Satna Cement Works v. Nagar Mahapalika — 1985 DIGILAW 29 (ALL)

JUDGMENT : N.D. Ojha, J. The Petitioner is engaged in the business of manufacture and sale of cement and has its factory at Satna in the State of Madhya Pradesh. It has its office at 230, Bansidhar Market, Uncha Mandi, Allahabad, Which falls within the limits of Nagar Mahapalika, Allahabad. At this office the Petitioner enters into contract of sale of cement with customers both within the limits of the Nagar Mahapalika as well as beyond it. It maintains two godowns: one in mohalla Himmatganj within the limits of the Nagar Mahapalika, Allahabad, and the other in village Dabrajpur at C.O.D. Road out side the limits of the Nagar Mahapalika, which the Petitioner has termed as Factory Cement Dump in village Dubrajpur. For bringing cement by road from the Petitioner's factory at Satna to its godown in Mohalla Himmatganj as well as to its Cement Dump in village Dubrajpur the trucks have to enter the limits of the Nagar Mahapalika through an octroi barrier. The cement which is stocked in the godown in mohalla Himmatganj after being brought within the limits of the Nagar Mahapalika through the aforesaid octroi barrier remains within the said limits and is according to the Petitioners sold to the customers within the limits of the Nagar Mahapalika from its sale office at Bansldhar market. The Petitioner admits its liability to pay octroi in regard to such cement. As regards as the cement which is stocked at the Cement Dump in village Dubrajpur, the case of the Petitioner is that after entering the limits of the Nagar Mahapalika, Allahabad through the aforesaid octroi barrier the cement is soon thereafter taken out of the said limits to reach its destination in village Dubrajpur out side the limits of the Nagar Mahapalika. This cement also while it remains lying in the said village is sold by the Petitioner from its sale office at Bansidhar market. This cement also while it remains lying in the said village is sold by the Petitioner from its sale office at Bansidhar market. According to the Petitioner the cement which is clocked in village Dubrajpur passes through the limits of the Nagar Mahapalika only in transit In connection with its onward journey to village Dubrajpur and the Nagar Mahapalika for the last about 12 years, since when the Factory Cement Dump at Dubrajpur has been in existence, had been issuing transit passes at the time of the entry 01 trucks within its limits at the aforesaid cctroi barrier which used to be surrounded at the octroi barrier at the other end while going ou of the said limits in connection with the onward journey to village Dubrajpur. 2. The Petitioner's grievance in the present writ petition is that from 1st February, 1984 the Nagar Mahapalika has stopped issuing passes as, aforesaid and has started realising octroi from it in regard to such cement also which only passes through its limits for being stocked in village Dubrajpur. The reliefs prayed for in this writ petition are that a direction may be given to the Respondents, namely, the Nagar Mahapalika, Allahabad and its octroi superintendent to issue transit passes as they used to do earlier in regard to the cement taken by the Petitioner to its Cement Dump in village Dubrajpur and not to realise octroi in regard to the said cement as also to refund the amount of octroi realised in respect thereof on and after 1st February, 1984. 3. The only point which has been urged by counsel for the Petitioner in support of the aforesaid reliefs is that even though the Petitioner's cement stored at its Cement Dump in village Dubrajpur passes through the limits of the Nagar Mahapalika, Allahabad for being stored at the said Cement Dump and was sold from its sale office at Bansiohar market it could not be held to have been 'brought within' the limits of the Nagar Mahapalika within the meaning of Section 172(2)(b) of the U.P. Nagar Mahapalika Adhiniyam, 1959 (hereinafter referred to as the Act). It was urged that no octroi was payable in respect of the said stock inasmuch as it was not stored and was not in existence at any place within the limits of the Nagar Mahapalika at the time of its sale. It was urged that no octroi was payable in respect of the said stock inasmuch as it was not stored and was not in existence at any place within the limits of the Nagar Mahapalika at the time of its sale. According to him physical presence of the said cement within the limits of the Nagar Mahapalika at the time of its sale was necessary to attract the provisions of Section 172(2)(b) of the Act. The relevant portion of Section 172 of the Act reads: 172. Taxes to be imposed under this Act-- ... (2) In addition to the taxes specified in Sub-section (1) the Mahapalika may for the purposes of this Act and the subject to the provisions thereof impose any of the f blowing taxes, namely-- (b) an octroi on goods or animals brought within the City for consumption, use or sale therein; ... Provided that octroi on goods under Clause (b) and a tax under Clause (c) shall not be levied at the same time. ... It indicated that before octroi can be validly levied two conditions have to be satisfied:-- (i) goods should be "brought within" the limits of the Nagar Mahapalika, and (ii) they should be brought for, consumption, use or sale therein. From the facts of the instant case it is clear that if the cement referred to above is held to have been "brought within'' the limits of the Nagar Mahapalika, Allahabad, the levy of octroi will be valid inasmuch as it is established, rather not seriously disputed, that the transaction of sale of the said cement by the Petitioner is effected within the limits of the Nagar Mahapalika at its sale office at Bansidhar market and thus the bringing in of the cement within the limits of the Nagar Mahapalika will be for sale therein. 4. It 19 admitted that the said cement enters within the limits of the Nagar Mahapalika through the aforesaid octroi barrier, even though only for going out through the octroi barrier at the other end on its onward journey to village Dubrajpur and it cannot be disputed that if the aforesaid entry satisfies the requirement of the good being "brought within" as contemplated by Section 172(2)(b) of the Act the levy of octroi will be valid. The crucial question which, therefore, falls for consideration is the true Import and interpretation of the aforesaid two words "brought within". The crucial question which, therefore, falls for consideration is the true Import and interpretation of the aforesaid two words "brought within". In Burma Shell Co. v. Belqaum Municipality AIR 1963 SC 906 it was held in paragraph 21 of the report that the true concept of octroi included the bringing In of the goods in local area so that the goods come to a repose there." The word 'repose' used by the Supreme Court in the aforesaid expression according to dictionary, inter alia, means 'rest, quiet, stillness' and the word 'there' obviously means within the limits of the local area concerned. In Town Municipal Council v. Urmilla Kothari AIR 1977 SG 873, it was held that if goods are carried in trucks which merely pass through the areas which lie within the municipal limits and are not unloaded and reloaded at any place within the municipal area the important element of repose and rest which the words 'brought into the municipal limits for the purpose of immediate exportation' in Section 124 of the Karnatak Municipalities Act 1964 imply is absent. It was further held that in such a case as the continuity or continuation process of the carriage of goods is not in any way in fact broken within the municipal limits it cannot be said that the goods were brought in or exported as contemplated by Section 124 aforesaid. Before octroi can, therefore, be levied on goods u/s 172(2)(b) of the Act the journey of the goods after being brought within the limits of a Nagar Mahapalika should break within the said limits and the said goods should lie there in a state of rest, quiet or stillness for "comsumption, use or sale therein." The view taken by it in the case of Burma Shell Co. (supra) was reiterated by the Supreme Court in the case of Hiralal Thakorlal Dalal Vs. Broach Municipality and Others, (1976) 3 SCC 398 . 5. A decision of the Calcutta High Court in Durgapur Truck Owners' Association v. State of West Bengal 1980 TLR 967 also throws considerable light on the true concept of goods entering into a local area. On a conspectus of the law on the subject it was held by Hon'bJe Mr. Broach Municipality and Others, (1976) 3 SCC 398 . 5. A decision of the Calcutta High Court in Durgapur Truck Owners' Association v. State of West Bengal 1980 TLR 967 also throws considerable light on the true concept of goods entering into a local area. On a conspectus of the law on the subject it was held by Hon'bJe Mr. Justice Sabjasachi Mukharji that if the carrier carries the goods into the metropolitan area for transit through the entirety of the metropolitan area or for part of it, then it cannot be said that the said vehicle enters Into the metropolitan area for user. 6. Viewed in the light of the legal principles enunciated in the aforesaid cases there seems to be no doubt that the Petitioner is not liable to pay octroi in regard to such cement which enters the limits of The Nagar Mahapalika Allahabad through one octroi barrier and after passing over an area wfthin the said limits goes out through another octroi barrier for its destination to village Dubrajpur admittedly lying beyond the limits of the Nagar Mahapalika because it is not the case even of the Respondents that the journey of the said cement is broken and the cement comes to a re-pose within the limits of the Nagar Mahapalika. The mere fact that after the cement has been stored in village Dubrajpur the transaction of its sale is effected by the Petitioner and its sale office at Bansidhar Market within the limits of the Nagar Mahapalika with the cement still lying In the said village will not be sufficient to levy octroi inasmuch as the other condition precedent for such levy namely of the said cement being 'brought within would be lacking. 7. Counsel for the Respondents placed reliance on the decision of a Division Bench of this Court in Shervani Sugar Syndicate Ltd., Allahabad Vs. Municipal Board, Ujhani, AIR 1982 All 402 . That was a case not of levy of octroi but of toll tax and the principle of repose and rest enunciated by the Supreme Court in the case of Urmilla Kothari (supra) was distinguished on (he ground. We are of opinion that there is nothing in this case which in any way militates against the principle of law enunciated in the cases referred to earlier. 8. We are of opinion that there is nothing in this case which in any way militates against the principle of law enunciated in the cases referred to earlier. 8. Counsel for the Respondents then urged that since the cement stored by the Petitioner at its Cement Dump in village Dubrajpur sold by it at its sale office within the limits of the Nagar Mahapalika, it is apparent that the ultimate purpose of bringing the said cement within the limits of Nagar Mahapalika at the stage of its initial entry is 'sale' within the said limits and the mere fact that the cement was stored beyond the said limits was of no consequence and it shall be deemed that there has been a notional repose of the cement within the limits of the Nagar Mahapalika. Not with standing the fact that there may have been no loading or unloading of the cement and no break of its journey within the said limits. 9. The argument is no doubt attractive but having given our anxious consideration we find it difficult to agree. Firstly, there seems to be no scope for invoking a legal fiction, as urged by counsel for the Respondents in view of the interpretation put on the words 'brought within' referred to above. Secondly, invoking the legal fiction, as urged by counsel for the Respondents notion of equity, may be in a disguised form, have to be brought in. In Commissioner of Income Tax, Patiala and Others Vs. Shahzada Nand and Sons and Others, AIR 1966 SC 1342 , it was held: Before we advert to the said arguments, it will be convenient to notice the relevant rules of construction. The classic statement of Rowlett, J., in Cape Brandy Syrdirate v. In Land Revenue Commrs. 1921 1 KB 64 71, still holds the field. It reads: In a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is an equity about 8, tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, One can only look fairly at the language used. To this may be added a riders: In a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. There is an equity about 8, tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied, One can only look fairly at the language used. To this may be added a riders: In a case of reasonable doubt, the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise." The underlying principle is that the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any notions which may be entertained by the Court as to what is just or expedient." 10. In an earlier decision while dealing with the provisions of C.P. and Berar Municipalities Act 1922 about imposition of terminal tax on goods it was held by the Supreme Court in Empress Mills v. Municipal Committee Wardha AIR 1998 SC 341 as follows: If "terminal" besides the above meaning has an additional meaning also and that meaning signifies the termini or the jurisdictional limits of the municipal area even then the construction to be placed on the term should be the one that favours the tax-payer, in accordance with the principle of construction of taxing statutes, which must be strictly construed and in case of doubt must be construed against the taxing authorities and doubt resolved in favour of the tax-payer. In Crawford on Statutory constructions in para 257 at p. 504 the following passage pertaining to construction of taxing statutes taken from Bedford v. Johnson 102 Colo 203; 78 Pac (2) 373(0) is quoted: Statutes levying taxes or duties upon citizens will not be extended by implication beyond the clear import of the language used, nor/will their operation be enlarged so as to embrace matters not specifically pointed out, although standing upon a close analogy, and all questions of doubt will be resolved against the government and in favour of the citizen, and because burdens are not to be imposed beyond what the statute expressly imparts. 11. 11. In view of the foregoing discussion this writ petition succeeds and is allowed and the Respondents are directed to issue transit passes to the Petitioner as they used to do earlier in regard to the cement taken by the Petitioner to its Factory Cement Dump in village Dubrajpur and not to realise octroi in regard to the said cement. The Respondents are further directed to refund to the Petitioner the amount of octroi realised from it in respect of cement referred to above on and after 1st February, 1984 within six weeks of the production of a certified copy of this order by the Petitioner. The parties shall, however, bear their own costs. I Petition allowed.