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TMI Blog1990 (10) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... local areas." According to the above section, a tax at the rate not exceeding 2 per cent ad valorem is leviable on entry of the scheduled goods into any local area for consumption, use or sale. Petitioners are wholesale dealers in textile goods in different cities in the State. In view of section 3 of the Act, the petitioners do not dispute that if any goods are brought by them into any local area and sold by them within the said area for the purpose of consumption or use within the local area, they are liable to pay tax on the sale turnover of such goods. Their sole grievance in these writ petitions is about the levy of tax under section 3 of the Act in respect of goods brought by them within the local area and sold therein to dealers outside the local area pursuant to which the goods so sold are transported or re-exported to places outside the local area. Respondents 1 and 2, however, levied tax under section 3 of the Act even on that part of the turnover of the textile goods which were sold by the petitioners to other dealers doing business outside the local area and which were transported outside the local area pursuant to such sale. The stand of the respondents has been tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its depot inside the octroi limits to extra-municipal points where they are bought and consumed by persons other than the company.' * * * 20.. It is not the immediate person who brings the goods into a local area who must consume them himself, the act of consumption may be postponed or may be performed by some one else but so long as the goods have been brought into the local area for consumption in that sense, no matter by whom, they satisfy the requirements of the Boroughs Act and octroi is payable. Added to the word 'consumption is the word 'use' also. There may be certain commodities which though put to use are not 'used up' in the process. A motor car brought into an area for use is not used up in the same sense as food-stuffs. The two expressions use and consumption together therefore, connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes, or uses them up. In this context, the word 'consumption', as has been shown above, must receive a larger meaning than merely the act of consuming in the generally understood s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n both in the Government of India Act, 1935 and the Constitution did not make any addition to the true concept of 'octroi' as explained above. That concept included the bringing in of goods in a local area so that the goods come to a repose there. When the Government of India Act, 1935 was enacted, the word 'octroi' was deliberately avoided and a description added to forestall any dispute of the nature which has been raised in this case. In other words, even without the description the tax was on goods brought for 'consumption, use or sale'. The word 'octroi' was also avoided because terminal taxes are also a kind of octroi and the two were to be allocated to different Legislatures. 22.. In our opinion, even without the word 'sale' in the Boroughs Act the position was the same provided the goods were sold in the local area to a consumer who bought them for the purpose of use or consumption or even for resale to others for the purpose of use or consumption by them in the area. It was only when the goods were re-exported out of the area that the tax could not legitimately be levied and in this case the municipality has agreed to refund the amount of tax on goods re-exported without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e levy under section 3 of the Act must be the sale for the purpose of consumption or use and not a sale intended to transport the goods outside the local area for resale therein. 7.. Sri H.L. Dattu, learned counsel for the State, however, submitted that the exact question which arises for consideration in this case did not arise for consideration in the aforesaid two cases of the Supreme Court. The learned Government Advocate pointed out that the Supreme Court in both the cases had held that so long the sale took place within the local area and such sale was intended for consumption or use of the goods within the local area, it attracted the levy though in a given case the parties may not actually use or consume the goods so purchased in the local area but may take them outside the local area. He pointed out that in neither of the decisions was there any clear principle laid down to the effect that even if a sale takes place within a local area, if such sale was intended for the purpose of transport of the goods outside the local area for resale it would not attract the levy. 8.. The learned counsel for the petitioners, however, relied on a subsequent judgment of the Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question that the sale took place only outside the municipal limits of Jodhpur since that involved an investigation into facts which could not be undertaken in a writ petition and proceeded on the footing that the sale of the products in question took place within the limits of Jodhpur. He, however, accepted the contention of IOC and the dealer that even if the sale is taken to have been effected within Jodhpur, no octroi was leviable as admittedly the goods had been sold in Jodhpur only for their onward transmission for use and consumption in Dangiawas outside the municipal limits. The Division Bench of the High Court has also approved of this conclusion and, in our opinion, rightly. As pointed out by my learned brother in his detailed discussion on this aspect, this issue is covered by the two decisions of the Supreme Court which have already been referred to. I have nothing to add, so far as this part of the case is concerned." 9.. In our opinion, the ratio of the judgment in Municipal Council, Jodhpur's case [1990] 32 STL 26 (SC) fully covers the question arising for consideration in these cases. 10.. The learned counsel for the petitioners submitted that a portion of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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