1. By this application under Articles 226 and 227 of the Constitution the petitioner, Municipal Council, Pandhurna, seeks a writ of certiorari for quashing an order passed in appeal by the sub-divisional Officer, Sausar setting aside a notice issued by the Municipal Council to the respondent No. 2 Abdul Rashid Khan asking the said respondentto pay double octroi duty in respect of a motor bus belonging to him.
2. This petition first came up for hearing before a Division Bench. At the time of the hearing of the petition before the Division Bench, one of the points raised on behalf of the respondent Abdul Rashid Khan was that the Municipal Council hati no power to impose octroi tax on motor vehicles inasmuch as motor vehicles did not fall within the meaning of the word 'motors' as used in item No. 87 (Class VIII) of the Schedule to the Rules framed by the Municipal Council for imposition of octroi tax. The Division Bench made this reference to a larger Bench as in its opinion the decisions in Municipal Committee, Malkapur v. Govind, 1955 Nag LJ 323 and S.R. Saharia v. Municipal Committee, Jabalpur, 1957 MPLJ 809 differed about the meaning of the word 'motor' as used in Octroi Imposition Rules framed by the Municipal Committee, Malkapur and the Municipal Committee, Jabalpur, and these rules were similar to the rules framed by the petitioner Municipal Council.
3. The material facts are that the respondent purchased a bus for the purpose of plying a stage carriage service from Mohgaon to Teegaon via Sausar and Pandhurna under a permit issued by the Regional Transport Authority, Jabalpur. The bus was first brought to Chhindwara and it was at Chhindwara that it was tested and passed before it was put on road. The petitioner Municipal Council made a demand for payment of octroi duty on the ground that as the bus halts at Pandhurna and takes up and leaves passengers at that place, it was brought within the municipal limits of the Pandhurna Municipal Council for consumption and use. The Municipal Council rejected the contention of the respondent Abdul Rashid Khan that as the bus only passed through Pandhurna while plying from Mohgaon to Teegaon, it could not be said to have been brought within the municipal limits of the Pandhurna Municipal Council for use and consumption and, therefore, the Council was not entitled to demand any octroi tax in respect of the bus. This contention was, however, accepted in appeal which Abdul Rashid Khan preferred before the Sub-Divisional Officer.
4. Section 66(1) (e) of the C. P. andBerar Municipalities Act, 1922 authorised the Municipal Council, to impose 'an octroi on animals or goods brought within the limits of the municipality for sale, consumption or use within those limits'. On 26th July 1958 the petitioner Municipal Council published rules sanctioned by the State Government imposing octroi tax on animals or goods brought within the octroi limits of the Municipal Council for sale, consumption or use within those limits. Clause (a) of item No. 87 (Class VIII) of the Schedule to these Rules specified the rate of octroi tax on 'motors', 'carriages' and 'all sorts of conveyances' and other articles.
5. It will be seen from the terms of Section 66 (1) (e) of the Act and the Rules framed by the petitioner Municipal Council on 26th July 1958 that the Municipal Council is entitled to demand octroi tax only in respect of those goods which are brought within the municipal limits for sale, consumption or use within those limits. The essential feature of the octroi tax are, therefore, (a) the bringing of the goods into the municipal limits and (b) the requirement that the goods should have been brought for the purpose of consumption, use or sale therein. The words 'brought within the limits of the municipality' are very significant. In them there is an element of pause or repose and they mean that animals or goods on which octroi is levied must be conveyed from another place and come to rest within the municipal limits. The second requirement of Section 66 (1) (e) and of the Rules shows that the goods must come to rest within the municipal limits for the purpose of sale, consumption or use therein. Thus, goods or animals in transit which merely pass through the limits of the Municipal Council, even if they are used within those municipal limits, cannot be said to have been brought within the limits of such a Municipality 'for the purpose of use or consumption'. The octroi tax is not a tax on the traffic of goods. The taxable event is the bringing of the goods within the municipal limits and that must be for the purpose of sale, use or consumption within the municipal limits.
6. In Burmah Shell Co. v. Belgaum Municipality, AIR 1963 SC 906, the Supreme Court while elucidating the difference between terminal tax and octroi has said that terminal tax is connected with the traffic of goods and that octroi is leviable in respect of goods brought into the municipal area for consumption, use or sale. The observations made by the Supreme Court in paragraph 21 of the judgment elucidating the meaning of the word 'consumption' support the view that in the expression 'goods brought within the municipal limits for sale, consumption or use', there is an element of pause or repose within the municipal limits for the purpose which the goods are brought. In fact, the Supreme Court has said in paragraph 21 that the concept of 'octroi' includes 'the bringing in of goods in a local area so that the goods come to a repose there.'
7. A Division Bench of this Court has pointed out in Anand Transport Co. (P.) Ltd. v. Board of Revenue, 1962 MPLJ 775 that to attract Section 66 (1) (e) of the Act it is not enough that certain goods have been brought within the limits of a municipality or that they have been merely used within such limits; it is only when goods are brought within the limits of a municipality for use within those limits that Clause (e) is attracted. In that case it has also been held that when a vehicle merely passes through the limits of a municipality or is casually brought within those limits, it cannot be taxed under Clause (e) and that similarly when a vehicle is so brought not for use within those limits but for making it fit for use, such as registration, passing or repairs, it cannot be taxed under Section 66 (1) (e). The decision in the case of Anand Transport Co. (P.) Ltd. v. Board of Revenue (supra) was referred to by Shrivastava J. in Municipal Council, Durg v. Gyan Singh, Second Appeal No. 469 of 1964, D/- 11-1-1968 (Madh. Pra) as indicating that the word 'use' occurring in Section 66 (1) (e) of the C. P. and Berar Municipalities Act had to be given a restricted meaning and hence a casual visit of a truck within the municipal limits would not make the truck liable to octroi duty. In that case Shrivastava J. rejected the claim of the Municipal Council, Durg, that it was entitled to impose octroi duty on certain trucks which used to transport gitti and other material to Durg from an outlying village and which trucks were always kept outside the municipal limits of Durg.
8. Now, in the present case, it is common ground that the owner of the bus in question, the respondent Abdul Rashid Khan, used to ply a stage carriage service from Mohgaon to Teegaon via Sausar and Pandhurna and the bus made a halt at Pandhurna for the purpose of picking up and alighting passengers. The halt of the bus at Pandhurna en route did not in any way constitute bringing in of the bus within the municipal limits of Pandhurno for the purpose of sale, use or consumption. It is nobody's case that the bus was brought to Pandhurna for sale to some purchaser residing within the municipal limits of Pandhurna. The bus was no doubt used by some passengers at Pandhurna when they alighted from it or boarded it. But it was not brought within the municipal limits of Pandhurna for use or consumption. It was only in transit and in the process of being used. The consumption or use of a stage carriage consists in the plying of a service with its aid. The bus comes to a repose within the limits of that municipality where it is brought forcommencing the service. The running of a service may be through the limits of several municipalities and passengers may use the bus in those limits. The bus may even at times run empty. But that does not make any difference to the position that the vehicle is brought for use and consumption within the limits of that municipality and comes to a repose there, where it is brought for commencing the service. It would be that Municipal Council and not the petitioner Municipal Council which would be entitled to impose an octroi tax in respect of the vehicle. It was never the intention of the Legislature to permit Municipal Councils to levy octroi tax on goods in transit which are not brought within the municipal limits and which do not come to rest there for the purpose of sale, use or consumption. The claim of the petitioner Municipal Council to levy an octroi tax on the respondent No. 2's bus merely on the ground that it passes through Pandhurna Municipality and makes a halt there cannot, therefore, be sustained.
9. In the view of the matter, it isreally not necessary to consider the question whether item No. 87 (Class VIII) of the Schedule to the Octroi Rules framed by the Pandhurna Municipal Council covered a bus. It may, however, be pointed out that there is really no conflict between the decisions in 1955 Nag LJ 323 (supra) and 1957 MPLJ 809 (supra) with regard to the meaning of the word 'motor'. In both these cases it has been held that the word 'motor' as used in the Octroi Rules of the Malkapur and Jabalpur Municipalities is wide enough to include motor cars and motor trucks. The two decisions differ in regard to the effect of the word 'excluding' used in item-58. Class VIII, of Rule 1 of the Malkapur Municipality as well as in item (70), Class VIII, of Rule 1 of the Octroi Rules of the Jabalpur Municipality. It may be noted that in item No. 87 (Class VIII) of the Schedule to the Octroi Rules of the petitioner Municipal Council the expression 'carriages and all sorts of conveyances' also occurs. These words are plainly wide enough to include a motor bus.
10. Learned counsel for the petitioner urged that the Sub-Divisional Officer had no authority after the coming into force of the M. P. Municipalities Act, 1961, to hear the appeal preferred by the non-applicant No. 2. The short answer to this contention is that the appeal preferred by Abdul Rashid Khan was pending when the M. P. Municipalities Act, 1961, came into force. Section 311 (1) of the 1961 Act provides that an appeal or revision pending before any authority under any of the enactments repealed by the 1961 Act immediately before thecommencement of that Act shall be heard and disposed of by the authority competent to hear such appeal or revision in accordance with the provisions of the enactment so repealed. Thus it is plain that the Sub-Divisional Officer who was authorised to hear and dispose of appeals under Section 83 of the C. P. and Berar Municipalities Act, 1922, was competent to hear and dispose of the appeal preferred by Abdul Rashid Khan which was pending when the 1961 Act came into force.
11. For these reasons, this petition is dismissed with costs of both the respondents. Counsel's fee for each of the respondents is fixed at Rs. 100/-. The outstanding amount of the security deposit after deduction of costs shall be refunded to the petitioner.