Bombay High Court
Bharat General & Textiles Industries ... vs Chief Officer, Mpl. Council, Malkapur & ... on 9 March, 2015
Equivalent citations: AIR 2015 (NOC) 1274 (BOM.) (NAGPUR BENCH), 2015 (5) ABR 412
Author: B.P. Dharmadhikari
Bench: B.P. Dharmadhikari, A.P. Bhangale
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY :
NAGPUR BENCH : NAGPUR.
Writ Petition No.3524 of 1997.
Bharat General and Textile Industries Limited,
Malkapur, Tahsil Malkapur,
District Buldhana, through its President
Shri K.B. Agrawal,
Resident of Malkapur, Tahsil Malkapur,
District Buldhana.
(Maharashtra State). .... Petitioner.
Versus
1] Chief Officer,
Municipal Council, Malkapur,
Tahsil Malkapur, District Buldhana,
(Maharashtra)
2] Purushottam Subhkaran Agrawal,
Octroi Collecting Agent,
C/o Hari Om Transport, Malkapur,
Tahsil Malkapur, District Buldhana
(Maharashtra State). .... Respondents.
Shri A.A. Naik, Advocate for petitioner.
Coram : B.P. Dharmadhikari &
A.P. Bhangale, JJ.
th
Dated : 09 March, 2015.
ORAL JUDGMENT [ Per B.P. Dharmadhikari, J.]
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2 wp3524.97 Judg..odt By this petition filed under Article 226 of the Constitution of India, the petitioner seeks declaration that the respondent no.1 Municipal Council and respondent no.2 its Octroi Collection Agent are not entitled to recover the octroi from it for goods falling under Item 4 of Chapter-I of the Maharashtra Municipalities (Octroi) Rules, 1968 [hereinafter referred to as, 'the Octroi Rules']. Submission is the petitioner is entitled to concessional rate of 50% as prescribed by Clause 2 of Part I-A of Schedule II of the submission of Form No.14.
There is also a direction to refund the amount of Octroi duty excessively collected from it with interest at 24%.
2] This Court has on 18-12-1997 while issuing rule in the matter directed the respondents to allow the petitioner to pay octroi duty which the petitioner was paying it till 15-11-1997, until further orders.
Insofar as the amount over and above it claimed by respondent no.2, the petitioner was directed to furnish security to the satisfaction of the Chief Officer of the Municipal Council at the end of every quarter of the year. This interim arrangement continues even till today.
3] Advocate Shri A.A. Naik, appearing for the petitioner, invites our attention to the Octroi Rules to urge that as per Rule 3 thereof the maximum and minimum rates as also levy of octroi has to be as specified in column no.3 thereof. Rule 5 prescribing the procedure for ::: Downloaded on - 13/03/2015 00:00:55 ::: 3 wp3524.97 Judg..odt imposing the octroi is also pointed out by him. According to him, Rule 4 permits the payment at 50% of the rate decided by the Municipal Council and in recognition of this obligation, the Administrator of the Municipal Council on 03-04-1991 forwarded a communication to its Octroi Superintendent. That communication directed the Octroi Superintendent to levy octroi at concessional rate as prescribed by Schedule II of Chapter I-A(II) on goods falling under Schedule I Item 4. Insofar as the goods and concession covered by Schedule II at serial no.35 of Part I-A(I) is concerned, the Administrator directed levy at 1.25% i.e at maximum rate. The concession was to be extended only after the petitioner filled in Form No.14. Accordingly, the petitioner continues to fill in Form No.14 and avail the concession prescribes by the rules. This arrangement continued till respondent no.1 appointed the respondent no.2 as its Octroi Collection Agent. The respondent no.2 refused to follow the arrangement and to abide the order of the Administrator dated 03-04-1991. He submits that, therefore, the present petition came to be filed.
4] According to him, the Municipal Council while opposing the admission of Writ Petition came up with defences that a communication of Administrator dated 03-04-1991 is not a resolution and therefore not binding upon it. He further submits that it also ::: Downloaded on - 13/03/2015 00:00:55 ::: 4 wp3524.97 Judg..odt pointed out that the concession could have been extended to the industrial undertakings and as the petitioner was not such an undertaking regulated by the provisions of the Industries Development and Regulation Act, 1951, the provisions of Rule 4 of the Octroi Rules were not attracted in its matter. Lastly, he points out that Form No.14 submitted by the petitioner to the Municipal Council, was not annexed with Form No.1.
5] The learned Counsel submits that as the Administrator is appointed under Sections 313 and 314 of the Maharashtra Municipalities Act, 1965, he substitutes the General Body, Standing Committee as also the Chief Officer. As such, it is not necessary for the Council to pass separately any resolution. He also points out that as per the scheme of 1968 Rules, no such resolution is required.
6] The affidavit filed by the petitioner in rejoinder is also pressed into service to show that the nature of activities undertaken by it. It is contended that those activities clearly qualify the petitioner to be an industrial undertakings. Lastly, it is submitted that when the concession is availed in terms of Rules 4, Form No.14 becomes mandatory and therefore it is a special provision and Form No.1 is compulsory when such concession or exemption is not available and as such it is a general provision. When the petitioner was found entitled ::: Downloaded on - 13/03/2015 00:00:55 ::: 5 wp3524.97 Judg..odt to the concession, therefore, the order of the Administrator expressly mentioned Form No.14 and it was not obligatory or mandatory to submit Form No.1 with it.
7] In the alternative and without prejudice it is submitted that procedure as directed by administrator was being followed since 1991 and almost for a period of about six to seven years. Our attention is also invited to the rejoinder to show that in fact this practice of providing concession or exemption was in vogue since the order of Administrator dated 11-12-1984. The practice in force for such a long time could have not been altered or discontinued to the prejudice of the present petitioner without extending it necessary opportunity. The judgment of Hon'ble Apex Court in the case of State of Tamil Nadu vs K. Sabanayagam and another, reported at AIR 1998 SC 344, more particularly, para 12 is relied upon to buttress the submission. He contends that having extended and allowed the concessional rate of octroi duty for over 12 to 13 years, the Municipal Council was estopped from raising such defences.
8] The rejoinder filed by the petitioner is on 15-12-1997 i.e. before this Court admitted the Writ Petition. The respondents had filed their submissions on 15-12-1997 itself. After this Court issued rule in this matter, the respondents have not filed any additional affidavit or return.
::: Downloaded on - 13/03/2015 00:00:55 :::6 wp3524.97 Judg..odt In rejoinder the petitioner has disclosed that it has a licence issued by the Government of India, Ministry of Industries, Department of Industrial Development styled as licensing of Industrial undertakings under the Industries (Development and Regulation) Act, 1951, issued on 04-05-1972. This licence, therefore, refutes defence that the petitioner is not an industrial undertakings within the provisions of the said enactment. In addition, the petitioner has produced other licences which also allowed it to manufacture the vegetable oil by the solvent extraction method and the eligibility certificate issued by the State of Maharashtra in 1970 under the Sales Tax Incentives Scheme. These documents also show the incorrectness in stand of the respondents that the petitioner not being an industry undertakings, cannot claim the exemption in terms of Rule 4.
9] Perusal of 1968 Octroi Rules, particularly Rule 3 reveals that every Council has to levy octroi in respect of goods specified in Schedule-I. The maximum and minimum rate of octroi on such goods is specified in column nos.3 and 5 of the said Schedule read with column nos.4 and 6. The procedure prescribed in Rule 5 states that the Municipal Council has to pass resolution in its special meeting and fix the rate at which octroi would be levied on different goods specified in schedule-I, fixing the date for coming into force of such levy and determine the number of and location of octroi post. Rule 4 pertains ::: Downloaded on - 13/03/2015 00:00:55 ::: 7 wp3524.97 Judg..odt to the certain goods which are exempted wholly or partially from the octroi or the goods on which octroi is payable on lower rate. Said concessional rate or exemption is subject to the conditions or exceptions mentioned against such goods which are specified in Schedule-II. No octroi is payable in respect of goods specified in Part I of that Schedule. Insofar as the goods mentioned in Part I-A of Schedule II are concerned, the octroi is payable at lower rate by certain industrial undertakings. Insofar as the goods specified in Part II of Schedule II are concerned, the octroi is not payable or shall be payable partially in respect of any of the goods specified in Part II of that schedule. However, for that purpose, the Council is required to pass necessary resolution under Rule 5.
10] The petitioner has been importing oil seeds of all kinds and it is not in dispute that those seeds imported by him for oil extraction fall under Item 4 of Schedule I. Item 4 Schedule I is covered by Schedule II, Part I-A(II). Thus, it is covered under the list of goods on which the octroi is payable on lower rate by certain industrial undertakings.
This concession of paying lower rate therefore casts corresponding statutory obligation on municipality by operation of 1968 Octroi Rules.
It was not necessary for the Administrator to pass any resolution on 03-04-1991 for said purpose. Moreover, as already noted above, the petitioner had been enjoying that concession from 11-12-1984, and it is ::: Downloaded on - 13/03/2015 00:00:55 ::: 8 wp3524.97 Judg..odt not the case of the Municipal Council that there was already a resolution of the Administrator then and hence the communication dated 03-04-1991 could not have been treated as resolution in contradiction with it. In fact, it has not taken any stand on said exemption granted to the petitioner on 11-12-1984. When exemption is granted by 1968 Octroi Rules and was already being enjoyed by the petitioner, the insistence on such resolution by respondent nos. 1 and 2 after appointment of the Octroi Agent in 1997 is itself erroneous and misconceived. Municipal Council has not pointed out any resolution withdrawing the said concession.
11] Provisions in Rule 4(iii) show that the partial payment of octroi or its non payment on any of the goods specified in Part II of Schedule II is made subject to a resolution of the Municipal Council.
Thus, in very same Rule 4, the Municipal Council has been expected to pass a resolution granting complete or partial exemption. In the light of this arrangement, it is apparent, that when benefit in terms of Rule 4(ii) is to be extended to or is to be continued for an industrial undertakings, there is no need to pass any resolution either by the Municipal Council or by the Administrator. Hence, the reason given by the Municipal Council for not continuing the benefit of concession to the petitioner is unsustainable.
::: Downloaded on - 13/03/2015 00:00:55 :::9 wp3524.97 Judg..odt 12] The provisions of 1968 Octroi Rules show that Form No.I has to be filled in as declaration by the importer in respect of dutiable goods imported into the Municipal Council octroi limits for consumption, use or sale. It is, therefore, a general provision when compared with Form No.14. Form No.14 is of declaration to be made by an importer who imports dutiable goods as raw material for his industrial undertakings. Form No.I is expressly with reference to Rule 14 of the Octroi Rules and that Rules obliges importer to furnish such particulars after he brings dutiable goods to octroi Naka. Form No.14 is in relation to Part I-A(II) of Schedule II. It is, therefore, a special provision for an importer who imports dutiable goods as a raw material for his industrial undertaking. When such raw material imported by the industrial undertaking is given special treatment in Form No.14, it is evident that a person obliged to declare such dutiable goods is not expected to fill in Form No.1 as it will be unnecessary duplication. The goods covered under Form No.14 impliedly stand excluded from Form No. I. Hence, last reason given by the Municipal Council to deny the benefit in terms of Rule 4(ii) of the Octroi Rules, 1968 to the petitioner is also unsustainable.
13] The learned Counsel for the petitioner has relied upon para 12 of the judgment of the Hon'ble Apex Court in the case of State of Tamil Nadu (supra). There the employees of Housing Board were ::: Downloaded on - 13/03/2015 00:00:55 ::: 10 wp3524.97 Judg..odt being paid bonus for several years and suddenly Housing Board turned around to contend that in terms of provisions of Section 32(v)
(c) of the Payment of Bonus Act, its establishment was exempted from the provisions of the said enactment. It is in this situation, which is addressed to by the Hon'ble Apex Court in para 12. The obligation to pay bonus can be accepted by the employer voluntarily and employer, therefore can waive the benefit of exemption. However, if in given case, erroneously at some point of time the concession or exemption not available under the Octroi Rules, 1968 is allowed to a particular person, the Municipal Council may not be wrong in recalling it. However, we add that it is not the issue which arises for determination before us.
14] Exemption or concession extended to any industrial undertaking can not be withdrawn all of a sudden and in any case, without giving any opportunity of hearing to it. Such withdrawal or cancellation of facility will cause such an industry, a serious prejudice. Municipal Council therefore ought to have heard the petitioner before discontinuing or withdrawing the concession. In the present facts, as the respondents were not justified in denying the concessional rate to the petitioner, we find its action unsustainable. It is set aside.
Accordingly, we direct it to continue to abide the letter of Administrator dated 03-04-1991 at annexure-A with the petition.
::: Downloaded on - 13/03/2015 00:00:55 :::11 wp3524.97 Judg..odt 15] If any surplus amount is already recovered by the Municipal Council because of its wrongful action quashed supra, that amount shall be refunded to the present petitioner within a period of six months from today with simple interest calculated at 6% per annum. If the amount is not so refunded the Municipal Council shall be liable to pay interest @ 8% thereafter till the amount is either paid or recovered by the petitioner.
16] Rule is made absolute accordingly. No costs.
JUDGE JUDGE
Deshmukh
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