TMI Blog2005 (2) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... mits of the Municipal Corporation of Greater Mumbai against the payment of octroi duty. 2.At the material time between 1989 and 1992 to which this dispute relates Entry 18 of Schedule H to the Mumbai Municipal Corporation Act, 1888 prescribed the following classification of octroiable goods : Potash, ritha, soda, alum, saline, 18. substances, shikakai, washing soda, caustic soda, refined saltpetre, phnyle and other substances used in washing clothes, floor and utensils. (emphasis supplied). Entry 18, it may be noted, was a part of Class III which was tilted as Articles used for fuel, lighting, washing and industrial use . The first part of Entry 18 refers to certain specified substances while the latter part refers to other substances used in washing clothes, floors and utensils. The position of the Petitioner was that Entry 18 comprehends only those articles which are directly used in washing clothes, floors and utensils and that Sulphonic Acid which is a raw material which is subjected to a further process of manufacture does not fall for classification thereunder. According to the Petitioner, Sulphonic Acid is toxic and cannot be directly used for washing clothes, floo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, it may be noted, was amended on 2nd February, 1993 so as to incorporate a residuary entry, Entry 62 which provides for the levy of octroi on all articles other than those specified in the preceding entries of the schedule (Schedule H) and in Schedule H-1. On 13th September, 1996, the Petitioner addressed a representation to the Joint Municipal Commissioner contending that prior to 2nd February, 1993 it was not liable to any octroi on Sulphonic Acid and that after the aforesaid date when the residuary entry came to be inserted it would be liable to the levy of octroi at the rate of 2% ad valorem which was the rate applicable under the residuary entry. The representation drew the attention of the authority to the circumstance that the decision of this Court in a similar matter involving Godrej Soaps Ltd. had been confirmed by the Supreme Court. Consequently, a refund of octroi duty paid at the rate of 4% for the period 9th September, 1989 to 1st February, 1993 and in excess of 2% for the period 2nd February, 1993 to 26th March, 1994 was sought. 5.On 20 th February, 1998, the Deputy Assessor and Collector wrote to the Petitioner stating that the Additional Municipal Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The Petitioner has restricted its claim between 9th September, 1989 and 10th December, 1992. 7.In the affidavit in reply which has been filed by the Municipal Corporation at the hearing and final disposal of the Petition, it has been submitted that the classification of Sulphonic Acid under Entry 18 was not challenged by the Petitioner and that therefore the Petition for the refund of octroi duty is not maintainable. It has been then asserted that the dispute before the Supreme Court in Godrej Soaps related to the classification of Alpha Olefin and Alpha Olefin Sulphonate, whereas the present Petition relates to the classification of Sulphonic Acid. Next, it has been averred that octroi is an indirect tax, the burden whereof is passed on to the actual user or consumer and therefore, the Petitioner would not be entitled to a refund on the ground of unjust enrichment. Finally, it has been submitted that the article was classified under residuary Entry 62 by the Corporation since the earlier interpretation of Entry 18 by the Corporation was incorrect. However, the article was also capable of being classified under Entry 54-A as a petroleum product and that the classification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2nd February, 1993 when the residuary entry was inserted in Schedule H octroi duty in excess of 2% which was the applicable rate has been refunded. Therefore, the Corporation has accepted the position of the Petitioner that the article was not exigible to octroi duty under Entry 18. There is hence no merit in the submission of the Municipal Corporation. There is also absolutely no merit in the contention which is baldly urged in the affidavit in reply that the article would be classifiable as a petroleum product. Neither has this contention been raised before the filing of the affidavit nor for that matter is there any material to sustain the said contention. No such contention was similarly raised before the Division Bench in Godrej Soaps. 9.In so far as the question of refund is concerned, there is merit in the contention of the Petitioner that the Corporation would be liable to refund octroi which has been collected without the authority of law. That is the plain consequence of the provisions of Article 265 of the Constitution. Counsel appearing on behalf of the Corporation adverts to Rule 26 of the Octroi Rules of 1965 under which it has been provided that when octroi has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not grant relief but that is not an inflexible rule. It depends upon the facts of each case. 10.In a subsequent decision in HMM Limited v. Administrator, Bangalore City Corporation [1997 (91) E.L.T. 27 (S.C.) = (1989) 4 SCC 640)] octroi duty had been charged on the importation of Horlicks powder within the limits of the Bangalore Municipal Corporation where the actual activity which was performed within the municipal limits was breaking bulk consignments from drums into bottles for the purpose of exportation. The Supreme Court held that mere physical entry into city limits would not attract the levy of octroi unless goods were brought in for use or consumption or sale. The Single Judge of the High Court had allowed a refund of octroi for a period commencing from three years prior to the filing of the writ petition. The Division Bench of the High Court on appeal set aside that order. While setting aside the order of the Division Bench, the Supreme Court held that realization of Tax or money without the authority of law is in violation of Article 265 of the Constitution and the collection of octroi on goods which were not meant for consumption or sale within the municipal limits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns the export. Compliance with the procedure prescribed in the Rules for filing claims of refunds are not conditions precedent for the right or eligibility for refund or the liability to refund but are provisions regarding proof of export of the goods imported and are not meant to be exhaustive either. They are to be interpreted and understood in that sense. The object of the Rules fixing a period of limitation for export however is different. The export cannot be put in perpetual doubt and the goods may be considered to have come to a repose if they were not exported within a particular period provided in the rules. 11.These decisions are in my view an answer both to the question of limitation as well as to the question of unjust enrichment that has been set up by the Municipal Corporation. In so far as the question of limitation is concerned, as the Supreme Court has held in Salonah Tea (supra) in a case under Article 226 of the Constitution, the Court has to scrutinize whether there have been any avoidable laches on the part of the petitioner of a nature that would lead to an inference of the abandonment of the claim or whether there is delay for which there is an absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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