Octroi can only be levied on goods meant for use or consumption within the Municipal area.

JUDGMENT :

R.K. Dash, J. - M/s. Rungta Sons Private Ltd. owns mines in the districts of Keonjhar and Sundargarh and by virtue of agreements it has been supplying ores to outside purchasers. So far as the mines in the district of Keonjhar are concerned, the ores are carried either by road transport and/or railway using the rail head/railway siding at Barbil. Since ores are transported through Barbil Municipal area, the Municipal authority has been levying and collecting octroi on sales effected within the Municipal jurisdiction even though the ores sold are meant to be consumed elsewhere. Levy of such tax although has no sanction under any statute, the petitioner has been complying with such illegal demands of the municipality on the apprehension that transportation of ores may be brought to a halt by the authority. Referring to a judicial pronouncement of the Hon'ble Supreme Court reported in Entry Tax Officer, Bangalore Vs. Chandanmal Champalal and Co. Etc. Etc. where it has been ruled that goods meant to be transported for use or consumption elsewhere shall not be levied with octroi tax, the petitioner made a request to the municipality for immediate stoppage of levy of octroi, vide its letter under Annexure-2 series but it was not heeded to. Instead, the municipality enhanced the octroi and notified the same vide Annexure-3 series. Petitioner, therefore, has urged that since the ores sold for use and consumption by the customers outside Barbil Municipal area, levy and collection of octroi on sale of such goods is illegal and contrary to law and so the Municipal authority be ordered to desist from further levy of octroi on sales and to refund the amount already collected.

2. Barbil Municipality, opp. party No. 2, through its Executive Officer has filed counter denying most of the averments made in the writ application. Admitting levy and collection of octroi, it has emphatically urged that the petitioner-company has been selling ores within Municipal limit of Barbil for use and consumption within that limit. Section 131 (1) (kk) of the Orissa Municipal Act (for short, 'the Act') provides that a Municipal Council may impose octroi on goods brought within the limits of the Municipality for consumption, use or sale therein. To give effect to the said provision Barbil Municipal Council framed bye-laws of its own. It is provided in the said bye-laws that when the goods are brought within the Municipal area, the person-in-charge thereof shall give a declaration in a prescribed form whether the goods are intended for consumption, use or sale within the limits of the Municipality or for immediate export or for temporary retention within the Municipal area and eventual export. If the goods are intended for immediate export, the same shall not be subject to tax at the octroi check-post and after the declaration in prescribed form is made, a transit pass shall be given by the Octroi Collector. The goods will then be allowed to be transported through the Municipal area under the escort of a Peon and as soon as the same go out, the transit pass will be surrendered to the Octroi Collector of the check-post. The bye-laws further provide that if the goods are detected to have been kept within the Municipal area for more than 24 hours, the same will be charged with octroi tax and fine. In view of such provisions, petitioner is required to submit declaration in the prescribed form and obtain transit pass as and when it intends to export ores outside municipal limit. At no point of time asserts the opp. party No. 2, the petitioner resorted to such procedure if at all it transported ores to outside consumers. The further case of the opp. party No. 2 is that the petitioner-company has been storing ores within Barbil Municipal area for months together and transacting business. In the facts and circumstances, therefore, levy and collection of octroi being in accordance with the provisions of the Act and the Bye-laws as aforesaid, no interference is