1993 (8) TMI 311 - HC - Indian Laws

Summary

Issues Involved:
1. Interpretation of Entries 50 and 52 of Schedule H to the Bombay Municipal Corporation Act.
2. Classification of the "Shell and Slide Machine" for octroi purposes.
3. Legality of the octroi rate applied by the Bombay Municipal Corporation.
4. Jurisdiction of the High Court in interpreting taxing statute items.
5. Availability and necessity of alternative remedies.

Detailed Analysis:

1. Interpretation of Entries 50 and 52 of Schedule H to the Bombay Municipal Corporation Act:
The core dispute centers on whether the "Shell and Slide Machine" used for packing cigarettes should be classified under Entry 50 or Entry 52 of Schedule H to the Act. Entry 50 pertains to "Machinery and their components and spares," with a specified octroi rate of 2% ad valorem. Entry 52 relates to "Instruments, apparatus and appliances and parts thereof," with a higher octroi rate of 4% ad valorem. The court noted that many items in Entry 52 could be termed as machinery but are specifically provided for under that entry, thus excluding them from Entry 50.

2. Classification of the "Shell and Slide Machine" for Octroi Purposes:
The machine in question is used for packing cigarettes and includes several standard features, one of which is an "Electronic Memory Unit." The petitioners argued that the machine is purely mechanical, except for the memory unit, and should be classified under Entry 50. The court observed that in common parlance and in the industrial and commercial world, such machines are known as "machinery" rather than "instruments, apparatus or appliances." The court concluded that the machine does not meet the description of any items specified in Entry 52 and should be classified as machinery under Entry 50.

3. Legality of the Octroi Rate Applied by the Bombay Municipal Corporation:
The petitioners were initially charged an octroi rate of 4% under Entry 52 by the Bombay Municipal Corporation. They paid the amount under protest and sought a refund, arguing that the correct rate should be 2% under Entry 50. The court found that the machine is indeed "machinery" and falls under Entry 50, thus entitling the petitioners to a lower octroi rate of 2%. The court directed the respondents to revise the assessment and refund the excess amount collected with interest.

4. Jurisdiction of the High Court in Interpreting Taxing Statute Items:
The respondents raised preliminary objections, arguing that the interpretation of taxing items is a question of fact and should not be decided by the High Court in its writ jurisdiction. They also pointed out that an alternative remedy by way of appeal was available. The court dismissed these objections, stating that the interpretation of an item in a taxing statute is a question of law that can be decided by the High Court under Article 226 of the Constitution. The court also noted that the availability of an alternative remedy does not bar the exercise of writ jurisdiction.

5. Availability and Necessity of Alternative Remedies:
The court addressed the respondents' argument that the petitioners should have pursued an alternative remedy by way of appeal. The court found that the alternative remedy is not an absolute bar to the exercise of writ jurisdiction, especially when the matter involves a clear question of law. The court referred to a previous case where it had relegated the parties to the appellate authority due to the highly controversial nature of the facts, but clarified that this was not a general rule and was specific to the facts of that case.

Conclusion:
The court concluded that the "Shell and Slide Machine" imported by the petitioners is machinery within the meaning of Entry 50 of Schedule H to the Act. The court directed the respondents to charge octroi at the rate of 2% ad valorem and refund the excess amount collected with simple interest at the rate of 15% per annum from the date of payment till the date of refund. The writ petition was allowed, and the rule was made absolute with no order as to costs.