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Issues Involved:
1. Liability of goods in transit for export terminal tax under s. 66(1)(o) of the C.P. & Berar Municipalities Act. 2. Refund of export terminal tax collected on goods in transit. Issue-wise Detailed Analysis: 1. Liability of Goods in Transit for Export Terminal Tax: The primary issue was whether goods passing through the limits of Wardha Municipality without being unloaded or reloaded are liable for an export terminal tax under s. 66(1)(o) of the C.P. & Berar Municipalities Act. The appellant argued that the terms "imported into or exported from" should imply the termination or commencement of the journey of the goods, excluding goods merely in transit. The respondent contended that the tax is applicable upon entry or exit of goods within municipal limits, and the term "terminal" refers to the jurisdictional limits of the municipality. The court examined the dictionary meanings of "import," "export," and "transit," and concluded that goods in transit, which are merely carried across a particular area, cannot be considered as imported into or exported from that area. The court further analyzed various precedents and statutory interpretations, emphasizing that "terminal tax" should be construed in favor of the taxpayer. The legislative history indicated that terminal tax was intended for goods whose journey ended within or commenced from the municipal limits, not for goods merely passing through. The court held that the terminal tax under s. 66(1)(o) is not applicable to goods in transit, as such goods are neither imported into nor exported from the municipality's limits. This interpretation aligns with the principle that taxing statutes must be strictly construed, and any ambiguity should be resolved in favor of the taxpayer. 2. Refund of Export Terminal Tax Collected on Goods in Transit: Given the court's decision that goods in transit are not liable for terminal tax, the appellant was entitled to a refund of the Rs. 240 collected by the Wardha Municipal Committee. The court reversed the decision of the Nagpur High Court, which had previously upheld the imposition of the tax. The court's ruling emphasized that the tax was wrongfully collected, as the goods were merely in transit and did not meet the criteria for being taxed under the relevant statutory provisions. Consequently, the appellant was entitled to recover the amount paid. Conclusion: The court allowed the appeal, determining that the terminal tax under s. 66(1)(o) of the C.P. & Berar Municipalities Act is not applicable to goods merely in transit through municipal limits. The decision of the Nagpur High Court was reversed, and the appellant was awarded costs in both the Supreme Court and the High Court.
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