are despatched to different destinations in the country and even outside the country. Only some goods are sold in Nadiad town itself. But the quantity of goods sold in Nadiad is insignificant.

( 4 ) SUPREME Court decisions on the word sale : It is contended by the petitioner-Company that when the goods are brought back into the octroi limits after undergoing some process, the goods cannot be said to have been imported for the purpose of sale therein. The goods are brought back within the octroi limits for the purposes of export. export means taking out the goods outside octroi limits. It is further submitted that whether the sale takes place within octroi limit or outside the octroi limits is immaterial. Even if the sale takes place as understood in the context of the provisions of the Transfer of Property Act, 1882 and the Sale of goods Act, 1930, within the octroi limits, the goods will not attract liability for payment of octroi duty. In short it is contended that the goods which may be brought within the octroi limits for its onward journey for export or for sale, the goods cannot be subjected to payment of octroi duty. On the other hand it was sought to be argued that if the sale takes place within the Municipal limits and the goods are brought within the Municipal limits with the intention to sell the same, then octroi duty would be attracted.

( 5 ) THE contention raised by the petitioner is covered in favour of the petitioner by the decisions of the Supreme Court in the following cases : (1) Burmah Shell Co. v. Belgaum Municipality, reported in AIR 1963 SC 906. (2) Hiralal Thakorlal v. Broach Municipality, reported in AIR 1976 SC 1446 : [1976 GLR 938 (SC)]. (3) Municipal Council, Jodhpur v. Mis. Parekh Automobiles Ltd. , reported in 1990 (1) SCC 367. (4) H. M. M. Ltd. v. Administrator, Bangalore City Corporation, reported in AIR 1990 SC 47. In the aforesaid decisions, the provisions of different Municipal Acts came up for consideration. However, the provisions considered by the Supreme Cour