SINNAR BIDI UDYOG LTD. Vs. SANGAMNER MUNICIPAL COUNCIL

JUDGEMENT

(1.) THIS Second Appeal raises a short question about the competence of respondent Municipal Municipal Council, Sangamner, to levy octroi on the goods described as 'Kaccha Bidi' brought by the appellant in the municipal area. Admitted facts show that appellant is a company registered under the Companies Act and is bringing 'Kaccha Bidi' after they are manufactured out of the municipal limits of Sangamner into Sangamner Municipal Area, then roast it with some special procedure and pack it so that they can be sold for human consumption. Since Municipal Council was levying octroi on these goods, appellant filed a Civil Suit bearing number 367/1975 in the Court of Civil Judge (Junior Division), Sangamner, for a perpetual injunction restraining Municipal Council, Sangamner from levying octroi on 'Kaccha Bidi' which the plaintiff was bringing in the municipal area. Municipal Council resisted the suit. The learned trial Judge dismissed the suit by his judgment and decree dated 30th October 1980 firstly on the ground that the suit is not maintainable in the absence of any notice under section 304 of the Maharashtra Municipal Councils Act, 1965 and on the ground that the plaintiff has failed to prove that 'Kaccha Bidi' are not liable for octroi. An appeal was filed by the unsuccessful plaintiff in the District Court at Ahmednagar and the learned Assistant Judge, Ahmednagar, was pleased to dismiss the appeal holding that the goods in question are liable for the levy of octroi tax. It is this decree which has been challenged in this Second Appeal.

(2.) SHRI V. J. Dixit, learned Counsel appearing on behalf of plaintiff/appellant, submitted that word 'Octroi' has been defined in section 2(28) of the Maharashtra Municipal Councils Act, 1965 to mean a tax on the entry of goods into a municipal area for consumption, use or sale therein. According to Shri Dixit, the word 'use' has the same meaning which the 'consumption' has and admittedly these 'Kaccha Bidi' are not consumed within the municipal area of Sangamner Municipal Council. They are just processed and sent outside the municipal limits. Therefore, Municipal Council has no authority to levy any tax on these goods. No part of the disputed 'Kaccha Bidi' is utilized for human consumption or otherwise and, therefore, it cannot be said that the said goods are used in the municipal limits. According to him, if the goods are processed and sent outside the municipal limits, they are only in transit and they cannot be subjected to the octroi by the Municipal Council from which they are passing through. Shri S. P. Deshmukh, learned Counsel appearing on behalf of defendant/respondent Municipal Council, defended the decree and submitted that word 'use' employed in the definition clause has been used in the wider sense and covers all kinds of use and the meaning is not necessarily confined to the use or consumption by which the goods are destroyed or used up.

(3.) IN the case of M/s Anwarkhan Mahboob Company vs. The State of Bombay (now Maharashtra) and others, : AIR 1961 SC 213, Supreme Court was pleased to consider the question whether the processing of raw tobacco into bidi pattis by removing stem and dust can be termed to be 'consumption'. The learned Judges of the Supreme Court were pleased to observe: