Baharia S.R. vs Mun. Com. Jabalpur

This appeal came up for hearing before us on a reference made by one of us (Choudhari J.) for determination of the following questions: -

(i) Whether the assessment of double octroi duty on the motor vehicles was in violation of Section 6 of the C. P. and Berar Motor Vehicles Taxation Act, 1942 (III of 1942) ?

(ii) Whether the C. P. and Berar Motor Vehicles Taxation (Amendment) Act, 1947 (XXXVII of 1947) enables the initiation of proceedings for the assessment and levy of an octroi on motor vehicles brought within the municipal limits before it came into force ?

(iii) Whether the Municipal Committee had the requisite authority to make a levy of double octroi duty on the motor vehicles in question in the circumstances of the present case ?

(iv) Whether second-hand motor vehicles come within the category of ''dutiable articles'' within the meaning of rule 1 of the Octroi Rules framed under the Municipalities Act ?

(v) Whether any octroi duty is liable to be levied or collected in regard to articles imported by the consumer for his personal use in contradistinction to those brought by the im(sic)citer for purposes of trade and commerce ?

The suit giving rise to this appeal was filed by the present appellant S. R. Baharia for an injunction restraining the Municipal Committee, Jabalpur, from levying octroi duty on the two trucks brought by him to Jabalpur in January 1947.

The appellant purchased two secondhand Chevrolet trucks from the Government auctioneer for a sum of Rs. 8,000 in military disposals at Allahabad on 15-12-1946 as per receipt Ex. P-1. He brought the trucks within the municipal area of Jabalpur in January 1947. The Municipal Committee, Jabalpur, by Memorandum No. 0/227/47, dated 27-1-1947 (Ex, P-2) required the appellant to furnish the requisite information asserting that he had imported the motor vehicles from out-station and brought them within the municipal limits without payment of octroi duty. The appellant supplied the requisite information. Thereafter, the Municipal Committee served him with a notice for payment of double octroi duty amounting to Rs, 397-11-0 on the two motor vehicles.

The plaintiff''s case is that under the law then in force, i.e., in January 1947 the trucks which were imported within the limits of the Jabalpur municipality were not liable for any octroi duty. He also stated that the Central Provinces and Berar Motor Vehicles Taxation (Amendment) Act, 1947 (XXXVII of 1947) had no application to the case, The Municipal Committee, Jabalpur, joined issue and stated that as the plaintiff omitted to give a declaration as required by rules he was liable to pay double duty.

The trial Court found in favour of the plaintiff and decreed his suit in its entirety. In construing Section 6 of the Central Provinces and Berar Motor Vehicles Taxation Act, 1942 it held that the Municipal Committee had no authority to impose any tax in the nature of octroi on the vehicles in question. The first appellate Court reversed the decree of the trial Court and dismissed the plaintiff''s suit as it came to the conclusion that the amending Act (Central Provinces and Berar Act No. XXXVII of 1947) was retrospective in operation.

The only question for consideration is whether the Municipal Committee, Jabalpur, could ask for octroi duty from the plaintiff on the two trucks which he imported within the limits of the Jabalpur Municipality in January 1947. We therefore, do not consider it necessary to answer the questions other than question No, (iii).

Section 66 of the Central Provinces and Berar Municipalities Act, 1922 gives power to a Municipal Committee to impose octroi on animals and goods brought within the limits of a municipality for sale, consumption and use within those limits. The procedure for imposition of the tax is laid down in Section 67 of the Act. The relevant Rules of the Municipal Committee, Jabalpur, which were in force in January 1947, were published in the Central Provinces and Berar Gazette, dated 14-5-1943, under notification dated 11-3-1943. Rule 1 of these rules empowered the Municipal Committee to levy octroi on commodities specified in the Schedule thereto annexed. Item 70 in class VIII of the Schedule is material and reproduced below: --

VIII. -- Metals and their manufactures and glass and other goods.

(70) Metal and metal-goods excluding pure gold & silver, watches, clocks, motors, motor cycles, cycles, tricycles, perambulators and machines and machinery and their spare parts, tools of all kinds, parts of all kinds, printing press and machines.

It is contended on behalf of the appellant that the Municipal Committee, Jabalpur, had no power to levy octroi on the trucks in question as item (70) of class VIII of the Schedule annexed to the above rules excluded moter and moter cycles. As against this it is contended on behalf of the respondent that the rules were intended to exclude only pure gold and silver and not the other articles mentioned in item (70) ibid. In support of this contention reference was made to the subsequent amendment of item (70) under notification No. 5510-6640-M-XIII, dated 15-12-1949, published in the Central Provinces and Berar Gazette, dated 23-12-49.

There is no manner of doubt that the word "motor" in item (70) is wide enough to include motor cars and motor trucks, as held in The Municipal Committee Malkapur vs. Govindsa (C R No. 889 of 1951 decided on 11-3-1954) but item No. (70) as worded did not give any authority to the Municipal Committee to levy octroi on motor cars and motor trucks brought within the limits of the Jabalpur municipality. It was (sic) in AIR 1931 156 (Nagpur) that oct (sic) was authorised only on commodities which were both included in a class and specified in the schedule. The notification must be construed strictly and its language does not clearly impose an obligation to pay octroi on motor cars and motor trucks. It therefore, gave no power to the municipal committee to levy octroi on motor cars and motor trucks brought into the municipality for use within its limits. The contention of the learned counsel for the respondent that there was intention to tax articles such as motor cars and motor trucks under item (70) cannot be accepted. It is well settled that the subject is not to be taxed unless the language of the statute clearly imposes the obligation, and in a case of reasonable doubt the construction most beneficial to the subject is to be adopted. The rules of strict construction with regard to statutes imposing taxation must be applied to the notification under consideration. We are of opinion that the language of the notification and its schedule does not include motor cars and motor trucks for taxation. The subsequent amendment in 1949 cannot have any retrospective effect. We, therefore, hold that the Municipal Committee, Jabalpur, had no power to levy octroi on the two trucks brought by the appellant within the limit of the Jabalpur Municipality in January 1947. We answer question No. (iii) in the negative.

The appeal succeeds. The decree of the first appellate Court is set aside and that of the trial Court is restored, The respondent shall bear the costs of the appellant throughout