TMI Blog2017 (9) TMI 1997X X X X Extracts X X X X X X X X Extracts X X X X ..... roleum products covered by Entry 22(a). In the Statement of objects and reasons appended to the impugned amendment, it is stated that natural gas was always implicitly included in Entry 22(a) as it is a part of the petroleum products. It further records that doubts were expressed whether natural gas and liquified gas were included in petroleum products. Therefore, an amendment is sought to be made though natural gas was already included and it is made retrospectively with effect from 1st April 1978 when the Municipal Corporation started levying octroi on natural gas or liquified gas products. The clear position of law is that every statute is presumed prima facie prospective unless expressly or by necessary implication it is given retrospective operation. But such presumption is not applicable to the declaratory or explanatory statues. Such statutes are made to supply an obvious omission or to clear up doubts as to the meaning of the provision or term or expression in the enactment. It is well settled that if the statute is curative or merely declaratory of the previous law, its retrospective operation is generally intended and is always open for the legislature to make enactmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IYAZ I. CHAGLA, JJ. Mr.Pradeep Sancheti, Senior Advocate with Mr.S.A.Balwal i/b. Vyas Balwal for the petitioner. M r.J. Reis, Senior Advocate with Mr.S.S.Pakale, Ms.Yamuna Parekh and Mr.Sagar Patil, Mr.A.A. Kumbhakoni, Advocate General with Mr.Akshay Shinde and Mr.Hemant Haryan, AGP for the respondent ACJUDGMENT (Per A.S.Oka, J.) The issue involved in this petition under Article 226 of the Constitution of India is concerned with the powers of the first respondent Municipal Corporation of Greater Bombay to levy octroi on natural gas imported by the petitioner Oil and Natural Gas Commission within the municipal limits of the first respondent. Under Section 192 of the Mumbai Municipal Corporation Act, 1988 (for short the said Act ), a power is conferred on the first respondent Municipal Corporation to levy octroi on the articles as specified in Schedule H to the said Act. We may note here that Section 139 of the said Act confers powers on the first respondent to impose four types of taxes which include octroi. At the material time, Entry 22(a) of Schedule H read thus: 22(a) Mineral Oils of all sorts, diesel oil, petrol, aviation spirit, all kinds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctroi was not payable on the natural gas. By a letter dated 13th May 1989, the Municipal Commissioner informed the Chairman of the petitioner that on the failure of the petitioner to pay the amount of octroi payable up to 31st December 1987 within fifteen days from the date of the receipt of the said letter, legal action would follow. The said letter also states that the demand for the further period i.e. from 1st January 1987 was being intimated to the petitioner. 2. During the pendency of this petition, the Maharashtra Ordinance No.II of 1993 was promulgated by the State Government by which various amendments were made to the said Act including the amendment to Schedule H and in particular to Entry 22(a). The said Ordinance was replaced by the Maharashtra Act No.XII of 1993. The amendment made by the Ordinance and the Maharashtra Act No.XII of 1993, clause(a) of Entry No.22 reads thus: 9. In Schedule H to the Bombay Corporation Act, (a). .. .. .. .. .. .. .. .. (b) in entry 22, in sub entry (a), for the words petroleum products the words petroleum products including natural gas and liquified petroleum gas shall be and shall be deemed to have been substit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made with retrospective effect. A submission made is that as the natural gas was never included in Entry 22(a), by purportedly passing a validating Act, the recovery of octroi on natural gas cannot be made with retrospective effect. 6. The second contention of the learned senior counsel appearing for the petitioner is based on Rule 25 of the Mumbai Municipal Corporation (levy) of Octroi Rules, 1965 (for short the Octroi Rules ). A submission is that even if the impugned Act and the impugned Ordinance are said to be valid, the recovery of octroi can be made only within a period of three months from the date of import of goods. Inviting our attention to the various demands which have been challenged by the petitioner, he submitted that the claim made for octroi only for a few days may be within the said period of three months and, therefore, the Municipal Corporation has no power to recover substantial part of their impugned demand for octroi. 7. The third submission was that at the relevant time, the petitioner was Oil and Natural Gas Commission under the Oil and Natural Gas Commission Act, 1959. The natural gas procured or produced by the petitioner will have to be treated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 56. He relied upon another decision of the Apex Court in the case of Commissioner of Income Tax, Bombay and others v. Podar Cement Pvt.Ltd. and others (1997) 5 SCC 482. He relied upon the said decision for pointing out that the principle stated in the well known commentary of Justice G.P.Singh titled as Principles of Statutory Interpretation has been accepted by the Apex Court. He submitted that there can be a clarificatory and declaratory amendment which could have retrospective effect. He submitted that in the present case, the amendment to Entry 22(a) is a clarificatory amendment which declares that the natural gas was always included in Entry 22(a) and, therefore, such an amendment could be retrospective. He invited our attention to the decision of the Constitution Bench of the Apex Court in the case of Association of Natural Gas and others v. Union of India and others (2004) 4 SCC 489. Inviting our attention to the said decision, he submitted that the Apex Court after due consideration of the scientific material placed before it came to the conclusion that the natural gas is a petroleum product and that the words petroleum or petroleum products have been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s two interpretations are possible, the one which is in favour of the petitioner assessee will have to be accepted by the Court. 13. We have given careful consideration to the submissions. We have already quoted Entry 22(a) of Schedule H as it existed prior to the impugned amendment. Before amendment, it included mineral oils of all sorts, diesel oil, petrol, aviation spirit, petroleum products, natural gasoline, paint solutions etc. Specific exclusion was made of kerosene and crude oil. Now, the first question for consideration is whether natural gas was covered by unamended Entry 22(a). On this aspect, the decision of the Apex Court in M/s.Indo International Industries (supra) will be relevant. Paragraph 4 of the said decision reads thus: 4. It is well settled that in interpreting items in statutes like the Excise Tax Acts or Sales Tax Acts, whose primary object is to raise revenue and for which purpose they classify diverse products, articles and substances resort should be had not to the scientific and technical meaning of the terms or expressions used but to their popular meaning, that is to say, the meaning attached to them by those dealing in them. If any term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce', 'systematic work or labour', 'habitual employment in the productive arts', 'manufacturing establishment', etc. But while construing a word which occurs in a statute or a statutory instrument in the absence of any definition in that very document it must be given the same meaning which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it . It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. Craies on Statute Law (Sixth Edn.) says thus at page 164: In construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts. It would be a II new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purpose of that Act alone. (Macbeth v. Chislett 1910 AC 220 223). 5. When the word to be con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which deals with regulation and development of oilfields, mineral oil resources, petroleum, petroleum products, other liquids and substances declared by Parliament by law to be dangerously inflammable. The submission of the Government of India before the Apex Court was that the term petroleum or petroleum products includes natural gas. The Apex Court thereafter proceeded to make a reference to scientific and other material placed on record regarding the concept of natural gas. In paragraphs 35 and 37 the Apex Court held thus: 35. All the materials produced before us would only show that the natural gas is a petroleum product . It is also important to note that in various legislations covering the field of petroleum and petroleum products, either the word 'petroleum' or 'petroleum products' has been defined in an inclusive way, so as to include natural gas. In Encyclopaedia Britannica, 15 th Edn. Vol. 19, page 589 (1990), it is stated that liquid and gaseous hydrocarbons are so intimately associated in nature that it has become customary to shorten the expression 'petroleum and natural gas' to 'petroleum' when referring to both. The word p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amendment is sought to be made though natural gas was already included and it is made retrospectively with effect from 1st April 1978 when the Municipal Corporation started levying octroi on natural gas or liquified gas products. In Podar Cement Pvt.Ltd. and others (supra) on which reliance is placed by the learned Advocate General, the Apex Court dealt with the law regarding declaratory statutes. In paragraph 51 of the said judgment, the Apex Court quoted with approval an opinion expressed by Justice G.P.Singh in his well known commentary on Principles of Statutory Interpretation . Paragraph 51 of the said decision reads thus: 51. In Justice G.P. Singh's 'Principles of Statutory Interpretation' (Sixth Edn. 1996) under the heading Declaratory Statutes , the learned author has summed up as follows : Declaratory statutes. The presumption against retrospective operation is not applicable to declaratory statutes. As stated in CRAIES and approved by the Supreme Court : For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any statute. Such Acts are usually held to be ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. A declaratory Act as defined by Justice G.P.Singh is to remove doubts existing as to the common law or the meaning or effect of any statute. The language shall be deemed always to have meant is declaratory, and is in plain terms retrospective. In the present case, the impugned amendment on its plain reading is clarificatory in nature which is expressly given retrospective effect. Therefore, making of such a legislation is certainly within the four corners of legislative competence of the State Legislature. There is one more aspect which is relevant. In this case, we are dealing with a taxing statute. Law is very well settled that in case of a taxing statute, the powers of the legislature are different in the sense that more latitude is available to the legislature in the matter of fiscal statutes. 18. As we have found that natural gas or liquified petroleum gas were always part of petroleum or petroleum products in Entry 22(a), what is sought to be done by the impugned amendment is to declare and clarify that the natural gas and liquified petroleum gas were always included in the term petroleum or petroleum products used in Entry 22(a). Therefore, we do not see any unco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax as the case may be and the Commissioner or at his instance the agents referred to him may refuse to pass any article belonging to such person until the said amount of octroi or deficiency is paid. 21. Rule 25 is applicable when the importer after following the procedure of the said Rules either fails to pay octroi or the octroi paid is short or when such octroi after having been paid has been erroneously refunded due to inadvertence, error, collusion etc. In such cases, Rule 25 provides that the person primarily liable to pay such tax or difference of tax shall pay the amount of tax or deficiency on receipt of a demand issued within three months of the date of the import or payment of tax as the case may be. The present case is of complete evasion of payment of octroi. It is not the case of the petitioner that the petitioner followed procedure of filling in forms and claiming that octroi was not leviable on natural gas. There is no provision under the said Act which provides for a period of limitation or outer limit within which octroi could be levied or collected from the date of its import. Rule 25 is merely an enabling provision which enables the Municipal Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed under sub section (1) of Section 194 by producing a certificate of an officer empowered by the Government concerned in this behalf stating that the article at the time of importation is a property of the Government. Such certificate has to be produced at the time of importation of the goods. This procedure is admittedly not followed in this case. Hence, the petitioner is disentitled to claim exemption. 23. Reliance is placed by the learned senior counsel appearing for the petitioner on the provisions of the Oil and Natural Gas Commission Act, 1959. Section 14 thereof empowers the Commission to plan, promote, organise and implement progammes for the development of petroleum resources and the production and sale of petroleum and petroleum products produced by it. In fact, Section 17 thereof makes it very clear that all the properties acquired by the Commission vest in the Commission. There is no provision in the said Act which provides that the natural gas procured or produced by the petitioner will be the property of the Government. 24. Thus, the challenge must fail on all grounds agitated by the petitioner 25. The learned senior counsel appearing for the Municipal C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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