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1990 Supreme(All) 12
High Court of Allahabad
A.N.Varma & M.M.Lal, JJ.
Krishi Diesel Filling Station, Patiapara
Vs.
Municipal Board, Moradabad
Civil Misc. Writ Petition nos. 12149 and 749 of 1989
Decided On : Jan 02, 1990
Advocate Appeared:
Virendra Singh
Octroi can be validly levied if the goods are "brought within" the limits of the municipality and are brought for "consumption, use or sale therein."
Headnote:
OCTROI - LEVY - CONDITIONS - PETROLEUM PRODUCTS - SALE WITHIN MUNICIPAL LIMITS - LIABILITY TO PAY OCTROI - U. P. MUNICIPALITIES ACT, 1916, SECTION 128(1)(VIII).
Fact of the Case:
Petitioners, petrol pump owners in Bijnor district, challenged the imposition of octroi by the Moradabad Municipal Board on petroleum products purchased from Indian Oil Corporation and Bharat Petroleum Corporation, which had depots within the municipal limits and paid octroi duty. The petitioners argued that the products were not liable to octroi as they were sold and consumed in Bijnor district, not in Moradabad.
Finding of the Court:
The court held that the conditions for imposing octroi under section 128(1)(viii) of the U. P. Municipalities Act, 1916, were satisfied: (i) the petroleum products were "brought within" the limits of the municipality, and (ii) they were brought for "consumption, use or sale therein." The court found that the products were sold by the corporations to the petitioners within the municipal limits of Moradabad, and thus the second condition was also satisfied.
Issues: Whether the petroleum products were liable to octroi duty under section 128(1)(viii) of the U. P. Municipalities Act, 1916.
Ratio Decidendi: The court relied on the Supreme Court decisions in Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Belgaum Borough Municipality and M/s. Hiralal Thakorlal Dalai v. Broach Municipality, which held that octroi is payable on goods brought into a local area and sold to consumers within the municipal area, even if the consumers bring them for use outside the area. The court also distinguished the case of M/s. Narain Das Brahma Nand v. State of U. P., where the court had directed the Nagar Palika Moradabad to verify whether the goods were used, consumed, or sold within the municipal limits before imposing octroi, as that case did not lay down any final or concluded opinion on the legality of the octroi.
Final Decision: The court dismissed both writ petitions, holding that the levy of octroi by the Moradabad Municipal Board on the petroleum products was not illegal and that the provisions of section 128 of the U. P. Municipalities Act were clearly attracted to the instant case.
M. M. Lal, J.
1. In both these writ petitions, filed under Article 226 of the Constitution of India, the petitioners have prayed for a writ of mandamus restraining the Municipal Board, Moradabad, respondent no. 2 from charging any octroi on petrol, mobil oil and diesel oil, which are sold to them by the Indian Oil Corporation Ltd. and Bharat Petroleum Corporation Ltd. As common questions of law are involved in both these writ petitions, hence these are being disposed of by a common judgment.
2. Krishi Diesel Filling Station, petitioner no. 1 of writ petition no. 12149 of 1989 has got petrol and diesel oil pump situated on the Patiapara Mill Road Crossing, Chandpur, district Bijnor and Bansal Automobiles, petitioner no. 2 of the said writ petition has its petrol and diesel oil pump on Dhansury Road at Chandpur, district Bijnor. Petrol and diesel oil pump of Gupta Filling Station, petitioner of the other writ petition is situate on Noorpur, Chandpur Road at Noorpur, district Bijnor. The Indian Oil Corporation Ltd. and Bharat Petroleum Corporation Ltd., have got their Depots Within the limits of Municipal Board, Moradabad, wherein they store diesel and petrol imported from outside after payment of octroi duty to the Municipal Board, Moradabad. The petitioners purchase petrol, mobil oil and diesel oil from the said corporations. The said petroleum products are then sold by the petitioners at their respective petrol and diesel oil pumps situate in district Bijnor. The case taken up by the petitioners is that because the entire petroleum products sold to them by the aforesaid corporations are used, sold and consumed within the district of Bijnor hence the said products are not liable to any octroi duty at Moradabad inasmuch as the requirements of section 128 of P. Municipalities Act, 1916 are not satisfied.
The Municipalities draw their power to levy tax from section 128 of the U. P. Municipalities Act. The said section, which provides for imposition of various types of taxes by the Municipal Boards, insofar as it is relevant for our purpose, is reproduced below :-
"128. Taxes which may be imposed-(1) Subject to any general rules or special orders of the State Government in this behalf, the taxes, which a board may impose in the whole or any part of a Municipality are - x x x x xx (viii) an octroi on goods or animals brought within the municipality for consumption, use or sale therein".
3. According to the said provision octroi can be validly levied provided the following two conditions are fulfilled :-
(i) goods should be "brought within" the limits of Nagarpalika ; and (ii) they should be brought for 'consumption, use or sale therein".
4. There is no dispute in this case that the petroleum products are "brought within" the limits of Nagarpalika Moradabad by the aforesaid corporations from outside. With regard to the second condition, learned counsel for the petitioners has urged before us that the particular petroleum products which are sold to or which are purchased by the petitioners from the aforesaid corporations cannot be said to have been brought within the limits of Nagarpalika, Moradabad for the purposes of consumption, use or sale therein. The Nagarpalika Moradabad on the other hand has taken a case in the counter-affidavit that the said petroleum products are sold by the aforesaid corporations to the petitioners within the limits of Nagarpalika, Moradabad. In our view when the said petroleum products are sold by the aforesaid corporations to the petitioners within the limits of Municipal Board Moradabad, the aforesaid second condition of section 128 (1) (viii) is also satisfied because it cannot be then said that the said petroleum products were not brought within the limits of Nagar Palika, Moradabad for sale therein.
Learned counsel for the petitioners has referred to us the various annexures filed by the petitioners along with the writ petition with a view to show that the aforesaid petroleum products are not sol
