BILLIMORA TOWN MUNICIPALITY Vs. SAURASHTRA TOBACCO STORES

JUDGEMENT

(1.) Adopt liberal standards of construction of provisions governing refund of octroi duty (and such other indirect taxes) and thereby serve the private interests at the cost of innumerable unidentifiable consumers. Or beware of economic reality of life and do not permit the profit margin of private businessmen/traders to be enhanced at the cost of consumers and the society at large. This in short is the main conflict which is required to be resolved in this appeal.

(2.) The appellant-Billimora Town Municipality is the original defendant of Special Civil Suit No. 68 of 1979 of the Court of Civil Judge (SD). Navsari. The respondents-original-plaintiffs filed the said suit for refund of octroi duty. The plaintiffs prayed that the Resolution dated 16/11/1976 passed by the Managing Committee of the Municipality and the Resolution dated 22/09/1977 passed by the General Board of the Municipality by which the defendant-Municipality rejected the refund claim made by the plaintiffs be declared illegal and void. The plaintiffs also prayed that the Municipality be directed to refund the octroi amount of Rs. 77 457.63 The plaintiff No. 1 is a registered firm and the other plaintiffs are the partners thereof. The plainthis deal in beedi and cigarette at Billimora and round about places. The plaintiffs importer beedi and cigarette within the Municipal limits and paid octroi duty thereon. As per the Octroi rules and by-laws if the goods are exported outside the municipal limits without breaking bulk and without changing hands then the importer would be entitled to claim refund of octroi duty. The plaintiffs claimed such refund on the goods exported for the period between the year 1971 and 1977. It was contended that the Managing Committee as well as the General Board of the Municipality rejected the refund claim of the plaintiffs on extraneous grounds namely that the Members of the Municipality did not see eye-to-eye politically with the plaintiff. The plaintiffs filed suit on 28/12/1975 The appellant-Municipality appeared in the suit and resisted the same on facts as well as on law points. The Municipality contended that the suit was time-barred and the plaintiff was not entitled to claim refund as the requirements of the Rules and by-laws providing for refund were not complied with. After recording evidence and after hearing the parties the trial Court decreed the suit of the plaintiffs as per its judgment dated 31/03/1984 and directed the Municipality to pay Rs. 77 457.63 with 6% interest from the date of the suit till realisation. Hence the present appeal by the Municipality.

(3.) The appellant-Municipality urges that the resolutions passed by the Managing Committee and General Board of the Municipality are perfectly ill conformity with the provisions of octroi rules and other provisions of law. In essence it was contended that as required under the provisions of octroi Rules and by-laws. the plaintiffs did not produce importing even though repeatedly called for. Therefore the claim of the plaintiff for refund was rejected. Counsel for the Municipality submitted that even at this stage if the plaintiffs were ready to comply with this requirement and produce the import bills as required under the provisions of Octroi Rules the Municipality was ready to make the payment of the amount claimed as and by way of refund of octroi duty. The Municipality also submitted in this appeal that the action taken by the Municipality was under the provisions of the Act rules and by-laws and therefore the suit should have been filed within a period of six months from the date of accrual of the cause of action as required under the provisions of sec. 253 of the Gujarat Municipalities Act 1962 ( the Act for short). Admittedly the suit has not been filed within six months from the date of passing of the resolution by the Municipality and therefore the suit should have been dismissed. On behalf of the Municipality it is also contended that in case the amount claimed is refunded it will result in the unjust enrichment of the plaintiffs and therefore also the suit should be dismissed.