MAFATLAL INDUSTRIES LIMITED Vs. NADIAD NAGARPALIKA

JUDGEMENT

(1.) What do the words 'consumption' and 'use' mean occurring in the provisions of the definition of the term 'octroi' in Sec. 2(16), in Sec. 99(i)(iv) of the Gujarat Municipalities Act, 1963 ? (hereinafter referred to as 'the Act'). This is the principal question which is arising for consideration in this petition.

(2.) The Facts : The petitioner-Company is manufacturing textile goods and for the purposes of carrying on manufacturing activity it brings into the octroi limits of Nadiad Town cotton, man-made fibre, machinery, machinery parts, colours, chemicals and such other articles. On the articles brought within the octroi limit, the petitioner pays octroi duty as per the rates prescribed in the Schedule to the rules and the bye-laws framed by Nadiad Municipality under the relevant provisions of the Act. Out of the articles so manufactured the petitioner-Company takes out some articles outside the octroi limits for the purposes of processing the some. Processing work is done in some other units of the petitioner-Company situated in different towns. Mainly grey cloth pieces of the length of 100 metres are taken out for such processing work. After the processing is over the goods are brought back to Nadiad town in the same length, i. e., about 100 metres.

(3.) After the goods are brought back, the cloth pieces of 100 metres are cut into different sizes of suitable length of 20, 30 or 40 metres so as to meet with the requirement of the excise rules and the demand in the market. While cutting the cloth to particular size, the requirements of the consumers are also kept in view. After the process of cutting the cloth in different sizes is over, the sale takes place. According to the petitioner negotiations for sale takes place at Bombay. Arrangement for sale is also finalised at Bombay. The Bombay office of the petitioner-Company remains in direct touch with Nadiad units. As per the instructions of the Bombay office the goods are despatched to different destinations in the country and even outside the country. Only some goods are sold in Nadiad town itself. But the quantity of goods sold in Nadiad is insignificant.