Bombay High Court
The Crane Owners' Association And Anr. vs The State Of Maharashtra And Anr. on 11 August, 1995
Equivalent citations: 1996(2)BOMCR587, (1995)97BOMLR559, 1996 A I H C 1300, (1996) 2 BOM CR 587
JUDGMENT N.D. Vyas, J.
1. The questions raised therein being similar, both the petitions are disposed off by this common judgment. The petitioner No. 1 in Writ Petition No. 751 of 1993 is an Association of owners of 'Cranes' and is registered under the Non-trading Corporation Act of 1959. The petitioners in Writ Petition No. 1008 of 1993 are owners of three container handlers which are registered as 'Vehicles' with the R.T.O., Raigad under the provisions of Motor Vehicles Act, 1988. For the sake of convenience, I shall only deal with the facts of the Writ Petition No. 751 of 1993.
2. It is the contention of the petitioners that the mobile cranes (which description for the present petitions would include container handlers also) are vehicles and are registered as motor vehicles under the Motor Vehicles Act, 1988; that formerly cranes were registered as non-transport vehicles, however, with the introduction of the new Motor Vehicles Act of 1988, they came to be classified as transport vehicles. The petitioners' grievance is that when such a crane is brought within the octroi limits with the intention of using it permanently, it is required to be registered under the Motor Vehicles Act with the Regional Transport Office having its jurisdiction over the concerned Municipal or Octroi area and if the vehicle remains in another State for more than twelve months, then it is liable to be registered in the other State as required under section 44 of the Motor Vehicles Act, 1988; that the certificate issued in one State is effective throughout India subject to what is provided in section 47 of the Motor Vehicles Act; that the crane is classified as non-transport vehicle and is compulsorily required to be registered under the Motor Vehicles Act and that the cranes are used for lifting things and are generally used only in private places like Docks etc. It is the further submission of the petitioners that a vehicle by its very nature, moves from one place to another and the cranes are also required to be taken from one region to another as work necessitates and remain at any place for a short period of time. It is the grievance of the petitioner that hitherto the cranes were permitted ingress and egress within the Municipal limits of Greater Bombay by Municipal Corporation of Greater Bombay (hereinafter referred to as B.M.C.) without any demand of octroi and the crane was treated as any other vehicle and having regard to its required mobility on account of the nature of vehicle, octroi was not demanded. However, as the respondents now required the petitioners to follow 'R' form procedure as per Rules 7 and 8 of the Municipal Octroi Rules (Exemptions) in respect of cranes .registered with the R.T.O. within the octroi limits, taken outside such limits and returning and as the B.M.C. charged octroi on cranes treating them as 'machinery' and not 'vehicles' when the cranes registered as vehicles outside Greater Bombay were brought within B.M.C's octroi limits, the present petitions have been filed. In the Writ Petition No. 1008 of 1993 it is the grievance of the petitioners that the three cranes which are brought within the octroi limits of Greater Bombay on a casual visit i.e. for work or even for repairs, octroi is demanded or 'R' form formality had to be undergone.
3. A short question that requires consideration is whether a mobile crane is a 'vehicle or machinery. It is the contention of the petitioners that the same is a 'vehicle'. On the other hand, the respondents contend that it is a 'machinery'. In order to appreciate the rival contentions, it would be advantageous to reproduce certain provisions of the Bombay Municipal Corporation Act (hereinafter referred to as the said Act) which are relevant for that purpose. Section 3(q) of the said Act defines 'vehicle' and the said definition is as follows:-
"3(q) 'vehicle' includes a carriage, cart, van, dray, truck, handcart and wheeled conveyance of any description capable to being used on the streets of the city."
Section 139 of the said Act provides for imposition of tax by B.M.C. on the following items:-
1) Property taxes; 2) a tax on vehicles and animals; 3) a theatre tax and 4) Octroi. Section 180 of the said Act provides as follows:-
"180. Except as hereinafter provided, a tax at rates not exceeding those specified in Schedule G shall be levied on all vehicles and on all animals of the description specified in the said schedule which are kept within Greater Bombay."
However, section 181 of the said Act provides that no tax shall be levied in respect of certain items enumerated therein. Section 192 of the said Act provides for levy of octroi at rates not exceeding to those respectively specified in Schedule H to the said Act in respect of articles mentioned in the said schedule, on the entry of the said articles into Greater Bombay for consumption, use or sale thereof. Schedule H thus enumerates the articles and the relevant entries as far as the present petitioners are concerned, are Entries 50 and 51. Entry 50 deals with 'machinery and Entry 51 deals with 'vehicles.' The said two entries are reproduces below:-
Entry No. Articles
50. Machinery and their components and spares-(a)(i) electric machinery for generation, transmission and distribution and motors and generators and their components and spares, (ii) electric goods including cells, batteries and copper strips, horn electric, (iii) electrical fittings and materials, (iv) electrical domestic appliances, (v) electrical machinery of all kinds, control switch-gear, generators, alternators and dynamos, motors, transformers and turbo generating sets, (b) agricultural machinery and parts, (c) oil engines, petrol and gas engines and machines worked by hydraulic pressure, and their parts, (d) tools of all kinds, (e) printing press machines and spares, (f) any other machinery, its components and spares not specifically provided for.
51. Vehicles-
(a) motor cars, motor cycles, chassis and lorries
(b) bicycles, perambulators, carriages, all kinds of vehicles and their components and spares.
Certain Exemption Rules have been enacted by the Municipal Corporation and they are known as 'Bombay Municipal Corporation Exemption from Octroi (Free Gift etc.) Rules, 1966 (hereinafter referred to as the 'said Exemption Rules'). For the purpose of the present petitions. Rule 7(a) of Part II is relevant and is reproduced below:-
"7(a). Articles liable to octroi which are temporarily imported into or exported temporarily from Greater Bombay and re-imported into Greater Bombay for the purposes of inspection, demonstration, exhibition, repairs, processing or for such other similar purposes as may be exempted from octroi provided that-
(1) The importer or exporter as the case may be or his duly constituted attorney applies for the same in writing in Form 'R' provided for the purpose.
(2) The processing, repairing etc. if so desired by Municipal Commissioner is carries out in the presence of the Municipal Octroi Inspector whose services may be obtained on payment of such fees as may be prescribed by Municipal Commissioner from time to time.
(3) The importer or the exporter as the case may be agrees to pay a registration fees of Rs. 5 per application and makes such deposit either in cash or in public securities or in other paper deposit as may be approved by the Commissioner from time to time. For the purposes of this Clause the Commissioner may accept from regular importers/exporters a fixed deposit instead of requiring them to pay such deposits at the time of import or export. No interest on deposits so paid shall be payable by the Corporation. The deposit made shall be refundable on due satisfaction of Municipal Commissioner that the purpose of which deposit was made has been fulfilled.
(4) No change of form, condition or appearance is involved except to the extent inherent in the processing or repairs allowed.
(5) That all the articles so imported are exported from or re-imported respectively within a period of six months or within such longer period as the Commissioner may allow.
(6) The importer or exporter agrees to produce sufficient documentary evidence if so desired by the Municipal Commissioner to his satisfaction that all articles have after processing, repairing etc. been exported from or reimported into Greater Bombay limits. In case however the Commissioner is satisfied that all these conditions are not duly observed, he may direct that the deposit at the credit of the importer or exporter may be confiscated and credited to the funds of the Corporation. If the full amount of octroi recoverable on such articles is not recovered by the deposit amount, further proceedings for the recovery of the balance may be instituted by the Municipal Commissioner."
In order to claim such exemption, a form is required to be filled up. The same is Form 'R' which is provided for under Rule I of part II of the said Exemption Rules.
4. From the above provisions, it is apparent that vehicles are subjected to vehicle tax as well as octroi. However, there is nothing like tax on machinery except that octroi is payable, just as in the case of vehicles. Moreover, as far as Form 'R' formality is concerned, there is a provision for claiming refund but on following Form 'R' formality.
5. It was the submission of Shri Hegde, the learned Counsel appearing for the petitioners, that mobile cranes are registered as vehicles under the Motor Vehicles Act. Not only that but in respect thereof, vehicle tax as levied by the B.M.C. is being also collected. In view thereof, the mobile cranes should be treated as 'Vehicles' and not 'Machinery. Shri Hegde relied upon an unreported decision of this Court in Criminal Writ Petition No. 745 of 1982 in the matter of M/s. Ishardas and Co. and two others v. State of Maharashtra and another. It was inter alia held therein that a mobile crane was a motor vehicles. He also relied upon a decision of the Supreme Court in the matter of Union of India and others v. Chowgule and Co. Pvt. Ltd. and others, reported in II(1992) A.C.C. page 84, in which it was inter alia held that 'dumpers' were motor vehicles and therefore, liable to pay compensatory tax for the availability of roads for them to run upon commission. He further relied upon a decision of the Supreme Court in the matter of M/s. Belani Ores Ltd. v. State of Orissa, in support of his submission. He also relied upon several other judgments. It was thus submitted by Shri Hegde that since the cranes in question were mobile cranes and were considered as vehicles and were in fact registered as per the provisions of the Motor Vehicles Act, for octroi purposes also, they should be treated as 'vehicles'. As far as this aspect of the matter is concerned, I find no difficulty inasmuch as there is no dispute raised by Shri Bharucha that the mobile cranes are not treated as 'vehicles' for the purpose of vehicle tax that is collected under the said Act. However, Shri Bharucha stressed that as far as the B.M.C. was concerned, a crane was a machinery falling under Item 50(f) of schedule 'H' (reproduced above) and B.M.C. was rightly treating it as machinery for the purpose of octroi. Shri Bharucha then relied on a decision of the Supreme Court in the matter of M/s. Plasmac Machine Manufacturing Co. Pvt. Ltd. v. Collector of Central Excise, reported in 1991(51) E.L.T. page 161, where the Supreme Court has inter alia observed:-
" 13. The submission that 'nuts' in Entry 52 are to be understood in the commercial sense is not disputed by the department. It is an accepted principle of classification that the goods should be classified according to their popular meaning or as they are understood in their commercial sense and not as per the scientific or technical meaning Indo International Industries v. Commissioner of Sales Tax, U.P., and Dunlop India Ltd. v. U.O.I., have settled this proposition. How is the product identified by the class or section of people dealing with or using the product is also a test when the statute itself does not contain any definition and commercial parlance would assume importance when the goods are marketable as was held in Atul Glass Industries (Pvt.) Ltd. v. Collector of Central Excise, and Indian Aluminium Cables Ltd. v. U.O.I., . In M/s. Asian Paints India Ltd. v. Collector of Central Excise, , which was a case of Emulsion paint, at para 8 it was said :-
"It is well settled that the commercial meaning has to be given to the expression in tariff items. Where definition of a word has not been given, it must be construed in its popular sense. Popular sense means that sense which people conversant with the subject matter with which the statute is dealing, would attribute to it."
CIT v. M/s. Taj Mahal Hotel, was applied."
On the basis of the above observations, of the Supreme Court, Shri Bharucha submitted that cranes in the commercial sense were understood as 'Machinery' and not 'Vehicles'. It was his further submission that no material whatsoever, either in the form of any affidavit or otherwise, has been produced in support of the contention that cranes were vehicles. Shri Bharucha further cited a decision of the Supreme Court in the matter of M/s. MSCO Pvt. Ltd. v. Union of India and others, wherein it was held that when a word to be construed is used in a taxing statute or a notification issued thereunder; it should be understood in its commercial sense. It was therefore submitted by him that reference to interpretation thereof in other statute was not permissible in law.
6. Shri Bharucha next submitted that apart from the commercial meaning, the primary or the-dominant purpose of the item in question should be looked at. It was his submission that the primary purpose of mobile crane was to lift material and put the same at a different location. This function by itself demonstrated that the crane was a machinery and just because the same is put on a chassis and is made mobile does not change the user of the said item. Shri Bharucha in support of his submission relied on the decision of Supreme Court in the matter of M/s. Atul Glass Industries Ltd. and others v. Collector of Central Excise and others, reported in 1986(25) E.L.T. page 473. He also relied on unreported decisions delivered by this Court in Letters Patent Appeal No. 23 of 1991 : M/s. Vicco Laboratories and another v. The Municipal Commissioner and another, and Writ Petition No. 2455 of 1983, M/s. Raymond Woollen Mills Ltd. and another v. State of Maharashtra and another, .
7. One cannot loose sight of the fact that in the Bombay Municipal Corporation Act, the term 'Vehicle' has been defined in section 3(q) of the said Act and it provides:-
"In this Act, unless there be something repugnant in the subject or context- 'vehicle' includes a carriage, cart, van, dray, truck, handcart and wheeled conveyance of any description capable of being used on the streets of the city."
The definition is not similar to that of Motor Vehicles Act which provides that a motor vehicle or a vehicle means any mechanically propelled vehicle adapted for use upon roads. However, since the word 'Vehicle' has been defined in the B.M.C. Act, the same must be understood to mean that wherever used in the statute. Shri Hegde submitted that the word 'Vehicle' was defined in the said B.M.C. Act and has to be so interpreted and understood as the same under all the provisions of the said statute. It was his submission that when for the purpose of vehicle tax cranes were treated as vehicles, for the purpose of octroi also they must be treated as vehicles. Shri Bharucha, on the other hand, submitted that it was true that the term 'Vehicle' has been defined in the B.M.C. Act but the same was not applicable as far as Octroi was concerned. It was his submission that the definition given in section 3(q) of the said Act started with the words 'unless there be something repugnant in the subject or context.....' and therefore when one has to consider the said definition in the context of octroi, it was not possible to consider the item as 'Vehicle'. I do not see any substance in the submissions made by Shri Bharucha. First of all, the term 'Vehicle' has been defined in the said Act and that should operate in respect of the entire Act. It would be erroneous to submit that the same word defined in the statute has to mean differently for different purposes. More important is the fact that for tax purposes, the B.M.C. has been recovering vehicle tax under the B.M.C. Act itself, treating the mobile cranes as vehicles, thus following the definition of 'Vehicle' given in section 3(q) of the said Act. It does not lie in the mouth of the B.M.C. than to turn around and treat cranes as 'machinery' and not 'Vehicles' for the purposes of octroi. Once an article is accepted as 'Vehicle', it cannot be treated differently for the purposes of octroi.
8. During the arguments, Shri Hegde drew my attention to couple of octroi bills in respect of cranes which were brought into the Municipal limits wherein he pointed out that in fact for octroi purposes also, the respondents have treated such cranes as vehicles and recovered octroi treating them under item Under Entry 51 and not Entry 52. On the other hand, Shri Bharucha produced few other documents showing that for octroi purposes also, the B.M.C. had treated such cranes as 'machinery' and not 'vehicles'. In view of the fact that the material produced by Shri Hegde and Shri Bharucha is not supported by any affidavit, I do not wish to take any cognizance of the same.
9. In my view, therefore, the mobile cranes are 'Vehicles' and not 'Machinery'. In view thereof, they are to be treated as 'Vehicles' for all purposes including octroi. In view of the above, the petitioners succeed in the petitions. The respondents, their Officers and Employees are directed not to demand and collect octroi levy or deposits under 'R' form in respect of mobile cranes and container handlers. I am informed that as per the interim orders, the petitioners in Writ Petition No. 1008 of 1993 paid an aggregate amount of Rs. 9,00,000/- as octroi to the B.M.C. The said amount shall be refunded with interest at the rate of 12% p.a. from the date of withdrawal/payment of the same, in view of the above decision. Petitions thus made absolute and disposed off. No order as to costs.
Certified copy expedited.