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1978 Supreme(P&H) 188
PUNJAB & HARYANA HIGH COURT
Prem Chand Jain and J.M.Tandon JJ.
Mohan Meakin Breweries Ltd.
Versus
Municipal Corporation Of Jullundur City
Civil Writ No. 1215 of 1978,
Decided On : NOVEMBER 30, 1978
The value of the liquor for the purpose of octroi includes the excise duty payable thereon, and Sections 90(3) and 113 of the Punjab Municipal Corporation Act, 1976 are not ultra vires Article 14 of the Constitution as there are sufficient guidelines in the Act itself for the exercise of discretion by the Government in specifying the rates of octroi.
Headnote:
OCTROI - LEVY - EXCISE DUTY - INCLUSION IN VALUE OF LIQUOR - VALIDITY OF SECTIONS 90(3) AND 113 OF THE PUNJAB MUNICIPAL CORPORATION ACT, 1976 - GUIDELINES FOR FIXING RATES OF OCTROI - SAVING PROVISION UNDER SECTION 428 OF THE ACT - INTERPRETATION.
Fact of the Case:
The petitioner, a seller of Indian made foreign liquor in Punjab, challenged the competency of the respondents to charge octroi for the import of liquor to its bonded warehouse within the limits of Municipal Corporation Jullundur City. The petitioner argued that the value of the liquor for the purpose of octroi could not include the excise duty payable at the time of its issue from the bonded warehouse, and that Sections 90(3) and 113 of the Punjab Municipal Corporation Act, 1976 (Corporation Act), which empower the State Government to fix rates of octroi, are ultra vires Article 14 of the Constitution for want of guidelines.
Finding of the Court:
The court held that the excise duty on the imported liquor was leviable at the time of its import and its actual payment was deferred till its issue from the warehouse. The value of the liquor for the purpose of octroi, therefore, included the excise duty payable thereon. The court further held that Sections 90(3) and 113 of the Corporation Act were not ultra vires Article 14 of the Constitution as there were sufficient guidelines in the Act itself for the exercise of discretion by the Government in specifying the rates of octroi. The court also held that the saving provision under Section 428 of the Corporation Act kept all notifications and taxes (including octroi) issued and imposed under the Punjab Municipal Act, 1911, in force until they were specifically superseded under the Corporation Act.
Issues: 1. Whether the value of the liquor for the purpose of octroi could include the excise duty payable at the time of its issue from the bonded warehouse. 2. Whether Sections 90(3) and 113 of the Corporation Act are ultra vires Article 14 of the Constitution for want of guidelines. 3. Whether the absence of a notification under Sections 90(3) and 113 of the Corporation Act barred the Municipal Corporation from charging octroi.
Ratio Decidendi: 1. The excise duty on the imported liquor was leviable at the time of its import and its actual payment was deferred till its issue from the warehouse. The value of the liquor for the purpose of octroi, therefore, included the excise duty payable thereon. 2. Sections 90(3) and 113 of the Corporation Act were not ultra vires Article 14 of the Constitution as there were sufficient guidelines in the Act itself for the exercise of discretion by the Government in specifying the rates of octroi. 3. The saving provision under Section 428 of the Corporation Act kept all notifications and taxes (including octroi) issued and imposed under the Punjab Municipal Act, 1911, in force until they were specifically superseded under the Corporation Act.
Final Decision: The writ petition was dismissed with no order about costs.
J.M.TANDON, J.
1. In this writ petition, a challenge has been laid to the competency of the respondents to charge octroi from the petitioner for the import of Indian made foreign liquor to its warehouse within the limits of Municipal Corporation Jullundur City.
2. The petitioner sells Indian made foreign liquor in the State of Punjab and for this purpose maintains a bonded warehouse, licensed under S.22(a) of the Punjab Excise Act, 1914 (hereinafter referred to as the Excise Act), within the limits of Municipal Corporation of Jullundur City. The liquor imported by the petitioner is stored in the bonded warehouse without payment of excise or countervailing duty. The liquor passes the octroi barrier of the Municipal Corporation, Jullundur, to reach its destination. Prior to the setting up of the Municipal Corporation, Jullundur City, there was a Municipal Committee governed by the Punjab Municipal Act, 1911 . A Municipal Committee has power to levy octroi on the entry of goods within its local area under S.61(2) of the Punjab Municipal Act. The Municipal Committee, Jullundur, had levied octroi tax ad valorem on Indian made foreign liquor. After the Municipal Corporation, Jullundur City, was set up in 1977, it continued to charge octroi from the petitioner for the import of liquor to its bonded warehouse. The octroi was charged not on the basis of the invoice value of the liquor, but on its potential value including the excise/countervailing duty which was to be paid by the petitioner to the Excise authorities within the State of Punjab when it was issued for sale from the bonded warehouse. The petitioner feeling aggrieved by the impugned levy, appealed to the Commissioner, Jullundur Division, challenging the authority of the Corporation to charge octroi and in any event to charge it on the potential value of the liquor including excise/countervailing duty. The Commissioner dismissed the appeal. It is under these circumstances that the present writ has been filed wherein the competency of the respondents to charge octroi and further to include the excise duty payable by the petitioner at the time of issue of liquor from the bonded warehouse for assessing its value for the purposes of octroi has been questioned. The petitioner has also challenged the vires of Sections 90(3) and 113 of the Punjab Municipal Corporation Act, 1976 (hereinafter referred to as the Corporation Act), which relate to the levy of octroi.
3. The respondents, in their written statements, denied that the levy of octroi was illegal or Ss.90(3) and 113 of the Corporation Act ultra vires, as alleged by the petitioner.
4. The learned counsel for the petitioner has urged the following three points :
1. The value of the liquor for the purpose of octroi could not include the excise payable by the petitioner at the time of its issue from the bonded warehouse within the limits of Municipal Corporation, Jullundur.
2.Sections 90(3) and 113 of the Corporation Act, which empower the State Government to fix rates of octroi are ultra vires Article 14 of the Constitution for want of guidelines.
3.In the absence of a notification under Ss.90(3) and 113 of the Municipal Corporation Act, no octroi can be charged.
5. We will discuss these points seriatim. It is admitted that the liquor is manufactured outside Punjab and is brought by the petitioner to be stored in its bonded warehouse at Jullundur. The excise duty on the imported liquor remains unpaid when it passes the octroi barrier of Municipal Corporation, Jullundur. It is further admitted that the Corporation authorities include the excise duty payable on the liquor for assessing its value for charging octroi. The value of liquor reflected in the invoice at the time of import does not include excise.
6. A licensed warehouse can be established under S.22 of the Excise Act and S.23 thereof prohibits the removal of intoxicants without payment of excise duty. These two Sections read :
"22. The Financial Commissioner, sub
