Dhannalal vs Board of Revenue M.P.

Chaudhari, J.—This application is filed by Dhannalal and Gulabchand under Art, 226 of the Constitution of India for a writ of certiorari quashing the order dated 17th May 1954 passed by the Additional Deputy Commissioner, Khurai, (respondent No. 2), and the order dated 8th August 1955 passed by the Board of Revenue, Madhya Pradesh (respondent No. 1).

The petitioners are grain merchants engaged in business of purchasing grain in the local market of Khurai and exporting the same out of the town by rail or other transport. The Municipal Committee, Khurai, (respondent No. 3), collects octopi tax, and it is in the matter of collection and refund of the said tax governed by the Rules made by the State Government under Secs. 71, 76 and 85 of the Central Provinces and Berar Municipalties Act, 1922. The petitioners applied under Rule 27 of the Rules for refund of the octroi duty paid on the goods exported by them. The Municipal Committee rejected the demand. Against that decision the petitioners filed an appeal before the Additional Deputy Commissioner, Khurai, who rejected it. The petitioners then filed a revision-petition before the Board of Revenue, Madhya Pradesh, which was also dismissed by an order dated 8th August 1955.

It is contended on behalf of the petitioners that the decision of the Board of Revenue is based on a misreading and misapprehension of the relevant Rules, They submit that they as exporters are entitled to the refund of the octroi duty paid and that the Board of Revenue was in error in holding that the refund provided for by the relevant Rules could not be made to a person other than the person who had made the original payment.

The admitted facts are that the petitioners purchased grain from cultivators who paid the octroi duty on it. No amount was paid by the petitioners. They, however, contend that the price paid by them to the importer cultivators included the octroi duty paid by them, and they are eligible for refund of the octroi duty in the instant case as the grain was subsequently exported by them.

The Additional Deputy Commissioner held that the refund was not admissible on two main grounds, viz, that the petitioners themselves never paid any octroi duty and that they produced no proof that octori was paid at all. The Board of Revenue was of the opinion that octroi duty was paid by the importers alone and not by the petitioners, and therefore they were not entitled to the refund.

Under Sec. 66 (1) (e) of the Central Provinces and Berar Municipalities Act, 1922 octroi is payable on animals or goods brought within the limits of the municipality for sale, consumption or use within those limits. Rules have been framed by the State Government under Secs. 71, 76 and 85 of the Act for the Municipal Committee, Khurai, for assessments, collection and refund of octroi tax. Rule 9 (c) of these Rules lays down that on the arrival of dutiable articles at an outpost, the muharrir on duty shall call upon the person in charge--

to declare whether they are intended--

(a) for consumption or use within the municipal committee of Khurai, or

(b) for immediate export beyond the limits of the municipal committee of Khurai. If the articles are stated to be intended for consumption or use within the municipal committee of Khurai, the duty is assessed under Rule 10 (a) and on payment of the duty a pass for the articles in the prescribed form is given. Rule 21 provides that goods intended for immediate export and in transit through the Municipal Committee of Khurai shall not be subject to any duty on the arrival of such goods at an outpost, and after the declaration under Rule 9 has been made the official in charge shall grant a pass in the prescribed form called the "Transit Pass." The goods will then proceed under the escort of a peon to the outpost by which they are to go out. There is no provision under Rule 9 for a declaration in respect of goods which are brought within the limits of the Municipal Committee, Khurai for sale; Rule 27 deals with refund of octroi on the exportation of dutiable goods outside the municipal committee limits. The exporter is entitled to a refund of duly equal to 7/8 the of the duty paid on them at the time of their import. Under proviso (b) to Rule 27 no refund is allowed if the amount to be refunded be less than Re. � or if the claim be made after expiry of two months from the date of export unless the exporter is able to explain satisfactorily the reason for the delay.

It is not disputed that the duty has been paid by the persons who brought in the grain. The petitioners purchased it and exported it. They claim refund of the duty which they indirectly paid on the grain. The nexus is the goods on which the duty is paid and not the person who paid it. Rule 27, therefore, entitles the petitioners to claim refund on the exportation of the grain. What will be the extent of refund or whether proviso (b) to Rule 27 would be applicable is a question for determination on the facts found in respect of each claim made, as provided by Rules 34 and 35.

The order of the Board of Revenue as well as that of the Additional Deputy Commissioner is, therefore, quashed. The petition is allowed with costs. Counsel''s fee Rs. 50/-. The amount of security deposited by the petitioners shall be refunded to them.