9911796707
TMI Blog2003 (2) TMI 485X X X X Extracts X X X X X X X X Extracts X X X X ..... arpur Industries Limited has various manufacturing units at different places. Shree Gopal Mills is one of its unit situated at Yamunanagar which is engaged in manufacturing amongst other items caustic soda and chlorine. For the purposes of manufacturing caustic soda and chlorine, the petitioners bring into their factory various raw material including salts within the municipal limits of Yamunanagar which is claimed to the common salt and its chemical name is Sodium Chloride. It is claimed that till January, 1975, the salt used to be obtained from Hindustan Salt Limited (a Government of India undertaking) and subsequently from its own salt works situated at Singach in Gujarat. The petitioners have alleged that vide notification dated 30-5-1953, the composite State of Punjab in pursuance of Section 61 of the Punjab Municipal Act, 1911 (for brevity, 1911 Act) had sanctioned a proposal of respondent No. 3 to levy tax in the nature of octroi on entry of goods in municipal limits of Municipal Committee, Yamunanagar for consumption, use of sale on the items set out in the Schedule to the notification which also contained the list of exempted items from the levy of octroi. Clause (b)(8) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de various representations to the respondents by sending them a certificate from Hindustan Salt Limited in which it is stated that the industrial salt sold to the petitioners unit at Yamunanagar is of the same physical and chemical consumption as that of common salt used for human consumption and the prices of both are the same. Annexures P-4 to P-8, P-10, P-11, P-14 and P-15 are the copies of various representations sent to various functionaries of the State or Municipal Committee, Yamunanagar. The aforementioned representations have remained under consideration of the State Government as is clear from letter dated 3-7-1978. Annexure P-17. On 26-11-1978, a notification, Annexure P-19 has been issued in pursuance of powers conferred by Sub-section (1) of Section 84 and Clause (a) of Sub-section (1) of Section 84 of 1973 Act, exemption was granted from payment of octroi duty only on common salt (edible salt) within the limits of all municipal committees and notified areas for human consumption w.e.f. 1-11-1978. The text of the notification is as under:-- "No./30/10/2CI-78-- In exercise of the powers conferred by Sub-section (1) of Section 84 and Clause (a) of Sub-section (1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r human consumption. It is in fact claimed that the industrial salt or common salt which is not used for human consumption and is used for manufacturing of caustic soda and chlorine is different than the edible salt used for human consumption. It has then been asserted that Municipal Committee, Yamunanagar was within its competence to levy and collect octroi on industrial salt used for manufacturing of caustic soda and chlorine under the Octroi Schedule. However, in order to make Item No. 61 of the Octroi Schedule more clear and explicit Haryana Act No. 7 of 1980 was enacted. The stand of the State further is that the industrial salt which is imported by the petitioners into municipal area cannot be used for human consumption and it cannot be exempted from payment of petrol. It has further been claimed that Epsom salt, other saline substances were liable to pay octroi under Item No. 61 of the Octroi Schedule and exemption was available only to edible salt used for human consumption. Entries 5 and 52 of State List in the 7th Schedule of the Constitution has also been relied upon to claim that the octroi is permissible to be levied on the entry of goods in the local area for consumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traders are granted exemption from the levy of octroi duty who produce a certificate from competent authority certifying that the salt imported to the municipal area is iodised and is fit for human consumption. 10. I have heard Mr. D.N. Sawhney, learned Counsel for the petitioners who has raised following three submissions before me :-- (a) Levy of octroi duty on common salt is violative of Article 14 of the Constitution because classification of common salt into industrial salt and non-industrial salt has been created in respect of same article on the basis of its use and that because both the salt are one and the same commodity. (b) Retrospective operation of Haryana Act No. 7 of 1980 is arbitrary, therefore, unconstitutional as the petitioners have been singled out for invidious discrimination for its application to their single individual unit. (c) That imposition of octroi duty also violates Articles 19(1)(g), 301 and 304 of the Constitution as it has suffered unreasonable restrictions on the inter-State freedom of trade, commerce and the same is against public interest. This argument is based on the presumption that octroi is a tax on movement of goods. 11. Mr. D.N. Saw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble classification based on Intelligible differentia is permissible if it distinguishes persons or things that are grouped together from others left out of the group. According to the learned counsel. The Legislature has specifically mentioned that respondent No. 3 Yamunanagar Municipal Committee has been charging octroi under Item No. 61 of the Octroi Schedule since July, 1975 and a large quantity of salt is being imported within the municipal limits of Yamunanagar for use in manufacturing of industrial products which would show that it has only one industry in mind i.e. the petitioner. The learned Counsel has again elaborated his argument by making reference to the letter dated 8-7-1975 (Annexure P-1) addressed by the Administrator of respondent No. 3 wherein octroi under Item No. 61 of the Octroi Schedule has been permitted to be collected subject to final decision by the Government. The aforementioned letter further reveals that industrial salt could not be exempted from levy of octroi and refund could be claimed by the petitioners after the decision of the Government. Thereafter, the petitioners have been paying octroi under protest, A reference has also been made to the repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to be exempted from levy of octroi and the industrial salt which is intended to pay octroi. According to the learned counsel, there is no artificial or superficial distinction between the two items. Referring to the order of Government dated 26-11-1978 Annexure P-19, the learned counsel has submitted that effort of the Government is to make this distinction more explicit which has eventually resulted into passing of Act No. 7 of 1980. The learned Counsel has drawn my attention to the averments made by respondent No. 3 in its written statement in which it has been averred that from 1972 to 1979 the petitioner's have been shifting their stand by describing the imported articles some times salt and at other time industrial salt which difference would show that the salt and industrial salt are two different commodities and cannot be considered as one and the same product. He has further argued that the common edible salt has to be iodized particularly in the District of Ambala in Haryana of which Yamunanagar use to be a part. In the area of Yamunanagar salt without iodine is not treated as edible salt because of wide spread prevalence of Goitre. He has also referred to the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication issued on 30-5-1963 which provided that only that salt is exempted from octroi which was not being taxed before 1-4-1937. The relevant portion of the Octroi Schedule issued on 30-5-1963 reads as under :-- "No. 2784-CI(4C-i)-63/20355. --Whereas in supersession of the tax levied in this behalf, the Municipal Committee, Pathankot, in district Gurdaspur, in exercise of the powers conferred by Section 61 of the Punjab Municipal Act, 1911, has proposed to levy a tax on the entry of the goods into the Pathankot Municipality for consumption, use or sale therein, in the nature of octroi (without refunds). And whereas the proposals of the taxation aforesaid have been sanctioned by the Governor of Punjab under Sub-section (8) of Section 62 of the aforesaid Act : Now, therefore, in supersession of the tax, the imposition of which was notified with Punjab Government Notification No. 11209-C-52/11-466, dated the 3rd January, 1953, as subsequently amended from time to time, and in pursuance of the provisions of Sub-section (10) of Section 62 of the aforesaid Act, the Governor of Punjab is pleased to notify the imposition of the tax, in accordance with the Schedule as hereinafter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that iodized refined salt is cured of the ill effect of magnesium. Therefore, I do not feel persuaded to accept the view that, the common edible salt would be the same commodity as the industrial salt. It is well known that the industrial salt is uncrushed and unrefined salt which would be devoid of any iodine. 21. Even otherwise I am of the view that wide discretion has been conferred on the Legislature in choosing the subjects of tax and if the statute discloses a broad permissible policy of taxation the Courts are likely to uphold it because the Courts would lean more readily in favour of the presumption of constitutionality of a taxing statute, rather than presuming otherwise. These principles are well known and have been repeatedly reiterated by the Supreme Court. In two judgments delivered by Constitution Benches of the Supreme Court in the cases of East India Tobacco Co. v. State of Andhra Pradesh, AIR 1962 SC 1733 and State of Madhya Pradesh v. Bhopal Sugar Industries, AIR 1964 SC 1179 the above view has been taken. Another Constitution Bench in the case of Vivian Joseph Ferreira v. Municipal Corporation of Greater Bombay, AIR 1972 SC 845 reiterating the same principle, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be attacked on the ground of its being discriminatory, although due to fortuitous circumstances or a particular situation some included in a class or group may get some advantage over others, provided of course they are not sought out for special treatment ((1963) 3 SCR 809 : (AIR 1963 SC 591). Likewise, the mere fact that a tax falls more heavily on some in the same group or category is by itself not a ground for its invalidity, for then hardly any tax, for instance, sales tax and excise tax, can escape such a charge, (Twyford Tea Co. Ltd. v. State of Kerala, (1970) 3 SCR 383 : AIR 1970 SC 1133)." 22. Similar view has been taken by another Constitution Bench in Damthulluri Ramaraju v. State of Andhra Pradesh, AIR 1972 SC 828 and in Kerala Hotel and Restaurant Association v. State of Kerala (1990) 2 SCC 502 : (AIR 1990 SC 913). In Kerala Hotel and Restuarant Association case (supra) , it has been observed that in taxing statute, the test to determine its validity is that it should not be palpably arbitrary as the scope for classification permitted in taxation is far greater than any other area. The observations of their Lordships read as under :-- "The scope for classif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be within the competence of the Legislature imposing the same and secondly it should be for a public purpose. If the third requirement that it has not violated any of the fundamental rights enshrined in Chapter III of the Constitution is satisfied, the taxing statute cannot be declared as invalid as has been laid down in Vivian Joseph Ferrira 's case (AIR 1972 SC 845) (supra). 26. A perusal of Act No. 7 of 1980 shows that it has been made applicable to every industry in Yamunanagar and incidentally if the petitioner happens to be the only industry merely on that account, it would not lose its character of a class of industry for the purposes of determining the question of valid classification. The Supreme Court in Charanjit Lal Chaudhary v. Union of India, AIR 1951 SC 41 held that that even one corporation or a group of persons can be taken to be a class by itself for the purposes of legislation provided there is sufficient basis or reason for it. It has been observed that there can certainly be a law applying to one person or a group of persons and the same cannot be held to be unconstitutional if it is not discriminatory in character. After perusing the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reasons, it is just and appropriate that amount is retained by the State i.e. by the people. The doctrine of unjust enrichment is a just and solitary doctrine. The power of the Court is not meant to be exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State, for, the State represents the people of the country. No one can speak of the people being unjustly enriched." 28. The argument of the learned counsel based on the Minority view in M/s. Lohia Machines case (AIR 1985 SC 421) (supra) has to be rejected because it cannot be said that the minority judgment is law declared by the Supreme Court under Article 141 of the Constitution, Therefore, I am not inclined to examine the aforementioned argument of, the learned counsel in any serious detail. 29. The last argument that the imposition of octroi duty violates Articles 301 and 304 of the Constitution, it imposes unreasonable restriction under Article 19(1)(g) of the Constitution would not require any serious consideration in view of the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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