Balwant Singh vs Commissioner, Jullundur Division and Another

Ashok Bhan, J.—Petitioner has impugned the action of the respondent-Corporation penalising him for non payment of octroi duty in the purported exercise of its jurisdiction u/s 116 of the Punjab Municipal Corporation Act, 1976 (hereinafter referred to as ''the Act'').

Undisputed facts are that on 30.7.1986, truck bearing Registration No. HYE 1194, loaded with certain goods on which octroi duty was leviable, was intercepted within the Municipal Limits of the Corporation. The truck was being driven from Surat and was destined to reach Amritsar with certain goods on which octroi duty was to be levied on its entry in the city of Amritsar. Though the case of the petitioner is that the driver has brought the truck within the Municipal limits due to sheer ignorance of the place where the octroi post was set up, yet the case of the Corporation is that it was a deliberate act to evade payment of octroi duty. The truck and the goods were seized by the Corporation Staff. On the goods seized, the octroi duty leviable was found to be Rs. 2,610-45. Vide Annexure P-1, apart from levying the octroi to the tune of Rs. 2,610-45, a further sum of Rs. 52,209/- was also made payable thereon in the form of 20 times octroi duty as costs/penalty that had been ordered to be imposed on the petitioner as he evaded to pay the octroi duty.

Aggrieved against the above imposition of the amount of penalty in the sum of Rs. 52,209/-, equivalent to 20 times of the normal octroi duty, petitioner took up the matter with the Commissioner of the Municipal Corporation, who vide order dated 5.8.1986 (Annexure P-2) reduced the amount of penalty from 20 times to 10 times of the normal octroi duty by referring the same as Composition Fee, although the petitioner had never moved for compounding of the offence and composition of the penalty that had been imposed upon him. Petitioner thereafter, filed an appeal u/s 146 of the Act before the Commissioner, Jalandhar Division, Jalandhar, against the order. Annexure P-2. Before filing the appeal, Petitioner deposited a sum of Rs. 2,610-45 as octroi duty against receipt No. 6484 of Book No. 129 dated 5.8.1986 and a sum of Rs. 26,104-50 as penalty amount, against receipt No. 5667 of Book No. 33 dated 5.8.1986.

Before the Commissioner, Jalandhar Division, Jalandhar, the point raised on behalf of the petitioner was that in the face of the provisions of Section 116 of the Act and the decision of this Court interpreting the said section, the authorities below had no jurisdiction to impose any penalty. This contention of the petitioner was rejected by the appellate authority holding that the sum of Rs. 26,104-50 was not the penalty amount but Composition Fee and, therefore, the Commissioner, Municipal Corporation, Amritsar, could charge the same as Composition Fee. Appeal was ordered to be dismissed, aggrieved against which, the present writ petition has been filed.

The only contention raised by the counsel for the petitioner is that Section 116 of the Act, as it existed at that time, does not give any jurisdiction to the Corporation or any of its officers to impose penalty by themselves. The only jurisdiction with the Corporation is to launch prosecution against the erring person who had tried to evade payment of octroi duty. Section 116 of the Act reads as under :-

"Penalty for evasion of octroi. - If animals or articles passing the octroi limits of a Corporation are liable to the payment of octroi then every person who causes or abets the introduction of, or himself introduces or attempts to introduce within the said octroi limits any such animals or articles upon which payment of the octroi due on such introduction has neither been made nor tendered, shall be punishable with fine which may extent either to twenty times the value of such octroi or to fifty rupees, whichever may be greater."

Section 116 of the Act camp up for interception and consideration before a learned Single Judge of this Court in Nitco Roadways Pvt. Ltd. and Anr. v. The Municipal Corporation, Ludhiana (1985) 87 PLR 448, and it was held as under :-

"The claim of the petitioners is that Section 116 of the Act does not give any jurisdiction to the Corporation or any of its officers to impose penalty by themselves. All that can be done by the Corporation in such a case to launch a prosecution against the erring person who has tried to evade the payment of octroi duty. Though a short affidavit was filed on behalf of the Corporation at the time of motion hearing challenging the maintainability of the petition, yet no reply on merits has been filed till today. It is, thus, patent that the Corporation does not choose to contest the claim of the petitioners. Otherwise also I am satisfied in the light of the judgments on Gian Chand v. The State (1958) 60 PLR 539 and Rahmat Elahi v. Emperor AIR 1931 Lah 752 that the Corporation or its officers have no jurisdiction of their own to penalise a person who has been found to have evaded payment of the octroi duty. No doubt, these two cases were decided u/s 78 of the Punjab Municipal Act, yet the later mentioned section is almost in similar terms as Section 116 of the Act. Thus, the ratio of these judgments fully applies to the facts of this case. I, therefore, hold that to penalise a person for non-payment of octroi duty, the Corporation has to prove its case in terms of Section 116 of the Act in a Court of competent jurisdiction."

A similar matter which arose u/s 78 of the Punjab Municipal Act, 1911, which is similar to Section 116 of the Act, was considered by a Division Bench of this Court in C.W.P. 631 of 1986 decided on 31.10.1986. It was held by the Division Bench that:-

"To canvas support for his attack on the impugned orders, to the extent penalty is imposed thereby, learned counsel for the petitioner has placed reliance on Rahmat Elahi v. Emperor AIR 1931 Lah 752 and Gian Chand v. The State (1958) 60 P.L.R. 539 and Nitco Roadways Pvt. Ltd. and Anr. v. The Municipal Corporation, Ludhiana and Anr. (1985)87 P.L.R. 448. We find that his submissions is fully supported by these judgments. Respondent No. 3 could not, of its own, impose penalty on the petitioner. It could only launch prosecution against him for having tried to evade the payment of octroi duty. Section 78 of the Punjab Municipal Act leaves no scope for doubt that penalty can be imposed only by a Court of competent jurisdiction. The Municipal Committee cannot assume this power which is judicial in character."

After the counsel for the petitioner concluded his arguments, Mr. G.S. Virdi, Advocate, appearing for Mr. H.S. Giani, Advocate, counsel for the Corporation, was called upon to address his arguments, Instead of rendering assistance to the Court, he made a request that the case be adjourned as Mr. H.S. Giani, counsel for the Corporation, was not present. Such a request should have been made before the hearing of the case had begun. Counsel for the respondents did not render any assistance in the matter.

I examined the provisions of the Act and found that u/s 151 of the Act, Commissioner of the Corporation with the previous sanction of the Corporation can allow any person to compound for any tax for a period not exceeding one year at a time. This section does not talk of composition of an offence. Similarly, Section 394-B of the Act, do not authorise the authorities under the Act to compound any offence made punishable by or under the Act unilaterally. By virtue of the provisions of Section 394-B, the Commissioner or any other person have been authorised to compound offences relating to the Act but its provisions nowhere authorise them to unilaterally compound the offences. In this case, petitioner had never applied for composition or accepted the same. Action of the respondents cannot be either deemed to be u/s 151 or u/s 394-B of the Act. Imposition of penalty by way of fine is only authorised by Section 116 of the Act, which in the present case is not applicable in view of the interpretation put by the learned Single Judge in Nitco Roadways Pvt. Ltd. and Anr. case (supra). Sitting in Single Bench, I am bound by the law laid down in Nitco Roadways Pvt. Ltd. and another''s case (supra) and follow the same.

For the reasons stated above, this petition is accepted. Orders, Annexures P-1, P-2 and P-5, relating to the extent of levying penalty to the tune of Rs. 52,209/- are quashed. The amount of penalty of Rs. 26,104-50 realised from the petitioner by the Corporation by way of penalty/composition fee is ordered to be refunded to him within two months of the receipt/production of a certified copy of this order.