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High Court Of Madhya Pradesh
T. C. Shrivastava and P. K. Tare, JJ.
SINGHAI TANTILAL, PANCHAMLAL - Appellant
Versus
CITY OF JABALPUR CORPORATION - Respondents
Second Appeal 709 Of 1956
Decided On : 03/26/1959
OCTROI DUTY - CITY OF JABALPUR CORPORATION ACT, 1948 - OCTROI RULES - INTERPRETATION - JURISDICTION OF CIVIL COURTS - EXCESSIVE RECOVERY OF DUTY - REFUND.
Fact of the Case:
The appellant, a licensee of the Narayan-ganj Range forest, allowed Kheruwas to collect kaththa from the forest and deliver it to him at Jabalpur. The respondent, Jabalpur Corporation, alleged that the appellant had imported 131 maunds 10 seers of kaththa without paying octroi duty and demanded double the duty as penalty. The appellant denied the import and claimed that the Kheruwas were liable to pay the duty. The lower courts dismissed the appellant's suit for refund of the excess duty recovered.
Finding of the Court:
The court held that the appellant was liable to pay octroi duty as the principal importer through his agents, the Kheruwas. The court also held that the Corporation authorities acted within their powers in imposing the penalty for non-payment of duty. However, the court found that the Corporation authorities had illegally assessed the duty on the market price of the kaththa instead of the cost price, which was contrary to the Octroi Rules. The court also held that the Civil Court had jurisdiction to examine the validity of the imposition and recovery of the tax, as the Corporation authorities had acted in excess of the powers conferred by law.
Issues: 1. Whether the appellant was liable to pay octroi duty as the principal importer through his agents, the Kheruwas? 2. Whether the Corporation authorities acted within their powers in imposing the penalty for non-payment of duty? 3. Whether the Corporation authorities had illegally assessed the duty on the market price of the kaththa instead of the cost price? 4. Whether the Civil Court had jurisdiction to examine the validity of the imposition and recovery of the tax?
Ratio Decidendi: 1. The court held that the appellant was liable to pay octroi duty as the principal importer through his agents, the Kheruwas, based on the finding that the relationship between the appellant and the Kheruwas was that of principal and agent, not seller and buyer. 2. The court held that the Corporation authorities acted within their powers in imposing the penalty for non-payment of duty, as the appellant was liable to pay the duty and the Kheruwas had failed to pay it. 3. The court held that the Corporation authorities had illegally assessed the duty on the market price of the kaththa instead of the cost price, which was contrary to the Octroi Rules. 4. The court held that the Civil Court had jurisdiction to examine the validity of the imposition and recovery of the tax, as the Corporation authorities had acted in excess of the powers conferred by law.
Final Decision: The court set aside the decrees of the lower courts and passed a decree entitling the appellant to a refund of the excess amount recovered by the Corporation, which was the amount beyond what was legally recoverable under the law.
( 1 ) THIS case comes before us upon a reference by one of us (Tare J. ).
( 2 ) THIS appeal by the unsuccessful plaintiff is directed against the decree dated 18-4-1956 passed by Shri D. G. Mahadeokar, Third Additional District Judge, Tabalpur, confirming the decree passed, bv Shri t. S. Khare, 1st Civil Judge Second Class, Jabalpur in Civil Suit No. 144-B of 1953 decided on 3-4-1954.
( 3 ) THE appellant sued for recovery of Rs. 4446/5/-inclusive of interest by way of damages, alleging that the respondent had wrongly recovered an amount of Rs. 3446/5/- from him as octroi duty with penalty for an alleged import of 131 maunds 10 seers of kaththa on 15-4-1952 without payment of the requisite octroi duty. The appellant further pleaded that he had imported 80 maunds of kaththa from Kheruwas from 1-1-1952 to 10-4-52 in small lots. The appellant was a licensee of the Narayan-ganj Range forest. He allowed some persons called Kheruwas to collect kaththa from that forest and to deliver it to him at Jabalpur. He also alleged that according to the agreement between him and the Kheruwas, the latter were liable to pay the octroi duty. As such he contended that there was no legal liability on him to pay the octroi duty and that the same could be recovered from the Kheruwas only. Therefore, the recovery of the octroi duty with penalty was said to be illegal and in excess of the powers conferred by the City of Jabalpur Corporation Act and the rules framed thereunder.
a. The respondent stated in the written statement that an anonymous letter was received in the office of the Corporation about the illegal action of the appellant in having imported the kaththa without payment of the requisite octroi duty, on 15-4-1952 in a truck bearing No. C. P. J. 1346. Therefore, the Octroi Superintendent made a demand for the amount of Rs. 3446/5/-as double the octroi duty for having imported 131 maunds 10 seers of kaththa valued at Rs. 36,750/ at the rate of Rs. 280/ per maund. The Chief Executive Officer passed an order dated 28-8-1952 in that behalf. It was averred that the Corporation authorities! having acted under the powers conferred by the City of Jabalpur Corporation Act, the suit was not tenable in a Civil Court, as the order of the Chief Executive Officer was final under the law. It was contended by the respondent that the burden of proof about payment of the octroi duty lay on the appellant, which he had failed to discharge and the suit was barred by time as it was not filed within 6 months of the presentation of the bill by the Municipal authorities.
( 4 ) THE lower courts upheld the defence contentions, except on the point of limitation, and dismissed the suit in its entirety. Hence the present appeal. The respondent did not challenge the adverse finding.
( 5 ) THE learned counsel for the appellant, referring to Section 120 of the City of Jabalpur Corporation Act 1948 (No. III of 1950), pointed out that the amount was recoverable as a cess under the said section. The said Act had been passed when the Government of India Act, 1935 was in force, under the legislative powers under item 49 list 2, 7th schedule of the said Act. It was pointed out that the Octroi Rules were framed, when the Cor-poration was not in existence and the town of Jabalpur had a Municipality. The said rules were framed on 9-41929 under the Government of India Act, 1919. It was, therefore, urged that the rules did not survive, when the Municipal Committee was converted into a Corporation and particularly when the legislative list under the Constitution of India did not authorise the imposition of any cess.
( 6 ) IT was further pointed out that while the City of Jabalpur Corporation Act authorised only the impost of a cess, while the rules provided for recovery of a duty, and, in fact, what was being recovered was a tax, inasmuch as the appellant, not having imported the said goods, was sought to be made liable for the same. Reliance was placed on Nagpur Kshatriy
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