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CIVIL APPELLATE JURISDICTION : Civil Appeal No 431/1961. Appeal from the judgment and order dated May 31, 1960, of the Mysore High Court in Writ Petition No. 94 of 1959. M. C. Setalvad, Attorney-General of India, D.N. Mukherjee and B. N. Ghosh, for the appellant.

A.V.Viswanatha Sastri and R. Gopalakrishnan,-for the respondent.

1962. November 16. The judgment of the Court was delivered by HIDAYATULLAH, J. In this appeal by certificate ,under Article 133 (1) (b) of the Constitution granted by the High Court of Mysore against its judgment and order dated May 31, 1960, the Burmah Shell Oil Storage & Distributing Company of India Ltd. is the appellant and the Belgaum Borough Municipality, Belguam, the respondent. The appeal arises out of proceedings commenced by the Company against the Municipality under Article 226 of the-constitution for a writ or, writs to prohibit the Municipality from arguing' octroi from the Company on its products brought inside the octroi limits for sale. The petition of the company was dismissed by the High Court. The Company deals in petrol and other petroleum' products which it manufactures in its refineries situated outside the octroi limits of Belgaum Municipality It brings these products inside the said area either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn sell them to others. The Company also directly sells its products to Government both Civil & Military, and to local bodies and big private concerns. The Company has a Divisional Office and Depot in Belgaum and the petition in the High Court was filed ,by the Divisional Manager in- charge of that area. The Company in the normal course of its business operations appoints dealers and licensees and typical forms of agreement between the Company and such dealers and licensees have been exhibited in the case. According to the Company, the goods, brought by it within the octroi limits can be divided into four separate categories as follows 1 . Goods consumed by the Company

"49. Cesses on the entry of goods into a local area for consumption, use or sale," and entry No. 52 of the State List in the Constitution which reads:-

"52. Taxes on the entry of goods into a local area for consumption use or sale therein."

It is pointed out that these Constitutional documents themselves indicate that octroi may be on goods (or animals) brought into a local area (a) for consumption (b) for use or

(c) for sale, and the Boroughs Act, before the amendment, had selected only two, namely, consumption and use and left out the third that is, sale". The tax was thus payable only when the goods or animals were brought for consumption or use, by the person who brought them in, but not when the goods or animals were brought in and sold and were consumed or used by the purchaser or someone else. It is conceded that after the amendment the tax was intended to be collected even in respect of goods brought for sale but here it is pointed out that the procedure under sections 75, 76 and 77 has not been followed as required by section 60 of the Boroughs Act and the imposition of octroi on goods and animals brought in, for sale fails to be effective. It is said that this amounts to a new tax and it needed to be imposed according to the provisions above- mentioned and reliance is placed ,upon Burmah Shell Oil Storage and Dist. Co. v. Manmad Municipality (1).