ORDER Bhargava, J. This petition under Articles 226 and 227 of the Constitution of India has been filed by the Petitioner, M.P. State Road Transport Corporation (hereinafter referred to as "the Corporation"). The reliefs sought in the petition are that a writ in the nature of mandamus be issued to the first Respondent, Notified Area Committee, Bairagarh, restraining it from recovering the octroi duty from the Petitioner Corporation, which was demanded by its notices dated 26-2-1969 and 25-8-1969 (Annexures A and G) and the said notices be quashed; that a writ in the nature of mandamus or any other appropriate order or direction be issued for restraining the said Respondent from seizing and selling the buses of the Petitioner Corporation against recovery of octroi dues which are the subject-matter of the said demand notices (Annexures A and G) and that Rule 26 of the Octroi (Assessment, Recovery and Refund) Rules be held to be ultra vires and unconstitutional inasmuch as it purports to enable the first Respondent to deduct 12 1/2 % of the octroi duty in the circumstances specified in the said rule. 2 The Petitioner is the State Transport Undertaking established under Section 3 of the Road Transport Corporation Act, 1950 (Act No. 44 of 1950). The Central Office of the Petitioner Corporation is situate at Bairagarh. It plies buses under the permits granted to it under the provisions of the Motor Vehicles Act, 1939, and under the schemes approved and notified by the State Government under Chapter IV-A of the Motor Vehicles Act. Its operational activities are carried through the Divisional Offices situate at Bhopal, Indore and some other places and the actual transport operations are carried on by the Depots established at various places functioning under the various Divisional Offices. It is urged that the Petitioner does not carry on any operational activity at Bairagarh. It has neither a Divisional Office there nor a Depot there. The buses required for the transport operations of the Petitioner are received at the Central Office, Bairagarh, during transit either in the form of chassis which are sent for the building of bodies of buses at various places beyond the local limits of Bairagarh or they are received in the shape of buses. The buses required for the transport operations of the Petitioner are received at the Central Office, Bairagarh, during transit either in the form of chassis which are sent for the building of bodies of buses at various places beyond the local limits of Bairagarh or they are received in the shape of buses. Thereafter the buses ready for operation are allotted by the Central Office, Bairagarh, to the Divisional Offices or to the Depots where the buses are utilized for transport operations The first Respondent is the Notified Area Committee established under the provisions of Section 340 of the M.P. Municipalities Act, 1961 (hereinafter referred to as "the Act") and it exercises the powers vested in it under the provisions of the said Act. The State Government, in exercise of the powers under Section 341 of the Act, vide notification dated 14th March 1967, has made applicable the rules made in respect of the Municipal Council, Baitul Bazar, for assessment, collection and recovery of octroi duty to the first Respondent. The said rules are published in Madhya Pradesh Rajpatra dated 31st December 1965. These rules, inter alia provide for imposition of octroi duty on the animals and goods brought within the municipal limits for use, consumption or sale, It will be convenient at this stage to refer to the relevant rules. In the rules, the word "goods" has been defined to include 'animals'. Rule 11 of the Octroi (Assessment, Recovery and Refund) Rules (hereinafter called "the Rules") provides that on arrival of taxable goods at an out post, the official on duty shall call upon the person in charge to declare whether they are intended (a) for sale, consumption or use within the octroi limit's, or (b) for immediate export beyond the octroi limits, or (c) for temporary detention within the octroi limits, and to give their description, weight, number or quantity and where tax is leviable ad valorem, their value including the cost of carriage. The person in charge is then required to make a declaration in the form prescribed by the rules. Rule 25 provides that the person in charge of goods intended for immediate export and in transit on arrival at a post, pay the tax according to the schedule, for which he will be granted a receipt in the prescribed form called the "Transit Pass". He will then be allowed to proceed without any escort. Rule 25 provides that the person in charge of goods intended for immediate export and in transit on arrival at a post, pay the tax according to the schedule, for which he will be granted a receipt in the prescribed form called the "Transit Pass". He will then be allowed to proceed without any escort. On the arrival of the goods at the exit post without having broken bulk on the journey and on the surrender of the pass, the octroi officials after verifying the entries in the pass with the goods will refund the tax as entered in the pass to person in charge of the goods, and no refund under this rule will be granted unless the goods arrive at exit post within a stipulated time of payment of the tax as entered in the pass. This will not bar the grant of refunds under the general refund rules. Thus, Rule 25 provides for refund of octroi duty paid on the goods at the limit of entry within the octroi barrier and on the declaration that such poods are not meant for use, consumption or sale within the octroi limits or when the entry of such goods is for a transit. Rule 26 which has been challenged in this petition reads as follows: "Every importer of goods, who had paid tax on it at the time it is imported into octroi limits, shall be entitled to a refund of the tax paid by him after deducting 121/2 per cent on such goods when it is exported out of the octroi limits without being sold, used or consumed within such limits ; provided that (a) no refund shall be given- (i) if the claim for refund is not supported by the receipt for the tax paid by the person claiming refund on such goods, (ii) if the amount to be refunded be less than Re. 1, (iii) if the claim be made after the expiry of one month from the date of the export unless the exporter is able to explain satisfactorily the reason for the delay, and (iv) after the expiry of one month from the date of import. (b) ..................... The Revenue Sub-Inspector of the first Respondent served a demand notice in the month of February 1969 on the Petitioner under Sub-section (2) of Section 157 of the M.P. Municipalities Act, 1961. (b) ..................... The Revenue Sub-Inspector of the first Respondent served a demand notice in the month of February 1969 on the Petitioner under Sub-section (2) of Section 157 of the M.P. Municipalities Act, 1961. By the said notice the Petitioner was required to pay a sum of Rs.14966 as octroi tax for the 19 new buses which allegedly were received and brought within the limits of Respondent No.1. A copy of this notice is annexure 'A' on record. The Petitioner in its reply dated 20 March 1969 stated that one of the vehicles mentioned in the notice did not pertain to the Petitioner. In respect of the other vehicles it filed a declaration submitting that the vehicles were not received for sale, consumption or use within the octroi limits of the first Respondent. The said declaration is annexure 'B' on record. As the Petitioner did not pay the demanded octroi duty, further notices were sent. On 25-8-1969 notice annexure 'G' was sent by the first Respondent to the Petitioner stating therein that three more buses were brought by the Petitioner Corporation within the octroi limits of the first Respondent and on these three vehicles also octroi duty was payable. In reply to the said notice dated 2-9-1969 which is annexure 'H' on record, it was stated by the Petitioner that the said three buses were brought at Bairagarh only for temporary stay and would be allotted to their outside Depots shortly and therefore it was stated that the said buses were not meant for sale, consumption or use within the Notified Area limits of Bairagarh. As the replies given by the Petitioner did not find favour with the authorities of Respondent No. 1 and as it was stated by the first Respondent that the buses were seized and would be sold for recovery of the octroi dues, the Petitioner has filed this petition. It has also been contended in the petition that Rule 26 which entitles Respondent No. 1 to deduct 121/2% of the octroi duty in cases where the goods on which Octroi duty was payable are exported outside the octroi limits without use, consumption or sale is ultra vires being in excess of the provisions contained in the M. P. Municipalities Act, 1961. The contention of the learned Counsel for the Petitioner is that as the buses in the present case were merely brought within the octroi limits for the purpose of allotting them to Divisional Offices or Depots outside the limits of Respondent No. 1, the first Respondent is not entitled to make any demand for the payment of octroi tax on these goods and the demand of the first Respondent is absolutely illegal and without authority of law. It is urged that the mere purpose of giving directions at Bairagarh by the Central Office of the Petitioner about the use of buses in outside places does not in any sense amount to the "use or consumption" of the goods within the octroi limits. The learned Counsel has placed strong reliance on the two decisions of this Court reported Anand Transport Co. v. Board of Revenue 1962 MPLJ 775 and the Full Bench decision in Municipal Council, Pandhurna v. R.P. Dube, Sub-Divisional Officer, Sausar and Anr. 1968 MP LJ 586. On the other hand, the learned Counsel for the Respondent has urged that as the Central Office of the Petitioner Corporation is situate at Bairagarh, the bringing in of the chassis of buses and the buses within the octroi limits of Respondent No. 1 and then sending them from there for being used outside the octroi limits of the first Respondent, itself amounts to the consumption or use of these goods within the octroi limits of Respondent No. 1 and therefore the octroi tax is rightly attracted. In Anand Transport Co's case, the Division Bench considered the provision contained in Section 66(1)(e) of the C.P. and Berar Municipalities Act, 1922, which corresponds to the provision made in Section 127(5) of the M.P. Municipalities Act, 1961. In paragraph 7, after referring to some authorities and the principles of interpretation, it observed: "On this principle, we are of the view that the meaning of "use" is restricted in a sense analogous to the other two words and connotes employment of the goods brought to any similar purpose to which such goods are ordinarily used." In paragraph 8 their Lordships said that to attract Clause (e) it is not enough that certain goods have been brought within the limits of a Municipality and it is also not sufficient that the goods have been merely used within such limits. It is only when goods are brought within the limits of a Municipality for use within those limits that Clause (e) is attracted. The ordinary meaning and purpose of that provision is clear. The clause envisages bringing in of goods for repetitive use within the limits of a Municipality so that it can be said that the goods have been substantially brought for use within those limits. In this view, when a vehicle merely passes through the limits of a Municipality or is casually brought within those limits, it cannot be taxed under Clause (e). Similarly, when a vehicle is so brought not for use within those limits but for making it fit for the use such as registration or passing or repairs, it cannot be taxed under that clause. The Full Bench case of Municipal Council, Pandhurna v. R.P. Dube, (supra) reiterated the principle which was enunciated in the case of Anand Transport Co. v. Board of Revenue (supra). The question for consideration before the Full Bench was as to whether the baiting of the bus at Pandhurna amounted to the purpose of use or consumption if some of the passengers got down there or boarded the bus at that place after the bus had halted. Their Lordships held that the bus comes to a repose within the limits of that Municipality where it is brought for commencing the service. The running of a service may be through the limits of several Municipalities and passengers may use the bus in those limits. The bus may even at times run empty but that would not make any difference to the position that the vehicle is brought for use and consumption within limits of that Municipality and comes to a repose there where it is brought for commencing the service. Their Lordships stressed that the words "brought within the limits of the Municipality" are very significant. In them there is an element of pause or repose and they mean that animals or goods on which octroi is levied must be conveyed from another place and come to rest within the Municipal limits for the purpose of sale, consumption or use therein. In them there is an element of pause or repose and they mean that animals or goods on which octroi is levied must be conveyed from another place and come to rest within the Municipal limits for the purpose of sale, consumption or use therein. Goods or animals in transit which merely pass through the limits of the Municipal Council, even if they are used within those Municipal limits, cannot be said to have been brought within the limits of such a Municipality for the purpose of use or consumption. It was further observed that the octroi tax is not a tax on the traffic of goods. The taxable event is the bringing of the goods within the Municipal limits and that must be for the purpose of sale, use or consumption within the Municipal limits. In Jothi Timber Mart v. The Corporation of Calicut and Anr. AIR 1970 SC 264 the question before the Supreme Court was whether the entry of goods within the local area for consumption, use or sale therein is made taxable by the State Legislature or the tax which would be imposed on mere entry of goods into a local area. The said question arose in the context of the provisions of Calicut City Municipal Act (Kerala Act 30 of 1961). Their Lordships discussed the provisions of that Act and held that to interpret the expression "brought into the city" used in Section 126(1) as meaning "brought into the city for any purpose and without any limitations" would amount to attributing to the Legislature an intention to ignore the constitutional limitations. The expression "brought into the city" in Section 126 must, therefore, be interpreted as meaning "brought into the Municipal limits for purposes of consumption, use or sale and not for any other purpose. The Supreme Court decision highlights the position that octroi duty can be imposed not merely on an entry of the goods within the Municipal limits. The purpose for which the goods are brought in is of significance and without that purpose being consumption, use or sale of the goods brought in, tax could not be imposed. In the instant case, there is a clear averment in the petition that no bus service of the Petitioner Corporation commences from Bairagarh. It was urged before us that the bus service commenced from Bhopal to Bairagarh and back. In the instant case, there is a clear averment in the petition that no bus service of the Petitioner Corporation commences from Bairagarh. It was urged before us that the bus service commenced from Bhopal to Bairagarh and back. In the return it is not stated that the Petitioner Corporation has an operational office or depot in Bairagarh. Therefore, in our view, merely the bringing in of buses or chassis for the purposes aforesaid, within the limits of the Notified Area Committee of Bairagarh cannot result in this being concluded fairly that the chassis of buses or buses were brought within the said notified area for 'use' or 'consumption' within the octroi limits of the first Respondent. Though it is true that user or consumption alone is not the decisive factor as it may some time happen that goods are brought within Municipal limits for use or consumption and ultimately they may not be so utilised, however, the words "for use and consumption" clearly indicate that there must at least be the positive intent or purport at the time of bringing in the goods to use them within the octroi limits of taxing authority. In our opinion, merely giving of directions for use or consumption of the buses at places outside the limits of the Municipality of Bairagarh cannot by any stretch of imagination be held to amount to use or consumption of buses within the octroi limits of Bairagarh Municipality. Giving such directions cannot be equated with use or consumption of the goods within the Municipal limits. The learned Counsel for the Respondents laid great stress on the observations made in Burmah-Shell Oil Storage and Distributing Go. of India Ltd., Belgaum v. Belgaum Borough Municipality, Belgaum. AIR 1963 SC 906 In that case it was observed that "so long as the goods are brought inside the area for sale within the area to an ultimate consumer, it makes no difference that the consumer does not consume them in the area but takes them out for consumption elsewhere". In our opinion, this observation is of no benefit to the first Respondent. In our opinion, this observation is of no benefit to the first Respondent. If the goods had been brought within the Municipal limits of Bairagarh for the purpose of use or consumption and thereafter they were actually wholly or partly not used or consumed there, the octroi duty would be attracted, for, it could not be said that the goods were not brought with the requisite intent or object of use or consumption within the octroi limits. In this connection we may also refer to a decision of this Court reported in Loonkaran Parakh and Ors. v. State of Madhya Pradesh and another. 1962 MPLJ 297 In that case it was observed that the liability for the payment of an octroi duty does not depend on the question whether the goods brought within the Municipal limits have or have not been actually sold, consumed or used within those limits. If goods are brought within the Municipal limits for sale, consumption or use within those limits, then octroi duty is payable in respect of them irrespective of the fact whether subsequently the goods are or are not sold, used or consumed within the limits. If, therefore, once goods are brought within the limits of the Municipal Committee for sale, consumption or use within those limits and octroi duty has been paid on them, the Municipal Committee is not bound to refund the octroi duty if after the import the goods are not sold, used or consumed. The Division Bench then considered some rules permitting refund in cases where unconsumed, unsold or unused goods were taken out of the Municipal limits and held that such provisions gave a concession to the person who had brought the goods under certain conditions. On consideration of the aforesaid principles and authorities, we are clearly of the view that the demand notices, annexures A and G dated 26-2-1969 and 25. 8. 1969, are wholly illegal and these notices are not supported by the authority of the provisions contained in the Act or the Rules made thereunder. 15 We may now consider the attack on the validity of Rule 26 which has already been reproduced. It deals with refund of octroi duty in certain circumstances. It appears to us that the attack on the validity of the rule is based on misconception. 15 We may now consider the attack on the validity of Rule 26 which has already been reproduced. It deals with refund of octroi duty in certain circumstances. It appears to us that the attack on the validity of the rule is based on misconception. If no octroi duty is chargeable in respect of the goods, there could be no question of deducting any part out of it as the entire amount will have to be refunded on the ground that the octroi tax was not attracted. However, in our opinion, the said rule has nothing to do with the refund of octroi duty paid in respect of goods on which no octroi duty could be levied. The rule deals with those cases when a person imports goods within Municipal limits and has paid duty on them at the time of the import but later on desires to take the goods outside the limits finding that they have not been used, consumed or sold within the Municipal limits. Thus, Rule 26 merely provides a concession by permitting refund where unused, unsold and unconsumed goods are taken out of the Municipal limits though initially those goods were intended to be used, sold or consumed within those limits. The Municipal Committee has power to prescribe the conditions and limitations and the procedure under which refund in such cases would be allowed. Section 85 of the Act empowers the Government to make rules regulating the refund of taxes and imposing limitations or conditions on such refunds. It has also been provided that no refund can be granted to any person otherwise than in accordance with the provisions of the Act and the rules made thereunder. No objection can, therefore, be taken to the said rules on the ground that they do not provide for the refund of the entire octroi tax amount. A similar view has been taken in the case of Loonkaran v. State of M. P. (supra). For these reasons, this writ petition is partly allowed. The demand notices dated 26-2-1969 and 25-8-1969 (annexures A and G) are quashed and Respondent No 1 is restrained by a writ in the nature of mandamus not to recover the octroi duty from the Petitioner Corporation on the basis of the said notices. For these reasons, this writ petition is partly allowed. The demand notices dated 26-2-1969 and 25-8-1969 (annexures A and G) are quashed and Respondent No 1 is restrained by a writ in the nature of mandamus not to recover the octroi duty from the Petitioner Corporation on the basis of the said notices. Respondent No. 1 is also restrained by a writ in the nature of mandamus from seizing or selling the buses of the Petitioner Corporation against the recovery of octroi dues which are the subject-matter of the impugned demand notices. The relief prayed for in the petition in respect of Rule 26 is refused. We direct that the parties shall bear their own costs. The security amount shall be refunded to the Petitioner. Petition allowed