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TMI Blog1989 (10) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... on "Horlicks" milkfood powder brought into the municipal limits in bulk containers (large steel drums) for being packed at the packing station in Bangalore in Unit containers (glass bottles) and thereafter exported outside the municipal limits. In respect of the quantity of the goods which were exported outside the municipal limits after being bottled, the petitioners sought refund of the octroi duty as there was no use or consumption or sale of the said milkfood within the municipal limits. The respondent corporation rejected the claim on the ground that R. 24 of the Bye-law 45 framed by the Municipal Corporation had not been complied with and as such refund could not be given. The petitioners again sought on 4th February, 1978 refund of octroi duty for the period 1974-75 to December, 1977 amounting to Rupees 13,39,652.92 enclosing computation of the duty collected for the aforesaid period. Again, the refund was refused by the respondents in March, 1978. Petitioners there-after filed writ petition in the High Court of Karnataka challenging the levy retention of octroi duty on "Horlicks" exported out of the municipal limits and seeking refund thereof. From 1st April, 1979, levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt. 26. Any person who has been exempted under bye-law No. 10 from production of goods at the Central Octroi Office on import shall, subject to the same conditions, be exempted from the production of goods to be exported. 27. The Octroi Superintendent of the Central Octroi Office on being satisfied as to the identity of the goods produced with those for which the receipt has been granted or the validity of the claim shall fill up Columns 11 to 15 and also the coupon and handover the form to the exporter." 4. There is no dispute that on the entire quantity of the goods brought within the municipal limits, octroi was collected from the petitioner. It claimed for refund only in respect of those quantities which were rebottled and exported from the city to outside places. This was refused. The contention of the petitioners was that only that portion of the goods which was imported in drums and was rebottled in bottles and exported outside the city was not liable to duty of octroi. It was contended before the learned single Judge that portion of the goods was not dutiable to octroi as these did not fall within the term "sale, consumption or use" within the local area of the city ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch was whether the Corporation was liable to refund that part of the amount of octroi duty paid by the petitioners on the quantity of the Horlicks powder imported into the city of Bangalore on the petitioners' informing the Corporation that they had despatched that part of the same from time to time by filling the same in bottles to places outside the city of Bangalore even though petitioners had not followed the procedure prescribed in Rules 24 and 25 of Bye-law No. 45 framed by the Corporation and even though they had not even informed of such despatches as and when these were made ? 6. Item 17 of the notification dated 4th March, 1975, as mentioned before, so long as it continued, was as follows : "17. Confectionary, biscuits, toffee, chocolates food essence, food coloured, aerated water and soft drinks, food drinks other than milk in condensed form bottled or canned arecanuts both scented or plain. 2% 0.06 ps. ad valorem 10 kg." 7. The Division Bench noted that in terms of the aforesaid levy, the petitioners were paying octroi on the basis of the total quantity of Horlicks imported into the city of Bangalore. Then a letter was addressed on the 8th Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of octroi. On this aspect, the Division Bench agreed with the learned single Judge. So far as the second contention raised by the Corporation was concerned, the Division Bench noted that the relevant provision of the rules was not considered. We have set out hereinbefore the said rules. In the Schedule there is a form for refund. The contention of the petitioners was that Rule 24 did not apply. Rule 24, as we have noticed hereinbefore, provided that in respect of articles on which octroi has been paid and which are `subsequently exported beyond the octroi limits without breaking bulk', refunds shall be subject to the rules indicated therein. So, according to the petitioners, after opening or breaking open the drums and putting the powder in the bottles, as in this case amount to breaking bulk, and as such, there was no scope of applying for refund under Rule 24. But the Corporation contended that it was not so. The Division Bench, however, accepted the contention of the Corporation. It is indubitably true that the petitioners had not claimed the refund in accordance with the law because according to the petitioners the said rules would have no application as the bulk was broken. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge how much octroi will be refundable on account which has been paid by the petitioners. The only ground on which the Division Bench had resisted the refund was that the petitioners did not apply in accordance with the procedure envisaged by Rules 24 and 25 of the aforesaid Bye-laws. Mr. Krishnamurthi Iyer, learned counsel for the respondent, contended that the High Court was right in the view it took on the construction of Rules 24, 25 and 26. We are unable to agree with this submission. As we have indicated before, "without breaking bulk" is not an expression of art, nor is it an expression defined in the Act or the rules. It has, therefore, to be construed in its literal and ordinary sense to the extent possible, and construed as it is, in our opinion, transferring the product from the drums by breaking seal of the drums to bottles, cannot be said to be "without breaking bulk". "Breaking bulk" is an expression not unknown to legal terminology especially in England. In the Cyclopedic Law Dictionary, 3rd Edn., "breaking bulk' has been stated to mean that for a bailee to open a box or packaging entrusted to his custody and fraudulently appropriate its contents. In Stroud's Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Shri Ganesh drew our attention to a decision of this Court in Kirpal Singh Duggal v. Municipal Board, Ghaziabad (1968) 3 SCR 551. There, the appellant had transported, between August 1953 and March 1955, certain materials in execution of a contract to supply goods for use by the Government of India. The respondent Municipality collected toll while the appellant's trucks were passing through the toll barrier. The appellant, in that case, obtained in June, 1955, a certificate from the authority concerned that the goods transported were "meant for Government work and had become the property of the Government". The appellant then applied to the Municipality for refund of the amount paid pursuant to the exemption granted by the Government of India under the U.P. Municipalities Act, 1916. The respondent declined to refund the amount. In an action against the respondent, the trial court decreed the claim. The High Court affirmed the order of the Civil Judge. Both the Civil Judge and the High Court took the view that by the rules framed under the Act an application for refund within six months from the date of actual payment is a condition precedent for refund of the toll. The pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been realised as octroi on the entry of the goods on which octroi was not leviable because these were not for use or consumption within the municipal limits. Mere, physical entry into the city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale. In this case, putting the powder from the drums to the bottles for the purpose of exporting or taking these out of the city is neither use nor consumption of the Horlicks powder attracting the levy of octroi. Such amounts, therefore, cannot be retained by the respondent-Corporation. There is no dispute as to the quantum in view of the fact that the amount has now been found to be certified to be credited pursuant to the direction of the learned single Judge of the High Court. We see no ground as to why amount should not be refunded. Realisation of tax or money without the authority of law is bad under Article 265 of the Constitution. Octroi cannot be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits. So these amounts become collection without the authority of law. The respondent is a statutory authority in the present case. It has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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