UNION OF INDIA THROUGH THE GENERAL MANAGER Vs. NAGAR MAHAPALIKA, ALLAHABAD THROUGH THE MUKHYA NAGAR ADHIKARI

JUDGEMENT

(1.) Between August, 1947 and February, 1955, the Rly. Administration at Allahabad imported large quantities of foodgrains and cereals which were liable to octroi duty payable to the Municipal Board of Allahabad. The Rly. Admn. imported these goods through contractors as well as itself directly. It also purchased these commodities from the Town Rationing Officer, Allahabad. The Municipality claimed that a sum of Rs. 62,944 -81 was payable by the Rly. Admn. as octroi on goods imported through the contractors. Out of this Rs. 30,048.87, has been realised leaving a balance of Rs. 32,895.94. The Municipality claimed that a sum of Rs. 19,737/3/ - was due from the Rly. Admn. on account of goods imported by it directly. The Rly. Admn. had paid a sum of Rs. 494/5/ - leaving a balance of Rs. 19,242/14/ -. The Municipality claimed that a sum of Rs. 51,728.65 was payable by the Rly. Admn. on account of goods purchased from the TRO. The Rly. Admn. denied its liability to pay octroi for goods purchased from the TRO on the ground that the TRO had himself paid octroi when he imported the goods. It also denied liability to pay octroi for goods imported through contractors on the plea that the contractors alone were liable to pay it and they must have paid it. The Rly. Admn. however, admitted its liability to pay Rs. 19,737/3/ - on goods directly imported by it and also admitted that only a sum of Rs. 494/5/ - had been paid on this account, leaving a balance of Rs. 19,242/14/ -. The Rly. Admn. claimed that it had exported a large quantity of these goods for which it was entitled to a refund of Rs. 37,140/3/ - from the Municipal Board. The Municipality denied any liability to the amount claimed as refund on the ground that the Rly. Admn. had not complied with the requisite rules meant for claiming refund.

(2.) At first the Rly. Admn. and the Nagar Mahapalika entered into negotiations to settle these demands. Subsequently the State Govt. referred the matter to the Addl. DM for settlement. While the matter was being heard by the Addl. DM the parties on 24 -1 -1963, executed an agreement whereunder these claims and counter claims were referred to the arbitration of the Judicial Secretary to the Govt. of U.P. The arbitrator after hearing the parties pronounced his award on 30 -7 -1964. He held that the claim of the Nagar Mahapalika on account of octroi duty due on goods imported through contractors has been paid and nothing is due now. The claim of the Rly. Admn. for refund was held barred by limitation as well by S. 326, U.P. Municipalities Act. The Arbitrator found that the Rly. Admn. had admitted its liability to pay a sum of Rs. 19,242/14/ - as octroi due on goods directly imported by it. He awarded this sum in favour of the Nagar Mahapalika, Allahabad, with proportionate costs against the Rly. Admn.

(3.) On the award being filed in the Court of the Addl. Civil Judge, Allahabad, both parties instituted objections. The objection of the Nagar Mahapalika in relation to the specification of the actual amount of costs awarded was upheld. The rest of the objections were rejected. The Court also dismissed the objections filed by the Union of India. Aggrieved, the Union of India came to this Court in appeal.