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TMI Blog2015 (5) TMI 777X X X X Extracts X X X X X X X X Extracts X X X X ..... r were used for an indefinite period in such a way that they come to rest finally and permanently within the Municipal limits or sold within the said limits. The said vouchers are capable of being sold by the Petitioner after they are brought into the limits of the City. In fact, going by the scheme narrated above, the said vouchers are sold by the Petitioner to its customers for value. The customers give the said vouchers to its employees called as users. On presentation of the said vouchers, the users get foods and beverages from the affiliated establishments and the affiliated establishments on presentation of the said vouchers to the Petitioner get the face value of the said vouchers after deducting the service charges. Thus, the said vouchers are capable of being used or sold within the limits of a City. The decision of Apex Court in the case of Bharat Sanchar Nigam Limited [2006 (3) TMI 1 - Supreme court] distinguished wherein the issue was considered in respect of of the nature of transaction by which mobile phone calls / electromagnetic waves. The said vouchers which are printed on paper are the goods within the meaning of the said Municipal Corporations Act. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chers, present the same to the Petitioner Company. On receipt of the vouchers, the Petitioner reimburses the affiliates after deducting service charges. 3. The case made out in the Petition is that the Petitioner Company has obtained certificate of authorization from the Reserve Bank of India under Section 7 of the Payment and Settlement Systems Act, 2007 (for short the said Act of 2007 ) to operate a payment system for issue of meal and gift vouchers in the form of 'paper based vouchers' and 'smart meal cards' with effect from 25th June 2009. In these two Petitions, we are concerned with the paper based vouchers. 4. The learned senior counsel appearing for the Petitioner has made extensive submissions. He invited our attention to the provisions of Pune Municipal Corporation Octroi Rules, 2008 ( for short the Octroi Rules ). He also invited our attention to the Maharashtra Municipal Corporations Act, 1949 (for short the Municipal Corporations Act ) and the Bombay Provincial Municipal Corporation (LBT) Rules, 2010 (for short the LBT Rules ). He urged that the said vouchers are payment instructions or payment instruments issued under a payment system operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Division Bench in the case of Maharashtra Chamber of Commerce Industries Agriculture Others v. State of Maharashtra, through its Secretary Others 2004(1) Bom.C.R. 137 and Small Scale Interpreneurs Association and Others v. State of Maharashtra and Others 2007(3) Bom.C.R. 496. On merits, he submitted that the said vouchers are capable of use and/or consumption as well as sale within the limits of the Municipal Corporations. He urged that no interference is called for in writ jurisdiction. 6. We have given careful consideration to the submissions. Under Clause 42 of Section 2 of the Municipal Corporations Act, the Octroi has been defined. Clause 42 of Section 2 reads thus: 2(42). Octroi means a cess on the entry of goods into the limits of a city for consumption, use or sale therein; but does not include a cess as defined in clause 6A or Local Body Tax, as defined in clause (31A). 7. The Local Body Tax has been defined in Clause 33A of Section 2 of the Municipal Corporations Act which reads thus: 2(33A). Local Body Tax means a tax on the entry of goods into the limits of the City, for consumption, use or sale therein, levied in accordance with the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sells it to the customers. The customers, in turn, provide the said vouchers to its employees. On presentation of the said vouchers in the restaurants or eating places or outlets, the ready to eat food items and beverages of the face value printed on the said vouchers is delivered to the users. Thus, the said vouchers are used to pay the price of the food items and beverages delivered to the users. On presentation of the said vouchers, the users can acquire the food items and beverages of the face value of the said vouchers. 11. As far as the use or consumption of goods for the purposes of charging Octroi is concerned, the law is laid down by the Apex Court in the case of Hindustan CocaCola Beverage Pvt. Ltd. vs. Sangli Miraj and Kupwad Municipal Corporation and Ors (2011)7 SCC 605. The Apex Court in Paragraphs 12 and 14 held thus: 12. While arriving at the above conclusion, this Court referred to the Constitution Bench judgment in Burmah Shell Oil Storage and Distributing Company of India Limited v. Belgaum Borough Municipality reported at MANU/SC/0314/1962 : AIR 1963 SC 906 where it was dealing with the question whether octroi was leviable on the goods brought within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Thus, the said vouchers are capable of being used or sold within the limits of a City. 13. Now coming back to the question whether the said vouchers can be said to be the goods, the learned senior counsel appearing for the Petitioner urged that the vouchers are not capable of consumption, use or sale and the said vouchers are nothing but a medium to acquire any article for consumption. The contention is that the said vouchers by itself are not capable of consumption, use or sale. He relied upon a decision of the Apex Court in the case of TATA Consultancy Services. In Paragraph 81 of the said decision, the Apex Court held thus: 81. It is not in dispute that when a programme is created it is necessary to encode it, upload the same and thereafter unloaded. Indian law, as noticed by my learned Brother, Variava, J., does not make any distinction between tangible property and intangible property. A 'goods' may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of transmitted, transferred, delivered, stored and possessed. If a sof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en uniformly defined meaning thereby all types of movable property. The learned counsel relied upon what is held in Paragraphs 43, 45, 47 and 48 of the said decision which read thus: 43. The sale of a ticket does not necessarily involve the sale of goods. For example the purchase of a railway ticket gives the right to a person to travel by railway. It is nothing other than a contract of carriage. The actual ticket is merely evidence of the right to travel. A contract is not property, but only a promise supported by consideration, upon breach of which either a claim for specific performance or damages would lie (Said v. Butt . Like railway tickets, a ticket to see a cinema or a pawn brokers ticket are memoranda or contracts between the vendors of the ticket and the purchasers. Cases on whether the terms specified on such tickets bind the purchaser are legion. It is sufficient for our purposes to note that tickets are themselves, normally evidence of and in some cases the contract between the buyer of the ticket and its seller. Therefore a lottery ticket can be held to be goods if at all only because it evidences the transfer of a right. 45. The further distinction sought to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uggested to be the moveable property. The only object of the right to participate would be to win the prize. The transfer of the right would thus be of a beneficial interest in movable property not in possession. By this reasoning also a right to participate in a lottery is an actionable claim. 16. The Apex Court observed that the possession of lottery tickets gives a right to participate in the draw. It was observed that it is merely a chance that a person holding a ticket gets a price. Therefore, it was held that the lottery tickets were not the goods but merely an actionable claim. This Court in the case of State Bank of India v. Neela Ashok Naik held that the fixed deposit receipts of the bank are the goods which can be pledged as a collateral security. However, the said vouchers have guaranteed utility and value which are capable of being sold. 17. It will be necessary to make a reference to the decision of the Apex Court in the case of Bharat Sanchar Nigam Limited. The issue which arose for consideration in the said decision was as regards the nature of transaction by which mobile phone calls are enjoyed. The question considered was whether it was a sale or service or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out earlier, the printed vouchers are sold to the customers for the value which is printed on the said vouchers. In turn, the customers hand over them to a user who uses the same for acquiring food and beverages. Even going by the scheme of the Petitioner, the said vouchers are sold by the Petitioner to its customers. Therefore, the said vouchers which are printed on paper are the goods within the meaning of the said Municipal Corporations Act. After the vouchers are brought within the limits of the Municipal Corporations Act, the same are capable of being sold. The said vouchers which are capable of being sold, delivered and possessed have its own utility. The same cannot be equated with a lottery ticket which merely an actionable claim. The said vouchers cannot be equated with electromagnetic waves. 21. The stand taken by the Pune Municipal Corporation in the Writ Petition No.5653 of 2010 is that the said vouchers will fall in the category of printed material which attracts Octroi of 2% in terms of the Octroi Rules. For the reasons recorded above, we are unable to persuade ourselves to take a view that the said vouchers are not the goods for the purposes of levy of LBT and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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