STATE OF GUJARAT Vs. GODHRA BOROUGH MUNICIPALITY

JUDGEMENT

(1.) A. Division bench of this court consisting of A. D. Desai & C. V. Rane JJ. hearing this appeal found difference of judicial opinion on the point whether a Municipality constituted under the Bombay Municipal Boroughs Act 1925 is entitled to file suit for recovery of octroi duty referred the following questions for our opinion:

(2.) In order to appreciate the rival contentions urged in connection with the questions referred to us it would be necessary to notice a few facts in the context in which these questions arise. The respondent-plaintiff is the Godhra Borough Municipality which filed a Special Civil Suit been No. 6 of 1967 in the Court of Civil Judge (S. D.) at Godhra against this State of Gujarat to recover Rs. 57 108 paise with interest and costs on the ground that the said amount was due in respect of the octroi duty payable by the State Government for having imported food-grains and other articles within the limits of the said Municipality in the course of the period commencing from April 1 1961 to April 30 1966 The case of the municipality was that it decided by its Resolution of August 21 1945 to impose octroi duty in respect of certain articles mentioned in the Schedule and imported by road and which were meant for sale consumption or use within the Municipal limits. After going through the procedure prescribed for imposition of tax under the Bombay Municipal Boroughs Act 1925 the plaintiff-Municipality made the Rules effective from March 1 1947 According to these Rules octroi duty was payable in respect of the goods mentioned in the Schedule and brought within the municipal limits for sale consumption or use. It appears that the plaintiff-Municipality has enacted fresh Octroi Rules and made their effective from June 1 1962 According to the plaintiff-Municipality the State Government imported food-grains etc. within the octroi limits of the said Municipality for purposes of sale consumption or use and therefore the State Government rendered itself liable to pay octroi duty. The plaintiff-Municipality there fore made demand on the State Government to arrange to pay the octroi duty payable under the Rules. As the State Government did not comply with the demand made by the plaintiff-Municipality the present suit out of which this appeal arises was filed against the State Government to recover the aforesaid amount of Rs. 57 108.42 paise being the amount of octroi duty which was due and payable according to the Bombay Municipal Boroughs Act 1925 and the relevant Rules framed thereunder.

(3.) The suit was resisted by the State Government contending inter alia that if the tax was not paid by the State at the time of import of the goods or articles the same could be collected only by the procedure of seizure and sale of the goods as provided in the Bombay Municipal Boroughs Act 1925 and the Gujarat Municipalities Act 1963 which were applicable to the respective parts of the period with which we are concerned in this appeal.