L H SUGAR FACTORYLTD Vs. MUNICIPAL BOARD PILIBHIT

JUDGEMENT

(1.) BY means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner, L.H. Sugar Factory Limited, seeks a writ, order or direction in the nature of mandamus commanding the respondents not to charge/realize octroi on sugarcane brought to the petitioner's factory. It further seeks refund of a sum of Rs. 81,000,00/ - which is claimed to have been illegally realized as octroi on the sugarcane brought to the petitioner's factory from 14th November, 1988 to 15th January, 1989.

(2.) BRIEFLY stated, the facts giving rise to the present writ petition are as follows : - The petitioner is a public limited company incorporated under the Companies Act. It is engaged in the business of manufacture and sale of sugar by vacuum pan process and alied products at its factory situated within the Municipal Limits of Pilibhit. The petitioner purchases sugarcane from outside the Municipal Limits of Pilibhit and brings the same to its factory. The Municipal Board, Pilibhit, started charging octroi on the sugarcane brought to the petitioner's factory at Pilibhit from outside the Municipal Limits @ 5 paise per quintal. The petitioner continued to pay octroi duty at the aforementioned rate till 31st August, 1982. Thereafter, the Municipal Board stopped realizing octroi duty from the petitioner on the sugarcane brought by it to its factory. According to the petitioner, the Municipal Board, Pilibhit published proposals proposing to levy octroi duty @ 20 paise per quintal on the sugarcane. The proposal was published in the UP. Gazette dated 7th November, 1981. Objections were invited from the public. The petitioner also filed its objections to the proposed levy of octroi duty @ 20 paise per quintal on the sugarcane. It appears that the Commissioner, Bareilly Division, Bareilly granted approval to the final list of items and the octroi duty leviable therein as per the recommendations of the Municipal Board, Pilibhit. The approved list was published in the U.P. Gazette on 28th August, 1982. The list was to be made effective from 1st September, 1982. In this list, sugarcane was omitted. From 1st September, 1982, the Municipal Board, Pilibhit stopped levying and realizing octroi duty on sugarcane brought by the petitioner from outside the Municipal Limits of Pilibhit to its factory. Subsequently, the State Government issued an order on 3rd July, 1987 purporting to be under Section 157(3) of the Municipalities Act, 1916 (hereinafter referred to as 'the Act'). It directed that in those municipalities where octroi duty is leviable on sugarcane brought for crushing within the sugar factory at more than 10 paise per quintal, octroi should be realized only @ 10 paise per quintal. However, where the octroi duty was less than 10 paise per quintal, this order will not authorize the Nagar Palika to charge 10 paise as octroi. Taking shelter behind this Government Order, the Municipal Board, Pilibhit started realizing 10 paise per quintal as octroi duty on sugarcane from the petitioner. The petitioner paid octroi duty for the period of 14th November, 1988 to 15th January, 1989, which came to Rs. 81,000,00/ -. The petitioner thereafter challenged the action of the Municipal Board on the ground that no octroi duty is payable under the aforesaid Government Order.

(3.) SRI Triloki Nath, the learneed Counsel for the petitioner, submitted that the Municipal Board, Pilibhit had, while publishing the proposal on the Gazette dated 7th July, 1981 superseded its previous list of octroi duty which culminated in the final list dated 20th August, 1982 which was published on 28th August, 1982, effective from 1st September, 1982, in which sugarcane did not find any mention and therefore, from 1st September, 1982, no octroi duty is chargeable or payable. He submitted that under Section 128 of the Act, the Municipal Board has been authorized to levy octroi. The procedure for levy and imposition has been provided under Sections 131 to 136 of the Act. Section 131 of the Act provides for framing of preliminary proposals. Sub -section (3) thereof requires the municipality to publish in the manner prescribed in Section 94 of the Act the proposal framed under sub -section (1). In exercise of the powers under Section 131(3) of the Act, the notification dated 7th July, 1981 was published. The Municipal Board considered the objections and thereafter recommended a list of the items on which octroi duty was to be charged, to the Commissioner for his approval. The Commissioner approved the list which has been published in the U.P. Gazette on 28th August, 1982. It does not include sugarcane. The submission is that after 1st September, 1982 as the earlier list of items on which octroi duty was leviable, had been superseded, no octroi duty can be charged or realized on sugarcane. He submitted that the Government Order dated 3rd July, 1987 does not authorize the Municipal Board, Pilibhit to realize octroi duty on sugarcane where it is not payable at all and therefore, the action of the respondents in realizing the octroi duty on sugarcane is wholly illegal and without the authority of law.