Bombay High Court
Jet Airways (India) Ltd. A Public vs Municipal Corporation Of Gr.Mumbai on 29 March, 2012
Author: S. A. Bobde
Bench: S. A. Bobde, R. D. Dhanuka
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oswp-208-01 & 2238-08.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 208 OF 2001
1. Jet Airways (India) Ltd. A Public )
Limited Company incorporated under)
the Companies Act, 1956 and having )
its registered office at 41/42, Maker )
Chambers-III, Nariman Point, )
Mumbai - 400 021. )
2. Mr. Saroj K. Datta, Indian Inhabitant,)
having his office address at )
Jet-Airways (India) Ltd., S.M.Centre, )
Andheri - Kurla Road, Andheri(E), )
Mumbai - 400 059. ) .. Petitioners
Versus
1. Municipal Corporation of Gr.Mumbai)
a Statutory Corporation formed under)
the Mumbai Municipal Corporation )
Act, 1888 and having its office at )
Mahanagar Palika Marg, Fort, )
Mumbai - 400 001. )
2. Joint Municipal Commissioner )
(Improvements), Municipal )
Corporation of Greater Mumbai, )
having his offie at Municipal Head )
Office, Main Building, Ground Floor )
Mahapalika Marg, Fort,Nynbau- 01 )
Mumbai - 400 001 )
3. The Assessor and Collector, )
Municipal Corporation of Greater )
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Mumbai, having his office at )
Municipal Head Office, Main )
Building, Ground Floor, Mahapalika )
Marg, Fort, Mumbai - 400 001 )
4. The State of Maharashtra ) .. Respondents
WITH
WRIT PETITION NO. 2238 OF 2008
1. Reliance Commercial Dealers Ltd. )
a Company incorporated under the )
Companies Act, 1956, having its )
Registered Office at Ground Floor )
Sri Ram Mills Premises, Ganpat Rao )
Kadam Marg, Worli, Mumbai 400013)
2. Mr. K. R. Raja, Son of )
Mr. Ramchandaran of Mumbai, )
Indian Inhabitant, Shareholder of )
Petitioner No.1 abovenamed, )
residing 1703, At Raheja Classique, )
Bldg. No. 1, New Link Road, )
Oshiwara, Andheri (W), )
Mumbai - 400 053 ) .. Petitioners
Versus
1. Municipal Corporation of Greater )
Mumbai, A & Cs. Vigilance Cell )
(Octori), Mahapalika Marg, )
Mumbai - 400 001 )
2. Joint Municipal Commissioner )
(Improvements), A & Cs Vigilance )
Cell (Octroi), Mahapalika Marg, )
Mumbai - 400 001. )
3. Deputy Assessor & Collector, )
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Municipal Corporation of Greater )
Mumbai, Mahapalika Marg, )
Mumbai - 400 001 ) .. Respondents
Mr. T. R. Andhyarujina, Sr. Advocate a/w Mr.E.P. Bharucha, Sr. Advocate
a/w Dr. Birendra Saraf & Sarosh Bharucha, Ms. Vishakha Vaswani i/by
M/s. V.V. Juris for petitioners in WP No. 208 of 2001.
Mr. Janak Dwarkadas, Senior Advocate a/w Mr. Chirag Bulsara & Ms.
Melanie D'Souza i/by M/s. A.S. Dayal & Associate for petitioners in WP
No. 2238 of 2008.
Mr. Jimmy Poochkhanwalla, Senior Advocate a/w Ms. Vidya Gharpure &
Ms. Komal Punjabi for respondents- BMC in both the matters.
Ms. Madhubala Kazale, AGP for respondent no.4- State in WP No.208/01.
CORAM: S. A. BOBDE &
R. D. DHANUKA, JJ.
RESERVED ON : FEBRUARY 02, 2012
PRONOUNCED ON : MARCH 29, 2012
JUDGMENT:{Per S. A. Bobde, J.)
1. These two writ petitions raise a common question of law i.e. whether the aircrafts belonging to the petitioners have been imported within the municipal limits of the City of Mumbai for use, sale or consumption within the meaning of Section 192 of the Municipal Corporation Act?
::: Downloaded on - 09/06/2013 18:22:17 ::: 4oswp-208-01 & 2238-08.doc W.P. No. 208 of 2001 by Jet Airways.
2. During the period from 1998 to 2000, the petitioner acquired about 19 aircrafts from Toulouse in France and Seattle in USA and flew them into Mumbai. The aircrafts were parked at the Mumbai Airport till the petitioners obtained a permanent registration. Thereafter the aircrafts were flown out of the municipal limits of Mumbai from the Airport at Mumbai according to the schedule permitted by the DGCA for operating the airlines.
3. The petitioner no.1 is a company which operates an airlines known as Jet Airways. It is registered as a Scheduled air transport service under the Aircrafts Act, 1934 and Rules, 1937 and carries passengers by air from one point to another in India, like all airlines do. Rule 3(49) defines Scheduled air transport service as follows:
"3. Definitions and Interpretation.- In these rules, unless there is anything repugnant in the subject or context -
(1) to (48) .......
(49) "Scheduled air transport service" means an air transport ::: Downloaded on - 09/06/2013 18:22:18 ::: 5 oswp-208-01 & 2238-08.doc service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, each flight being open to use by members of the public;"
The petitioners book passengers for travel from one point to another according to the schedule and fly them to their destination by aircrafts. At the destination, the aircrafts are refueled and another set of passengers is taken on for being flown to their destination at other points. The points between which the travel takes place are always different towns or cities and both points are never within the same Municipal limits. The aircrafts thus fly from point to point in the country according to the schedule laid down and approved by the DGCA. While on the ground, between two flights, apart from disembarkation and embarkations of passengers, the aircrafts are serviced and fueled for the next flight. Thus after their import into municipal limits of Mumbai, the aircrafts were exported after servicing, fueling and taking passengers.
4. The Respondent Municipal Corporation sent a notice dated ::: Downloaded on - 09/06/2013 18:22:18 ::: 6 oswp-208-01 & 2238-08.doc 17/7/2000 calling upon the Petitioner to pay Octroi in respect of 19 aircrafts which according to the Corporation had entered the Municipal limits for the purpose of use or consumption and claimed that octroi was payable on the aircrafts, in fact, by the petitioners after 22nd July, 1998.
The notice alleged that failing payment, action would be initiated under the Octroi Rules, including stoppage of import of such articles within the municipal limits.
5. The Petitioner replied to the said notice on 14th August, 2000 and denied that the aircrafts had entered the limits for the purpose of use or consumption. According to the Petitioner the aircrafts were used for transporting passengers by air from a point within Mumbai to a point outside the municipal limits of Mumbai. The use of the aircrafts was the transport of passengers by flight and there was no use to which the aircraft were put within the Municipal limits. The petitioner prayed for a personal hearing which was granted on 4th December, 2000 and 8th January, 2001.
6. It is common ground and undisputed that none of the aircrafts in question in all the petitions, whether of Jet Airways or Reliance, are used for flying within the municipal limits of the City of Mumbai.
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7. After hearing the Petitioners the Dy. Municipal Commissioner passed the impugned order dated 19th January, 2001 and confirmed the demand. According to the Corporation the 'usual station' of the aircrafts, was specified by the Petitioners as Mumbai and that the aircrafts were 'used' in Mumbai because they were loaded with passengers, fueled and serviced at the Mumbai airport before they flew out. According to the Corporation an aircraft is used even when passengers embark and disembark and the aircraft is serviced and fueled on the ground before flying out. This, in substance, is the reason why the aircrafts can be said to have entered the Municipal limits for use; strangely, also for consumption.
We are constrained to observe that the claim of the corporation that the aircrafts are consumed in Mumbai is a rather fanciful and untenable claim and we reject the same. In the result the Corporation confirmed the demand and called upon the petitioners to pay a sum of Rs. 28,98,92,554/- as octroi duty on the 19 aircrafts flown in by the petitioners. Eventually, the respondent Corporation has passed an assessment order and claimed an octroi of Rs. 38 Crores by estimating the value of the aircrafts to be Rs.3,880 Crores at the rate of 1% ad valorem on 200 Crore per aircraft, under entry 60 of Schedule H of the Act. No hearing was granted before passing the assessment order.
::: Downloaded on - 09/06/2013 18:22:18 ::: 8oswp-208-01 & 2238-08.doc W.P. No. 2238 of 2008 by Reliance Commercial Dealers:
8. The petitioner no.1 - Reliance Commercial Dealers is a company, which has imported two aircrafts, one is a Falcon 900 Ex Aircraft registered as VT-AKU meant for carrying the officers of the company or guests as passengers from point to point within the country to various locations for business or work. The other aircraft A319-115 registered as VT-IAH is the Airbus which is also used for the same purpose. The petitioner no.1 has been granted a Certificate of Registration dated 18th January, 2008 and 1st November, 2007 in respect of the two aircrafts. Both the aircrafts were imported at New Delhi. They are registered at New Delhi with the Director General of Central Aviation. Reliance Commercial Dealers Limited is a Non-Scheduled Air Transport (Passenger) Service under the provisions of the Aircraft Act, 1934 and the Aircraft Rules, 1937 which, in brief, means that they do not fly their aircrafts according to the fixed schedule like airlines do, but fly them out as occasion demands. Both the aircrafts regularly fly in and out of Mumbai.
9. The petitioner-Reliance Commercial Dealers Ltd. received a ::: Downloaded on - 09/06/2013 18:22:18 ::: 9 oswp-208-01 & 2238-08.doc notice dated 20.08.2008 from the respondent no.3-Municipal Corporation alleging that the octroi duty is liable to be paid in respect of the import of the aircrafts under section 192 (1) of the Mumbai Municipal Corporation Act. The petitioners replied claiming that there was no import of goods for consumption, use and sale within the Municipal limits of Mumbai.
Without prejudice, the petitioners submitted a document demanded by the Corporation. The petitioners have, thereupon approached this Court by this petition, challenging the aforesaid notice.
10. At the outset, Mr. Andhyarujina for the petitioners accepted that if the aircrafts are used for flying within the municipal limits of the City of Mumbai, the petitioner would be liable to pay octroi on the import of such aircrafts within the municipal limits of Mumbai.
11. The entry or import of the aircrafts within Mumbai is not disputed. The only question is whether the petitioners have imported the aircrafts into the city limits of Mumbai for consumption, use or sale therein within the meaning of Section 192 of the City of Mumbai Act read with Schedule - H. From amongst the three terms employed in the said provision i.e. consumption, use or sale, it is obvious that there is no ::: Downloaded on - 09/06/2013 18:22:18 ::: 10 oswp-208-01 & 2238-08.doc element of sale of the aircrafts. Though stated in the order of the Corporation, we have not been able to discern any consumption of the aircrafts. Thus the question narrows down to whether the aircrafts have been imported into the city limits of Brihan Mumbai for use therein.
Section 192 (1) levies octroi on articles specified in Schedule - H on their entry within Brihan Mumbai as follows:-
192. Octroi on what articles and at what rates leviable.
(1) Except as hereinafter provided, a tax, at rates not exceeding those respectively specified in Schedule H, shall be levied in respect of the several articles mentioned in the said Schedule, or so many of them or such of them as the Corporation shall from year to year in accordance with section 128 determine, on the entry of the said articles into Brihan Mumbai for consumption, use or sale therein. The said tax shall be called an "octroi".
Schedule - H specifies articles liable to payment of octroi contains entry 60 in Group - D which reads as follows:-
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Articles Liable to Payment of Octroi
Sr.No. Articles Maximum rates of octroi leviable
Group D 1 per cent ad valorem
55. .....
56. .....
57. .....
58. .....
59. .....
60. Aeroplanes of all kinds including
helicopters, components, parts and
accessories of any of them.
12. Mr. Tehmton Andhyarujina, the learned counsel for the Petitioners contended that when a scheduled operator like the Petitioner flies aircrafts into Mumbai they are done so only for offloading passengers and their luggage and then taking fresh passengers aboard along with their luggage. On the ground the aircrafts also take on food and beverages and other necessities. They are fueled and serviced for the next flight. None of this ,according to the Petitioners constitutes use of an aircraft. The sole use of a passenger aircraft according to the learned counsel is the transportation by air , of passengers, from one location to another according to a schedule and an aircraft cannot be said to be used when it is parked on the ground ::: Downloaded on - 09/06/2013 18:22:18 ::: 12 oswp-208-01 & 2238-08.doc for the purpose of disembarkation and embarkation of passengers along with their luggage, or for servicing maintenance and fueling. It was submitted that the certificate of registration of an aircraft mentions "a usual station" for every aircraft. This is a requirement of the Aircraft Rules 1937 framed under the Aircraft Act 1934 vide Rule 30 (1). It appears from Rule 30(4) that where the usual station of an aircraft is not in India, the Central Government may refuse to grant registration in India or continue a registration already granted.
ig The learned counsel further contended that if the mere landing of the aircraft at Mumbai and its parking for the purpose of disembarkation, embarkation of passengers and its fueling, servicing etc. constitutes `use', then every air transport operator, Indian and international, whose aircrafts landed in Mumbai in the course of a flight schedule would be liable to pay octroi which the Corporation has never demanded.
13. It was also contended by Mr. Andhyarujina that in any case the articles in question i.e. the aircrafts are not meant for being located within Mumbai and there is no repose within the municipal limits and, therefore, no octroi is payable on an aircraft which is transiting through municipal limits.::: Downloaded on - 09/06/2013 18:22:18 ::: 13
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14. According to the respondent-Corporation, octroi is payable by the petitioners on the entry of their aircrafts into the municipal limits because the entry in question is the first entry of the aircrafts into Mumbai.
Further, though it is not disputed that the aircrafts entered Mumbai for the purpose of later flying away, they were used in Mumbai after landing and that attracts octroi. This fueling and loading constitutes "use" of the aircrafts within the municipal limits of Mumbai. It was further contended on behalf of the Corporation that the petitioners were liable to pay octroi on the entry of the aircrafts by virtue of Section 192 of the MMC Act notwithstanding that they may claim refund upon its exit from the municipal limits. The learned counsel for the Corporation submitted that the aircrafts entered Mumbai for the first time after their acquisition by the petitioners for the purpose of fueling and loading cargo and passengers before flying away. According to the Corporation, octroi is not payable on any subsequent entry after the first, because Section 194A of the MMC Act exempts articles imported for the purpose of immediate exportation.
15. The flight of aircrafts within the country and hence their use, is determined by the Aircraft Act, 1934 and the Aircraft Rules, 1937 framed thereunder. It is not disputed that octroi is being charged for entry within ::: Downloaded on - 09/06/2013 18:22:18 ::: 14 oswp-208-01 & 2238-08.doc the municipal limits for use therein i.e within the said limits It is, therefore, important to see whether aircrafts which are registered in India and are meant for flying throughout the country , as distinct from local flying club aircrafts which fly within the municipal limits, can be said to be enter the municipal limits of a City for use therein.
16. It is not disputed that all the aircrafts in question are registered in India and are permitted to and meant to fly throughout the country and abroad. The flights or the movement of such aircrafts have to be in accordance with the schedule fixed and approved for the petitioner Jet Airways, which runs a Scheduled air transport service as defined in Rule 3 (49) and regulated by Rule 134. The flights of the aircrafts of Reliance Commercial Dealer which runs a non scheduled Air Transport (Passenger) Service are not according to such a schedule. Unlike motor vehicles, all aircrafts are registered in India for the whole of the country by the Central Government vide Part IV of the Aircraft Rules. Only aircrafts which have a usual station within the country are normally registered and if the usual station has changed to outside the country the Indian registration is liable to be cancelled vide Rule 30 (1) and (4). The specification of a usual station does not seem to have any other significance and does not denote a ::: Downloaded on - 09/06/2013 18:22:18 ::: 15 oswp-208-01 & 2238-08.doc permanent location of such crafts which are registered in India for flying throughout the country. Though referred to in the impugned order, Mr. Pochkhanawala fairly accepted that the usual station of an aircraft does not have much significance in determining whether an aircraft has entered municipal limits for use therein i.e. for the purpose of determining liability of octroi.
17. Section 192 of the BMC Act which, read with Schedule H, provides for the levy of Octroi clearly contemplates that the taxable event is the entry of an aircraft within the Municipal limits of the city of Brihan Mumbai for sale, use or consumption therein. The entry (of the aircrafts), in the present case, must thus be shown to be for sale, use or consumption within the municipal limits of Mumbai. As observed earlier, no case is made out by the respondents for sale or consumption. Therefore, the first question that arises is : what is `use' of an aircraft? It will not do to ask :
to what use an aircraft can be put or what can be done to it. For indeed many things can be done to an aircraft such as painting, cleaning, repairing, fueling, loading and unloading. But this can hardly be said to be the use of an aircraft which is meant to fly.::: Downloaded on - 09/06/2013 18:22:18 ::: 16
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18. The levy under Section 192 quoted hereinabove is on "the entry of the said articles into Brihan Mumbai for consumption, use or sale therein". It is therefore a levy of the tax contemplated by Entry 52, List II, Seventh Schedule of the Constitution, which reads as under:
"52. Taxes on the entry of goods into a local area for consumption, use or sale therein."
Prior to the Constitution, the Government of India Act, 1935, contained the following Entry in the Provincial List:
"49. Cesses on the entry of goods into a local area for consumption, use or sale."
19. In our view, it is obvious that mere entry of goods is not enough to attract the octroi; the entry must be for the purpose of consumption, use or sale within the local area. Further, the word "therein" is significant and indicates unambiguously that the consumption, use or sale must take place in the local area and not outside. Section 192 therefore uses the word "therein" which is to be read in conjunction with the words "entry....into Brihan Mumbai....for ::: Downloaded on - 09/06/2013 18:22:18 ::: 17 oswp-208-01 & 2238-08.doc consumption, use or sale". It may be noted that the word "therein" was not there in the Government of India Act, 1935 but has been added by the Constitution.
20. The entry at Sr. No. 60 in Schedule-H of the Act mentions aeroplanes of all kinds, helicopters, components, parts and accessories of any of them, which enter into Brihan Mumbai for "consumption, use or sale therein". There is no question of any aircraft being consumed as contended by the Corporation and it is not the Corporation's contention that there is a sale of any aircraft within the local area of Brihan Mumbai. What needs examination is whether the aircraft of operators whose flight originated outside Brihan Mumbai and which land at CSIA Airport, Mumbai, disembark passengers, take on fuel and food and beverages, embark passengers and take off for a destination outside Brihan Mumbai are "used" in Brihan Mumbai. The sole question therefore is what is `use' of an aircraft and does that use fall within the meaning of `use' in Section 192 and Entry 52, List II, Sch. VII, in the local area of Brihan Mumbai?
21. There was a great deal of debate on the meaning of the ::: Downloaded on - 09/06/2013 18:22:18 ::: 18 oswp-208-01 & 2238-08.doc word `use'. Justice Oliver Wendell Holmes said in Towne vs. Eisner, 62 L.Ed. 372 at 376:
"A word is not a crystal, transparent and unchanged; it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and the time in which it is used."
What then are the circumstances in which the word `use' can be attributed to aircraft of scheduled or non-scheduled operators which land at and take-off from Mumbai? An aircraft is designed and meant solely to fly after taking off from a runway and then to land on a runway at the destination of the flight. It is a mode of transport as much as a ship, railway train or automobile are. The circumstances are that an aircraft enters the airspace above Brihan Mumbai, lands on a runway at CSIA Airport, moves to the parking slot and the passengers disembark. After the routine of refueling and loading food and beverages for passengers, passengers embark for the destination of the flight, the aircraft moves down to the runway and takes off. The aircraft cannot be said `used' in Mumbai. It is there for a transient period of time while not flying, which is what it is designed and meant for. Once landed and parked, the ::: Downloaded on - 09/06/2013 18:22:18 ::: 19 oswp-208-01 & 2238-08.doc aircraft ceases to be `used' for which it was made viz. flying. After a short halt, it flies out again. Such an entry or import into a local area can never fall within the concept of octroi since "that concept included the bringing in of goods in a local area so that the goods come to a repose there" (See 1963 (2) Suppl. SCR 216, Burmah Shell Oil Storage and Distributing Co. India Ltd. vs. The Belgaum Borough Municipality).
The Supreme Court, in a case concerning terminal tax which is leviable on import and export into a local area reported in 1958 SCR 1102, The Central India Spinning, Weaving and Manufacturing Co. Ltd. Vs. Municipal Committee, Wardha, while repelling the contention that all that has to be seen is whether the goods were imported or were exported held as under:
"The effect of the construction of "import" or "export" in the manner insisted by the respondent would make railborne goods passing through a railway station without the limits of a Municipality liable to imposition of the tax on their arrival at the railway station or departure therefrom or both which would not only lead to inconvenience but confusion, and would also result in inordinate delays and unbearable burden on trade, both inter State and intra State. It is hardly likely that that was the intention of the legislature. Such an interpretation would lead to absurdity which has, according ::: Downloaded on - 09/06/2013 18:22:18 ::: 20 oswp-208-01 & 2238-08.doc to the rules of interpretation, to be avoided."
"...."import" is not merely bringing into but comprises something more i.e. `incorporating and mixing up of the goods imported with the mass of property' in the local area...."
It may be observed that though octroi and terminal taxes are different taxes, they resemble each other in one respect, namely, that they are leviable in respect of goods brought into a local area. For octroi, there is a further condition, namely, that the goods are brought into the local area for consumption, use or sale.
22. We see no difference between a railway train entering and leaving a railway station and an aircraft entering an airport and leaving it. A railway train may have passengers disembarking and embarking at a railway station, have good and beverages taken on at a railway station for catering to its passengers, apart from taking coal or diesel or fuel, in the same way that an aircraft has to disembark and embark passengers, take on fuel and food and beverages after landing and before take-off for the next destination a an airport. This activity in regard to a train or aircraft can hardly be said to be "use" of the train or aircraft in the ::: Downloaded on - 09/06/2013 18:22:18 ::: 21 oswp-208-01 & 2238-08.doc context and setting of Entry 52, List II, Sch. VII and Section 192 of the Act bearing in mind the fundamental fact that the `use' of an aircraft is to fly from one place to another and nothing else. Even assuming that such activity in relation to a parked aircraft may in common parlance be referred to as `use' of an aircraft, we think that the meaning of `use' in relation to an aircraft is its use for flying into and out of Mumbai and not use by way of disembarking and embarking passengers, refueling and loading foods and beverages.
23. The taxable event is the entry of goods into a local area for use `therein'. The fundamental ingredient of the taxable event is that the goods will `repose' in the local area for `an indefinite period' and `finally and permanently rest within the municipal limits' and amount to `a mixing up of the goods with the mass of property in the local area'.
Thus, there can be no doubt that an aircraft flying in and out of a local area cannot possibly be considered as entry of the aircraft for `use' in the local area. Where, however, defunct aircrafts are brought into the local area for display as museum pieces or to be set up as static displays in cities near air-force commands or any other site in the cities, they may be liable for octroi. We do not pronounce on this because the question ::: Downloaded on - 09/06/2013 18:22:18 ::: 22 oswp-208-01 & 2238-08.doc may well be whether they are `aircraft' at all since they are incapable of flying and the capability for flight is the sine-qua non of aircraft and this question does not arise in the case before us.
24. There is another approach to the question of interpretation.
Words are not to be viewed in isolation and their meaning ascertained only according to dictionaries. The word must be viewed in the light of its setting in the sentence. Entry 52, List II, Sch. VII, and Section 192 use sentences. It would be profitable to recall the words of the Supreme Court in (1981) 4 SCC 173, K.P. Varghese vs. I.T.O., Ernakulam and anr:
"The task of interpretation of a statutory enactment is not a mechanical task. It is more than a mere reading of mathematical formulae because few words possess the precision of mathematical symbols. It is an attempt to discover the intent of the legislature from the language used by it and it must always be remembered that language is at best an imperfect for the expression of human thought and as pointed out by Lord Denning, `it would be idle to expect every statutory provision to be drafted with divine prescience and perfect clarity'. We can do no better than repeat the famous words of Judge Learned Hand when he said:::: Downloaded on - 09/06/2013 18:22:18 ::: 23
oswp-208-01 & 2238-08.doc "It is true that the words used, even in their literal sense, are primarily and ordinarily the most reliable source of interpreting the meaning of any writing: be it a statute, a contract or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of a dictionary; but to remember that statutes always have some public purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning."
".....we must construe its language having regard to the object and purpose which the legislature had in view in enacting that provision and in the context of the setting in which it occurs. We cannot ignore the context and the collocation of the provisions in which Section 52 subsection (2) appears, because as pointed out by Judge Learned hand in most felicitous language:
"the meaning of a sentence may be more than that of the separate words as a melody is more than the notes, and no degree of particularity can ever obviate recourse to the setting in which all appear, and which all collectively create."
25. We have considered the sentences in Entry 52, List II and in Section 192, in the light of the above law laid down by the Supreme Court and it seems to us clear beyond doubt that the legislature has been ::: Downloaded on - 09/06/2013 18:22:18 ::: 24 oswp-208-01 & 2238-08.doc invested with the power to tax entry of goods into a local area for consumption, use or sale therein. The purpose of allowing the State Legislature to impose octroi is to allow taxation of goods that enter into a local area for either consumption, use or sale within the local area.
The purpose is not allow taxation of entry of any goods which enter temporarily into and then exit the local area. If the consumption and sale have to take place within the local area, the `use' must equally take place within the local area. Hence, if an aircraft was brought into the municipal limits of Brihan Mumbai for the purpose of flying from one place in Mumbai and land in another place in Mumbai, it could safely be said that the aircraft meant for `use' in Mumbai. However, where the aircraft enters and lands in Mumbai after taking off from a place outside Mumbai and then takes off to fly to another destination outside Mumbai, the aircraft cannot be said to have entered for `use' in Mumbai. The stopover after landing is transient and there is clearly no intention on the part of the operator that the aircraft is to be used in Mumbai. Moreover, as a matter of fact, the aircraft is used to fly all over the country and abroad to any destination permissible under law. We are therefore satisfied that the legislature never intended the result as is contended for by the Corporation viz. that the aircraft enters Mumbai for `use' in ::: Downloaded on - 09/06/2013 18:22:18 ::: 25 oswp-208-01 & 2238-08.doc Mumbai.
26. Blacks Law Dictionary, 8th Edition, gives the meaning of the word "use" as follows:-
"The application or employment of something; esp., a long- continued possession and employment of a thing for the purpose for which it is adapted, as distinguished from a possession and employment that is merely temporary or occasional < the neighbors complained to the city about the owner's use of the building as a dance club>."
The word "use" thus means the employment of a thing for the purpose for which it is made or adapted. Since an aircraft is undoubtedly adapted for flying, there can be no doubt that it can be said to be used when it is flown.
In the case of an aircraft, which has been registered as belonging to a scheduled operator and is employed for transportation of passengers, the aircraft can be said to be used only when it is flown for the purpose of transportation of passengers from one destination to another. At any rate, as observed earlier, an aircraft can be said to be used only when it is employed for flying, much as a boat can be said to be used when it is employed for floating and moving through water and a motor car can be ::: Downloaded on - 09/06/2013 18:22:18 ::: 26 oswp-208-01 & 2238-08.doc said to be used when it is driven. It would be inappropriate to suggest that an aircraft or vehicle is being used even when it is being loaded with passengers, luggage or fuel. Thus the term, "on the entry on the said articles into Brihan Mumbai for consumption, use or sale therein" in Section 192 in relation to an aircraft connotes the entry of the aircraft for the purpose of being used for flying passengers within the municipal limits of Brihan Mumbai. Thus, octroi would not be leviable on the entry of such aircrafts into the municipal limits if such entry is for the purpose of flying in and out of the municipal limits for passenger transport. In order to attract octroi, it is essential that the article should have been imported for sale, use or consumption within the municipal limits. If the article is imported within the city limits not for use therein but temporarily as in transit, it must be necessarily inferred that the article has not entered for use within the municipal limits. It is settled law that octroi is not leviable if goods are not brought into the octroi area for the purpose use in the area but for export and, in fact, exported by the importer. In Burmah-Shell Oil Storage and Distributing Co. of India Ltd. Belgaum vs. Belgaum Borough Municipality, Belgaum [AIR 1963 SC 906] relied on by Mr. Andhyarujina, the Supreme Court observed that it is a peculiar requirement to octroi that the goods must not only have entered the area but must be "for the purpose ::: Downloaded on - 09/06/2013 18:22:18 ::: 27 oswp-208-01 & 2238-08.doc of consumption, use or sale therein". The Supreme Court observed in para 20 as follows:-
"......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 expressions use and consumption together therefore, connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes, or uses them up. ........."
In the said decision it was not a case of import for the purpose of use, the Supreme Court concluded as follows:-
".....The company was, however, not liable to octroi in respect of goods which it brought into the local area and which were re-exported......"
27. In a subsequent decision in the case of Tata Engineering & Locomotive Company Limited and anr. vs. Municipal Corporation of the City of Thane and ors. [1993 Supp (1) SCC 361] where the question was whether the motor vehicle parts brought and stocked by the petitioner in the ::: Downloaded on - 09/06/2013 18:22:18 ::: 28 oswp-208-01 & 2238-08.doc bounded warehouse within the municipal limits of Thane attracted octroi though the parts were brought in bulk and thereafter taken out or sent from the municipal limits in smaller packing. The Supreme Court in the case of HMM Limited and anr. vs. Administrator, Bangalore City Corporation and anr. [(1989) 4 SCC 640] observed that 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, while holding that putting the Horlicks 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. Mr. Andhyarujina and Mr. Dwarkadas appearing for the petitioners also relied on the decision of the Supreme Court in Acqueous Victuals Pvt. Ltd. vs. State of U.P. And ors. [(1998) 5 SCC 474] where the Supreme Court considered the earlier decision on the subject and observed that the word "consumption" is added to the word "use" and in either case the entry within the municipal limits must be with a view to their retention. The Supreme Court, vide para 14, referred to the word "therein" at the end of Entry 52 and emphasized the observations made in Burmah Shell (Supra) as follows:-
".........In other words, a sale of the goods brought inside, even though not expressly mentioned in the description of octroi as ::: Downloaded on - 09/06/2013 18:22:18 ::: 29 oswp-208-01 & 2238-08.doc it stood formerly, was implicit, provided the goods were not re-exported out of the area but were brought inside for use or consumption by buyers inside the area. In this sense the amplification of the description both in the Government of India Act, 1935 and the Constitution did not make any addition to the true concept of `octroi' as explained above.
That concept included the bringing in of goods in a local area so that the goods come to a repose there."
The court further observed that, "15. In view of the aforesaid decision, it becomes obvious that the word "retention" is held to be a synonym with the word "repose", meaning thereby the article concerned must finally rest within the municipal limits. In the light of the aforesaid judgment 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.
::: Downloaded on - 09/06/2013 18:22:18 ::: 30oswp-208-01 & 2238-08.doc (emphasis supplied)
28. Supreme Court, vide para 18, concluded as follows:-
"18. It is, therefore, obvious that the underlying common idea behind all the three relevant words "sale", "consumption" or "use" within the municipal limits of the imported commodity so as to attract the levy of octroi thereon would require proof of the fact that the commodity concerned got consumed completely within the municipal limits or was used for an indefinite period in such a way that it came to rest finally and permanently within the municipal limits or was sold within the municipal limits.........."
Supreme Court observed in paragraph 20 as follows:-
".....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 use without total exhaustion but in every case the commodity concerned must not have left the municipal limits........"
It is clear that no octroi can be charged whether for use or consumption within the local limits unless the goods come to a repose ::: Downloaded on - 09/06/2013 18:22:18 ::: 31 oswp-208-01 & 2238-08.doc there. Further an article cannot be said to have imported for use unless it is meant to be used for an indefinite period within the municipal limits so that it ultimately rest within the municipal limits and does not come out subsequently.
29. In the circumstances of this case, we are, therefore, of the view that the aircrafts have not entered the municipal limits of Brihan Mumbai for the purpose of use therein i.e. for the purpose of flying within the municipal limits. Assuming that there is some kind of use involved in disembarkation, embarkation of passengers, luggages and fueling, such use is not use within the meaning of that term in Section 192 in relation to an aircraft. In any case, even if the word "use" as employed colloquially is applied for such incidental activities referred to above, it cannot be said that the entry is for the purpose of use within the municipal limits since the import into the municipal limits is with the intention of exporting and it is settled law that the use contemplated must be for an indefinite period, in such a way that comes to rest finally and permanently within the municipal limits vide Acqueous Victuals Pvt. Ltd. (Supra).
30. At this juncture we may note the contention raised on behalf of ::: Downloaded on - 09/06/2013 18:22:18 ::: 32 oswp-208-01 & 2238-08.doc the Municipal Corporation that octroi is payable by the petitioners on the first entry because Section 192 of the Act contemplates the payment of octroi duty on all articles mentioned in the schedule irrespective of whether the importer may seek refund thereof upon export. In support of this contention, the learned counsel for the Corporation relied on the decision of a Division Bench of this court in the case of The Raymond Woollen Mills Ltd. and anr. vs. State of Maharashtra and anr. [AIR 1992 BOMBAY 412].
In that case the Division Bench held that the petitioner which imported greasy wool, polyester fibre, acrylic fibre, nylon fibre for the manufacture of its products in the Mills at Thane were liable to pay octroi upon the entry of those goods within the municipal limits of Greater Mumbai, though the goods were stored in the custom bonded warehouse and later removed for being exported to Thane. It was contended on behalf of the company that since their intention was to import consignment into Mumbai for being used at their factory in Thane, which is outside the municipal limits of MMC, it was not liable to pay any octroi duty. The Division Bench negatived the contention and held that the liability to pay duty arises as soon as the goods are brought within the octroi limits of the Corporation.
The liability for payment of tax arises when the goods cross the octroi barrier and is not deferred till the company chooses to file bills of entry for ::: Downloaded on - 09/06/2013 18:22:18 ::: 33 oswp-208-01 & 2238-08.doc home consumption and remove the goods from the Customs Bonded Warehouse. We find that the ratio of the said decision is not applicable to the present case since that decision was rendered having regard to the specific articles in question about which it was not possible to ascertain what would be intention of the importer. The Division Bench observed, on the basis of a judgment of the Supreme Court in Shroff and Co. vs. Municipal Corporation of Greater Bombay [1989 Supp (1) SCC 347], that the purpose of the import is decided and that the liability to pay octroi duty would arise unless the purpose of the import is immediate exportation outside the octroi limit. The Division Bench came to the conclusion that the liability to pay octroi arose because the purpose of the import was not immediate exportation but storing of the goods in the Custom Bonded Warehouse and their subsequent removal from it. The Division Bench specifically observed that it was not possible for the Corporation to ascertain the intention of the importer in such circumstances. The case here is entirely different. It is not disputed that the aircrafts have been imported into the municipal limits of Mumbai not for the purpose of being permanently located or flown within the city of Mumbai but have been imported while in transit to other destination according to the schedule.
Moreover, it was rightly pointed out by Mr. Dwarkadas that the Supreme ::: Downloaded on - 09/06/2013 18:22:18 ::: 34 oswp-208-01 & 2238-08.doc Court has observed in TELCO judgment (Supra) that the mere physical entry of goods would not attract levy of octroi in the following words:-
"17. In the case of impost of octroi the taxable event is the entry of goods which are meant to reach an ultimate user or consumer in the area. Mere physical entry into the octroi limits would not attract levy of octroi. When the goods are brought in not for consumption within the area but for temporary detention and eventual export, octroi is not leviable......
There is similar observation in Mafatlal Industries Ltd. vs. Nadiad Nagar Palika and anr. [(2000) 3 SCC 1] which reads as follows:-
"7. In view of the above legal provisions, octroi duty can be levied when goods are brought into the octroi area for consumption, use or sale - mere physical entry of the goods into the octroi area would not attract the levy of octroi."
We have no hesitation in rejecting the contention on behalf of the Corporation.
31. It is also not possible to accept the contention raised on behalf of the Corporation that the petitioners are liable to pay octroi upon the first entry of the aircrafts within the municipal limits and not on subsequent entries in view of Section 194A which reads as follows:-
::: Downloaded on - 09/06/2013 18:22:18 ::: 35oswp-208-01 & 2238-08.doc "194A. Exemption of articles imported for immediate exportation. -- Subject to such rules, not inconsistent with this Act, as the Commissioner with the approval of the Standing Committee, shall from time to time frame in this behalf, any article imported into Brihan Mumbai for the purpose of immediate exportation shall be exempted from the levy of octroi, if such article is conveyed direct from the place of import to the place of export under such supervision and on payment of such fees therefor as shall be determined in the said rules: provided that no rule framed as aforesaid shall have effect unless and until it is confirmed by the State Government."
32. Octroi is attracted where there is a entry of articles mentioned in the schedule for sale, use or consumption within municipal limits. There can be no levy if the entry is not for sale, use or consumption. Whether such entry is for the first time or not is irrelevant to the issue. It is the contention which seems to be in justification of the demand from the petitioners alone and not from the many airlines, national or international, whose aircrafts fly in and out of Mumbai everyday. It was indeed contended by Mr. Poochkhanwalla that the Municipal Corporaiton does not demand octroi from aircrafts which do not have the usual station at Mumbai and on some aircrafts which have not entered India through ::: Downloaded on - 09/06/2013 18:22:18 ::: 36 oswp-208-01 & 2238-08.doc Mumbai. We do not see how the point of entry of an aircraft in India through Mumbai is relevant to the issue in hand. The contention regarding the liability for payment of octroi depending on the specification of the usual station of an aircraft is equally untenable. The need to specify usual station arises in relation to Sub-section (4) of Section 30 of the Aircraft Rules, which provides for registration of the aircraft. As observed earlier, Sub-section (4) empowered the Central Government to decline to accept an application for registration of the aircraft in India where the usual station of aircraft and its ordinary area of operation are not situated in India.
33. It was lastly contended by Mr. Poochkhanwalla that the petitioners have an alternative remedy of filing an appeal against the demand under the provisions of MMC Act. We see no merit in this contention in the present case since what is questioned is levy of octroi duty as being illegal and without authority of law. Moreover, these petitions have been under consideration of this court since about 2001.
Rule has been issued and the matter has been referred to a Division Bench.
It would not be appropriate to relegate the petitioners to an alternate remedy at this stage, particularly having regard to the observations of the Supreme Court in A.V. Venkateshwaran, Collector of Customs Bombay vs. ::: Downloaded on - 09/06/2013 18:22:18 ::: 37 oswp-208-01 & 2238-08.doc Ramchand Sobhraj Wadhwani and anr. [AIR 1961 SC 1506] relied upon by Mr. Andhyarujina. In that matter the Supreme Court referred to the following observations in State of U.P. vs. Mohammad Nooh:
"....It must be borne in mind that there is no Rule, with regard to certiorari as there is with mandamus, that it will lie only where there is no other equally effective remedy. It is well established that, provided the requisite grounds exist, certiorari will lie although a right of appeal has been conferred by statute. The fact that the aggrieved party has another and adequate remedy may be taken into consideration by the superior court in arriving at a conclusion as to whether it should, in exercise of its discretion, issue a writ of certiorari to quash the proceedings and decisions of inferior courts subordinate to it and ordinarily the superior court will decline to interfere until the aggrieved party has exhausted his statutory remedies before the writ will be granted is a Rule of policy, convenience and discretion rather than a Rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies."
The said contention is, therefore, rejected.
::: Downloaded on - 09/06/2013 18:22:18 ::: 38oswp-208-01 & 2238-08.doc WRIT PETITION NO. 208/2001
34. In the result, Rule is made absolute in the following terms:
Demand notice dated 29.01.2001 is hereby quashed and set aside.WRIT PETITION NO. 2238/2008
35. In the result, Rule is made absolute in the following terms:
Demand notices dated 26.08.2008 and 28.08.2008, raising demand for octroi are quashed and set aside.
(R. D. DHANUKA,J.) (S. A. BOBDE, J.)
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