A. P. RAVANI, J. ( 1 ) ADOPT liberal standards of construction of provisions governing refund of octroi duty (and such other indirect taxes) and thereby serve the private interests at the cost of innumerable unidentifiable consumers. Or beware of economic reality of life and do not permit the profit margin of private businessmen/traders to be enhanced at the cost of consumers and the society at large. This in short is the main conflict which is required to be resolved in this appeal. ( 2 ) THE appellant-Billimora Town Municipality is the original defendant of Special Civil Suit No. 68 of 1979 of the Court of Civil Judge (SD ). Navsari. The respondents-original-plaintiffs filed the said suit for refund of octroi duty. The plaintiffs prayed that the Resolution dated 16/11/1976 passed by the Managing Committee of the Municipality and the Resolution dated 22/09/1977 passed by the General Board of the Municipality by which the defendant-Municipality rejected the refund claim made by the plaintiffs be declared illegal and void. The plaintiffs also prayed that the Municipality be directed to refund the octroi amount of Rs. 77 457. 63 The plaintiff No. 1 is a registered firm and the other plaintiffs are the partners thereof. The plainthis deal in beedi and cigarette at Billimora and round about places. The plaintiffs importer beedi and cigarette within the Municipal limits and paid octroi duty thereon. As per the Octroi rules and by-laws if the goods are exported outside the municipal limits without breaking bulk and without changing hands then the importer would be entitled to claim refund of octroi duty. The plaintiffs claimed such refund on the goods exported for the period between the year 1971 and 1977. It was contended that the Managing Committee as well as the General Board of the Municipality rejected the refund claim of the plaintiffs on extraneous grounds namely that the Members of the Municipality did not see eye-to-eye politically with the plaintiff. The plaintiffs filed suit on 28/12/1975 The appellant-Municipality appeared in the suit and resisted the same on facts as well as on law points. The Municipality contended that the suit was time-barred and the plaintiff was not entitled to claim refund as the requirements of the Rules and by-laws providing for refund were not complied with. The plaintiffs filed suit on 28/12/1975 The appellant-Municipality appeared in the suit and resisted the same on facts as well as on law points. The Municipality contended that the suit was time-barred and the plaintiff was not entitled to claim refund as the requirements of the Rules and by-laws providing for refund were not complied with. After recording evidence and after hearing the parties the trial Court decreed the suit of the plaintiffs as per its judgment dated 31/03/1984 and directed the Municipality to pay Rs. 77 457. 63 with 6% interest from the date of the suit till realisation. Hence the present appeal by the Municipality. ( 3 ) THE appellant-Municipality urges that the resolutions passed by the Managing Committee and General Board of the Municipality are perfectly ill conformity with the provisions of octroi rules and other provisions of law. In essence it was contended that as required under the provisions of octroi Rules and by-laws. the plaintiffs did not produce importing even though repeatedly called for. Therefore the claim of the plaintiff for refund was rejected. Counsel for the Municipality submitted that even at this stage if the plaintiffs were ready to comply with this requirement and produce the import bills as required under the provisions of Octroi Rules the Municipality was ready to make the payment of the amount claimed as and by way of refund of octroi duty. The Municipality also submitted in this appeal that the action taken by the Municipality was under the provisions of the Act rules and by-laws and therefore the suit should have been filed within a period of six months from the date of accrual of the cause of action as required under the provisions of sec. 253 of the Gujarat Municipalities Act 1962 ( the Act for short ). Admittedly the suit has not been filed within six months from the date of passing of the resolution by the Municipality and therefore the suit should have been dismissed. On behalf of the Municipality it is also contended that in case the amount claimed is refunded it will result in the unjust enrichment of the plaintiffs and therefore also the suit should be dismissed. ( 4 ) BY Resolution dated 16/11/1976 (Exh. On behalf of the Municipality it is also contended that in case the amount claimed is refunded it will result in the unjust enrichment of the plaintiffs and therefore also the suit should be dismissed. ( 4 ) BY Resolution dated 16/11/1976 (Exh. 45) the Managing Committee of the Municipality resolved that as per letter dated October 13 1976 import bills extract from the Khata Vahi and certain other details were called for but the plaintiffs has not produced the same and therefore the claim of refund is being rejected. The plaintiff preferred appeal before the General Board of the Municipality. The Central Board as per its Resolution dated 2/09/1977 confirmed the decision taken by the Managing Committee and particularly referred to the provisions of Octroi Rule No. 21 (7) (e) and held that the Managing Committee was within its power to call for the relevant details including import hills so as to verify the refund claim of the importer. If the importer could not lead sufficient proof to substantiate his claim then decision of the Managing Committee was not required to be interfered with. It may be noted that before passing the aforesaid Resolution. the Municipality heard the plaintiffs who were represented by an advocate. ( 5 ) IN order to decide as to whether the aforesaid decision taken by the Municipality is legal or not. it will be necessary to look at the provisions of relevant Octroi Rules and by-laws. The appellant-Municipality has framed rules and by-laws under sec. 46 (1) and sec. 48 (J) of the Bombay District Municipalities Act (III of 1901 ). These rules and by-laws are in force even after the enforcement of the Gujarat Municipalities Act 1963 There is no dispute with regard to the fact that the parties are governed by these octroi rules and by-laws which have been produced at Exh. 48. Rule 2 defines several terms. For our purposes the definition of import bill and export certificate may be referred to. As per the definition Import Bill means a receipt in the prescribed form furnished and signed by the Import Naka Karkun on the import of the goods. The prescribed form is in Form B to the schedule. 48. Rule 2 defines several terms. For our purposes the definition of import bill and export certificate may be referred to. As per the definition Import Bill means a receipt in the prescribed form furnished and signed by the Import Naka Karkun on the import of the goods. The prescribed form is in Form B to the schedule. Export Certificate means a certificate in the prescribed form furnished and signed by the Export Naka Karkun at the time of export of the goods in accordance with the condition prescribed in that behalf. Rule 3 deals with octroi limits and Nakas. Rule 4 makes provision with regard to imposition and nature of tax and class of property made liable to the pay-ment of tax. Rule 5 deals With the arrangements to be made by the Chief Officer in connection with the publication of rules and maintenance of other records. Rule 6 prescribes duties of the Import Naka Karkun regarding import bill. The Import Naka Karkun is required to prepare the import bill whenever the goods are brought to the import naka. He is required to note in consecutive order in the foil and counterfoil of the import book. The import bill would contain the description of goods. weight thereof. rate at which the tax is calculated thereon the amount of tax leviable Ion the goods name of the owner or person in charge of the goods the date and hour when the tax was received whether the tax received in cash or by entry in the current account if there be any. The octroi Naka Karkun is required to demand declaration if any made under Rule 7 regarding the original invoice showing the value of goods and declaration made in Rule 8 regarding intention to export the roods or that the goods were in transit. Rule 9 deals with the dispute between Import Naka Karkun and Importer with which we are not concerned. Rule 10 deals with refund for goods which have been brought within octroi limits for reparation only. Rules 11 and 12 deal with the power of the import Naka Karkun or regarding the transit pass for goods in transit with which we are not concerned. Rule 13 makes provision for refund of octroi duty. Rule 10 deals with refund for goods which have been brought within octroi limits for reparation only. Rules 11 and 12 deal with the power of the import Naka Karkun or regarding the transit pass for goods in transit with which we are not concerned. Rule 13 makes provision for refund of octroi duty. In case the gods imported within the municipal limits are exported without breaking the bulk and also without changing hands the importer will be entitled to claim refund of octroi duty paid by him. However it also provides that to claim refund the importer must fulfil other conditions also namely (1) the importer must have made a declaration at the time of import of goods as required under Rule 8 that the goods were to be exported; (2) the amount of refund should not be less than eight annas; (3) that the claim should be made within seven days from the date of export in the prescribed form before the appropriate authority in the prescribed manner and (4) the claimant should produce an export certificate relating to such goods with the application for refund. Rules 20 and 21 also Ideal with the refund of octroi duty. Rule 20 (B) provides as to what Naka Karkun is required to do whenever the goods. which are not goods in transit are sought to be exported. It is the duty of the export Naka Karkun to ask the Exporter to produce the import bill and the declaration taken by the Import Naka Karkun regarding the intention to export the goods. He is further supposed to examine the import bill and the declaration and he should satisfy himself (1) that the declaration produced by the exporter is duly signed (by the exporter); (2) that the import bill produced is in prescribed form and duly signed by the import Naka Karkun (3) that the goods to be exported are declared to have been intended for export at the time of the import. In case the goods were imported for reparations then the goods are exported within 30 days and (4) that the packages and or articles are intact and not broken nor have changed form. In case the goods were imported for reparations then the goods are exported within 30 days and (4) that the packages and or articles are intact and not broken nor have changed form. Only after the Export Naka Karkun is satisfied about the aforesaid factors he may issue export certificate in the prescribed form in Schedule C. He is required to send a copy of the export certificate to the officer in charge of octroi at the close of every day and retain one copy with him in the export certificate book itself. From this it should be clear that the import bill is an important item which is required to be produced before and examined by the Export Naka Karkun. Rule 21 provides for refund and it also provides as to the authority who will take decision to refund the amount of octroi. The relevant portion of Rule 21 (2) (e) and sub-rule (3) reads as follows : 21 Refund of Production on Export Certificate: (1) x x x (2) The Chief-Officer shall receive the refund application and shall (a) to (d) x x x (2) On the expiration of ninety days or on export of all the goods mention in the said declaration whichever is earlier after making necessary inquiry: and requiring such proof as to any matter affecting the admissibility of ally such claim as he may deem fit and shall sanction such refunds up to the amount of Rs. 20. 00 and submit such refund application above Rs. 20. 00 the Managing Committee for disposal with his remarks (3) The Managing Committee shall on being satisfied that the claim. . for refund is admissible under those rules and by-laws after making necessary if need be resolve and admit the claim and shall be entitled to reject if the claim is not allowable under these rules and by-laws. . . . . (4) x x x x x. As per the provisions of Rule 21 (2) (e) the Chief Officer has power to make necessary inquiry and require such proof as to any matter affecting the admissibility of any such claim as he may deem fit. If the amount of refund claim is up to the extent of Rs. 20. 00 he may pass the same and if the amount claimed is more than Rs. 20. If the amount of refund claim is up to the extent of Rs. 20. 00 he may pass the same and if the amount claimed is more than Rs. 20. 00 he may submit the same with his remarks before the Managing Committee for disposal of the application. As per. the provisions of sub-rule (3) of Rule 21 the Managing Committee has to satisfy itself about the claim of refund and after making necessary inquiry has to take a decision thereon. ( 6 ) UNDER the Act the Municipality is empowered to levy octroi duty on the goods which enter the limits of the Municipality for consumption use or sale therein. Once the goods are held to be chargeable to octroi duty then the refund of octroi duty can be claimed thereof only in accordance with the provisions of the Act the Rules and by-laws. Ordinarily all the octroi rules and by-laws provide for levy of octroi duty as well as refund thereof. Such refund can be claimed duly in accordance with the provisions of the Act the Rules and by-laws. The contention that the provisions dealing with refund and exemption of octroi duty should be liberally construed and the requirements laid down therein should be held to be directory cannot be accepted. If strict compliance is not insisted and liberal standards are adopted in the matters of refund and exemption of octroi duty it will amount to exposing the honest people to suffer heavier burden of duty. On the first principles as well as from the point of view of the equity and from the point of view of public revenue the interests of which are required to be safeguarded by the courts also there is no room for adopting liberal standards and construing the same liberally. In the democratic society where tax is levied for development purposes. the payment of taxes by citizens should be considered to be the prime duty of all concerned. The burden of tax should be borne by those who can bear the same. Those who are liable to pay the tax and who can and do pass on the burden of the tax to the subsequent purchasers and ultimately pass it on to the consumers should not and cannot be allowed to escape from their liability and this should never happen on the grounds of technicality or some such other considerations. Those who are liable to pay the tax and who can and do pass on the burden of the tax to the subsequent purchasers and ultimately pass it on to the consumers should not and cannot be allowed to escape from their liability and this should never happen on the grounds of technicality or some such other considerations. No undue hardship should be or allowed to be caused to the citizens. Wherever he is sought to be meted with invidious treatment he is required to be protected. However the court cannot be unaware of economic realities of life. The court has got to take into consideration the fact that the burden of indirect taxes and in the instant case that of octroi duty is always passed on to the subsequent purchasers of the commodity. The entire burden is ultimately borne by the customers. If a businessman is given refund wrongly. he is not going to reduce the price of the commodity to that extent. Price of the commodity is being determined by market forces and since other businessmen do not get the benefit of wrongful (or so-called liberal) refund or exemption the price will remain the same. Therefore all wrongful and so. called liberal refund/exemption will only increase the profit margin of the businessman concerned at the cost of the innumerable unidentifiable consumers. To adopt liberal construction in matters of refund of indirect taxes would amount to serving the private interests of traders and/or businessmen at the cost of society. This is both unjust and inequitable and not in consonance with the principles of socialist jurisprudence to which we are wedded as per the Constitution. In evolving socialist jurisprudence one cannot give importance to the technical niceties and forget the economic realities of life. The stark economic reality is that burden of indirect taxes is always passed on to the consumers. Therefore in such cases if a wrong refund order is made society at large suffers and interests of the private businessmen or traders are served at the cost of innumerable and unidentifiable consumers of the commodity. On the other hand assuming that refund of an indirect tax like octroi duly (or excise/custom duty) is wrongly denied the trader or businessman is not going to bear the burden of the same. On the other hand assuming that refund of an indirect tax like octroi duly (or excise/custom duty) is wrongly denied the trader or businessman is not going to bear the burden of the same. He might have already passed on the burden of tax to subsequent purchasers or in future he would do so. Therefore he is not going to lose in any way. His profit margin will be reduced that is all. However. only care that is required to be taken is that no one should be treated with invidious discrimination lest he may be pushed out of market. But in the instant case there is no case of discrimination. In this view of the matter the contention that the provision for refund should be held to he directory and strict compliance should not be insisted and liberal construction be adopted has no merit and the same is hereby rejected. ( 7 ) AS far as this case is concerned. it is an admitted position that the Municipality demanded import bills from the respondent-plaintiffs in order to verily/the claim made by the plaintiffs. It is also an admitted position that the plaintiffs did not produce the import bills as required by the Chief Officer and the Managing Committee of the Municipality The trial court thought that tit was not necessary for the Municipality to call for such details. However the learned Judge overlooked the provisions of octroi rules. The octroi rules clearly provide and empower the Chief Officer as well as the Managing Committee to call for the details as may he necessary to verify the claim of refund made by the importer. Therefore the trial court was clearly in error in holding that it was unnecessary and irrelevant for the Municipality to call for such details. ( 8 ) MOREOVER the provision for production and examination of import bills is not an empty formality. Rule 20b provides that export certificate wile be issued by Naka Karkun only if certain conditions are fulfilled by the exporter. The Export Naka Karkun. is duty bound to ask the exporter to produce the import bill and the declaration regarding the intention to export the goods given by the importer at the time of import of goods. The Naka Karkun should also examine the import bill and declaration for the purpose of his own satisfaction. Before the issuance of export certificate. is duty bound to ask the exporter to produce the import bill and the declaration regarding the intention to export the goods given by the importer at the time of import of goods. The Naka Karkun should also examine the import bill and declaration for the purpose of his own satisfaction. Before the issuance of export certificate. it is the duty of the Export Naka Karkun to follow the aforesaid procedure. But that does not mean that the subsequent authorities i. e. the Chief Officer and the Managing Committee can also not call for the same documents for the purpose of verification of the claim and for satisfying themselves as to the genuineness of the claim. The Provision of Rule 21 (2) (e) and 21 (3) clearly empowers the Chief Officer and the Managing Committee to call for such documents as may be necessary for the purpose of verification of the refund claim. This has two-fold purposes. If the original import bill is called for and examined by the Chief Officer or the Managing Committee it can be seen as to whether the Export Naka Karkun has actually complied with the provisions of the rules and by-laws. It can be verified as to whether the insisted for the production of import bills and whether he examined the same or not. Moreover the underlying principle behind making provision for refund is to see that octroi should not become an obstacle to free internal trade within the district state or even in the entire country. Therefore on the same goods octroi duty is not to be collected by different local authorities from time to time when the goods move from place to place in the process of trade and commerce without there being any intention to use consume or sell within the octroi limits of the Municipality. Hence. in respect of the goods which are not to be used sold or consumed in the municipal octroi limits generally care is taken to see that refund of octroi duty is made provided certain conditions are fulfilled. As far as this case is concerned the exporter is required to produce the import bill before the Export Naka Karkun so that the can examine the same and if necessary make necessary endorsement thereon. This is with a view to see that the exporter may not use the same import bill for charging the ultimate consumer. As far as this case is concerned the exporter is required to produce the import bill before the Export Naka Karkun so that the can examine the same and if necessary make necessary endorsement thereon. This is with a view to see that the exporter may not use the same import bill for charging the ultimate consumer. If on such import bill there is some endorsement made either by the Naka Karkun or by the Chief Officer or by the Managing Committee of the Municipality then it would not be possible for the importer to charge octroi duty from the purchaser in the town itself on the basis of such import bill. Because the endorsement on such import bill would show that the octroi duty paid by him has already been refunded or at any rate it would show some marking by the Naka Karkun or by the Chief Officer or the Managing Committee of the Municipality. Those markings would prevent him from misusing the same. This would also prevent the repetitive user of the same import bill for the purpose of claiming refund. If the actual production of import bill is insisted upon. it will be immediately verified on the spot as to whether the goods sought to be exported are covered by the import bill or not. thus in order to see that the aforesaid purposes are achieved insistence of the production of import bill cannot be said to be an unnecessary and irrelevant formality. ( 9 ) IT is an admitted position that in this case the refund application made by the plaintiffs was not accompanied by the necessary import bills. Not only that even tat a later stage when the Municipality called upon the plaintiffs to produce the import bills the plaintiffs failed to produce the same. Even at this stage during the course of the hearing of the appeal the counsel for the appellantmunicipality submitted that if the plaintiffs produce the import bills and satisfy the Municipality regarding the genuineness of the claim the Municipality is prepared to consider the refund application on merits and pay the amount of octroi duty that may be found due. Even so the plaintiffs have not produced any import bill as required by the Municipality. Even so the plaintiffs have not produced any import bill as required by the Municipality. in above view of the matter it is clear that the plaintiffs have not complied with the requirements of the rules and by-laws providing for refund of octroi duty. On this ground alone the judgment and decree passed by the trial court is required to be reversed and set aside. ( 10 ) IF it is necessary to decide the question as to limitation then it is very clear that the decision has been taken by the Municipality under the provisions of the Act the octroi rules and by-laws. The refund application itself has been made under the relevant provisions of octroi rules and by-laws. Therefore the decision taken by the Municipality by which the application for refund has been rejected cannot iq any way be said to be ultra vires the powers of the Municipality and/or illegal. The relevant part of the provisions of sec. 253 reads as follows:"253 No suit shall lie against a municipality or against any officer or servant of municipality in respect of any act done in pursuance or execution or intended execution of this Act or in respect of any alleged neglect or default in the execution of this Act. (a) unless it is instituted within six months next after the accrual of the cause of action. . . . "the resolution passed by the Managing Committee of the Municipality. Exh. 45 is dated 16/11/1976 The General Board of the Municipality passed the impugned resolution Exh. 5 6/09/1977 Thes resolutions have been passed by the Municipality in pursuance of the powers conferred upon it under the provisions of the Act the rules and by-laws. The resolutions have been passed in discharge of the duties under the Act It cannot be said that the resolutions were not passed for the execution of the Act or for the intended execution of the Act. Had the refund been granted would it not be under the Act. Similarly refusal to grant refund of octroi duty particularly when refusal is based on the ground that the requirements of the rules have not been complied with is also for the execution of the Act and rules or at any rate for the intended execution of the Act and rules. Similarly refusal to grant refund of octroi duty particularly when refusal is based on the ground that the requirements of the rules have not been complied with is also for the execution of the Act and rules or at any rate for the intended execution of the Act and rules. It is not the case of the plaintiffs nor can it be even conceivably contended that the Municipality while rejecting the claim of refund acted wholly without jurisdiction. The reliance placed by the trial Court on the decision of this Court in the case of Savarkundla Municipatity v. Manager Nivas Nirman Sahkari Mandli Ltd. reported in 22 GLR 866 has no application. Therein the action of the Municipality rejecting the permission to construct the buildings on land was held to be de hors the Act. In the instant case the action of the Municipality rejecting the refund application on the ground that the requirement of the rules have not been complied with is pursuant to the execution of the Act or at any rate for the intended execution of the Act. Similarly the reliance placed by the trial Court on the decision in the case of M/s. Mukhi Tapubhai Keshavji v. Gondal Municipality reported in 24 GLR 340 is also wholly misplaced. Therein the question for determination was from which date the period of limitation started to run. On the facts of the case it was held that from the date when the position of law became clear the limitation would start to run. In the facts and circumstances of the case Article 113 of the Limitation Act was held to be applicable. In the instant case the cause of action arose from the date of passing of the impugned resolutions which the Municipality passed under the Act. Therefore the suit should have been filed within a period of six months from the date of accrual of the cause of action i. e. latest before 21/03/1978 In this case the suit has been filed on 12/12/1978 Thus the suit is clearly time-barred. On this ground also the suit is required to be dismissed. ( 11 ) THE counsel for the Municipality has also urged that in case the amount of octroi duty is refunded it would amount to unjust enrichment of the plaintiff. On this ground also the suit is required to be dismissed. ( 11 ) THE counsel for the Municipality has also urged that in case the amount of octroi duty is refunded it would amount to unjust enrichment of the plaintiff. In the facts and circumstances of the case this question does not arise and therefore we do not propose to discuss the same. ( 12 ) BEFORE parting with the judgment we may mention that during the course of the hearing the parties had arrived at a settlement and after hearing the counsel for the Municipality on 21/03/1985 we adjourned the matter so that the parties can put the consent terms in writing and obtain the signatures of the respective clients. As a matter of fact the consent terms have been produced on record which have been duly signed by the respective advocates of the parties and by Govanbhai Meghjibhai Raval-respondent-plaintiff No. 2 who is a partner of plaintiff No. 1 firm. As per the consent terms the appellantmunicipality had agreed to pay Rs. 32 500 to the respondent-plaintiffs on or before 30/06/1985 in full and final settlement of the claim of the plaintiffs. However plaintiff No. 2 Govanbhai Meghjibhai Raval who was present in Court said that he did not wish to settle the matter. Thus he has backed out from the compromise arrived at between the parties. In this view of the matter we are keeping the consent terms on record but do not record the same. It may be noted that the Municipality had made it clear that these consent terms were subject to the confirmation by the General Board of the Municipality. However when the plaintiff No. 2 has backed out from the settlement it will not be necessary for the Municipality to place the same before the General Board of the Municipality. Even so we hope and trust that if the plaintiffs have second thought and approach the Municipality within a period of one month from today the Municipality may consider the request of the plaintiffs and do the needful keeping in mind the fact that the Municipality agreed to settle the matter for Rs. 32 500 against the total claim of the plaintiffs. ( 13 ) IN the result the appeal is allowed. 32 500 against the total claim of the plaintiffs. ( 13 ) IN the result the appeal is allowed. The Judgment and decree passed by the trial Court is reversed and set aside and the suit is ordered to be dismissed. There shall be no order as to costs. .