1. As common questions of law arise for determination in these cases, I propose to dispose of them by a common order.
2. The Petitioners in Writ Petitions Nos. 85 of 1976 and 3100 of 1977 who are the principal and sub-transport contractors respectively for carrying iron ore from Hubli railway station to Karwar-Belikere ports in their public carrier vehicles commonly called as 'lorries' or 'trucks', challenge the imposition of a fee called 'supervision fee, levied by the Hubli Dharwar Municipal Corporation (hereinafter referred to as the Corporation) at the rate of Rs. 2/- truck per journey.
3. Iron ore is extracted-from Bellary/Hospet Mines by a Karnataka Government company called 'the Mysore Minerals Limited' (hereinafter referred to as the MML). Another Government company called 'the Minerals and Metals Trading Corporation of India Limited' (hereinafter referred to as the MMTC) has entered into a contract with MML and the Government of Karnataka, to import iron ore of the quantity of about five to six lakhs tons annually from Karwar Belikere, ports situated in the State of Karnataka. One of the terms of the contract between the MMTC and MML is that such iron ore should be made available at the aforesaid two ports for shipments to foreign countries. But, in order to enable the shipment of the iron ore to foreign countries, iron ore will be transported from Bellary to Hubli by rail and from Hubli to Karwar Belikere which are not connected by train facilities by trucks owned by the petitioners, under a 'contract entered into by them with the. MMTC and MML. The term of the contract that is material for these cases reads thus:
(a) MML will load the iron ore into trucks provided by Transport contractor at the Hubli railway yard.
(b) The transport contractor will have to transport the iron ore from 'Hubli railway yard to Karwar Belikere ports.
At the Hubli railway yard, unloading of iron ore from the railway wagons and their re-loading on the trucks is inevitable. After such re-loading, the trucks proceed to their destination points and unload the iron ore for shipment from those places.
4. Briefly, the case of the petitioners, which is supported by MML and MMTC in so far as the challenge to the levy of is supervision fee against any of them this: (i).Iron ore is not imported into the Municipal Corporation limits for being exported; (ii) that there is no element of pause and repose in the journey though there is a break of journey of goods as a result of the unloading of the goods from the railway wagons and loading into the trucks; and (iii) the carriage of goods from Hospet to Karwar Belikere in a continuous process and the goods are really in transit. The petitioners have also contended, that in any event, they are not liable for payment of supervision fee and that it is only the MML and MMTC` that are liable to pay the same, which is disputed by them. On these grounds, the Petitioners contend that no supervision fee can be levied by the Corporation, either under the Bom. provincial Municipal Corporation Act, 1949, (Bombay Act No. LIX) (hereinafter referred to as the Bombay Act) that was in force till 1-6-1977 or thereafter on which day, the uniform 'the Karnataka Municipal Corporations Act of 1976 (Karnataka Act No. 14 of 1977), replacing the Bombay Act came into force. As the facts asserted by the petitioners, were disputed by the Corporation, this Court in Writ Petns. Nos. 1714 and 2640 of 1973 decided on 11-11-1975, directed the, Commissioner of the Corporation to determine the facts and the consequent liability under the Bombay Act. in pursuance of the directions of this Court, the Commissioner, after considering the representations and 'objections filed by the parties and after pro viding them an Opportunity of hearing, by his order No. LAW/OCT 26 + 29 dated l6th, December, - 1975, (Exhibit-A) has found that the facts asserted by the petitioners were correct. He has, however, held that the petitioners are liable for supervision fee under Section 147 of the Bombay Act for which reason, they have again moved this court for appropriate reliefs.
5. On the construction of the provisions of the Bombay Act, the Commissioner has held that the petitioners are liable for payment of supervision fee, which is supported by the Corporation. In its return, the Corporation does not dispute the facts asserted by the petitioners and found in their favour by the Commissioner. But still the Corporation has asserted that the goods are imported to be immediately exported for which reason they are not exigible to octroi but are exigible to supervision fee. The Corporation has also asserted that there is a break in the transit of goods by unloading and reloading at the railway yard and the transit of the goods is not continuous. The Corporation has also urged that even if the journey is continuous, in such event also, the petitioners are liable to pay the supervision fee.
6. Sriyuths K. Shivashankar Bhat and T. S. Ramachandra, learned counsel for the petitioners contended, that on the facts found by the Commissioner and admitted by the Corporation, Section 147 of the Bombay Act had no application. Elaborating the said contention, they urged that there was no import of goods, that loading and unloading at the railway yard was a continuous process in the transit of goods and the levy of supervision fee was unauthorised In support of their contention, learned counsel. for the petitioners, strongly relied on the rulings of the Supreme Court in Central India Spinning and Weaving and ., Empress Mills, Nagpur v. Municipal Committee, Wardha, : 1SCR1102 in Town Municipal Council, Kalaghatgi v. . Urmila Kothari, (1977) 1 Kant LJ 214 and the ruling of this Court in Urmila Kothari v Town Municipal Council, Kalaghate, (1976) Kant LJ 314 Sriyuths C. M. Desal and R. J. Babu, learned counsel appearing for MML and MMTC agreed with these submissions and supported the petitioners
7. Sri H K. Vasudeva Reddy, learned counsel for the Corpn. contested every one of the contentions urged for the petitioners and supported the levy on diverse grounds. Firstly, he urged that by reason of unloading and reloading at Hubli railway yard there is import into the Corporation limits, though the goods may not be used for purposes of consumption, use or isle in the territorial limits of the Corporation. In urging this contention Sri Vasudeva Reddy maintained that the rulings of the Supreme Court in the Central India Spinning and Weaving. and Mfg. Co. Ltd's case, and the Town Municipal Council, Kalaghatgi's cases have no application. Secondly, he urged that even to ascertain whether the goods have been imported or not, supervision fee can be levied on the petitioners. Before examining the contentions urged for the petitioners, it is useful to examine the first contention urged by Sri Vasudeva Reddy immediately as that will facilitate a proper appreciation of the contention urged for the petitioners.
8. On an examination of the pleadings and the material placed before him, the Commissioner agreeing with the case of the petitioners, MML and MMTC, has found that the goods are not imported for purposes of consumption, use or sale within the Corporation limits and that at the railway yard they are merely unloaded and reloaded on the trucks. The fact there is unloading and reloading at the railway yard, situated in the territorial limits of the Municipal Corporation is not disputed either by the petitioners or by MML and MMTC All these are not denied or disputed by the Corporation. But, still the Corporation, somewhat strangely, contends that the goods are imported into the limits of the Municipal Corporation and that by reason of the unloading from the railway wagons and reloading on the lorries, there is a break in the carriage or transit of goods.
9. As noticed earlier, the unloading and reloading at the Hubli railway yard to a different mode of transport viz., trucks is necessitated and compelled for the sole reason that Hubli Karwar Belikere are not connected by train. If the first loading Point of the iron ore viz. Hospet/ Bellary were directly connected by train to Karwar Belikere being the two shipment places for export to foreign countries, the goods would have travelled only in the goods trains and not by means of lorry transport. Secondly, it is common knowledge that iron ore extracted from the mines, is not used an such but undergoes a complicated process of manufacture in modem steel plants situated in this country or other foreign countries. Admittedly there is no modern steel manufacturing plant within the territorial limits of the Hubli - Dharwar Municipal Corporation. In these circumstances, to say that iron ore is imported into Hubli for use, sale or consumption unimaginable and is totally unrealistic.
10. In the Central India Spinning and Weaving and 's., case the facts in brief were these: The cotton bales of the appellant were transported from Yeotmal to Nagpur by road on vehicles passing the Municipal limits of Wardha Municipality. The goods were not unloaded or reloaded at Wardha but were merely carried across the municipal area. By reason of that fact only, the Wardha Municipality sought to impose a Ex called 'terminal tax' on the goods of the appellant purporting to act under Section 66 (1) (o) of the C. P. & Berar Municipalities Act, 1922, which provided for levy of a terminal tax on goods or animal imported into or exported from the limits of a Municipality. The appellant resisted the claim of the Municipality on diverse grounds and contended that there was neither import into nor export from the limits of the Municipality and therefore there was no occasion for levying the terminal tax. On -a review of the English, American and Indian authorities, a Constitution Bench of the Supreme Court interpreted the words 'imported into and exported from' the Municipal limits occurring in Clause (6) of sub-section (1) of Section 66 in these words:
'By giving to the words 'imported into exported from' their derivative meaning without any reference to the ordinary connotation of these words as used in the commercial sense, the decided cases in India have ascribed too general a meaning to these words it appears from the setting, context and history of the clause was not intended. The effect of the construction of 'import' or 'export' in the manner Insisted upon by the respondent would make rail borne goods Passing through a railway station within the limits of a Municipality liable to the imposition of the tax on their arrival at the railway station or departure there from 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 to the rules of interpretation, to be avoided.'
In the latest case of Town Municipal Council, Kalaghatgi, which will be noticed by me in detail at a later stage which arose out of a writ petition filed by the petitioner in W.P. No. 3100 of 1977, the Supreme Court has reiterated the same principle. The principle enunciated by the Supreme Court is a legal principle land cannot be distinguished on the ground that the facts in those cases were not identical to the facts in the present cases. After all no case is an authority on facts. For these reasons, there is no merit in this contention of Sri Vasudeva Reddy and I reject the same.
11. Section 147 of the Bombay Act on which the Corporation has based its claim, seriously disputed by the petitioners, reads thus
'147. Until the contrary is proved any goods imported into the City shall be presumed to have been ported for the purposes of consumption, use or sale therein unless such goods are conveyed from the place of import to the place of export by such routes, within such time, under such supervision and on payment of such fees therefor as shall be determined by the standing orders'.
Section 147 of the Bombay Act occurs under the sub-heading of 'Exemptions from Octroi', of Chap. XI of Municipal Taxation. The heading of Section 147 'of the Bombay Act is 'Articles imported for immediate exportation'. The heading of a section gives a clue in understanding the meaning of the section, though the same cannot control the plain language of the, section itself. In this background, one may say that Section 147 of the Bombay Act provides for exemption from octroi on goods leviable for octroi imported for Immediate exportation.
12. Section 147 of the Bombay Act provides for an initial presumption that goods imported into the territorial limits of a municipal Corporation have been imported for the purposes of consumption, use or sale in the territorial limits of such a Corporation. The initial presumption raised is a rebuttable presumption and the party asserting to the contrary has to establish the same, except in those cases where the Municipal Corporation admits them or does not dispute them as in the present cases.
13. While Sri Shivashankar Bhat contends that the opening words 'until the contrary is proved' qualities both the parts of Section 147 of the Bombay Act Sri Vasudeva Reddy maintains that it is not so and those words qualify only the former part of that section' viz., 'any goods imported into the city shall be presumed to have been imported for the purposes of consumption, use or sale therein'. In other words, the. attempt made by Sri Vasudeva Reddy is to read the two parts of the same section as independent sections or as providing for two contingencies. The word 'unless' is a conjunction and means 'if not'. That word is a pleonasm and' is used only to add emphasis (vide 'pleonasm' at page 455 of the Flower's Modem English Usage, Il Edition, Revised by Sir Ernest Gowers published by the English Language Book Society and Oxford University, Press). I do not see any reason to depart from the rules of grammar and give an artificial meaning to the word 'unless' occurring in Section 147 of the Bombay Act. In this view, it would be proper to hold that the words 'unless the contrary is proved' qualify both the parts of that section. As noticed earlier, the goods are neither imported into nor exported from the territorial limits of the Hubli-Dharwar Corporation but they are only in continuous and unbroken journey to reach their destination viz., Karwar Belikere ports. The goods merely pass through or cut across the limits of Hubli-Dharwar Corporation without cause or repose and thus the later part of Section 147 of the Bombay Ad also does not authorise the levy of supervision fee. Which are then the other cases in which supervision, fee can. be levied under Section 147 of the Bombay Act, is a matter that does not arise for my determination. I therefore, refrain to express my opinion on that question.
14. In my opinion, the above principle is also concluded by the ruling of this Court in Town Municipal Council, Kalaghatgi's case, affirmed in appeal by the Supreme Court. In order to ascertain the same, it is useful to refer to the facts of that case and the principles enunciated therein in some detail. On the road passing through Hubli to Karwar, the trucks carrying iron ore of the petitioner in W. P. No. 3100 of 1977 had to pass through a portion of the road lying in the Municipal limits of Kalaghatgi town at which place there is a town Municipality established and functioning under the provisions of the Karnataka Municipalities Act, 1964 (Karnataka Act No. 22 of 1964) (hereinafter referred to as 'the 1964 Act'). The trucks pass through the said road portion without pause or repose, unloading or reloading. But still the said Municipality in the purported exercise of its power under Section 124 of the 1964 Act, levied a fee called 'supervision fee' against the petitioner which was challenged by it before this court. On 3rd March 1976 a learned single Judge of this Court dismissed the said writ petition but, in Writ Appeal No. 150 of 11976, the Division Bench of this Court consisting of Govinda Bhat, C. J. and Venkatachaliah, J. reversed the said decision' and upheld the claim of the petitioner. On the authority of the ruling of the Supreme Court in Burmah Shell Oil Storage and Distributing Co. of India Ltd. v. Commercial Tax Officer, : 1SCR902 , the Division Bench held that the words 'import' and 'export' occurring in Section 124 of 1964 Act were not defined terms and are used only in their ordinary sense (vide para 7). After referring to the principles enunciated, in the Central India Spinning and Weaving and 's., case, the Division Bench observed thus:
'In the present case, to attract the provisions of Section 124 of the Act, the goods must be 'brought into the municipal limits for the purpose of immediate exportation'. The ideas bringing in' and 'export' are complementary to ea h other, and the essential element implicit in these two processes is that an element of pause and repose is at to the first process before the second process of export commences. The expression 'brought into' and 'immediate exportation' thus understood do not in our opinion, take in or envisage a continuous process of transit of goods by vehicles which merely use the State highways across the municipal areas. Upon a proper construction of Section 124 of the Act, such a process of continuous transit cannot be held to imply or involve the process of 'bringing into? and immediate exportation' -from the municipal limits of the goods in question. For instance, a vessel say, with a corgo, destined for New Zealand may call in at a number of ports on the voyage and may continue her voyage without it being said that the goods it carries are 'imported goods' and were brought into each of the ports for the immediate purpose of exportation therefrom'.
We are unable to bring ourselves to agree with the view taken by the learned single Judge. The trucks of appellant which merely pass through the State highways within the municipality limits cannot be said to have 'brought into' for the 'immediate purpose of exportation' from the municipal limits the cargo they carry. The -impugned levy on such trucks is not one that can be said to be authorised by Section 124 of the Act.The above decision of this 'Court was challenged by the Municipality in appeal before the Supreme Court. Affirming the decision of this Court, the Supreme Court observed thus:
'The opening words of Section 124 of the Act viz., 'any article or animal brought into the municipal limits for the purpose of immediate exportation' on the construction of which the up shop of the case depends are very important. They imply processes of 'importing into' ,and 'exporting from' the municipal limits of goods or animals and are indicative of an element of repose and rest of 'the goods within the municipal limits. As rightly held by the Division Bench of the High Court, the expressions brought into' and 'immediate exportation' do not comprehend within their sweep the continuous process of transit of goods, by vehicles which merely use the State highways passing through the areas which lie within the municipal limits. In the instant case,' the iron ore is carried in the trucks of the respondent which merely pass through the areas which lie within the municipal limits and is not unloaded and reloaded at any place within the municipal area. As such, the important element of repose and rest which the words 'brought' into the municipal limits for -the purpose of immediate 'exportation imply is absent in the instant case' In the next para quoting with approval, extensively, the principles enunciated in the Central India spinning and Weaving and 's., case the Supreme Court proceeded to observe thus:
'The enunciation of law in the above case fully covers the present case. In the present case also, the iron ore which is in transit from Railyard at Hubli to Karwar and Belikere harbours can hardly be characterised as goods brought into or exported from the municipal limits of Kalaghatgi because they are neither imported into nor exported from any point within municipal limits but are merely carried across a particular stretch of territory or across a particular area with the object of being transported to its ultimate destination. In Brown v. State of Maryland, (1827) 12 Wheat 419, 442, 6 Law Ed. 678, 686, Chief-Justice Marshal dealing with the word importation said as follows:
'The practice of most commercial nations conforms to this idea. Duties according to that practice, are charged on those articles only which are intended for sale or consumption in the country. Thus sea stores, goods imported and re-exported in the same vessel, goods landed and carried, over land for the purpose of being re-exported from some other port, goods forced in by stress of weather, and landed, but not for sale are exempted from the payment of duties. The whole course of legislation on the subject shows that in the opinion of the legislature the right to sell is connected with the payment of the duties'.
In Wilson v. Robertson, (1855) 24 LJ QB 185 where Section 33 of the 48 Geo 3, c. civ., imposed a duty on all goods 'imported into or exported from Berwick Harbour', and the harbour extended from Berkwick down the Tweed to the sea, but not above the bridge and goods were brought up the river in a seagoing vessel which, having first used the Harbour Commissioners' rings and posts in order to moor the vessel while lowering the masts, passed through Berwick Bridge and unloaded her cargo about 200 yards above the bridge and beyond the limits of the harbour; it was held that these goods were not 'imported into' the harbour and as such liable to duty.
Bearing in mind the above authoritative enunciation of law, we are of opinion that as the continuity or continuous process of the carriage of iron ore is not in any way in fact broken within the municipal limits of Kalaghatgi, the respondent cannot be said either to bring in or export the iron ore as contemplated by Section 124 of the Act read with Rule 26 of the Rules and as such is not liable to pay the octroi or what is styled as 'supervision fee'. A contrary interpretation Would make rail borne goods passing through the Railway stations within the limits of the municipality liable to the imposition of the fee on their arrival at those Railway Stations and departure therefrom which, could not be the intention of the Legislature. The High Court was, therefore, perfectly justified in Allowing the appeal and issuing the writ sought for'.
The language of Section 124 of the 1964 Act is not in pari materia with Section 147 of the Bombay Act. But, a close reading of those two provisions, reveals that the purpose, scheme and object for which they have been enacted are one and the same. In this view, the construction placed by the Supreme Court and this Court on Section 124 of the 1964 Act, is equally applicable in construing Section 147 of the Bombay Act and the corresponding provisions if any, of the Karnataka Municipal Corporation Act, 1976 (Karnataka Act No. 14 of 1977) that came into force from 1-6-1977 replacing the Bombay Act which, however, now stands omitted on the abolition of the octroi in the State. I have, therefore, no hesitation in holding that the levy and collection of supervision fee by the Corporation, on the petitioners is wholly unauthorised and is illegal.
15. As I have held that the Corporation cannot levy the fee, it is unnecessary to examine as to who is liable for payment the same to the Corporation.
16. In the light of my above discussion I make the following order:
(a) quash the order No. LAW/OCT 26+29 dated 16th December, 1975 (Exhibit-A in Writ Petition No. 85 of 1976) of the Commissioner, Hubli Dharwar Municipal Corporation-,
(b) declare that the Hubli Dharwar Municipal Corporation respondent No. I cannot levy and collect supervision fee on the public carrier vehicles or trucks that carry iron ore from Hubli railway station to Karwar Belikere ports either, under the Bombay Provincial Municipal Corporations Act, 1949. (Bombay Act LIX) or under the Karnataka Municipal Corporation Act, 1976 (Karnataka Act No. 14 of 1977);
(c) restrain the Hubli Dharwar Corporation - respondent No. 1 from collecting supervision fee ' from the 'petitioners, on their public carrier vehicles or trucks carrying iron ore from Hubli railway station to Karwar Belikere ports in future; and
(d) direct the Hubli Dharwar. Corporation respondent No. I to refund the supervision fee, so far collected by it to the petitioners.
17. Rule issued is made absolute.
18. Petitioners are entitled to their costs from respondent No. 1. Advocate's Sees Rs. 100/- in each petition.
19. Petitions allowed.