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1981 Supreme(Goa) 6
Goa High Court
K. M. MISHRA, Ag. J.C.
Indian Oil Corporation Ltd. - Appellant
Versus
The Union of India, New Delhi - Respondents
Special Civil Appln. (W.P.) Nos.129,130 and 131 of 1980
Decided On : 15 June 1981
A. Setalvad with M.D. Gaitonde, for Petitioners; S.K. Kakodkar, for Respondents.
Octroi can only be levied on goods imported for consumption within the municipal limits and not on goods re-exported outside the municipal limits.
Headnote:
OCTROI - LEVY - PETROLEUM PRODUCTS - RE-EXPORTED GOODS - JURISDICTION - AUTHORITY OF LAW - ARTICLE 265 OF THE CONSTITUTION OF INDIA - INTERPRETATION OF BYE-LAWS - SALE SIMPLICITER - CONSUMPTION, USE OR SALE THEREIN - MEANING AND SCOPE - RE-EXPORTED GOODS NOT LIABLE TO OCTROI - LEVY WITHOUT AUTHORITY OF LAW - WRIT PETITION MAINTAINABLE - ARTICLES 226 AND 265 OF THE CONSTITUTION OF INDIA.
Fact of the Case:
The petitioner, an oil corporation, challenged the levy of octroi on petroleum products by the Mormugao Municipal Council, Vasco-da-Gamma. The petitioner received petroleum products at its installation in Vasco-da-Gama, which were then distributed to agents, dealers, and customers for consumption within the municipal area or re-exported for sale/consumption outside the municipal limits. The petitioner paid octroi on a monthly basis for products sold within the municipal limits. However, the Municipal Council served bills and issued a warrant for the payment of octroi on the entire quantity of imports made by the petitioner, including those re-exported outside the municipal limits. The petitioner challenged the assessment order and the amended Bye-laws, arguing that octroi could only be levied on goods imported for consumption within the municipal limits and not on goods re-exported outside the municipal limits.
Finding of the Court:
The court held that the petitioner was not liable to pay octroi on petroleum products re-exported outside the municipal limits. The court interpreted the relevant Bye-laws and Entry 52, List 2 of the 7th Schedule of the Constitution of India, which defines octroi as a tax on the entry of goods into the local area for consumption, use, or sale therein. The court held that sale simpliciter did not attract the levy of octroi since the sine qua non for the levy of octroi was consumption. Consequently, no octroi could be levied in respect of goods re-exported for consumption or use outside the municipal limits.
Issues: 1. Whether the Mormugao Municipal Council had the authority to levy octroi on petroleum products re-exported outside the municipal limits. 2. Whether the levy of octroi on re-exported goods was without the authority of law and violative of Article 265 of the Constitution of India.
Ratio Decidendi: 1. The court interpreted the relevant Bye-laws and Entry 52, List 2 of the 7th Schedule of the Constitution of India, which defines octroi as a tax on the entry of goods into the local area for consumption, use, or sale therein. The court held that sale simpliciter did not attract the levy of octroi since the sine qua non for the levy of octroi was consumption. Consequently, no octroi could be levied in respect of goods re-exported for consumption or use outside the municipal limits. 2. The court held that the levy of octroi on re-exported goods was without the authority of law and violative of Article 265 of the Constitution of India, which prohibits the levy, collection, or realization of taxes except by the authority of law.
Final Decision: The court allowed the writ petitions and quashed the assessment order and the amended Bye-laws. The court held that the petitioner was not liable to pay octroi on petroleum products re-exported outside the municipal limits.
ORDER :- These three writ petitions under Art.226 of the Constitution have been filed by three different oil corporations, all Government Companies incorporated under the Companies Act, 1956, challenging levy of octroi on petroleum products by the Mormugao Municipal Council, Vasco-da-Gamma. Because the facts and law involved in all these three petitions are the same, it is proposed to dispose of the three petitions by this common judgment.
2. The facts relevant for the disposal of these writ applications may now be stated :-
I shall take up the facts of writ petition No.129180 filed by Indian Oil Corporation
Ltd. The facts in the other two petitions filed by Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. being almost identical, I do not consider it necessary to narrate them separately.
M/s. Indian Oil Corporation Ltd. (to be hereinafter referred to as I.O.C.) has an installation at Vasco-da-Gama, where it receives petroleum products manufactured by it in its refineries and procured through other sources. These products are received in bulk for storage through ocean tanks, tank wagons, tank trucks, etc. and thereafter distributed to various agents, dealers and customers for the purpose of consumption within the municipal area and are also re-exported for sale/consumption outside the limits of the said municipal area. The disposal of the products imported by the I.O.C. at its installation at Vasco-da-Gama is grouped into the following main categories :-
(i) products sold by the Oil Corporation to its agents, dealers and consumers situated within the municipal limits;
(ii) products sold by it to its dealers and customers situated outside the municipal limits ;
(iii) products re-exported by it from their installation to places outside the municipal limits where they are sold to agents, dealers and customers for consumption; by them
(iv) products re-exported by it to their own depots outside the municipal limits;
(v) products consumed by it within the municipal limits;
(vi) deliveries to other oil companies on product exchange basis; and
(vii) sales to international vessels and barges calling at Mormugao port.
Prior to May, 1979, the Mormugao Municipal Council had not provided for levy of any octroi. Octroi was for the first time introduced on petroleum products by framing certain Bye-laws which were published in the official gazette dated 1st February, 1979.
Before and upon the coming into force of the Bye-laws there were some meetings between the petitioners, the Municipal Council and Secretary (Revenue), wherein some modalities and procedure regarding collection of octroi from the Oil Corporations were evolved. They were to this effect :
(i) Octroi would not be payable by the oil companies at the time of imports within the Municipal limits. Octroi would be payable by the Oil Companies only on the quantities actually sold to the retail outlets and consumers situated within the municipal limits for consumption by such retail out lets/consumers.
(ii) The oil companies would pay octroi in terms of (i) above on a monthly basis and should make payments not later than the fifth day of the following month. A statement showing the details of sales made to retail outlets and consumers within the Mormugao Municipal Limits on which octroi was payable would also be furnished by the oil companies to the Municipal Council along with the payment.
(iii) The value for the purpose of assessment/payment of octroi as aforesaid would be based on the ex M.I. price i.e. the main port price fixed by the Central Government and that such value would not include sales tax, octroi or other local levies, if any.
(iv) Octroi would not be payable in respect of sales made by the oil companies to barges or fishing vessels for their own consumption for their fishing operations.
(v) The question regarding the levy of octroi in respect of bunkers as well as the ocean going coastal vessels for their consumption would be decided a
