A.P. Ravani, J.
1. Discussion and observation made in interlocutory proceedings by superior Court are against the petitioner. Can such a petitioner be allowed to maintain a petition under Article 226 of the Constitution of India before this Court on the ground that the observations and discussion made by the superior Court are likely to prejudice his case in civil suit Can he be permitted to keep the suit pending in Civil Court and also to proceed with the writ petition in the High Court Even if the scope of the petition is expanded by introducing certain new facts and additional grounds, can the petitioner be allowed to adopt such a course On the basis of the material on record of the petition, is the petitioner-Company entitled to claim immunity from payment of octroi duty in accordance with the order passed by the State Government under Section 99 of the Gujarat Municipalities Act, 1961 These are the important questions which arise in this petition.
2. The relevant facts are as follows:
An existing textile undertaking called Shri Amarsinhji Mills Ltd. at Wankaner has been taken over by the petitioner No. 1-Company sometime in June-July 1981. On June 29, 1981 petitioner No. 1-Company entered into an agreement of sale in respect of this property. The agreement of sale was not produced together with the petition. But it was produced later on by way of amendment. Thereafter today after the arguments of the other side were over, the document of sale and a document of sublease have been produced. The document of sale is dated June 30, 1981 and the deed of sub-lease is also dated June 30, 1981 both of which have been executed immediately next day after the execution of agreement to sell.
3. It appears that some time after the beginning of the financial year 1982-83 conflict between the petitioner-Company and the local authority of the town, i.e. respondent No. 1-Municipality, started. The controversy arose as to the levy of octroi duty at the proper rate and as to the applicability of particular Entry in the Schedule appended to the octroi rules and bylaws. The petitioner-Company contended that the machinery goods imported by it would fall in the Entry 'Iron and steel machinery' (except electrical), i.e. Entry No. 8 in Class II of Schedule. The Municipality contended that the same would fall in 'Electrical goods of all varieties' Entry No. 19 of Class I of the Schedule or in the Entry 'Copper, Brass, Aluminium and vessels Makes or Shapes of all Metals or Hardwares' (Entry No. 26 of Class I of the Schedule). The petitioner-Company contended that the rate of octroi duty would be 0.75 % ad valorem whereas the respondent-Municipality contended that the rate of octroi duty would be 2.40% ad valorem.
4. As per the relevant provisions of the rules and by-laws, the petitioner-Company preferred an appeal before the Chief Officer of the respondent-Municipality by its letter dated March 31, 1982 and prayed for refund of the octroi duty paid by it. The said appeal was decided by the Chief Officer after hearing the parties on April 12, 1982. The petitioner-Company had prayed for refund of the octroi amount on various grounds. The Chief Officer rejected the appeal as per his order dated April 12, 1982 (Annexure 'F' to the petition). Against this order, the petitioner-Company preferred an appeal before the Executive Committee of the respondent-Municipality. It is stated that similar appeal was also preferred before the Octroi Appellate Committee of the Municipality. According to the petitioner-Company, the Executive Committee decided in their favour by order dated June 25, 1982. However, the President of the Municipality passed an order directing that the decision given by the Executive Committee be not implemented. The President passed this order on July 3, 1982 (Annexure 'H' to the petition).
5. After the order was passed by the President of the respondent-Municipality, the petitioner-Company rushed to the Civil Court and filed a suit being Regular Civil Suit No. 71 of 1982. The suit was filed on July 7, 1982. The petitioner-Company has inter alia prayed therein that the order passed by the President of the Municipality be declared illegal and void, the Municipality be directed to levy the octroi duty as per the decision of the Executive Committee dated June 25, 1982 (i.e., at the rate of 0.75% ad valorem) and be it further held and declared that the respondent-Municipality is entitled to levy and collect octroi duty on the goods in question at the rate prescribed in Item No. 8 of Class II of Schedule I to the Octroi Rules and By-laws (i.e. 0.75% ad valorem) and the Municipality be restrained from levying octroi duty in any other manner whatsoever. On the same day an application for injunction was filed before the Civil Court. Initially ad interim injunction was granted. The Municipality appeared in the suit and resisted the same on facts as well as on law points. The learned Civil Judge (J.D.) passed order dated August 18, 1982 and vacated the injunction order (Annexure 'I') which was passed earlier. On account of this order, the situation which came into existence was that, the order of the President of the respondent-Municipality dated July 3, 1982 (Annexure 'H' to the petition) came into operation. The decision of the Executive Committee dated June 25, 1982 was not required to be implemented. The matter was carried further before the Appellate Court at Morbi. An appeal being Misc. Civil Appeal No. 26 of 1982 was filed by the petitioner-Company. The appeal was decided by the learned Assistant Judge, Morbi, on September 10, 1982. He dismissed the appeal by his order dated September 10, 1982 (Annexure 'J' to the petition). The petitioner, therefore, has approached this Court by way of the present petition. In this petition, on the basis of the order passed under Section 99 of the Gujarat Municipalities Act, 1961 ('the Act', for short), it is also contended that respondent No. 1 - Municipality is not entitled to levy octroi on the goods imported by the petitioner-Company within octroi limits of the Municipality for a period of five years commencing from July 1, 1981. The petitioner-Company has also claimed refund of the amount of octroi paid (i.e. Rs. 2,75,561.41 Two lakh seventy-five thousand five hundred sixty one and paise forty-one) with 18% interest per annum.
6. The petition was filed on November 20, 1982. Originally the petition was filed only against the Municipality. Respondent Nos. 2 and 3, i.e. State of Gujarat and the Director of Municipalities, have been joined later on. In para 16 of the petition, the ground for invoking the jurisdiction of this High Court has been mentioned. With an object to show that this petition is under Article 226 and not under Article 227 of the Constitution of India, an effort is made to explain and point out as to why it became necessary to invoke the jurisdiction of this Court. The reasons mentioned in the petition are:
1. Various observations made by the learned Assistant Judge in the order of September 10. 1982 were such that they would seriously affect the petitioner-Company. Hence, no useful purpose was to be served by waiting till the final disposal of the suit.
2. The observations made in the order dated September 10, 1982 were bound to be followed by the lower Court of Civil Judge (J.D.) as they are binding on it.
These were the only two reasons mentioned for invoking the jurisdiction of this High Court. It is not even impliedly suggested that a part of the subject-matter of the petition was different and was not covered by the scope of the suit pending before the trial Court, and hence this petition be entertained and proceeded further. Later on, at the time of arguments, certain other factors have been sought to be pressed in service in support of the contention that the petitioner can move this Court even when the suit is pending before the trial Court.
7. A substantial part of the petition is covered by subject-matter pending before the Court of Civil Judge (J.D.) Wankaner. That pertains to the legality and validity of the action of the Municipality regarding the levy of octroi duty as per the rate prescribed in Item No. 19 or 26 of Class-I of the Schedule appended to the Octroi Rules and By-laws. The subject -matter of the suit also covers the order passed by the Chief Officer dated April 12, 1982 (Annexure 'F' to the petition) and the order passed by the President dated July 3, 1982 (Annexure 'H'). This petition also covers the questions regarding legality and validity of the order passed by the Court of Civil Judge (J.D.) Wankaner, (Annexure 'I') dated August 8, 1982 and the order passed by the learned Assistant Judge, Morbi. dated September 10, 1982 (Annexure 'J').
8. Another part of the petition is with respect to the applicability of order passed by the Government under Section 99 of the Act. The contention of the petitioner is that as per the relevant orders passed by the Government under Section 99 of the Act, the Municipality is not entitled to levy any octroi duty whatsoever on the goods imported by the petitioner-Company within the Municipal limits for a period of five years commencing from June 30, 1981.
9. A lesson in commonsense is imparted to the pupils of kindergarten that you cannot ride two horses together. Against the dictates of this lesson in commonsense, the petitioner contends that it wants to proceed with both the proceedings (i.e. civil suit pending in the Civil Court and this petition) together simultaneously. The counsel for the petitioner requested that this Court should decide the questions involved in the petition on merits. He further stated that in case the petitioner succeeds in the petition before the High Court, the proceedings before the Civil Court shall be withdrawn. But in case he does not succeed, what will he do In that case, the petitioner desired to proceed further with the suit. (After the decision in the petition, whether the petitioner can or cannot proceed with the suit is a different matter). The petitioner has not even made statement that the suit pending in lower Court will be withdrawn now, say within a period of about a fortnight or one month and the same shall not be proceeded further. No statement is made to the effect that the petitioner is ready to abide by the decision of this Court and after the decision of this Court is pronounced, the suit shall not be proceeded with. On the contrary, the statement made is that the petitioner wants to proceed further with the petition and only if the petitioner succeeds in the petition the suit will be withdrawn. In other words, the petitioner wants to have best of both the worlds. As stated hereinabove, this is against dictates of commonsense. One cannot ride two horses together simultaneously. A choice has got to be made. If a party does not make the choice, he cannot be permitted to have best of both the worlds. In fact, a similar provision is made in Section 10 of the Civil Procedure Code where between two parties same subject-matter is being agitated in two different Courts of competent jurisdiction, the proceedings initiated earlier should proceed further and the proceedings initiated later on are required to be stayed. The analogous principle can be made applicable here. Moreover, as per the provisions of Section 15 of the Civil Procedure Code, every suit is required to be filed in the Court of lowest grade competent to try it. The provisions of these two sections are based on public policy. A party cannot be permitted to invoke the jurisdiction of as many Courts as he likes simultaneously; he has to choose his forum. Having chosen the forum in a given case, a party may be permitted to change the forum and proceed with the same subject matter in one of the courts. But there is no provision according to which the party can be permitted to proceed further with both the proceedings in two different forums simultaneously. In fairness to the counsel for the petitioner, it must be stated that he has declared that he is not in a position to point out any provision of law or any authority which lays down a proposition that a party can be permitted to proceed further with the litigation in the same subject-matter in two different forums simultaneously. However, to buttress the point, the Learned Counsel for the petitioner has relied upon the following two decisions of this High Court:
(1) S.K. Patel v. Union of India 23(1) G.L.R. 670; and
(2) Harishchandra v. Syndicate Bank 21 G.L.R. 657.
Both the aforesaid decisions lay down a principle that availability of alternative remedy of a suit or other proceedings is not a bar to invoke the jurisdiction of this Court under Article 226 of the Constitution of India. The decisions in these two cases do not lay down the proposition that a party can move the trial Court by way of civil suit and can also in the same subject-matter invoke the jurisdiction of this High Court under Article 226 of the Constitution of India and can proceed further with both the proceedings simultaneously. There cannot be any such decision. At any rate no such decision has been brought to my notice. The proposition is based on no rational ground. It is also against public policy and hence cannot be accepted. In above view of the matter in so far as the subject-matter of the petition is covered by a litigation pending in the trial Court is concerned, the same will have to be decided on the basis that the petition is under Article 227 of the Constitution of India. This will have repercussions on the other part of the petition also. But discussion regarding the same may be postponed for a while.
10. The reasons mentioned in para 16 of the petition for invoking the jurisdiction of this Court cannot be accepted. At an interlocutory stage of a proceeding, superior Court is bound to give reasons in support of the conclusion arrived at by it. The order that may be passed by the appellate or revisional Court is, in any case, required to be a speaking order. Moreover, the discussion made and the reasons given at this stage by the superior Court are only tentative. The same are being made on the basis of material available on record at that stage of the proceeding. The observations made by the superior Court at this interlocutory stage of the proceedings, not being final in the matter, are never taken as binding to the lower Courts for the purpose of arriving at decision on merits at the final stage. Had it been so, in all the cases wherever there is appeal/ revision at the interlocutory stage, the proceedings before the trial Court would become meaningless or merely a matter of formality. In fact to make such suggestion will be tantamount to becoming unfair to the lower Court. Expression of such comments may amount to contempt of Court in a given case. Be that as it may, for the aforesaid reasons, this contention is rejected.
11. The scope of challenge to the order passed by the lower Courts in a petition under Article 227 of the Constitution is very limited. Counsel for the respondent-Municipality has referred to the decision of the Supreme Court in the case of Hindustan Aeronautics v. Ajit Prasad reported in : (1972)ILLJ170SC His submission is that the principles laid down in this case are of course with regard to the scope of jurisdiction under Section 115 of the Civil Procedure Code. But the same will be applicable when the Court exercises its jurisdiction under Article 227 of the Constitution of India. As laid down in this decision, unless there is a jurisdictional error, the High Court should not disturb the concurrent finding of fact arrived at by the lower Courts. The Counsel for the respondent-Municipality has also relied upon a decision of the Supreme Court in the case of Mohd. Yanus v. Mohd. Mustaqim reported in : 1SCR211 In this case the Supreme Court has dealt with the scope of the jurisdiction of the High Court while exercising powers under Article 227 of the Constitution of India. The earlier principle has been reiterated in this decision and it has been laid down that the supervisory jurisdiction conferred on the High Court under Article 227 of the Constitution of India is limited 'to see that an inferior Court or Tribunal functions within the limits of its authority'. It is categorically laid down that a mere wrong decision without anything more is not enough to attract the jurisdiction of the High Court under Article 227 of the Constitution of India. The principles laid down by the Supreme Court in the aforesaid decision squarely apply to the present case and much more so because, in the instant case, it is not shown that the lower Courts have failed to exercise jurisdiction or that the lower Courts have disregarded the principles of natural justice or that the procedure adopted by the lower Courts is not in consonance with the procedure established by law.
12. A reference may be made to a recent unreported decision of the Supreme Court in the case of The Siliguri Municipality and Ors. v. Amalendu Das and Ors. rendered in Civil Appeal No. 762 of 1984 (arising out of S.L.P. No. 13709 of 1983). The case before the Supreme Court arose out of a proceeding initiated under Article 226 of the Constitution of India. The levy of graduated consolidated rate on the annual letting value of the building in terms of the amended provisions of the Bengal Municipal (Amendment) Act, 1980, was challenged by way of a petition under Article 226 of the Constitution before the High Court and the High Court granted interim stay of the levy as per the amended provision of the aforesaid Act. The Supreme Court in this connection has observed as follows:
We are constrained to make the observations which follow as we do feel dismayed at the tendency on the part of some of the High Courts to grant interlocutory orders for the mere asking. Normally, the High Courts should not, as a rule, in proceedings under Article 226 of the Constitution grant any stay of recovery of tax save under very exceptional circumstances. The grant of stay in such matters, should be an exception and not a rule.
The Supreme Court has further observed:.. The Court has to show awareness of the fact that in a case like the present a municipality cannot function or meet its financial obligations if its source of revenue is blocked by an interim order restraining the municipality from recovering the taxes as per the impugned provision. And that the municipality has to maintain essential civil services like water supply, street lighting and public streets etc., apart from running public institutions like schools, dispensaries, libraries, etc. What is more, supplies have to be purchased and salaries have to be paid. The grant of an interlocutory order of this nature would paralyse the administration and dislocate the entire working of the municipality. It seems that these serious ramifications of the matter were lost sight of while making the impugned order.
In view of the aforesaid principle laid down by the Supreme Court with regard to the grant of interlocutory orders in a proceeding instituted under Article 226 of the Constitution of India, which, mutatis mutandis apply with greater force to the proceedings instituted by way of suits in Civil Courts. Moreover, in this case the orders passed by the lower Courts are not shown to be in any way perverse or lacking in jurisdiction.
13. This brings us to the second point regarding the applicability of the order issued by the Government under Section 99 of the Act. The petitioner-Company contends that the octroi duty can be imposed and levied by the Municipality in accordance with the provisions of the Gujarat Municipalities Act. Section 99 of the Act empowers the Municipality to impose octroi duty subject to any special or general order passed by the Government in that behalf. The Government has passed order under the provisions of Section 99 of the Act to the effect that in respect of the goods imported by a 'new industry' as defined in the order issued by the Government, no octroi can be levied for a period of five years commencing from the date of establishment of industry or from the date of expansion of the industry as contemplated under the order. The relevant provision of the order bearing No. MUN/1164/DH, dated 7th September, 1965 and amended from time to time by Gujarat Government Order No. MUN/1168/ 5142(72)/DH, dated 28th June 1972, No. MUN/1176/1346(77)/DH, dated 15th April, 1977 and No. KP/24/82 NPL/1179/533 (82) M, dated 6th February, 1982 (hereinafter referred to as 'the Order' for brevity's sake) reads as under:
No octroi shall, for the period specified in Schedule 'A' appended hereto, be leviable on the building materials, plants, machinery, stores, spareparts, raw materials, semi-finished goods or any other goods brought within the octroi limits of a municipality specified in Schedule 'B' annexed hereto, not for sale but for manufacture of any goods or in erecting any factory by a new industry.
Explanation I : xxxxx xxxxx
Explanation II : - For the purposes of this order 'INDUSTRY' means:
(i) xx xx xx xx xx xx xx xx
(ii) xx xx xx xx xx xx xx xx
(iii) In case of any industry established before the 1st May, 1960 but which has undergone or which undergoes expansion after that date, the expanded part of such industry.
(iv) xx xx xx xx xx xx xx xx
Explanation III : For the purposes of this order 'A New Industry' means any such industry which:
(a) xx xx xx xx xx xx xx xx
(b) xx xx xx xx xx xx xx xx
(c) is an expansion of the existing industrial undertaking in the State provided the value of land, building and plant and machinery constructed/purchased for the said expansion is not less than 50 % of the total investment in the undertaking prior to the said expansion.
SCHEDULE- 'A' Period
Seven years from the date of erection of a factory for a new industry or five years from the date on which production of goods has commenced in a new industry whichever is less. x x x x x x
It is not disputed that the respondent-Municipality is one of the Municipalities included in Schedule 'B' to the aforesaid order. According to the petitioners their case is covered by Clause (c) of Explanation III. As against this, the contention of the Municipality is that, if at all the Order is applicable the case of the petitioner-Company would be covered by Explanation II Clause (iii).
14. However, before discussing and deciding the aforesaid rival contentions with regard to the applicability of the Order passed by the Government under Section 99 of the Act, it will be necessary to decide as to whether this part of the subject-matter of the petition should be treated as a petition under Article 226 and not under Article 227 of the Constitution of India. It is an admitted position that the petitioner-Company field suit in respect of the part of the subject -matter of the petition. The suit is pending. It also appears that this particular aspect of the case, i.e., the applicability of the Order passed by the Government under Section 99 of the Act and the exemption or the immunity claimed by the petitioner thereunder is not directly raised in the suit pending before the trial court. The petitioner-Company approached the civil court with the challenge to the effect that the goods imported by it falls into one or the other Entry of Schedule appended to Octroi Rules and By-laws. In a sense the suit filed is with respect to the liability of the petitioner to pay the octroi duty. By resorting to the provisions of the aforesaid Order, the petitioner-Company merely desires to expand the scope of the subject-matter pending before the trial court. In the suit pending before the civil court, the facts on the basis of which the total immunity is claimed could have been placed. If these facts have not been placed from the beginning, they can be inserted by way of amendment also. The facts on the basis of which the immunity from payment of octroi duty is claimed are not such that for which any court would have refused or would refuse amendment. It may be that at the time of filing of the suit, the petitioner may not be aware of the provisions of the aforesaid Order. Or, it may be that the petitioner-Company after weighing all the pros and cons might have chosen to restrict its claim to the applicability of a particular Entry in the Schedule. But the fact remains that the subject-matter before the civil court is the same, that is to say, the liability of the petitioner-Company to pay octroi duty. What is sought to be done by relying upon 'the Order' is that the scope of the subject-matter is being expanded. Once a suit is pending in respect of the part of the subject-matter, the petitioner cannot be permitted to bring a petition before this Court in this indirect manner. This amounts to circumventing the provisions of law indirectly. That which cannot be done directly, cannot be permitted to be done indirectly. In view of the fact that the civil suit is pending and in the civil suit these very contentions could have been raised right from the beginning and if they are not taken from the beginning, the same can still be taken by way of amendment, the petitioner should be relegated to the remedy of civil suit which the petitioner has already filed and which is pending.
15. The petition is a composite one. It is difficult to divide the petition into two parts. It is not shown by the petitioner-Company as to how the petition is divisible and it is not even contended by the petitioner-Company that, divide the petition in two parts and treat one part under Article 227 of the Constitution of India and another part under Article 226 of the Constitution of India. The contention of the petitioner is that the entire petition is under Article 226 of the Constitution of India. For the reasons stated in para 16 of the petition, the petitioner-Company considers it futile to proceed further with the suit. As stated hereinabove this cannot be permitted. The entire petition has got to be treated as a petition under Article 227 of the Constitution of India.
16. There is yet another difficulty in the way of the petitioner. Assuming that the contention of the petitioner that in view of 'the Order,' the petitioner-Company is not liable to pay any octroi duty whatsoever for a specified period of time can be entertained, can be treated as falling under Article 226 of the Constitution of India, then also sufficient and proper factual data has not been placed on record. Therefore also, it is not possible to grant relief as prayed for in this petition. This position may be examined.
17. It is the contention of the petitioner-Company that as per the provisions of Clause (c) of Explanation III, the goods imported by the petitioner-Company, within octroi limits of the Municipality, would be immune from payment of octroi duty for a period of five years from July 1, 1981 onwards. The sum total of the basis of the petition on this score is that, apply the provisions of the Order Clause (c) of Explanation III and recognise that the petitioner-Company is immune from being charged to octroi duty by the Municipality for a period of five years from July 1, 1981. It is further prayed that the respondent-Municipality be directed to refund the amount of octroi duty that has been paid by the petitioner-Company since July 1, 1981.
18. Counsel for the petitioner relies upon Clause (c) of Explanation III of the Order. Before concentrating on this particular part of 'the Order,' at this stage it would be proper to analyse the Scheme of the Order which is as follows:
1. Goods covered by the notification:
Building materials, plant and machinery, spareparts, raw materials, semifinished goods or any other goods brought within the octroi limits of the Municipality specified in Schedule 'B'.2. Purpose:
The goods should have been brought within the municipal limits not for sale but for manufacture of any other goods or for erecting any factory.3. By whom brought : By a new industry.
(A) As per Clause (ii) of Explanation II, the industry established after May 1, 1960 shall be eligible to be covered by 'the Order'. An industry which might have been established before May 1, 1960 but in which production of goods commenced after May 1,1960 also will be covered by the Order. An industry which has undergone expansion or undergoes expansion after May 1, 1960 will be covered by Explanation II.
(B) The Order applies to 'a new industry' which is not formed by the splitting up or the reconstruction of a business or undertaking already in existence, etc. [see Clause (a) of Explanation III] and which is not formed by transfer to a new business or undertaking of a building machinery or plant, etc. (see Clause (b)], but it applies to an expansion of the existing industrial undertaking in which an investment to the extent of 50% of the total investment in the undertaking prior to the said expansion is made for the purpose of construction, etc.
(C) As per Explanation I, agricultural processing industry, not run by a co-operative society, has been excluded. Therefore, such industry is not eligible for being considered for the benefit under 'the Order.'
5. Period:Period will be seven years from the date of erection of factory for a 'new industry' or five years from the date of production of goods is commenced in the 'new industry' whichever is less.
19. On the aforesaid basis if one applies the relevant provisions of Explanation III Clause (c) of the Order on which reliance is placed by the petitioner-Company, the eligibility criteria of a 'new industry' would be as follows:
(1) That it should be an expansion of the existing industrial undertaking.
(2) That the value of land, building, plant and machinery, constructed/ purchased for the purpose of expansion should be more than 50 of the total investment in the undertaking prior to the date of expansion.
Thus, as a necessary condition for becoming eligible, the industry must have made 50% of the total investment in the undertaking prior to the date of expansion. Such investment should be for the purpose of expansion. The amount of 50% of investment should be calculated on the basis of the total investment in the Company immediately prior to the date of expansion. Therefore, the definite material on the following points should be there:
1. Date of commencement of expansion.
2. Total investment in the Company immediately on the preceding date of commencement of expansion.
3. The date on which 50% of the total investment is made, that is to say, not the starting point of the making of investment, but this has reference to the date on which 50% of the investment is actually made.
4. Such investment should be for the purpose of expansion, meaning thereby, it should be for the purpose of increase in the production capacity of the unit.
20. It may be noted that before the industry becomes eligible for claiming exemption under Clause (c) of Explanation III of 'the Order', it must be shown that the industry has made 50%, of the total investment for the purpose of expansion. So long as this much investment is not made, the industry does not become eligible for claiming immunity or exemption from payment of octroi duty.
21. In the aforesaid background, in the instant case, the material on record may be examined with regard to each of the points mentioned hereinabove.
22. First let us take the date of commencement of expansion.
(a) The petitioner-Company has relied upon a letter written by Jt. Commissioner of Industries and General Manager, Rajkot, dated December 17, 1982. The letter is addressed to the Director of Municipalities, Ahmedabad, and copy is endorsed to the petitioner-company. It is at page 158 of the compilation. The date of commencement of expansion as per para 2 of the letter is May 1979. The details regarding the total investment in the Company and regarding further investment made in the Company for the purpose of expansion and modernisation have been given on the basis, as if the expansion has started in May 1979.
(b) In the petition it is stated that the date of expansion is from 1st July, 1981. The date of expansion referred to in the petition has reference to the date of purchase of the undertaking by the petitioner-Company. However, 'the Order' has nothing to do with the change of ownership, or the change of management of the industrial undertaking. It is not the owner or the management who becomes entitled to exemption from payment of octroi duty under 'the Order'. It is the industrial undertaking that becomes entitled to claim exemption.
23. Thus, there is no clarity with regard to the date of commencement of expansion. It may be that expansion might have started in May 1979 as stated in the letter written by the Jt. Commissioner of Industries dated December 17, 1982 and which has been relied upon by the petitioner-Company. There is no material on the record to show as to what was the total investment in the industrial undertaking in the month of May 1979. There is no material on record to show that what actual investment for the purposes of expansion has been made since May 1979. Thus, on the basis of the record of the case, it is difficult to take the first step, i.e. the determination of the date of commencement of expansion of the undertaking.
24. Secondly, let us consider the total investment in the undertaking on the date of commencement of expansion.
(i) There is no material on record to show as to what was the total investment in the undertaking in May 1979.
(ii) As per the stand of the petitioner-Company, the expansion commenced from July 1, 1981. Therefore, the date just preceding the date of expansion would be June 30, 1981. On this date, as stated in the petition, the total investment in the undertaking was Rs. 86/-lakh and odd. This is sought to be supported by document of agreement of sale executed on June 29, 1981. However, as per this document, the price of stock in trade was to be determined by the parties at a later stage. For determination of the total investment, the amount of price of stock in trade also should include therein. No material on record has been pointed out to me to indicate as to what amount was determined as price of stock in trade. The document further indicates that liability of sales tax which may be adjudged in future was to be shared by both, the vendor and vendee. There is no material on record to show as to what was the amount of liability of sales tax which was ultimately adjudged and how much of the same was borne by the petitioner-Company. Thus, the picture sought to be presented by the petitioner is at any rate incomplete.
(iii) Again the aforesaid picture is in conflict with the picture that emerges from the document relied upon by the petitioner-Company itself. The petitioner-Company relied upon the eligibility certificate dated December 24, 1982 issued by the office of the Industries Commissioner. The document is produced at page 184 of the compilation, para 3 of the document reads as follows : 'The total investment of the above referred unit in the fixed assets on the date of commissioning of the unit/on the date of diversification or expansion is as under:----------------------------------------------------------------------------S. No. Description of Amount offixed assets investment----------------------------------------------------------------------------1. Land |2. Building | Nil3. Plant & Machinery | Rs. 101.42 lakh ----------Rs. 101.42 lakh----------------------------------------------------------------------------
Thus, as per this document relied upon by the petitioner-Company, the total investment in fixed assets of the Company just prior to the date of expansion was Rs. 101.42/- lakh. This does not include the value of land and building. This does not include the investments in liquid assets and mixed assets. Nowhere in the record, the value of land and building is separately shown on the date of expansion (whichever may be considered to be the date of expansion). By referring to the date of commencement of expansion, the value of land and building has not been shown separately.
25. Again it must be realised that, as per 'the Order', the important aspect is that the total investment immediately prior to the date of expansion is to be taken into consideration. Therefore, the value of land and building as on that date should be taken into calculation for the purpose of determination of total investment. The book value of land and building cannot and should not be taken as the basis for determining the total investment. However, there is no mention of book value of the land and building on that particular date.
26. If July 1, 1981 is the date of commencement of expansion, then market value of land and building on that date should be determined and the same should be taken into consideration for determination of 'total investment'. If May 1979 is the date for the purpose of commencement of expansion, then the market value of land and building on that date should be taken into consideration. Assuming that, not the market value but the book value of the land and building is to be taken into consideration, then also one is in dark as to what is the book value of the same. There is nothing on record to show that on the relevant date what was the market value of the land and building of the petitioner-Company. There is no material with regard to the value of other assets. Thus, on the basis of the material on record, it is not possible to determine the second important item, that is the total amount of investment on the date immediately preceding the date of commencement of expansion.
27. Now let us consider the date on which 50% of the total investment is made, that is to say, not the starting point of the making of investment, but this has reference to the date on which 50%) of the investment is actually made. No material on record is produced to show that on this particular date the Company has actually reached the limit of 50% of the total investment. Therefore, if at all the petitioner-Company is eligible to claim exemption under 'the Order', then even it is not possible to say from which date onwards the petitioner-Company has become eligible to claim benefit extended under 'the Order'.
28. This brings us to the examination of the purpose of investment. As per the order the purpose of investment must be 'expansion of an existing industrial undertaking'. The expansion may be either horizontal or vertical. It may be extensive or intensive. But in any case the term 'expansion' must have reference to the production capacity of the industrial undertaking. If the investment is made either for replacement of the machinery or for modernisation of the same, which has no connection with the increase in production capacity of the industrial undertaking, the same cannot be taken into consideration as investment for the purpose of expansion. There is no material on the record to show as to what was the production capacity of the industrial undertaking immediately prior to the date of commencement of expansion. Again there is no material on record to show that after the required investment (i.e. 50 % of the total investment in the Company) is made, what will be the production capacity of the industrial undertaking. Therefore, it is not possible to come to a definite conclusion as to whether the investment referred to in the petition is for the purpose of expansion as understood hereinabove.
29. Thus, even if I were to make an attempt to decide the case of the petitioner-Company pertaining to the applicability of 'the Order' passed under Section 99 of the Act, in view of the paucity of material and conflicting pictures emerging therefrom, it will not be possible to grant any relief to the petitioner-Company in this petition.
30. Still one more question regarding the claim of refund of the amount made by the petitioner-Company requires to be considered. The petitioner has claimed refund of an amount of Rs. 2,75,561.41 ps. paid by the petitioner-Company as and by way of octroi duty. The claim appears to have been made on the basis of Section 72 of the Contract Act on the ground that the amount is paid under mistake of law or under coercion. In para 7 of the petition it is specifically stated to the effect 'that whatever amount that has been paid by the petitioner towards octroi in past are refundable to the petitioner on the grounds that they are paid under mistake of law and under misapprehension about the correct legal position.' Section 72 occurs in Chapter V of the Contract Act. The Chapter deals with relations resembling those created by the contract and not by or under the contract as such. (see State of West Bengal v. B.K. Mondaland Sons reported in : AIR1962SC779 In the case of Union of India v. New India Industries Ltd. reported in 1982 (2) G.L.R. 1108, the Division Bench of this High Court consisting of V.V. Bedarkar, J. and myself, after referring to certain decisions of the Supreme Court and the decisions of House of Lords, has observed as follows:
From this it should be clear that the underlying object of Section 72 is that a person cannot retain the money of, or some benefit derived from another which legitimately does not belong to him and which it would be unconscionable to allow him to retain the same. Therefore, the basic idea is that there should be restitution of the money or the benefit, derived on account of mistake or cocrcion and the persons who has been deprived of the money or benefit should be restored the same, and that there should not be unjust enrichment.
In view of the aforesaid position of law, the petitioner-Company must plead and prove:
(1) that the defendant cannot retain the money of another which legitimately does not belong to him;
(2) that the money has been paid to the defendant under the mistake of law which was common to both. Both must be shown to be labouring under a common mistake. Or the petitioner-Company must plead and prove that the money was paid under coercion;
(3) that the plaintiff has been deprived of money which legitimately belonged to him, meaning thereby, the plaintiff must prove that he has sustained loss; and
(4) the person who has been deprived of money or the benefit should be restored the same. Restoration should not be to a person who has not suffered any loss.
31. In the petition as it stands, it is not shown that the petitioner-Company as well as the respondent-Municipality were labouring under the common mistake and that the Municipality has recovered the amount, in respect of which prayer for refund is made, while labouring under that common mistake. The petition as it stands today, does not show that the petitioner-Company has suffered loss on account of the payment of octroi duty. Mere payment of octroi duty to the Municipality does not prove the loss inasmuch as the octroi duty is an indirect tax and the importer who brings the goods chargeable to octroi within the Municipal limits is entitled to pass on the burden to the ultimate consumer. Thus, the ultimate buyer of the commodity suffers the loss. It is not stated in the petition that the petitioner-Company has suffered any loss on this count. On the contrary, there is an indication in the petition that the entire burden of octroi duty is passed on to the consumers of the end product of the Company, i.e. fabrics (see Ground No. G-17 in the petition).
32. The aforesaid questions are essentially questions of fact. Without there being sufficient and satisfactory material on record on these questions of fact, the relief of refund of the amount claimed in the petition cannot be granted here in this petition.
33. It may be clarified that the aforesaid discussion has been made with regard to the applicability of 'the Order' passed by the Government under Section 99 of the Act, is made only with a view to show that, on the basis of the material placed on record of this petition, it is not possible to grant any relief. The discussion regarding the applicability of 'the Order' should not be taken as a finding arrived at by me on the questions involved in the petition. The discussion is made on the basis of the assumption that the interpretation placed by the petitioner on 'the Order' is correct. Be it noted that this position is assumed and no finding whatsoever is given on this point. The entire discussion would show that no reference whatsoever has been made to the rival contentions raised by the respondent-Municipality. It may be that the rival contention with regard to the correct interpretation and the applicability of 'the Order' under Section 99 of the Act may be correct. No attempt has been made to decide which one of the two rival contentions is correct and legally valid. The entire discussion and observations are made with a view to show that even if there is an assumption in favour of the petitioner-Company regarding the correctness of the interpretation suggested, it is not possible to grant any relief since necessary material is not placed on record. Therefore, it is again made clear that the aforesaid discussion and observations regarding 'the Order' under Section 99 of the Act need not and should not be taken as the final expression of opinion by me on the points involved in the case.
34. The purpose of clarification is that in future litigation, if there be any, the discussion and observations may not come in the way of either of the parties. In the result, the petition fails and the same is rejected. Interim relief stands vacated. Rule discharged with cost.
35. Counsel for the petitioner-Company requests that the operation and implementation of this judgment be stayed for a period of 15 days from today. As per the interim relief granted by this Court, the respondent-Municipality is restrained from recovering octroi duty on import of goods within the octroi limits, covered by 'the Order' on the condition that the bank guarantee is furnished for the amount demanded within a week from the date of demand of octroi duty on the goods. In view of the unreported decision of the Supreme Court in Siliguri Municipality's case (supra), in the instant case, interim relief cannot be granted. Moreover, there is a concurrent finding of two Courts below that the petitioner-Company is not entitled to interim relief pending the suit before the trial Court. As far as the claim of the petitioner-Company regarding the total exemption from payment of octroi duty as per 'the Order' passed by the Government under Section 99 of the Act is concerned, I have expressed definite opinion that on the basis of material placed on record in this petition the relief prayed for by the petitioner-Company cannot be granted. Therefore, to continue the interim relief even after rejecting the petition would amount to doing something against the principles laid down by the Supreme Court in the aforesaid case. Hence the prayer is rejected.