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2022 (12) TMI 1106 - HC - VAT and Sales TaxMaintainability of petition - availability of alternate remedy - time limitation - Rejection of claim for refund of octroi - only reason for rejecting and/or disallowing the Petitioner s claim for refund of octroi was that the Petitioner had failed to produce the original declaration duly certified by the Octroi Inspector, which was done subsequently. HELD THAT - While the Respondent has alleged the availability of an alternate remedy, we find that no specific provision and/or details of the same have been stated. In any event we find in the facts of the present case, that the Petitioner is justified in approaching this Court under Article 226 of the Constitution of India. In so far as delay is concerned, we find that there has in fact been no delay so as to deny the Petitioner relief if the Petitioner is otherwise entitled to the same. It is well settled law that there is no rule of law, which says Courts under Article 226 of the Constitution cannot enquire into claims despite the passage of time. The test is to see whether the illegality complained of is manifest and whether the same can be sustained solely on the ground of laches. The test is not the physical running of time but the fact that justifiable reasons exist for warranting a Courts action in cases where injustice has been done or justice has been denied. All that the Court has to see is whether the delay and laches on the part of the Petitioner is such as to disentitle a Petitioner of the relief claimed. It is now well settled that where a case has been made out to merit interference under Article 226 relief would not be denied solely on the ground of delay. Thus, both the preliminary grounds of objection are rejected as entirely baseless and without any merit. Eligibility for a refund under Section 194(2) of the MMC Act - HELD THAT - Inspector would render the Petitioner ineligible for a refund of octroi under Section 194(2) of the MMC Act. We have examined the provisions of Section 194(2) of the MMC Act and find that a plain reading of the same makes clear that the purport of Section 194(2) of the MMC Act is to exempt from octroi those articles which are imported for the purpose of fulfilling a specified contract with the Government or otherwise for the use of the Government - Section 194 (2) does not provide for an exemption of octroi at the threshold i.e. at the time of import but entitles a person/entity to claim a refund of octroi provided that such person/entity is eligible. In the case of OIL AND NATURAL GAS COMMISSION OF INDIA, VERSUS MUNICIPAL CORPORATION OF GREATER BOMBAY, MUNICIPAL COMMISSIONER, MUNICIPAL CORPORATION OF GREATER BOMBAY, DY. ASSESSOR COLLECTOR (O) AND STATE OF MAHARASHTRA. 2017 (9) TMI 1997 - BOMBAY HIGH COURT the issue involved pertained to the powers of the Municipal Corporation of Greater Bombay to levy octroi on natural gas that was being imported by the Petitioner in that case (ONGC) within the Municipal limits of the Municipal Corporation of Greater Bombay. In the facts of that case Section 139 of the MMC Act specifically conferred powers upon the Municipal Corporation to impose four different types of taxes including octroi in terms of Entry 22(a) of Schedule-H - even the said judgment of ONGC is of absolutely no avail to the Respondents as the same was delivered and applicable in entirely different facts. Additionally as we have already held in the facts of the present case, the Respondent No.3 was duty bound to duly certify the octroi exemption since Petitioner had fulfilled the eligibility criteria. Petitioner could not therefore be deprived of its entitlement to octroi refund on failure of Respondent No.3 discharging its duties as required in law. Thus we hold the judgment relied upon is of no avail to the Respondents. There are no hesitation in holding that the Petitioner is eligible for a refund of octroi under Section 194 (2) of the MMC Act of an amount of Rs.16,71,401/- paid as octroi on the said articles imported pursuant to the said work order - in the facts of the present case the failure to provide a declaration of duty certified by the octroi officer would not render the Petitioner ineligible for a refund of octroi of Rs.16,71,401/- (Rupees Sixteen Lakhs Seventy One Thousand Four Hundred and One only) paid as octroi on the said articles imported pursuant to the said work order. Petition allowed.
Issues Involved:
1. Eligibility for a refund under Section 194(2) of the MMC Act. 2. Impact of failure to provide a declaration duly certified by the Octroi Inspector on eligibility for a refund of octroi. Detailed Analysis: 1. Eligibility for a refund under Section 194(2) of the MMC Act: The petitioner entered into a contract with the Indian Navy for repair, refit, and service, which required importing spare parts. An octroi exemption certificate was issued by the Ministry of Defence, certifying that the items were exempt from octroi duty. The petitioner paid the octroi duty and later filed for a refund under Section 194(2) of the MMC Act, providing necessary documentation, including the contract, octroi exemption certificate, and goods receiving certificate. According to Section 194(2) of the MMC Act, a refund of octroi is granted if: - A written declaration signed by the importer states that the article is imported for fulfilling a specified contract with the Government. - A certificate signed by an officer empowered by the Government certifies that the article has become the property of the Government. The petitioner complied with both criteria by providing the necessary documents. The court found that the petitioner had fully complied with the substantive provisions of Section 194(2) of the MMC Act and was thus eligible for a refund. 2. Impact of failure to provide a declaration duly certified by the Octroi Inspector on eligibility for a refund of octroi: The petitioner's claim was rejected by the respondent on the grounds of not providing the original declaration duly certified by the Octroi Inspector. The petitioner argued that this was a procedural lapse due to human error and that the substantive compliance with Section 194(2) should suffice for the refund. The court held that the requirement of a declaration duly certified by the Octroi Inspector is procedural and not a substantive criterion for eligibility under Section 194(2). The court emphasized that the doctrine of substantial compliance should be applied to avoid hardship where a party has done all that was reasonably expected but failed to comply with some procedural aspect. The court rejected the respondents' preliminary objections regarding alternative remedy and delay, stating that no specific alternative remedy was provided and that the petitioner had been diligently following up on the matter. The court concluded that the petitioner was eligible for the refund and that the failure to provide the certified declaration did not disqualify the petitioner from receiving the refund. The court set aside the impugned letter dated 16th December 2017 and directed the respondents to refund the amount of Rs.16,71,401/- within three months, failing which interest at the rate of 7% per annum would be payable from the date of filing the petition until realization.
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