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TMI Blog1998 (5) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... icipalities, therefore, could validly impose octroi on the weight of liquid contents of the bottles and not on the weight of bottles which were mere containers as these bottles after taking out the liquid contained therein were being sent back in their empty state to the writ petitioner by the wholesalers for re-cycling and thus these bottles were not imported within the local limits of the Municipalities for consumption, use or sale therein. This contention of the writ petitioner was rejected by the Division Bench of the High Court relying on its earlier decision in the case of Prem Nath Monga Bottlers (p) Ltd. vs. Municipal Board, Meerut & Ors. in Civil Misc. Writ Petition No. 6883 of 1973 decided on 11.02.1980. We shall refer to the said judgment at the appropriate place in the latter part of the judgment . In the impugned common judgment, the division bench of the High Court held that even though the cold drinks were being imported for being sold within the municipal limits, the bottles in which they were carried and filled in could be said to have been used within the municipal limits, the bottles in which they were carried and filled in could be said to have been used within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks like Cococola, Fanta, Vimgo, Soda Water, Lemon etc. but they did not permit levying octroi on the weight of bottles which contained these soft drinks. As the respondent- Municipalities were seeking to levy octroi on the basis of gross weight not only of the beverages contained but also of the bottles containing the beverages which were brought within the municipal limits of the aforesaid Municipalities, the writ petitioner company filed three writ petitions in the High Court of judicature at Allahabad in the year 1983. The grievance made in the writ petition was that from 1980 onwards the respondent- Municipalities were illegally recovering octroi also on the weight of bottle-containers which they were not entitled to do and hence the respondent- Municipalities were required to be ordered to refund the requisite amount of octroi levied on the basis of the gross weight of bottles from 1980 onwards. During the pendency of the writ petitions in the High Court from 1983 till 1987, by interim orders, the respondent-Municipalities were restrained from recovering octroi on the gross weight of bottles meaning thereby the octroi duty was required to be confined only on the net weight of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ococola, Fanta, 2.25 per quintal Vimto, sodawater lemon etc. It is of course true that the notification regarding Municipality of moradabad was brought on record of this case at page no. 47 of the main paper-book but we may mention that similar notifications were issued by the Governor of uttar Pradesh concerning the other three Municipalities also. Learned counsel for the writ petitioner submitted that aforesaid entry at SI. No. 17 includes aerated water like cococola, fanta, vimto, sodawater, lemon etc. for which the rate of octroi prescribed is 2.25 per quintal. That this would show that no separate rate of octroi was sought to be levied on the bottles containing these beverages. Therefore, there could be no octroi imposed under the Act so far as the bottles or containers of these beverages were concerned. It was also submitted that the High Court in the impugned judgment had erroneously held that these bottles containing the beverages were being used within the municipal limits and were imported for that purpose. That they were brought within the municipal limits only as containers, as only beverages were sold and not the bottles within the municipal limits. In fact, two Munic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y not be returned by the consumers to the retailers or wholesalers for being re-sent to the writ petitioner for recycling. Therefore, for an indefinite period the bottles can also be said to have entered the municipal limits fro the purpose of use. Learned counsel for the respondent-Municipalities accordingly submitted that the view taken by the Division Bench of the High Court in the impugned judgment and also the view taken by the earlier Division Bench of the High Court in Civil Misc. Writ petition No. 6883 of 1973 cannot be said to be erroneous in any manner. They also invited our attention to some of the judgments of this Court and also one judgment of the Orissa High Court to which we shall make a reference hereafter. Learned counsel for the respondent-Municipalities further submitted that the writ petitioner never filed relevant statement of objections as required by the Act and that no details were furnished to the effect that the empty bottles were being re-exported after the contents thereof were taken out by the consumers. It was also contended that in substance the bottles could also be said to have been sold within the municipal limits as the full value of bottles was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the relevant provisions of the Act which held the field during the period from 1980 to 1987. Section 128 of the Act provides for taxes which may be imposed. Sub-section (1) clause (viii) thereof lays down that subject to any general rules or special orders of the State Government in this behalf, the taxes which a Board may impose in the whole or par of a Municipality can consist of octroi on goods or animals brought within the Municipality for consumption, use or sale therein. It is, therefore, obvious that before any octroi is levied on any commodity by the Municipality, it must be shown that the said commodity was brought within the municipal limits for consumption, use or sale therein. Section 134 of the Act deals with resolution of Board directing imposition of tax. Sub-section (1) thereof lays down that when the proposals have been sanctioned by the State Government, the State Government after taking into consideration the draft rules submitted by the Board, shall proceed forthwith to make under Section 296 such rules in respect of the tax as for the time being it considers necessary. Sub-section (2) of Section 134 provides that when the rules have been made, the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that if the packing or bardana by utilisation of which the consignments of goods liable to octroi entered the municipal limits the former would also as packing materials become liable to bear the burden of octroi duty and gross weight thereof would remain chargeable for octroi. However, despite the said Rule 4, it has to be considered whether the said the falls within the for corners of the charging provision of Section 128(1)(viii) . In the light of this main charging provision, it must be held that weight of bardana or packing which contains the consignments of octroiable beverages would remain liable to be included in the taxable gross weight of the consignment provided such baradana or packing which, even may be primary packing or secondary packing, is shown to be brought within the municipal limits for the purpose of its sale, consumption or use within the municipal limits. If such primary or secondary packing is not brought within the municipal limit for the purpose of consumption or sale or use thereof and is found to have been taken out of the municipal limits after its contents were discharged within the municipal limits, then the weight of such outgoing bardana or packing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company to a refund of tax and (c) for sale by it directly to consumers or to dealers who distributed the goods within the area to ultimate consumers. Considering the case of the appellant before this Court, Hidayatullah, J. made the pertinent observations in connection with the legal position concerning the imposition of octroi duty by the Municipality. Interpreting the word found in Entry 52 of the State List in the Constitution dealing with taxes on the entry of goods into a local area for consumption use or sale therein it was held as under:- " 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 the performed by someone in 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 exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said, decision, it becomes obvious that the word 'retention' is held to be synonym with the word 'repose', meaning thereby the article concerned must finally rest within the municipal limits. In the light of the aforesaid judgement of the Constitution Bench of this Court, therefore, it is obvious that before a Municipality can impose octroi duty on any commodity, it has to be shown that the commodity concerned was brought within the municipal limits for consumption that is for being totally used up so that it ceases to exist within the municipal limits themselves or it was to be used for an indefinite period within the municipal limits so that it ultimately rests within the municipal limits and does not go out subsequently, or the commodity concerned must be shown to have been brought within the municipal limits for the purpose of sale within the said limits. Having laid down the aforesaid legal position concerning the imposition of octroi in the penultimate paragraph of the Report at page 234, the Court observed that the Burmah Shell was liable to pay octroi tax on goods brought into local area (a) to be consumed by itself or sold by it to consumers direct and (b) for sale to deal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods brought within the Notified Area Committee of Faridabad were not brought for consumption or sale. It was argued, however, that the goods were brought into the Notified Area Committee for use, and on that account octroi was leviable. The expression "use" is not defined in the Act. In its ordinary meaning the word "use" as a noun, is the act of employing a thing; putting into action or service; employing for or applying to a given purpose. But the word "use" occurs in Entry 52 List II of the Seventh Schedule to the Constitution sandwiched between "consumption " and "sale" and it must take colour from the context in which it occurs. It is a settled rule of interpretation that when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take, as it were, their colour from each other, that is, the more general is restricted to a sense analogous to the less general: Maxwell on Interpretation of Statutes, 11th Edition, p.321. The coupling of three words "consumption", "use" and "sale" connotes that the underlying common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these bottles on which the disputed octroi duty was levied by the respondent-Municipalities were brought within the municipal limits for consumption or use. So far as the question of consumption is concerned, it does not present any difficulty as it is no one's case that the empty bottles, if in fact found to be taken out of the municipal limits can be said to be consumed or destroyed within the municipal limits. However, a further questions still would remain for investigation, namely, whether out of the total consignments of bottled beverages imported within the municipal limits, the entire consignments of the very bottles after getting emptied got re-exported or whether some of the said bottles forming part of the original consignments got destroyed by way of breakage etc. or were never returned by the consumers concerned and only rest of the imported bottles were re-exported by enabling the consumers and the retailers or wholesalers to get refund of the price of the bottles paid by way of advance security from the writ petitioner on return of these empty bottles for recycling. it is axiomatic that if the bottles in which beverages were brought within the municipal limits for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been brought within the municipal limits for use till the beverages contained therein were sold to the dealers and retailers for ultimate consumption by the consumers. The aforesaid reasoning of the Division Bench of the High Court cannot bear scrutiny for the simple reason that this Court in the Constitution Bench decision in Burmah Shell's case (supra) has clearly ruled that even though the use of the commodity brought within the municipal limits may not amount to its destruction or total using up, the commodity concerned while being brought in the municipal limits must have reposed within the municipal limits and was not taken out later on. If the writ petitioner's case on facts is found true, namely, that the bottles which contained beverages did not repose within the municipal limits in empty form after their contents were consumed by the consumers and were actually taken out of the municipal limits, it could not be said, as assumed by the High Court that the goods were used within the municipal limits. We must, therefore, hold that if the writ petitioner satisfies the authorities concerned that the bottles containing the original consignments after getting emptied within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the aforesaid decision is of no avail to the respondent-Municipalities as it is nobody's case that if empty bottles were actually taken out of the municipal limits after their contents were discharged within the municipal limits, they would get used up even partially only because they remained for some time within the municipal limits containing the beverages without having reposed therein. Learned counsel for the State of Uttar Pradesh placed reliance on the Dictionary meaning of the term 'repose' as found in Shorter Oxford Dictionary, Volume 2, 3rd Edition, p. 1799, wherein one of the meanings of the word 'repose' is mentioned as 'temporary rest or cessation from activity'. That may be the dictionary meaning but the term 'repose' in the context of octroi duty is treated by the Constitution Bench of this Court in Burmah Shell's case (supra) as a synonym for final resting of the commodity without being later on taken out of municipal limits. It must, therefore, be held that the commodity which is imported within the municipal limits must either be sold or consumed or used up completely or must be subjected to a continuous the without total exhaustion but in every case the commod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n so that the writ petitioner will not be found to be guilty of unjust enrichment by getting such refund. This question was also to be examined by the authorities before whom claim of refund is lodged. As held by the Constitution Bench of this Court in Mafatlal Industries Ltd. & Ors. vs. Union of India & Ors. [(1997) 5 SCC 536], the question of unjust enrichment pertaining to such refund claims has to be examined by the authorities concerned. Before parting with discussion on Point No.1, we may also mention that one decision of this court in Nagar Mahapalika, Meerut vs. Prem Nath Monga Bottlers pvt. Ltd. & Anr. [(1996) 8 SCC 1] was pressed in service by learned counsel for the writ petitioner. In our view that decision is of no avail to the writ petitioner on the facts of the present case. This Court in the said decision was concerned with the question whether the exemption of octroi granted to mineral water bottles would include aerated water bottles also. It was held that the mineral water bottles would include latter type of bottles also. Such is not the controversy before us. Point No.1 is answered accordingly. In the light of the decision on Point No.1 Point No.2 will natural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities concerned within the period of 12 weeks from today. The writ petitioner will have to support such claim for refund by producing relevant evidence on the following points: (a) Nature of the consignments concerned with their dates and the number of bottles packed with beverages brought within the municipal limits with their weight. b) Proof regarding the fact that these bottles were not sold within the municipal limits to wholesalers retailers or to any other person. c) Number of bottles covered by the concerned consignments which were subsequently taken out as empty bottles beyond the municipal limits for recycling and weight of such empty bottles; d) Whether the bottles which are actually found to have been taken out of the municipal limits were the very same bottles containing beverages brought within the municipal limits by way of relevant consignments; e) Whether the value of such bottles and amount of octroi duty on their weight was passed on to the consumers or not? When the relevant facts and figures are placed before the authorities supported by relevant documentary evidence and if the authorities concerned get satisfied about the same then only the question of r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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