1. The order in this appeal shall also govern the disposal of Letters Patent Appeals Nos. 153 to 155, all of 1955. These appeals have been filed against the orders made by Bhutt J., in four miscellaneous petitions filed by the Municipal Committee, Sagar, asking that the orders of the Additional Deputy Commissioner, Sagar, and the Board of Revenue Madhya Pradesh, Nagpur, passed respectively on 11-12-1950 and 8-9-1954 be quashed.
2. The facts of these four cases are alike, except in the matter of some dates and amounts involved. Shortly stated these facts are as follows: The third respondent in each of these Letters Patent appeals is a firm of bidi merchants, which exported within the limits of the Sagar Municipality certain quantities of tobacco.
According to the rules existing in the said municipality they were required to pay octroi duty on the tobacco so imported. They, however, felt that in view of the demands of the Central Government of excise duty on the same tobacco the Municipal Committee was not entitled to make a second demand of octroi from them. They filled in the declaration forms prescribed, leaving the 5th column unentered, because they declined to pay the duty and did not even pay it in protest. Along with the declarations so filed they claimed a refund of the duty which, it has been mentioned, was not paid on that elate.
3. The firms then filed a suit for injunction against the Municipal Committee to prohibit the Committee from making the demand of the octroi duty. We need not go into the details of that suit except to say that it was dismissed on 13-12-1947 (Civil Suit 4A of 1947 of the Court of First Additional District Judge, Sagar).
The firms thereafter paid the octroi duty on 16-1-1948, and it seems that they pressed for the refund of a part of that duty on the ground that some of the goods imported had since been exported outside the municipal limits and that under the rules they were entitled to a refund of the duty so collected.
This request of theirs was turned down by the Municipal Committee, which appointed a sub-committee of the Finance Committee to consider the matter. The Sub-Committee decided all the cases of refund unfavourably to the firms on the ground that column 5 of the declaration asking for refund, which requires importers to show the amount of duty they had already paid, was left unfilled, and that the applications for refund were therefore liable to be rejected.
This recommendation of the Sub-Committee was approved by the Finance Committee by its resolution dated 14-12-1.948, and the said resolution in its turn was approved by the General Committee on 30-12-1948. Admittedly, this resolution was not communicated to the contending firms, and these firms filed an appeal against the order involved in the resolution of the General Committee before the Deputy Commissioner on 23-10-1950.
The appeal was heard by the Additional Deputy Commissioner, who by his order dated 3.1-12-1950 allowed the appeal and ordered refund of the octroi duty collected from the firms on tobacco which had since been exported outside the municipal area. A further appeal was taken to the Board of Revenue, but it was rejected.
It was in these circumstances that the Municipal Committee filed the four petitions out of which these present appeals arise for getting the orders of the Additional Deputy Commissioner and the Board of Revenue quashed.
4. The learned Single Judge dismissed the miscellaneous petitions, holding that the orders impugned were proper and that in any event these were not proper cases for interference by the High Court in exercise of its extraordinary powers under Article 226 of the Constitution. The order of the learned Single Judge is challenged before us, and we are asked to quash the two orders of the revenue authorities ordering refund of the duty collected.
We heard the learned counsel for the Municipal Committee, Sagar; but in the circumstances of the case we did not trouble the counsel for the respondents to reply.
5. The contention of the Municipal Committee is altogether technical. It says that the application for refund under the Rules can only be made when the duty has already been paid and not before. According to the Municipal Committee, these firms had declined to pay the duty demanded of them and had forcibly taken the goods into the municipal area, and yet they had made an application for refund of the duty.
In short, the contention of the Municipal Committee is that an application for refund made a year before the payment of the duty cannot be entertained, and that no fresh application for refund can now be entertained because it has to be made within a certain time. The answer of the firms is that they had not paid the duty because their suit for injunction was there and they had undertaken to pay the duty if the decision went against them.
The firms contend that even under the Rules the Municipal Committee was bound to refund the octroi duty collected on goods which were exported from the municipal area, and that the contention of the Municipal Committee is nothing but a device to pocket the duty which the committee can neither in law nor in equity retain.
It is also pointed out that the ground was not put in in that way before the revenue authorities and all that was stated was that in column 5 of the declaration asking for refund they did not name the duty which had been paid.
6. It is also contended by the Municipal Committee that an application for refund has to be made strictly in accordance with the Rules and that no such application having been made no refund can be granted. Lastly, the Municipal Committee has contended that the appeal filed before the Deputy Commissioner was out of time, because the period prescribed by the Statute is only 30 days and the appeal was ex Facie filed nearly two years after the resolution of the Municipal Committee.
7. There can be no doubt that each party was acting more or less in contravention of the Rules. The importing firms thought their contentions in the civil suit so strong that they took all risk and brought in the goods without payment of the duty. The Municipal Committee also did not enforce the coercive machinery of law to recover the duty from them.
Apparently, both sides acquiesced in each others' action and waited to see how the civil suit would be decided. In this way, the Rules about the recovery of the octroi duty from these importing firms remained to a large extent in abeyance and were only invoked when the civil suit was decided. The only action which the importing firms took was to make an application for refund, which in the circumstances appeared somewhat ludicrous because they had not paid the duty at all.
However, they pressed the application only when they had paid the duty after the dismissal of the suit. The action of the Municipal Committee turning down the firms' request for refund was also taken after the civil suit was decided. By that time it was clear to all concerned that the duty had to be paid, and in fact it was paid.
It was also clear to everybody concerned that a part of the goods had not remained inside the municipal area but had been exported. If one goes by the spirit of the Rules and the law, the Municipal Committee was no more entitled to retain the duty on the exported goods than the firms were exempted from payment of duty on the imported goods.
The payment of the duty in these circumstances was postponed, but the firms made good their part of the obligation under the Act by paying the whole of the duty on the imported goods. The Municipal Committee came up with technical objections having obtained the entire duty, because it did not wish to make the refund.
8. Now, this case, as we have said, presents unusual features. If everyone, that is to say, the Municipal Committee and the importing firms, had acted according to the letter of law, all these technical objections would not have been there; but neither the one nor the other did its duty under the Rules, and the Municipal Committee for years did not enforce the coercive machinery against the importing firms, apparently waiting to see first what the decision of the civil court would be.
In these circumstances, it is idle for the Municipal Committee to insist that the declaration forms executed by the importing firms should have shown the amount of duty paid contrary to the fact that no duty was paid or recovered. It seems, therefore, that this plea of the Municipal Committee is a technical one and is made mainly to enrich itself at the expense of these persons.
In these circumstances, we do not think that we can allow this unjust enrichment by the Municipal Committee, which has no more in its favour than the technicalities that the duty was not paid in time and that the application for refund was not made within 30 days of the export of the goods. It is for this reason that the Additional Deputy Commissioner, the Board of Revenue and the learned Single Judge did not allow technicalities to stand in the way of the answering respondents.
We do not wish to go too largely into the question of Rules, because we think that the highest authority appointed under the municipal law to decide appeals has given its verdict in favour of the answering firms, and if we were to interfere we would be using the technicalities of the law to cause an unjust enrichment to the Municipal Committee, which the policy of the law is to avoid: See American Jurisprudence Vol. 46 p. 101.
We think that in the exercise of our extraordinary powers under Article 226 we should be reluctant to interfere in a matter of this kind and particularly when the revenue authorities have not chosen to interfere and the learned Single Judge has not exercised his discretion under Article 226 of the Constitution.
9. The above disposes of the main contentions arising under the municipal law, except the one of limitation. Under Section 173 (2) power has been conceded by the C. P. and Berar Municipalities Act to the appellate authorities to extend the period allowed for appeal on sufficient cause being shown.
The learned Additional Deputy Commissioner held in this case that the Municipal Committee had taken no action to inform the respondent-firms about its resolution, and that the appeal was filed only after the resolution came to the notice of these firms. In view of this and in view of the fact that extension of time was approved by the highest tribunal appointed to scrutinize these matters under the C. P. and Berar Municipalities Act, we do not think, regard being had to the circumstances of this ease, that we should interfere.
10. The appeals fail and arc dismissed, but we do not make any order about costs, partly because we did not hear the other side and more so because these persons should not have taken the bold step of not paying the duty but should have, according to the Rules, deposited the amount of duty in full, which apparently they were in a very good position to do.
If they had done so, all this litigation would have been avoided, because their application for refund would not have been open to the technical objections such as have been raised.