Skip to content


Municipal Corporation of Delhi and anr. Vs. Man Mohan Tuli and ors. - Court Judgment

LegalCrystal Citation
SubjectOther Taxes
CourtDelhi High Court
Decided On
Case NumberLetters Patent Appeal Nos. 72, 73 and 103 of 1977
Judge
Reported inAIR1979Delhi144
ActsDelhi Municipal Corporation Act, 1957 - Sections 178(1); Delhi Terminal Tax Rules, 1958 - Rules 2(3), 2(16), 10, 10(16), 17(1) and 27(1)
AppellantMunicipal Corporation of Delhi and anr.
RespondentMan Mohan Tuli and ors.
Appellant Advocate S.T. Desai, Sr. Adv. and; R.B. Datar, Adv
Respondent Advocate Madan Bhatia, ; Maheshwar Dayal, ; B.N. Kirpal and ;
Cases ReferredA. In Amrit Banaspati Co. Ltd. v. Union of India
Excerpt:
the case debated on terminal taxing on the goods carried - it was that the trucks entered the godowns from uttar pradesh border line were limited by the godowns in delhi corporation - for which the terminal tax was levied - it was held that goods within the municipal limits for immediate export was exempted from the terminal taxing - section 13: [altamas kabir & cyriac joseph,jj] custody of child - welfare of child vis--vis comity of courts - the minor girl child of 3 1/2 years was brought to india by her mother. the minor girl was a citizen of u.k. being born in u.k. her parents had set up their matrimonial home in u.k. and had acquired status of permanent residents of u.k. the child with her mother was supposed to return to u.k. but the mother cancelled her tickets and remained.....1. letters patent appeals nos. 72 and 73 of 1977 have been filed against the common judgment of h. 4 anand, j., dated 27th january, 1977, in civil writ petitions nos. 240 of 1976 and 73 of 1976 respectively.2. letters patent appeal no. 103 of 1977 has been filed against the judgment of dalip k, kapur, j., dated 23rd march, 1977, in civil writ petition no. 183 of 1976.3. by the said judgments, the three writ petitions were allowed, and hence the present three appeals. these three appeals have been heard together as they involve common points for determination.4. the petitioners in civil writ petition no. 240 of 1976 were:(1) m/s. nitco roadways private limited, (2), r. l bhalla, general manager and shareholder of m/s. nitco roadways private limited, and the respondents were: (1) the union.....
Judgment:

1. Letters Patent Appeals Nos. 72 and 73 of 1977 have been filed against the common judgment of H. 4 Anand, J., dated 27th January, 1977, in Civil Writ Petitions Nos. 240 of 1976 and 73 of 1976 respectively.

2. Letters Patent Appeal No. 103 of 1977 has been filed against the Judgment of Dalip K, Kapur, J., Dated 23rd March, 1977, in Civil Writ Petition No. 183 of 1976.

3. By the said judgments, the three Writ Petitions were allowed, and hence the present three appeals. These three appeals have been heard together as they involve common points for determination.

4. The petitioners in Civil Writ Petition No. 240 of 1976 were:

(1) M/s. Nitco Roadways Private Limited,

(2), R. L Bhalla, General Manager and shareholder of M/s. Nitco Roadways Private Limited,

and the respondents were:

(1) The Union of India through Secretary, Ministry of Home Affairs,

(2) The Delhi Terminal Tax Agency/ Commissioner, Delhi Municipal Corporation.

(3) The Lt. Governor for the Union Territory of Delhi, and

(4) Shri I. L. Dawara, Terminal Tax Officer, Municipal Corporation of Delhi, Delhi,

5. The petitioner in Civil Writ Petition No, 173 of 1976 was Manmohan Tuli, and the respondents were (1) The Union of India through the Secretary, Ministry of Home Affairs, (2) the Municipal Corporation of Delhi through its Commissioner, (3), The Commissioner, Municipal Corporation of Delhi, (4) The Terminal Tax officer, Municipal Corporation of Delhi and (5) The Ghaziabad Nagar Palika, Ghaziabad, U. P. It appears that on an objection as to the locus stands of Manmohan Tuli, one of the tenants, Associated Traders and Engineers Ltd. was allowed to be imp leaded as a Co.-petitioner,

The petitioners in Civil Writ Petition No. 183 of 1976 were:

(1) Shrimati Uma Devi, Wife of Shri Hazari Lal, ,

(2) Shrimati Maya Devi, Wife of Shri Tam Vatar,

(3) Shrimati Mira Devi, wife of Shri Rattan Lal, and the respondents were:

(1) The Union of India through the Secretary, Ministry of Home Affairs,

(2) The Municipal Corporation of Delhi through its Commissioner,

(3) The Commissioner, Municipal Corporation of Delhi, Delhi,

(4) The Terminal Tax Officer, Municipal Corporation of Delhi, Delhi,

(5) The State of Uttar Pradesh through the Chief Secretary,

(6) M/s, Economic Transport Organization,

(7) Tatanagar Transport Corporation, and

(8) M/s, Shanti Roadways,

6. The circumstances in which the Writ petitions were filed were as follows. Manmohan Tuli is the owner of a piece of land situate by the side of the Grand Trunk Road near the sixth milestone from Delhi to Ghaziabad beyond Shahdara-Delhi-cum Uttar Pradesh (U. P.) Border. A layout plan has been filed along with the writ petitions. It shows that the said land is surrounded on , sides, ie., south and west, by the territories of Uttar Pradesh and on the other two sides, i.e., north and east, by the Union Territory of Delhi. The plan also shows, and it is common ground, that the Delhi-U. P. Border line passed through the southern portion of the said land of ManmohanTuli, and most of the said land lies to the north side of the border line and only a small strip of it lies to the south of the said line. Manmohan Tuli construct ed various buildings on his land for use as godowns for the purpose of renting them out to various companies including transport companies to be used by them for unloading their goods brought by trucks and temporarily storing them there before their transship said godowns are built on the land in such a manner that there is an entrance on the southern side of the land and the trucks carrying goods can pass into the land only through the said entrance from the Grand Trunk Road (G. T. Road) which is within the territory of the State of U. P. and which forms part of the local area of the Ghaziabad Nagar Palika. It is common case that the north of the aforesaid land is undeveloped, low lying, and water logged, and is incapable of being used for plying lorries and trucks.

7. Manmohan Tuli let out some of the godowns to some transport organizations which have interstate operations involving interstate movement of goods. The trucks carrying goods for various destinations pass along the G.T. Road, and move into the godowns in Manmohan Tuli's land through the aforesaid entrance. It is common ground that the goods thus brought into the land whereon the godowns are situated are unloaded for being sorted out and the goods intended for various destinations are re-loaded into the respective trucks going to the said destinations. The trucks then move out of the land through the same entrance back to the G. T. Road and go to the respective places of destination. In other words, the trucks carrying goods come by the G. T. Road, cross the Delhi U. P. Border line and enter the land of Manmohan Tuli which is in the Union Territory of Delhi. As the goods were thus being carried into the Union Territory of Delhi after crossing the border line, the Terminal Tax officer of the Municipal Corporation of Delhi passed two orders, dated 23rd May, 1975 and 7th July, 1975, in pursuance of which a terminal tax post was attempted to be set up at the entrance to Manmohan Tuli's land for the purpose of collecting terminal tax on goods carried into the said land. The Ghaziabad Nagar Palika also purported to levy terminal tax on such goods on the ground that the land in front of the entrance to the land of Manmohan Tuli and through which the trucks pass for reaching the entrance, is according to it, situate within its local limits. It may be stated here that there is another terminal tax post established at point on the G. T. Road to the West of the aforesaid entrance to the land of Manmohan Tuli and near the Shahdara-Delhi-cum U. P. Border, and, according to the petitioners, terminal tax was being charged by the Municipal Corporation once again on the same goods when they move out of the godowns situated in the land of Manmohan Tuli back to the G. T. Road which is in U. P. and pass through the said terminal tax post again into the Union Territory of Delhi.

The petitioners had thus three grievances, namely,-

(1) that a terminal tax post was sought to be set up at the entrance to the land of Manmohan Tuli;

(2) that the terminal tax was being levied on the goods brought by the trucks into the said land even though they were taken into the land for only , sorted out and transshipped again to various destinations and were thus merely in transit;

(3) that the same goods were being subjected again to another terminal tax when they pass through the second check post established on the G. T Road, to the west of Manmohan Tuli's land and near the Shahdara-Delhi-cum U. P. Border; and

(4) that the goods were also being subjected to terminal tax by the local body of Ghaziabad.

8. It was in those circumstances that the petitioners in Civil Writ Petition No. 240 of'1976, who are doing the business of transport of goods, the petitioner in Civil Writ Petition No, 73 of 1976, Manmohan Tuli, who is the owner of the land in which the godowns are situated, and the petitioners in Civil Writ Petition No. 240 of 1976, who claim to be joint owners of the land along with. Manmohan Tuli, filed the respective writ petitions, praying-

(1) that the orders, dated 23rd May, 1975 and 7th July, 1975 be quashed;

(2) that the respondents in the writ petitions be prohibited from establishing any terminal tax post near the entrance to land/godowns of Manmohan Tuli; and

(3) that the said respondents be prohibited from levying demanding or imposing any terminal tax in respect of the goods brought into the said land/godowns for sorting and transshipping them to various destinations.

9. Counter-affidavits were filed by the respondents in the writ petitions wherein they maintained that they were entitled to. establish a check-post or terminal tax-post at the border line mar the entrance of the land/godowns of Manmohan Tuli, that no terminal tax was being charged on the goods which were meant for immediate export and a procedure has been laid down for obtaining transit passes for such goods, that it was incorrect to say that terminal tax was being charged twice over for goods carried into the Union Territory of Delhi and that the orders, sought to be quashed were issued by appropriate authorities in due exercise of powers vested in them to issue such orders/notifications.

10. H. L Anand J., who heard Civil Writ Petitions Nos. 240 of 1976 and 73 of 1976, by his common, judgment, dated 27th January, 11977, held-

I, for the purpose of terminal tax, entry of goods into the godowns and their storage in them for transshipment or otherwise did not amount to carriage of goods into the Union Territory of Delhi in transit or otherwise, because

(a), the goods could be said to be carried into the Union Territory of Delhi only when they entered into an area which was freely accessible from the Union Territory of Delhi and which in turn had an opening into that territory as would happen where the goods are carried into the Union Territory of Delhi, either through the terminal tax barrier fixed under the Rules or otherwise at any point of entry where there is an access to the Union Territory;

(b) the carriage of the goods into the godowns in question did not tantamount to the carriage of the goods to the Union Territory of Delhi since the carriage was in fact into a building the access to which was not through the Union Territory of Delhi and part of which was admittedly not in the Union Territory of Delhi, and the entry of the goods into such a building could not be said to be an entry into the Union Territory of Delhi for the purpose of terminal tax on goods, and for the same reason, for the purpose of terminal tax, the building could not be said to be situated within the Union Territory of Delhi; and

(c) Prima facie, taxability would depend on the ability of the local body to provide the necessary civic services, and the Municipal Corporation of Delhi had admittedly not provided any of the services to the godowns, nor had it claimed that it was in a position to do so because of the peculiar location of the property and the situs of its only entry which rendered it necessary to pass through the territory of the neighbouring local body in the territory of State of U. P.;

II. that on a true interpretation of the provision in Section 178(1) of the Delhi Municipal Corporation Act, and having regard to the historical background of the taxes and other relevant considerations, it must be held that S. 178(1) authorises a levy of terminal tax on goods which are carried by rail or road into the Union Territory of Delhi from any place outside thereof for consumption or use or sale in such territory, and thereforee, entry of goods into the Union Territory of Delhi in transit, with or with, out transshipment or haltage, would be outside the taxing sweep of the Provision;

III. that goods in transit are not subject to the levy of terminal tax if they are bona fide in transit, even though it is necessary to unload the goods for transshipment and vehicles have to halt for the purpose for a reasonable period, subject, however, to the power of the Corporation to take such effective steps of the prevention of evasion of the levy as may be considered necessary; and

IV. that the entry into the godowns followed by an exit from there for entry into the local area through the barrier could not be treated as two distinct acts of entry, as the goods which entered the Union Territory when they, entered into the building were leaving the building not for movement to a place outside the territory but to continue the process of transit, and thereforee, it would be wholly unreasonable to treat the second entry as a fresh act of entry and levy terminal tax for a second time.

10-A. In the result, the learned Judge quashed the two impugned orders, and also restrained the Corporation from treating the entry into the building as an entry into the Union Territory of Delhi and from levying any terminal tax on the goods while in transit in the Union Territory of Delhi even though it may involve transshipment, haltage and coordination for the purpose of transit. The learned Judge made it clear that the Corporation would, however, be within its right to devise reasonable restrictions in regulating the transshipment, haltage and coordination in the process of transit of the goods through the Union Territory of Delhi.

11. Dalip K. Kapur J., who heard C.W.P. No. 183 of 1976, by his judgment dated 23rd March, 1977, allowed the said writ petition following the judgment of H. L. Anand, J. It appears that submissions were made before the learned Judge in order to dissuade him from following the judgment of H. L. Anand, J. However, rejecting the said submissions, Dalip K. Kapur, J. held that the contention of the respondents in the writ petition that the terminal tax can be charged even on goods which enter the Union Territory of Delhi in the course of passing through, i.e. in transit, cannot be accepted in view of the terms of Section 178(1) of the Delhi Municipal Corporation Act, 1957. The learned Judge pointed out that the words 'carried into' used in the said provision denote something of a permanent character and do not include 'carried into' in transitory sense, and that the expression carried into' is not the same thing as , carried through. The learned judge also pointed out that in fact the Corporation does not impose terminal tax on goods which merely pass through Delhi and in such a case a transit pass system is in operation, that however, there is a time limit relating to the period during which the goods can be retained in the Union Territory of Delhi while in transit, namely a few hours, and that in the instant case the goods are retained for longer than the permissible period for the reasons that the godowns are situated on the border between U. P. and Delhi and the goods are brought into the godowns for the purpose of sorting them out and transshipping them by different trucks for various destinations. In view of the same, the learned judge, while allowing the writ petition, directed the Corporation to work out a special procedure for imposing terminal tax in the case of the godowns in question which would both prevent evasion of tax and also not lead to imposition of tax on goods which are not otherwise liable in the sense that they are goods in transit merely staying on longer than is ordinarily permissible.

12. The Terminal Tax Officer and the Municipal Corporation of Delhi through its Commissioner filed Letters Patent Appeals Nos. 72 and 73 of 1977 against the judgment of H. L. Anand, J., and Letters Patent Appeal No. 103 of 1977 against the judgment of Dalip K. Kapur.

13. As already stated, the first prayer in the writ petition was that the orders, dated 23rd May, 1975 and 7th July, 1975, passed by the Terminal Tax Officer of the Municipal Corporation of Delhi be quashed. The learned counsel for the appellants stated before us that, irrespective of the result of the appeals, the appellants have decided to withdraw the said two orders, and, thereforee, did not address any arguments challenging the judgments of H. L. Anand and Dalip K. Kapur Jj in so far they quashed the said orders. It follows that the said two orders passed by the Terminal Tax Officer will stand quashed.

14. The second prayer in the writ petitions was that the appellants herein (the respondents in the writ petitions), be prohibited from establishing any terminal tax post near the entrance to the land/godowns of Manmohan Tuli. As regards this, the learned counsel for the appellants contended that the Corporation was entitled to establish such a post near the entrance to the godowns which is very near the border line between U. P. and the Union Territory of Delhi. The learned counsel contended that Section 178(1) of the Delhi Municipal Corporation Act empowers the levy of terminal tax on all goods carried by railway or road into the Union Territory from any place outside thereof, that the border between U. P. and the Union Territory of Delhi is near the entrance to the land/godowns of Manmohan Tuli, that Rule 2 (3) of the Delhi Terminal Tax Rules, 1958, defines 'barrier' as meaning a barrier established under Rule 10 that Rule 2 (16) defines 'terminal tax limits' as meaning 'the limits of the Union Territory of Delhi, that Rule 10 (b) empowers the Delhi Terminal Tax Agency specified under Section 179 of the Delhi Municipal Corporation Act to establish barriers in the immediate vicinity of the Terminal Tax. Limits that may from time to time be determined by the Agency as most suitable for intercepting the import of goods for assessment and collection, of the tax, that Rule 7 empowers the Terminal Tax Officer, the Assistant Terminal Tax officer, any Inspector or such other officers as may be authorised by the Agency in that behalf, to examine goods and demand passes, and that the said Agency of the Corporation was thus entitled to establish a terminal tax post or barrier near the border line between the U. P. and the Union Territory of Delhi which passes through the land of Manmohan Tuli near the aforesaid entrance to it. The contention seems to be unanswerable. It is, however, not necessary to discuss the same as Shri Madan Bhatia, learned counsel for the owners of land/ godowns, stated before us that they have no objection to the establishment of a terminal tax post or barrier on the land of Manmohan Tuli near the entrance thereto, and that they will also provide such facilities as may be necessary for the Corporation to establish such a post. We, thereforee, give a direction to the owner of the land/godowns as well as the transport companies not to raise any objection to the establishment of a terminal tax post or barrier on the land and near the entrance thereto.

15. The third prayer was that the appellants be prohibited from levying, demanding or imposing any terminal tax in respect of the goods brought into the land/godowns for the purpose of only sorting and transshipping them to various destinations. As regards this prayer, the learned counsel for the appellants pointed out that the appellants had clearly stated in their counter-affidavits that no terminal tax was being charged on the goods which were meant for immediate export and a procedure has been laid down for obtaining transit passes for such goods, and that it was not, thereforee, necessary for the learned single judges to go into the question as to whether terminal tax was payable in the instant case, we understand from the counsel for the respondents herein that the Corporation took the stand before the learned single Judges that terminal tax was payable for goods brought into the land/godowns in question, as they were being unloaded at that place, and that the tax would be so livable even if the goods were in transit and were being unloaded only for the purpose of sorting and transshipping them into other trucks going to different destinations. Be it as it may, the stand taken by the learned counsel for the appellants before us is the same as what was set out in the counter-affidavits, namely, that no terminal tax was being charged on the goods which were intended for immediate export and a procedure has been laid down for obtaining transit passes for such goods in transit. It is, thereforee, sufficient for us to consider the legal position as regards goods which are in transit and are brought into the land/godowns in question and are unloaded only for the purpose of sorting and transshipping them into other trucks going to different destinations.

16. Section 178 of the Delhi Municipal Corporation Act, 1957, provides for the levy of terminal tax on all goods carried by railway or road into the Union Territory of Delhi from any place outside thereof, Section 183 of the said Act confers power on the Central Government to make rules in relation to the levy, assessment and collection of terminal tax under the aforesaid Act. It provides that the Central Government may by such rules prescribe the following among other matters, namely-

(a) the examination of goods liable to payment of terminal tax;

(b) the inspection, weighing or other wise examining the contents of any conveyance or package for the purpose of ascertaining whether it contains my goods in respect of 'which terminal tax is payable;

(c) the seizure and confiscation of goods liable to terminal tax in case of refusal to pay such tax;

(d) the measures to Prevent evasion of terminal tax;

(e) any other matter which is to be or may be prescribed for the levy, assessment or collection of the terminal tax.

17. Accordingly, the Delhi Terminal Tax Rules, 1958 were made by the Central Government and they came into force on 7th April, 1958. We may point out here that the virus of Sections 178 and 183 of the Corporation Act and the aforesaid rules has not been questioned before us, As stated earlier by us; the Delhi-U. P. Border line passes through the southern portion of the land in question, and most of the said land lies to the north side of the border line and only a small strip of it lies to the south of the said line. The trucks carrying goods for various destinations pass along the G. T. Road and move into the land/ godowns in question through an entrance. It is common ground that, the goods thus brought into the land whereon the godowns are situated are unloaded for being sorted out, and the goods intended for various destinations are re-loaded into the respective trucks going to the said destinations. Thus, the trucks carrying the goods go by the G.-T. Road, cross the Delhi U. P. border line and enter the land of Manmohan

Tuli which is in the union Territory of Delhi,

18. Rule 10 (b) of the aforesaid rules empowers the Delhi Terminal Tax Agency specified in sub-section (1) of Section 179 of the Corporation Act to establish a barrier at any place on or in the immediate, vicinity of the terminal tax limits that may from time to time be determined by the Agency as most suitable for intercepting the import of goods for assessment and collection of the tax, The expression 'terminal tax limits', is defined in Rule 2 (16) as meaning 'the limits of the Union Territory of Delhi. Rule 2 (9) defines import' as meaning the carrying of goods by railway or road into the terminal tax limits. In Central India Spg. and Wvg. and Mfg. Co. Ltd. v. Municipal Committee Wardha, : [1958]1SCR1102 , 'terminal tax' was explained as under (at p. 348 of AIR):-

'Therefore, terminal tax on goods imported or exported is similar in its incidence and is payable on goods on their journey ending within the Municipal limits or commencing there from and not where the goods were merely in transit through the municipal limits and had their terminus elsewhere.'

18-A. In Amrit Banaspati Co. Ltd. v. Union of India, 2nd (1973) 1 Del 237 : 1973 Tax Lr 2546 , it has been pointed out that the words 'shall be levied on all goods carried by railway or road' in Section 178(1) show clearly that the section imposes terminal tax on the carriage or movement of goods from outside the Union Territory of Delhi into the said territory. It is clear from the above provisions and the decisions that when trucks carrying the goods cross the Delhi U. P, Border line, and enter the land/godowns in question, they cannot but be said to have carried the goods by road into the Union Territory of Delhi within the meaning of Section 178(1) of the Corporation Act. Consequently, terminal tax becomes livable under the said sub-section.

19. We may point out here that H. L Anand J. took the view that the entry of the goods into the land/godowns did not amount to carriage of goods into the Union Territory of Delhi, because (a) the land or godown was not freely accessible from the Union Territory of Delhi and (b) the carriage was into a land or

building the access to which was not through --the Union Territory of Delhi and part of which was admittedly not in the Union Territory of Delhi, and in the circumstances the building could not be said to be situated within the Union Territory of Delhi. With respect to the learned judge, we are unable to agree with the said reasoning. As stated already, a substantial part of the land and the godowns thereon are situated in the Union Territory of Delhi. The border line between the Union Territory of Delhi and U. P. runs through the land practically at the southern end, and only a small strip of the land lies to the south of the border line, i e. in U. P. For the purpose of terminal tax we are concerned with the land and the godowns to the north of the border line, and they are admittedly in the Union Territory of Delhi. Carriage into the Union Territory of Delhi occurs only when the trucks cross the border line and when once they cross and enter the land/godowns, the carriage is clearly into the Union Territory of Delhi from U. P. It is for this reason that we held above that terminal tax becomes livable when the trucks carrying the goods cross the border line and enter the land/godowns in question.

20. We may also point out that the learned single Judge has taken the view that the levy of terminal tax under Section 178(1) depends upon the ability of the local body to provide necessary civic services to the land/godowns in question, and that since the Municipal Corporation of Delhi has not provided and does not claim to be in a position to provide them because of the peculiar location of the land/godowns and the situs of its only entry, the terminal tax is not leviable. In our opinion, this aspect would arise only if the virus of Section 178(1) is challenged, As the said virus has not been challenged, the provision has to be given effect to as it stands. Section 178(1) confers the power to levy terminal tax, and does not make it conditional on civic services being rendered. We, thereforee, need not deal with the correctness of the aforesaid view of the learned single Judge, as it does not arise in the present case.

21. However, though the goods thus brought into the land/godowns are liable to the levy of terminal tax by virtue of the provision in Section 178(1) read with Rules 2 (3), 2 (16) and 10 (16) and 10 (b), an exception has been made by the rules in the case of goods brought into the Union Territory of Delhi for immediate export. Part V of the Rules consists of Rules 26 to 29 and they lay down a procedure in respect of the goods ordinarily liable to terminal tax but exempted there from under certain conditions. We are concerned in the present case only with Rules 26 and 27. Rule 261 provides that when the goods liable to terminal tax but exempted there from if exported immediately, are declared to be intended for immediate export, they shall be dealt with under the transit pass system thereinafter provided. Rule 27 (1) (a) provides that when such goods intended for immediate export are brought at the barrier of import, the importer shall declare in writing in such form as may be prescribed by the Agency from time to time, that the goods are intended for immediate export. Rule 17 (1) (b) provides that on receipt of such a declaration, the Collecting Officer shall fill up by the carbon process a transit pass in Form T.T. 5, and on payment of a fee of Rs. 2 per vehicle handover the foil with both the coupons attached to it to the importer. There are two provisos to sub-rule (b). It is common ground that they are not applicable to the present case,

22. According to the above provisions if the goods are intended for immediate export, the importer has to make a declaration at the barrier of import that the goods are intended for immediate export. On making such a declaration, the Collecting Officer has to issue a transit pass in Form T.T. 5 on payment of Rs. 2 per vehicle. On receiving the transit pass, the importer has to act in accordance with the provisions in sub-rules (2) to (6) of Rule 27. These sub-rules provide, inter alia, that the importer shall forthwith take the goods to the barrier of export via such route as may be prescribed by the Agency under sub-rule (4), that the Agency may fix the timings at which such goods may leave the barrier of import for the barrier of export, that when the goods are brought to the barrier of export, the importer shall present the transit pass granted to him, and the Collecting Officer shall note the time at which it is presented and shall also check the goods with the particulars given in the transit pass, that if the description or weight of the goods does not tally with the particulars entered in the pass and there is any shortage, the Collecting Officer shall demand payment of the amount of tax payable in respect of such shortage, and that if the time entered in the transit pass had expired before the pass is presented, the Collecting Officer shall demand the full amount of tax ordinarily payable on the goods on import, and thereafter shall proceed as if the charge was a charge on account of goods imported in the ordinary way. They also provide that the Agency shall prescribe the route between every two barriers and the period within which the goods imported through one of them for immediate export shall be exported through the other, that the Terminal Tax Officer may extend the time fixed if he is satisfied that the delay was due to circumstances over which the importer had no control. The transit pass in Form T.T. 5 Issued to the importer for goods intended for immediate export contains columns for the various entries to be made as provided in sub-rules (2) to (6), such as date and hour of import, description, weight and particulars of the goods, destination of the goods, barrier by which the goods are to be exported, route via which the goods are to be exported, and the time at which the pass is presented at the export barrier.

23. Thus, goods brought into the Union Territory of Delhi for immediate export are exempted from being liable for terminal tax, provided the importer makes the declaration, pays a nominal sum of Rs, 2, and acts in accordance with the various provisions of sub-rules (2) to (6) of Rule 27 mentioned above, This is what was pleaded in the counter-affidavit, namely, that in respect of goods intended for immediate export no terminal tax is charged on the goods and a procedure has been laid down for obtaining transit passes for such goods. If the importer does not make a declaration or does not act in accordance with the procedure set out in sub-rules (2) to (6) of Rule 27, he would be disentitled to claim the exemption, and terminal tax would be leviable, fully or partly, in accordance with the provisions in the various sub-rules of Rule 27.

24. In the present case, the goods are admittedly carried into the land/godowns only for the purpose of sorting and transshipping them into the other trucks going to various destinations. That means clearly that they are carried into the Union Territory of Delhi for immediate export, The mere fact that the goods are unloaded and re-loaded does not mean, in our opinion, that they were not carried into the Union Territory for immediate export. The goods are merely in transit through the municipal limits and have their terminus elsewhere. The word 'immediate' cannot, in the context of the nature of the import and export, be understood as meaning 'without any time gap'. The very nature of the operations of import and export is such that there would be some time-gap between the import and the export. It would be too unrealistic if 'immediate export' is understood as meaning that the trucks which carry the goods into the Union Territory should leave immediately without any time-gap. In -our opinion, the words 'immediate export' mean that the goods should be exported within a reasonable time, What would be 'reasonable time' would vary from case to 'ease and would depend upon factors like the quantity of the goods and the time that is reasonably necessary for unloading, sorting and re-loading them, the availability of trucks for export and the like. The concerned officer has to determine in each case the time within which the export is to be made taking into consideration all relevant circumstances like those mentioned above.

25. We, thereforee, hold that in the instant cases, when the trucks carrying goods intended for various destinations cross the Delhi-U. P. border line and enter into the land/godowns in question, they have to be treated as having carried the goods by road into the Union Territory of Delhi, and the goods would normally be liable to levy of terminal tax. But, if at the time of entrance the importer makes a declaration that some of the goods are intended for immediate export in the form prescribed as per the provision in Rule 27 (1), no terminal tax can be levied on those goods covered by the declaration. The rest of the goods, if any, which are not intended for immediate export would be liable to levy of terminal tax. As regards the goods in respect of which a declaration is made as mentioned above, the importer is entitled to get a transit pass. The officer concerned has to fix a reasonable time for the unloading, sorting and re-loading of the goods into the various trucks going to different destinations, taking into consideration the factors like the quantity of the goods, the time that is reasonably necessary for unloading, sorting and re-loading, the availability of trucks for export and the like. The importer is then bound to complete the re-loading or transshipment within the time so fixed, and thereafter act according to the stipulations mentioned in the transit pass issued to him. Any violation of the said stipulations would render the goods liable to levy of terminal tax, in full or in part in accordance with the provisions in the various sub-rules of Rule 27.

26. For the foregoing reasons, we allow the three Letters Patent Appeals Nos. 72, 73 and 103 of 1977 partly, and modify the orders of H. L. Anand J. and Dalip K. Kapur J. in the respective writ petitions by directing the parties to act in accordance with law and in the light of this judgment. The impugned orders, dated 23rd May, 1975, and 7th July, 1975, passed by the Terminal Tax Officer of the Municipal Corporation of Delhi as already stated, stand quashed. In the circumstances of the case, all the parties are directed to bear their own costs in these Letters Patent Appeals.

27. Appeals partly allowed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //