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Washim Municipal Council, Washim Vs. Chaganlal - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 438 of 1979
Reported inAIR1983Bom437
ActsMaharashtra Municipalities Act, 1965 - Sections 105; Constitution of India
AppellantWashim Municipal Council, Washim
Appellant AdvocateS.C. Mehadia, Adv.
Respondent AdvocateN.S. Munshi, Adv.
the case questioned on whether the truck brought within municipal area hired or offered for hire therein, was liable to pay octroi duty - the court ruled in such circumstances the resident owner would be liable to pay octroi duty. - [couto; m.l. pendse, jj.] in the first instance the order passed under s. 132(5) is an order of a summary nature and does not conclude the rights of the petitioners, because while passing the assessment order, it is always open to the petitioners to point out that the assets recovered in the search were not undisclosed to point out that the assetsrecovered in the search were not undisclosed income. secondly, the order passed under s. 132(5) is appealable under the provisions of the act and if there is any violation in the exercise of the power, then the proper..........duty of rupees 1,625 from the said chaganlal for having imported a truck no. mhv 2576 within washim municipal area. the said truck was registered at the ansing address in the name of chaganlal. ansing is a village about 20 miles away from washim. it was so registered under motor vehicles act at the aforesaid village.3. the defence of the defendant was that the vehicle was not registered within the washim municipal areas that it was not brought to washim municipal area when it was first purchased: that he did not give ansing address to evade tax and that octroi duty was not liable to be paid as the truck was not brought in washim municipal area for consumption, use or sale' by the defendant. 4. the learned trial judge held that the truck was brought within the municipal area of.....

1. This Revision Application is directed against a reversing decree and judgment passed by the Joint Judge in Regular Civil Appeal No. 105 of 1978. The claim involved being in a sum below Rs. 3,000 the present Revision Application is filed.

2. The suit out of which this Revision Application has arisen was filed by Washim Municipal Council against one Chaganlal to recover octroi duty of Rupees 1,625 from the said Chaganlal for having imported a truck No. MHV 2576 within Washim Municipal area. The said truck was registered at the Ansing address in the name of Chaganlal. Ansing is a village about 20 miles away from Washim. It was so registered under Motor Vehicles Act at the aforesaid village.

3. The defence of the defendant was that the vehicle was not registered within the Washim Municipal areas that it was not brought to Washim Municipal Area when it was first purchased: that he did not give Ansing address to evade tax and that octroi duty was not liable to be paid as the truck was not brought in Washim Municipal area for consumption, use or sale' by the defendant.

4. The learned trial Judge held that the truck was brought within the Municipal area of Washim and that the defendant had brought it within the meaning of the word 'bringing' in the Octroi Rules. He, therefore, decreed the plaintiff's suit.

5. Aggrieved by that judgment and decree. the defendant preferred an appeal before the District Judge, Akola. The learned District Judge who heard that appeal by judgment and order dt. 20-2-1979 held that no octroi was liviable as the truck could not be said to have been brought within the Municipal area for 'consumption. use or sale therein'. In that view of the matter he held that octroi was not livable and dismissed the suit allowing the appeal.

6. Evidence was led in the trial court which evidence was considered by both the Courts. That evidence in his opinion did not succeed, or was sufficient to bring the facts within the definition of goods liable to octroi. namely consumption. use or sale. In other words, the learned Joint Judge held that the evidence did not succeed in establishing that the defendant was using the truck within the Municipal area. He observed that 'It appears from the evidence on record that the truck is used in different States and it is possible to imagine that the defendant might be carrying on the goods from the Washim also to other places. Mere place of business of the defendant would not render the motor truck to be taxed.' He referred to a number of decisions which were cited before him both by the appellant as well as the respondent and came to the conclusion that 'the plaintiff has not satisfactorily established that the truck of the defendant was used within the municipal limits of Washim and as such the defendant was not livable to pay octroi.' He also held that the interpretation of the word 'use' must be made in such a manner as to be favourable to the defendant. He considered that as an obligation in view of the fact that octroi was a taxing statute and following the decisions in Central India Spinning. Weaving & Mfg. Code. Ltd. v. Municipal Committee. Wardha. : [1958]1SCR1102 and A. V. Fernandez v. State of Kerala. : [1957]1SCR837 he held that octroi being a taxing statute, where two interpretations were possible the interpretation in favour of the citizen must be accepted. While holding so, he did not record any conclusion as to what in his opinion is the second interpretation of the word 'use' which was applicable and which the defendant. owner of the truck. satisfied so as to be given the benefit of the alternative interpretation favourable to the citizen in a taxing statute. He also did not conclude on the basis of the evidence and facts as to for what purpose the vehicle was being put to use or used. if at all. within the Washim Municipal area.

7. Two questions arise and fall for determination in the present case. The first is whether considering the evidence, the vehicle could be said to be used or entered the municipal area of Washim for the purpose of 'use' so as to be liable to pay octroi duty. Octroi is obviously a one point tax levied for the first time when goods enter within an octroi area in which octroi is collectable. It is not mere entry of goods within such an octroi area which becomes liable to payment of octroi duty. The goods must be brought for either of the purposes mentioned therein namely for 'consumption. use or sale'. The first question which therefore. arises is as to what is the meaning of the words 'consumption. use or sale' or more particularly of the applicable word 'use' in this case. It is obvious that the other two. namely 'consumption' and 'sale' are not attracted in the present case. So far as the truck is concerned. it cannot be consumed and octroi would be livable if it is brought within the municipal area of Washim for purposes of sale.

8. The second question which arises is whether the evidence which was disclosed in the case and the circumstances which are established qualify for the use of the terminology that the truck was 'used' within the municipal area of Washim. inasmuch as the question is whether in the circumstances and the evidence the definition is attracted to the truck and whether it could be said to be used in the municipal area of Washim and. therefore. there is liability to pay octroi. It is obvious that the question as to what is established should be considered first.

9. There is little documentary evidence which is adduced which is of any assistance or use. The only evidence consists of oral evidence given by the Tax Superintendent of the Municipal Council and one process server of the plaintiff. The defendant examined himself.

10. It is common ground and undisputed that the defendant is a resident of Washim and also carries on business at Washim. He also admitted in his evidence that he does not reside at Ansing nor has he any office at Ansing. He also stated that 'I operate the business (presumably transport business) from the place where I get goods for transport'. It is also an admitted position that the defendant initially had a permit to operate only in the State of Maharashtra. He stated that for the first four months he operated the truck on short routes. After he got a permit he had operated on longer routs and now his truck is entitled to operate within the States of Andhra, Maharashtra and Gujarat. He denied a suggestion which was put to him in the cross-examination that he 'operated this business from Washim'.

11. What is, however. clear from the evidence of the Tax Superintendent is that the defendant carries on his business from Washim and that transport business is one of his businesses. The fact that the defendant operates the truck and carries goods on hire in his truck cannot be disputed and is not disputed. What has further appeared in the evidence is that the truck is parked near the house of the defendant or at the motor stand when it is not loaded.

12. It has come in the evidence that trucks passing through Washim had to take to what is called a transit pass. According to the defendant also 'whenever the truck passes through Washim' he has taken a transit pass. No such transit pass, however, is produced. On the other hand the plaintiff's tax superintendent stated 'no transit pass has been so far issued for this empty truck'. He also stated that it was his opinion that 'empty truck which halts at Washim should also take the transit pass'. The process server also gave evidence stating that the 'defendant does his business of truck from Washim' and that the truck 'halts at Washim when not in use'. In his cross-examination. however. he had to admit that he had not seen himself the 'defendant conducting his business'.

13. It will be clear from the aforesaid evidence that the defendant does carry on the business of transport or business of operating a truck from Washim that he has no business or residence or house at Ansing and that when this truck when not loaded is seen at the house of the defendant and is also parked at the motor stand at Washim. Further the truck visits Washim and is also admittedly loaded at Washim sometimes and takes goods out of Washim as well as brings goods inside Washim.

14. The question then is whether on the basis of this evidence of user and on the basis of the facts and circumstances which are established in this case. whether it could be said that this truck had entered Washim for purposes of 'use' so as to attract the liability of octroi duty.

14-A. It will be now convenient to refer to some of the definitions of the word 'use' in the various works in that behalf. In 'Words & Phrases' by John B. Saunters the meaning assigned to the word 'use' in his dictionary is quoted as 'to employ to any purpose'. The word there is said to be capable of wide signification. meaning thereby to make use of, to apply and to put into practice. It is not a word of precise meaning and 'conveys the idea of enjoyment derived by the user from the corpus of the object enjoyed' as held in Arbuckle Smith & Co. Ltd. v. Greenock Corpn. (1960) 1 All ER 568 (per Lord Radcliffe, at p. 574). In Stroud's Judicial Dictionary the word 'use' as occurring in various enactments and the meaning ascribed to it in those enactments has been referred: some of which may be of assistance in interpreting the word 'use' in the present case. In London County Council v. Wood. (1897) 2 QB 482, the word 'use' in Section 32 of Highways and Locomotives (Amendment) Act, 1878 fell for decision. It was held that a 'steam roller crossing one country in order to do work in another was, whilst passing over highways in its journey' was being used within S. 32 of the Act. It will thus be seen that where the steam roller was crossing the highway for working in another country, its journey over the highway was equated to its use on the highways. In the Motor Vehicles (Construction and Use) Regulations 1951. the word 'uses' occurs and was interpreted as was held applicable to cases where a driver was using the vehicle and was in charge of it. In James & Son v. Smee (1955) 1 QB 78. it was held 'if the driver is a servant then his matter is also 'using' the vehicle whether the master is a private individual or a limited company, provided that the servant is driving on his master's business.'

15. In the Constitution of India. the subject the Octroi is dealt with under Entry 52. List II of the Seventh Schedule. Octoroi tax is described as a tax on entry of goods into any local area 'for consumption. sue or sale therein'. A Municipality. therefore, is entitled to levy octroi in terms of the provisions of the Municipalities Act upon entry of goods, into its local area where the goods are imported for 'consumption. use or sale therein'.

15-A. Now the use of the twin words 'consumption' and 'use' clearly indicates that they convey different meanings. In consumption an article is also used. but this is tantamount to its being used up. The article changes its form and becomes a different article or is altogether used up. The simultaneous use of the word 'use' along with 'consumption' in the Entry, therefore, clearly indicates such use of articles or such application thereof as is different and distinct from consumption. To my mind, the 'use' therein is also contemplated to apply to cases where the article is 'put to use' or is 'applied for any purpose' within the octroi area. If, therefore. an article is 'put to use' within the municipal area. or if it is 'applied for any use' within the octroi area. it would be still goods entered or imported within the Municipal area for '''use therein' and, therefore, would be liable the octroi duty. Entries relating to Legislative subjects in the Constitution have to be given a wider meaning.

16. Mr. Mehadia strongly relied upon a judgment of the Gujarat High Court in Jafarabaad Municipality v. Kathiawar Industries. : AIR1969Guj344 . There the respondents were bringing into Jafarabad municipal area natural salt for being crushed in their factory and then exporting it out of the municipal area either as crushed salt or uncrushed salt, The contention was that salt so imported was not liable for payment of octroi duty as the salt was not used up in the process of grinding and was really the same in form. substance and matter. It was urged in that case that in order to attract the liability for payment of octroi. the article must be used. It may be either used up akin to consumption or must be so transformed as to become a different article and a different marketable commodity so as to attract and quality for the adjective 'use'. In other words it was urged that where the article ceased to be what it was when it was imported. and becomes a different article and is marketed as such. then only it could be described as an article imported for purposes of using it. Reliance in that case was also placed upon a judgment of the Supreme Court. : [1961]1SCR709 . Anwarkhan Mehboob Co. v. State of Bombay , where tobacco which contained waste materials and patti as also stems etc. was imported as such within the State of Bombay . The waste materials. stems and other things were removed and only leaf portion called patti was exported. There the word which fell for construction was 'consumption' and it was contended that the article was not consumed so as to attract excise duty. It was held that by removal of 'stems and dust from raw tobacco a different commercial article known as bidi patti came into existence which had a different marketability from that of raw tobacco'. It was, therefore, held that the article was consumed within the State and. therefore, the Act applied to it. In the Jafarabad Municipality's case also, the Gujarat High Court came to the conclusion that the ground salt or crushed salt though is not different in form, substance and composition. it is still a different marketable commodity and applying that test which was adopted in Anwarkhan's case (supra). allowed the appeal and held that octroi was livable in respect of such salt which was ground in the factory of the respondent. but not to such salt which was ground or crushed in that factory.

17. The reasoning of this decision seems to me can be applied and can be made applicable to cases of articles wherein the imported article is 'put to use' within the octroi area or is applied for purposes including making profit or gain out of it. If the article is applied for purposes of making profit or business then octroi would be attracted. If such meaning is given to the word 'use' and which would be consistent considering the circumstances. connotation and the context in which the word appears. it seems to me that it is capable of being attracted to a case where an article is brought within the octroi area and is put to use. Instances can be multiplied to show that in cases where articles which are used in the sense they do not get consumed or worn out in the process but are used or applied to obtain monetary advantage or some other benefit out of them. then such articles would be liable to octroi duty. Take for instance the import of plant and machinery, use of a car within the limits of a municipal area etc. they will still be used for the purposes of the owner. The purpose mayor may not be actually for making profit out of the articles or goods. Nevertheless it would still be used within the octroi area.

18. I may also refer to a judgment of a single Judge of this Court in R. B. Shirke Bros. v. Ratnagiri Municipality, : AIR1978Bom25 . There of course the facts were so strong against the appellant and are distinguishable from the present case. There the vehicle was registered within the municipal area in the name of the owner who was also residing therein. and was using it within the municipal area. Vehicle tax was paid in respect of the vehicle to the Municipality and it was only the octroi payment which was resisted. In the circumstances which were found established in that case. there could hardly be any difficulty in coming to the conclusion that the vehicle was used within the municipal limits.

19. Another instance of the extended definition of the word 'use' occurring in another statute and legislation is to be found in the case of State of U. P. v. Ramagya Sharma. : 1966CriLJ79 . That was a case of infringement of Cls. 5 and 7 of the Iron & Steel Control Order 1956. Iron and Steel obtained upon permits under that Control Order was found to be not used for the purposes for which they were obtained. There was no evidence of misuse of iron and steel articles. The Court held that though the word 'use' was capable of being given a wider application. it did not include nonuse thereof. Reliance in that behalf was placed upon Maxwell dealing with the 'Wide Sense given to words' indicating that words are 'frequently taken in the widest sense. sometimes even in a sense more wide than etymologically belongs or is popularity attached to them. in order to carry out effectually the legislative intent.'

20. If. therefore. the words are capable of being used. and meaning given to them in the widest sense. and even sometimes meaning given beyond the grammatical. etymological or popular meaning so as to stop the mischief and effectuate the intention of the legislation. then it seems to me quite clear that the intention in using the word in the collocation of words 'consumption. use or sale' with reference to the goods brought within an octroi area. the ordinary meaning and not merely the popular meaning of the word 'use'. 'Use therefore would include any such contingency of applying the goods imported for any purpose and would also include putting the goods to any use within the municipal area.

21. If this interpretation is correct and if this connotation is adopted. then it seems to me that in the circumstances of this case. where the truck was used for business and was hired within the municipal area of Washim or was offered for transport and for hire within the municipal area. the defendant was liable to pay octroi duty thereupon. Consequently and particularly when it was registered in the name of the defendant who was a resident of Washim, who had given the Ansing address without his having any business or residence there, is a case where clearly that was done for the purpose of evading the payment of octroi duty. In the circumstances of the user to which the truck is put within the municipal area of Washim. it must be held to have been brought into Washim area, an octroi area, and was, therefore, liable to pay octroi duty.

22. Consequently this Revision Application must be allowed and the judgment and decree of the lower appellate Court is set aside and reversed and that of the trail Court is restored. Rule made absolute in terms of the prayer. Respondent will pay the costs of the petitioner.

23. Revision allowed.

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