ADHUNIK SYNTHETIC LIMITED Vs. MUNICIPAL COUNCIL JALGAON

JUDGEMENT

(1.) THIS petition filed under Article 226 of the Constitution, seeks a writ of Mandamus against the Municipal Council, Jalgaon, to grant exemption from payment of octroi under Rule 24 (3), (4) of the Maharashtra Municipalities (Octroi) Rules, 1968, in respect of the import of Partially Oriented Yarn which is exported after texturising/processing by the petitioner company, at its factory at Jalgaon.

(2.) THE petitioner is a public limited company, registered under the Companies Act, 1956 with its registered office at Kandivali (West), Mumbai and it established a factory for processing of yarn at Plot No. J/49, Additional M. I. D. C. Area, Jalgaon. The said factory is registered under the Factories Act, 1948, and commenced its production some times in January, 1987. There is no dispute that the factory is located within the limits of the Municipal Council, Jalgaon. It paid octroi duty under protest till September 1989 and from October 1989, it stopped payment of the same on the grounds that the Partially Oriented Yarn (commonly known as P. O. Y.) was imported within the Municipal limits and exported after its processing and was thus exempted from payment of octroi. The company claimed exemption for payment of octroi as well as refund of the amount paid under protest from January 1987 to September 1989. This was not conceded to by the Municipal Council and therefore, the petitioner approached us seeking a writ of Mandamus and for declaration that it was so entitled.

(3.) THE petitioners contends that the P. O. Y. is procured by its head office from various parties and more particularly from the Reliance Industries, Patalganga, and the said yarn is processed at the factory at Jalgaon and thereafter is exported to the companys godown at Bhiwandi. The yarn imported by the petitioner within the limits of Jalgaon Municipal Council is meant for temporary detention and its eventual export is done after processing and therefore, the petitioner is entitled for exemption on payment of octroi duty as provided under Rule 24 (3) and (4) of the Octroi Rules. During the processing of the P. O. Y. no new commercial product comes into existence after texturising process and no manufacturing operation is carried out when the process is undertaken. The petitioner further contends that merely processing/texturising as done in the factory at Jalgaon, does not amount to any manufacturing activity and therefore, producing any new product. There is no question of consumption, use or sale of the yarn by the petitioner within the limits of Municipal Council, Jalgaon and therefore, it is not liable to pay octroi duty. The Municipal Council, ought to have refunded the amount right from the first day by applying the provisions of Rule 24 (3) and (4) of the Octroi Rules, urges the petitioner. The petitioner has also relied upon a decision of this Court in the case of (Dimple Silk Mills Pvt. Ltd. and another v. Municipal Council, Amravati and another), W. P. No. 1363 of 1987 handed down by the Division Bench of 4/5-10-1988. In addition, the petitioner has also relied upon the following decisions of the Supreme Court. 1. Burmah-Shell Oil Storage and Distributing Co. of India Ltd. , Belgaum v. Belgaum Borough Municipality, Belgaum, A. I. R. 1963 Supreme Court 906. 2. Tata Engineering and Locomotive Company Limited and another v. The Municipal Corporation of the City of Thane and others, A. I. R. 1992 Supreme Court 645. 3. H. M. M. Ltd. , and another v. The Administrator, Bangalore City Corporation, Bangalore and another, AIR 1990 Supreme Court 47. 4. M/s. Hiralal Thakorlal Dalal v. Broach Municipality and others, A. I. R. 1976 Supreme Court 1446. 5. Chowgule and Company Pvt. Ltd. and another v. Union of India and others, 1981 (1) Supreme Court Cases 653. The petitioner also relies upon another decision of this Court in the case of Khandelwal Traders, Akola v. The Akola Municipal Council, AIR 1985 Bombay 218.