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Issues Involved:
1. Validity of the 10% deduction under Rule 18(3) of the Octroi Rules post-15th February 1950. 2. Entitlement of the plaintiff to bring the suit. 3. Whether the suit was barred by limitation. Detailed Analysis: 1. Validity of the 10% Deduction under Rule 18(3) Post-15th February 1950: The principal question was whether the 10% deduction as provided for in Rule 18(3) was invalid from 15th February 1950. The rule stated: "A deduction of ten per cent shall in all cases be made before refunding the amount of octroi duty on exportation of goods either in transit as per rule 13 or otherwise under rule II (2)." The legality of such a deduction prior to 15th February 1950 was not in controversy. The deduction was initially authorized as a tax on octroi refund under s. 59(b)(xi) of the Bombay District Municipal Act, 1901, which was sanctioned by the Government of Bombay. This practice continued under the Bombay Municipal Boroughs Act, 1925. However, with the application of the Bombay Provincial Municipal Corporation Act, 1949 to Poona on 15th February 1950, the powers of taxation became governed by s. 127 of the Act. This section did not authorize a tax on octroi refund and explicitly prohibited the imposition of any tax which the State Legislature had no power to impose. The appellant's argument that the levy could be considered a fee under s. 466 was rejected as no standing order prescribing any fees had been made. Consequently, the High Court rightly rejected the defense that the deduction was legally valid. 2. Entitlement of the Plaintiff to Bring the Suit: The plaintiff was entitled to bring the suit as per the Poona City Municipality's Octroi Rules and Bye-laws which defined "a claimant" as a person who produces the duly receipted import bill and the corresponding export certificates. The plaintiff had produced these documents and had received 90% of the refund, making it logical that he was entitled to claim the remaining 10%. The High Court concluded that the plaintiff, having made the claim in accordance with the rules, was the person entitled to receive the full refund, thus he was also entitled to bring the suit. 3. Whether the Suit was Barred by Limitation: The appellant relied on s. 487 of Act LIX of 1949, which required that no suit should be instituted against the Corporation unless it was commenced within six months next after the accrual of the cause of action. However, the benefit of this section would be available only if the deduction of 10% was "an act done or purported to be done in pursuance or execution or intended execution of this Act." The High Court held that the levy was not in pursuance or execution of the Act, and therefore, the suit was not barred by limitation. The High Court's decision on this point was upheld. Conclusion: The High Court found in favor of the plaintiff on all the points raised: - The 10% deduction was invalid in law post-15th February 1950. - The plaintiff was entitled to bring the suit. - The suit was not barred by limitation. Accordingly, the High Court allowed the appeal and made a decree in favor of the plaintiff for Rs. 7,364/15/- with interest at 4% from the date of the suit and costs throughout. The Supreme Court dismissed the appeal by the Municipal Corporation, affirming the High Court's judgment.
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