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TMI Blog1994 (8) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. Annexure G is the order by the revisional authority dismissing the revision filed against annexure B order. Annexure H is the order by which the Additional Commissioner, Sales Tax, imposed penalty for non-payment of entry tax on goods re-exported from Durg area and for not showing the same in the return. Annexures I, J and K are assessment orders for later periods against the petitioner. By annexure L, appeals filed against the three assessment orders were rejected. By annexure M, the Board of Revenue dismissed the second appeal against the appellate orders. 3.. Petitioner stated in para 1 of the petition that cloth is supplied by the petitioner to other dealers within the local areas of Durg and to dealers carrying on business outside local area of Durg. 4.. Petitioner does not dispute liability to pay entry tax in regard to goods brought into the local area of Durg and sold to dealers in Durg, since subsequent sale by Durg dealers was for consumption or use by persons in the local area. Petitioner contends that a part of the goods which petitioner brought into Durg area, were sold in Durg to dealers of Balaghat and Raipur and were taken to Balaghat and Raipur for sale to cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refers to cotton fabrics, silk fabrics and woollen fabrics. 6.. The entry tax is a substitute for the octroi recovered earlier by local bodies under the respective laws relating to local authorities relating to activity of goods entering for consumption, use or sale. Under the scheme of imposition and recovery of octroi, the intention of the dealer was expressed by filling the declarations and when the declaration was presented at the time of "taking away the goods" from local area, refund was made. Though the present Act does not lay down any elaborate procedure, the words "brought for consumption, use or sale" have acquired a definite connotation and should receive interpretation similar to the one given in Man Mohan Tuli v. Municipal Corporation of Delhi AIR 1981 SC 991 in the context of "octroi". The Supreme Court considered the import of entries 52 and 56 in the List II and pointed out the distinction between the octroi and terminal tax: "(1) Terminal tax and octroi are similar kinds of levies which are closely interlinked with (1) destination of the goods, (2) the user in the local area on arrival of the goods. Where the goods merely pass through a local area without being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to point out that the goods brought into a local area were not mixed up in the mass of the property in the local area. In cases where there is no material to conclude that the goods were not intended to become the mass of the property within the local area, tax will be leviable under the provisions of the Act. 7.. We will now advert to the decisions placed before us by both sides having a bearing on the controversy in this case. Petitioner relies on the leading decision that of the Constitution Bench in Burmah-Shell Oil Storage and Distributing Co. of India Ltd., Belgaum v. Belgaum Borough Municipality, Belgaum AIR 1963 SC 906. The company caused entry of petroleum products into the municipal octroi limits either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn, sold them to others. The company was also directly selling the products to Government local bodies and private concerns. It has a divisional office and depot at Belgaum within its municipal limits. The company appointed dealers and licensees as per agreement. The court held that the company was liable to pay octroi tax on the goods brought into local area (a) to, be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as shown by the transport passes, but the reduction would be given only if such goods are not sold within the municipal limits and if they are exported within a period of six months from the date of import. The High Court held that the goods were re-exported by the IOC from inside the local area to its retail outlet outside the local area for use or consumption by the ultimate consumer outside the local area and, therefore, octroi was not leviable even if the sale took place within the local area. The Supreme Court (in para 18 of the judgment) rejected the contention of the State that the earlier decisions of the Supreme Court were not concerned with the situation where the goods were sold within the octroi limits thereafter exported for consumption outside the said limits and there was nothing in those judgments to the effect that if the goods are brought into a local area for sale to a dealer who then transports the goods outside the local area for sale, no octroi is chargeable. It was further observed: "If the goods were brought within the municipal limit for the purpose of sale (sale means passing of the title to the purchaser), then different considerations might have applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. Undoubtedly there was no sale within the corporation limits. Appellant's claim was for refund of octroi as there was no use or consumption or sale within the corporation limits. Rule 24 of the Rules contemplated refund only where the goods are exported within three months and rule 25 required observance of some formalities. The Supreme Court held that the claim was sustainable. 11.. The next decision is Indian Oil Corporation v. Municipal Corporation, Jullundhar AIR 1993 SC 844. The IOC set up a pipe line terminal and LPG bottling plant at Suchi Pind which later on was brought within the municipal limits. IOC transported petroleum products through underground pipe lines to its depot within the corporation. These petroleum products were meant: (i) for use or consumption by the IOC within the limits of the municipal corporation; (ii) for sale by IOC through its dealers or by itself for consumption within the octroi limits, by persons other than the IOC; (iii) for sale by the IOC through its dealers or by itself inside the octroi limits and the vendee, after completion of sale takes those products outside the octroi limits for sale, use or consumption; and (iv) for export by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore v. Chandanmal Champalal & Co. [1994] 95 STC 5 (SC); JT [1994] 3 SC 334. It was argued before the court that the words "sale therein" in entry 52 which speaks of tax on the entry of goods into a local area for consumption, use or sale therein, must be given their due and natural meaning and should not be restricted to sale for the purpose of consumption or use of the goods sold within the limits of the concerned local areas. Reference was made to the propositions in Burmah-Shell Oil Storage and Distributing Co. India Ltd. v. Belgaum Borough Municipality AIR 1963 SC 906, Hiralal Thakorlal Dalal v. Broach Municipality AIR 1976 SC 1446 and Municipal Council v. Parekh Automobiles Ltd. [1990] 1 SCC 367 which, it was contended, dealt with cases where the levy was of municipal octroi under State legislation and there was no justification to take a restricted view of the words "sale therein" where the levy is created by the State Legislature and assessment and collection is made by the State Government. The court observed as under: "While we cannot deny the force and substance in the submissions urged by Sri Narasimha Murthy, we do not find it possible to give effect to it in the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he caused entry of the goods into the local area of Durg for the purpose of sale. He has no case that at the stage of entry, any goods were earmarked for being sold in Durg to dealers from outside. He has also no case that title in the goods passed to such dealers not within the local area, but outside the local area. He has no case that the sale to dealers was of unascertained goods or that appropriation of goods did not take place within the local area. Going by the averments in the writ petition, entry of goods to Durg was caused for the purpose of sale in Durg and it so happened that both dealers inside Durg and outside Durg purchased goods from the petitioner. Appropriation took place in Durg and the sale was of ascertained goods. It is not the contention of the petitioner that the transport of the goods from Durg to outside was by or at the risk of the petitioner. The transport was by the purchasers themselves who instead of dealing with the goods in Durg, chose to deal with them outside. Title in the goods also passed to such dealers within the local area of Durg. These circumstances show that the case falls within the third category described in paragraph 2 of the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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