BIRLA CEMENT WORKS KOTKAPURA Vs. STATE OF PUNJAB

JUDGEMENT

(1.) Correctness of the Division Bench judgement in Indian Oil Corporation v. Municipal Corporation, Jullundur, AIR 1990 Punj and Har 99, having been doubted, the matter has been referred to the Full Bench.

(2.) The Division Bench held that the Municipal Committee was entitled to levy octroi on all the goods brought within the Municipal limits which were to be sold to consumers outside the Municipal limits. This was so held as the title in the goods passed within the jurisdiction of the Municipal Committee. It is not necessary to refer to the aforesaid decision in detail as the aforesaid judgement was set aside by the Supreme Court subsequently. Since the entire matter stands referred to the Full Bench, brief narration of the facts of the claim made by the petitioner is necessary.

(3.) Birla Cement Works is a Proprietary Concern of M/s. Birla Jute Manufacturing Company Ltd., Calcutta. This Company has a manufacturing unit known as 'Birla Cement Works' located in Chittorgarh in Rajasthan State. Its office is located in Punjab at Kotkapura and that office is also registered as a dealer under the Punjab General Sales Tax Act and also under the Central Sales Tax Act. Its godown is also situated within the Municipal limits of Kotkapura. The unit of manufacturing cement started functioning in August, 1972. From Chittorgarh the cement used to be brought in railway racks up to Kotkapura. The distributor of the petitioner's firm at Amritsar used to receive orders from the dealers in the State of Punjab. Thus Amritsar office used to inform Kotkapura office about the demand of the dealers in different towns in the State of Punjab. On arrival of the cement at the railway station, Kotkapura, the information used to be supplied to the Municipal Committee, Kotkapura, about its arrival and the number of cement bags which were to be brought within the Municipal limits of Kotkapura for consumption, use or sale and on such bags octroi duty used to be paid whereas transit pass used to be obtained from the Municipal Committee with respect to the cement bags which were to be sent straight to other towns in the State of Punjab. For about 8 years this system continued to work. On 10/07/1973 the Municipal Committee, Kotkapura, passed resolution No. 733 to charge octroi on all consignments of goods where destination station was Kotkapura. It was also decided not to issue transit passes in respect of such consignments. The Executive Officer of the Municipal Committee also passed an order in pursuance of the resolution aforesaid The matter was taken before the Deputy Commissioner, Faridkot, challenging the aforesaid order of the Executive Officer dated 10/07/1973, as well as the resolution. The Deputy Commissioner vide his order dated 20/08/1973 suspended the execution of the resolution as well as the order aforesaid. The State of Punjab vide order dated 2/08/1974, decided that the Municipal Committee, Kotkapura, could charge octroi if there was change in the consignee at Kotkapura, otherwise the cement brought by the petitioner company was to be cleared from Kotkapura by transit pass system. Copy of the order is Annexure P-11. The Sub-Divisional Officer (Civil), Faridkot, exercising powers of the Deputy Commissioner under Section 232 of the Punjab Municipal Act, passed the order dated 8/08/1974, that the decision was to be taken in accordance with the direction of the Secretary to Government, Punjab. On 14/08/1975, the Municipal Committee all of a sudden refused to issue transit passes and insisted on payment of octroi duty on cement which was to be exported to other towns from Railway Station, Kotkapura. A representation was made to the Deputy Commissioner and a direction was issued thereon to the Municipal Committee to issue transit passes. Copy of the order of the Deputy Commissioner is Annexure P-12. The State also directed issuance of transit passes. Copy of the order is Annexure P-13. On 23/08/1976, the State again passed an order that octroi be charged on cement sent by the petitioner to different places outside Kotkapura and also to recover the arrears of octroi from the petitioner. Copy of this order is Annexure P-14. Thus the Municipal Committee raised a demand on 31/08/1976 to the tune of Rs. 2,27,810.80 Paise as octroi on cement sent outside Kotkapura during the period from August 21, 197 5/07/1976 vide letter dated 1/04/1977 - Annexure P-15. Against this order of the Executive Officer, the matter was taken before the Deputy Commissioner, Faridkot, in appeal under Section 84 of the Punjab Municipal Act. The appeal was dismissed in view of the instructions issued by the State Government vide order dated 28/03/1978 - Annexure P-16. Likewise another appeal was decided by the Additional Deputy Commissioner, Faridkot on 9/12/1980, dismissing the same holding that since the goods were sold by the Company through its dealers or by its inspector the octroi limits of Kotkapura to other persons but were consumed outside the Municipal limits, octroi could be levied. In this writ petition filed by the petitioner orders dated 23/08/1976 passed by the State of Punjab directing the Municipal Committee to charge octroi on the cement sent outside the Municipal limits of Kotkapura and orders of the Executive Officer dated 1/04/1977 demanding octroi duty of Rs. 2,27,810.80 Paise for the period August 21, 197 5/07/1976 and order dated 9/12/1980 passed by the Additional Deputy Commissioner, Faridkot, are under challenge.