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Issues involved: Whether import of zinc oxide within the limit of Greater Bombay attracts the imposition of octroi.
Summary: The appellant, engaged in importing zinc oxide into Greater Bombay for sale to the rubber manufacturing industry, objected to the levy of octroi under Section 192 of the Bombay Municipal Corporation Act, claiming that zinc oxide was not used in the construction of buildings or roads. The High Court initially ruled in favor of the appellant, stating that zinc oxide did not fall under the class of articles used in construction and therefore, no octroi could be levied. However, the Division bench overturned this decision, emphasizing that the classification in Schedule H was merely a convenient index and not determinative of taxability. The appellant argued that zinc oxide did not belong to Class IV of Schedule H and hence, octroi should not be imposed. Section 139(4) of the Act provides for the imposition of octroi, with Section 192(1) specifying the articles subject to octroi as listed in Schedule H. Zinc oxide was listed under serial No. 26 in Class IV, which included articles used in construction. The Division Bench held that the heading of the class did not affect the taxability of zinc oxide to octroi. The Supreme Court upheld the Division Bench's decision, emphasizing that the quantity of zinc oxide used in paint for buildings did not negate its classification as an article used in construction. The Court clarified that the presence of an item in the Schedule warranted octroi levy, regardless of the specific class it fell under. The Court dismissed the appeals, stating that the Full Bench decision cited by the appellant did not establish the correct law. The appellant was directed to pay the due duty amount with interest to the respondent within three months.
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