Nitco Roadways Pvt. Ltd. and another vs The Municipal Corporation Ludhiana and another

I.S. Tiwana, J.—The petitioner impugn the action of the respondent-Corporation in penalising them to the tune of Rs. 12,538/- for non payment of octroi duty in the purported exercise of its jurisdiction u/s 116 of the Punjab Municipal Corporation Act, 1976 (forshort, the Act).

The undisputed facts are that on 6th June, 1977, truck No. PNP 6755 loaded with certain goods on which octroi duty was leviable was found within the area of the Corporation. Though the stand of the petitioner is that the driver had brought the truck within those limits by sheer mistake as he failed to notice the octroi post on the Ludhiana-Chandigarh road, yet the case of the Corporation is that it was a deliberate Act to evade payment of octroi duty. It is conceded that some of the goods were meant to be off-loaded at Ludhiana whereas the remaining were to be carried to other destination beyond Ludhiana. The truck and the goods were seized by the Corporation''s staff and the above-noted demand was raised against the petitioners by way of octroi duty and fine.

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 is to lauch 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 in Gian Chand v. The State (1958) 60 P.L.R. 539 and AIR 1931 752 (Lahore) (1) that the Corporation or its officers has 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 section 16 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.

In the light of the above, the action of the Corporation in demanding any penalty or fine from the petitioners or the driver of the truck in question is quashed. It is however, made clear that the passing of this order does not debar the Corporation from taking any other appropriate proceedings against the petitioners or the driver of the truck in accordance with law. The bank guarantee as furnished by the Petitioners in terms of the order of this Court dated 29th August, 1977 stands released. I pass no order as to costs.