Appeal No 481 of 1957
Appeal by special leave from the judgment and order dated December 12 1955 of the Punjab High Court Circuit Bench Delhi in Civil Writ Application No 11 D of 1955
Gurbachan Singh and R section Narula for the appellant
CK Daphtary Solicitor General of India H J Umrigar and T M Sen for respondents Nos 1 to 4
Dr J N Banerjee and P C Agarwala for respondent No 5 1958
September 30
The Judgment of the Court was delivered by DAS C J
The facts material for the purpose of disposing of this appeal by special leave are shortly as follows The appellants before us claim to have been dealers in foreign liquor since 1922 and to have before the partition of the country held licenses in forms L 1 L 2 L 10 and L 11 at Amritsar Sialkot and Multan
The appellants allege that in 1945 they had also secured a license in Form L 2 in respect of some premises in Chawri Bazar Delhi but that the operation of the said license had to be suspended on account of the unsuitability of the Chawri Bazar premises
Then came the communal riots in the wake of the partition of the country and that license could not be renewed
ln 1951 the appellants applied to the Chief Commissioner Delhi exhibit 1 for licenses both in Forms L 1 and L 2 in respect of Karolbagh or at any place in Delhi
On May 17 1951 the Home Secretary to the Chief Commissioner by letter exhibit 2 conveyed to the appellants the sanction of the Chief Commissioner to the grant to them of license in Form L 2 in respect of Karolbagh Delhi
This license has ever since then been renewed from year to 1427 year
In 1954 a vacancy arose in respect of a license in Form L 2 on account of the closure of the business of Messrs Army and Navy Stores of Regal Buildings New Delhi which held such a license
Accordingly on January 21 1954 the appellants submitted an application exhibit 4 to the Deputy Commissioner for the grant of a foreign liquor license in Form L 2 in the aforesaid vacancy
In that application the appellants stated inter alia that they were  prepared to operate it in such a part of Delhi as may be determined by the authorities 
Not having received any reply for nearly 3 months and apprehending that interested persons were endeavouring to cause hindrance in the matter of the granting of the license to them on the plea that the appellants had no premises in Connaught Place the appellants on March 11 1954 wrote a letter exhibit 5 to the Chief Commissioner in which after pointing out that Karolbagh where they had their L 1 license was in New Delhi the appellants stated  In any case we have already made it clear in our application which we made to the Deputy Commissioner Delhi on the 21st January 1954 that we are prepared to operate this license in any locality which the authorities might deem proper 
This letter was acknowledged by the Personal Assistant to the Chief Commissioner who on March 15 1954 stated exhibit 6 that the  application No Nil dated 18 3 1954 on the subject of grant of foreign liquor license in Form L 2  had been forwarded to the Home Secretary Delhi State for disposal
Exhibit 7 to the petition is an important document
It is a letter dated May 21 1954 addressed by the appellants to the Excise and Taxation Commissioner stating that  with a view to avoiding any possible objection as to locality etc we have secured suitable premises also in the Connaught Place area New Delhi in which area has occurred a vacancy on account of the surrender of this license by Messrs Army and Navy Stores 
The letter concluded with the request that early orders be passed oil their application
On July 30 1954 the appellants wrote a long letter exhibit 8 to the Chief Commissioner claiming justice in the matter of their 1428 application for the L 2 license
In the second paragraph of that letter it was stated It is now being acclaimed by the party concerned and their friends that they have succeeded in removing the only obstacle that stood in the way of their getting the said L 2 license by so arranging matters that our application has been kept back by the Excise Commissioner and that only five or six other applications of firms without much merit in them have been forwarded to you in order that they might have a smooth sailing as against those applicants 
The appellants prayed that the Excise Commissioner might be directed to forward all records concerning the case to the Chief Commissioner so that the latter might be able to arrive at a just conclusion and they asked for a hearing to explain their claim fully
A copy of this letter appears to have been endorsed to the Excise Commissioner on August 13 1954 by the Under Secretary Finance
The Excise Commissioner then wrote a letter No 295C54 dated August 31 1954 to the Under Secretary Finance a copy of which was produced by the learned Solicitor General at the hearing before us
In this letter the Excise Commissioner explained why the application of the appellants was not considered by him to be a good and proper one and stated that reasons why according to him the applications of two  other applicants including Messrs Gainda Mall Hem Raj respondent No 5 should be given the preference
In the penultimate paragraph of this letter of explanation it was stated  In the end it may also be added that the applicant has no premises in New Delhi and as such he had no claim
The license in Form L 2 is granted in respect of certain premises
 The conclusion was that under the circumstances there is no force in the application of Messrs Ghaio Mall and Sons
 It is apparent that the Excise Commissioner did not remember that the appellants had by their letter exhibit 7 of May 21 1954 addressed to him stated that they had secured suitable premises also in the Connaught Place area New Delhi
Be that as it may on September 11 1954 the appellants wrote another letter exhibit 9 to the Chief 1429 Commissioner pressing their claim
In this letter reference was made to their letter to the Excise Commissioner of May 21 1954 exhibit 7 in which it had been stated that the appellants had secured suitable premises in the Connaught Place area in New Delhi
A copy of this letter was sent to the same Under Secretary Finance to whom the Excise Commissioner had written his letter of August 31 1954 alleging that the appellants had no premises in New Delhi
Exhibit 9A is the postal acknowledgment by the Under Secretary Finance of the letter containing the copy of the appellants  letter but it does not appear from the record that the Under Secretary Finance thought it necessary to remind the Excise Commissioner that the appellants were maintaining that they had secured suitable premises in New Delhi
This was followed by a letter exhibit 10 from the appellants to the Excise Commissioner intimating that an application had been made to the Collector on September 11 1954 for a change of their premises for L 1 license from Karolbagh New Delhi to H 32 Connaught Circus New Delhi
Although this letter had been written in connection with the change of L 1 license it certainly did specify that the appellants had secured the premises H 32 Connaught Circus
The personal Assistant to the Excise Commissioner replied exhibit 11 that the matter was under consideration
There was a reminder exhibit 12 sent to the Excise Commissioner on December 8 1954 about the change of L 1 license from Karolbagh to Connaught Circus
It appears from papers for the first time produced before us at the hearing of this appeal that on September 3 1954 a note was put up by the Under Secretary Finance before the Finance Secretary Shri section K Mazumdar
At the forefront of this note we find the following statement  The applicants Messrs Ghaio Mall and Sons have no premises in Connaught Circus
For these reasons if for no other their claim has to be rejected
 The note concluded with the recommendation that in case it was decided that the vacancy should be filled the recom mendation of the Excise Commissioner should be accepted that is to say the L 2 license should go to 1430 Messrs Gainda Mall Hem Raj Respondent No 5
On September 8 1954 the Finance Secretary simply endorsed the file to the Chief Minister who on September 14 1954 recorded the following order on the file  Commissioner s recommendation may be accepted 
There is nothing on the record produced before us to indicate that the matter was sent up to the Chief Commissioner or that his concurrence was obtained under section 36 of the Government of Part C States Act No 49 of 1951
On December 14 1954 the Under Secretary Finance wrote to the Excise Commissioner a letter which was for the first time produced at the hearing before the High Court and to which detailed reference will be made hereafter
On January 15 1955 the appellants were informed that the change applied for by them in respect of their L 1 license had been allowed
The appellants were not told anything about the rejection of their application for L 2 license but evidently they came to know that the L 2 license for which a vacancy had arisen on account of the closure of Messrs Army and Navy Stores had been granted to Messrs Gainda Mall Hem Raj respondent No 5
On December 24 1954 the appellants wrote severally to the Home Secretary exhibit 14 Finance Secretary exhibit 15 and the Under Secretary Finance exhibit 16 asking for a copy of the order or orders granting license to Messrs Gainda Mall Hem Raj andor rejecting their own application for L 2 foreign liquor license
Three postal acknowledgments Exs
16A 16B 16C relating to those three letters are on the record
The appellants got no reply from any of them
Not having received any reply the appellants on December 21 1954 moved the Punjab High Court Circuit Bench under article 226 for appropriate writs or orders but as it was not then quite clear whether the order granting the license to Messrs Gainda Mall Hem Raj had actually been made the Circuit Bench summarily dismissed that writ application as premature
There were proceedings taken by the appellants to obtain leave to appeal first from this Court under article 136 which was adjourned sine die and then from the High Court under article 133 but it is not necessary 1431 to go into further details of those proceedings
After the appellants had definitely ascertained that the L 2 license had been granted to Messrs Gainda Mall Hem Rai the appellants instead of proceeding with their application for leave to appeal to this Court filed a fresh writ petition in the High Court Circuit Bench out of which the present appeal has arisen
In the present writ petition the appellants have impleaded 7 respondents namely 1 The State of Delhi 2 The Chief Minister Delhi 3 The Excise and Taxation Commissioner Delhi 3 A Secretary Delhi State 3 B Under Secretary Finance 4 The Chief Commissioner Delhi and 5 Messrs Gainda Mall Hem Raj
The principal ground  urged by the appellants in support of this petition are that the ap plications of the appellants and of the other applicants had never been placed before the Chief Commissioner who under r I of Ch
5 of the Delhi Liquor License Rules 1935 framed under section 59 of the Punjab Excise Act Punjab I of 1914 as extended to Delhi was the only competent authority empowered to grant L 2 license for wholesale and retail vend of foreign liquor to the public and that the Chief Commissioner had never applied his mind to the applications and did not in fact make any order and that respondents Nos 2 and 3 had purported to exercise jurisdiction and power which were not vested in them by law and that their decision if any had not received the con currence of the Chief Commissioner as requiried by the proviso to section 36 of the Government of Part C States Act
The appellants pray for the issue of appropriate writs orders or directions a quashing and setting aside the order of granting L 2 license to respondent No 5 b directing the respondent No 4 the Chief Commissioner to hold proper enquiry regarding suitability of premises etc to hear both the parties and to decide the application of the petitioner before taking tip the application of the 5th respondent
There is a prayer in the nature of a prayer for further and other reliefs and there is the usual prayer for costs
182 1432 A Written statement verified by the affidavit of Shri
section K Majumdar the Finance Secretary has been filed on behalf of respondents I to 4
In paragraph 5 of that written statement it has been averred that all the applications including the appellants  application were in fact considered but it is significant that it has not been stated by whom the applications had been considered
Messrs Gainda Mall Hem Raj have filed an affidavit only stating that they had been informed that the Chief Commissioner had sanctioned the grant of the license to them
The appellants with the leave of the High Court filed a consolidated affidavit setting out facts including the fact that although they had written to the Home Secretary the Finance Secretary and the Under Secretary Finance asking for a copy of the order granting the license to Messrs Gainda Mall Hem Raj no copy of the order or even a reply to the letters had been received
In reply to the consolidated fresh affidavit an affidavit affirmed by the Finance Secretary Shri section K Majumdar has been filed
In paragraph 13 of this affidavit it has been stated that since no appeal lies against the order of the Chief Commissioner the question of supplying a copy of the order to the appellants does not arise
Statements of this kind cannot but leave an impression in the mind of the Court that the respondents were not squarely dealing with the case made by the appellants but were evading the production of the order of the Chief Commissioner which it was obviously insinuated not to have been made at all
In order to compel the respondents to produce the original order if any the appellants made an application to the High Court supported by an affidavit
Paragraph 2 of the petition which was quite precise reads thus  2
That with reference to paragraphs 7  8 of the written statement and paragraphs 10 and 11 of the affidavit of the Finance Secretary it is submitted that the respondents have not filed any proper return to the rule issued by the Court inasmuch as the original order sought to be quashed with nothings etc which led to those orders have been withheld by the 1433 respondents
The respondents have not even stated that the Chief Commissioner Delhi who is admittedly the only competent authority for the grant of an L 2 license passed any orders himself
The replies are evasive
It is not stated who considered the application of the petitioner ie whether it was a clerk who was doing the noting or whether the Collector or the Finance Secretary or the Chief Minister who did it
 On this application the High Court on April 11 1955 made the following order Let the order rejecting the petitioners  application be brought to court by an officer or official of the department concerned
 The Finance Secretary filed a reply paragraph 3 of which was in the term  following  3
That I have carefully gone through the relevant papers
The case of the petitioner was considered along with that of other applicants and it was finally decided to issue the license in favour of Messrs Gainda Mall Hem Raj
It was not considered necessary to send an intimation of rejection to all those who had not been granted the license in question
There is therefore no specific order rejecting the petitioner s application as ordered to be produced by the Hon ble Court
 Although it was obvious what order of the Chief Commissioner the appellants were insisting on being produced the respondents were prompt in taking advantage of the wording of the High Court s order directing the production of the order rejecting the appellants  application and stated that there was no specific order rejecting the appellants  application
This is nothing short of what may be called swearing by the card
The deponent overlooks the fact that the order granting the license to Messrs Gainda Mall Hem Raj was in effect tantamount to a rejection of the appellants  application
The appellants moved the High Court again on August 8 1955
After stating how the respondents were evading the real issue the appellants in paragraph 5 of the petition categorically 1434 stated that their case was that the Chief Commissioner Delhi the competent authority had not passed any order sanctioning the license in favour of Messrs Gainda Mall Hem Raj and prayed that the respondents be directed to file the original record of the case including the actual sanction for the grant of the license to Messrs Gainda Mall Hem Raj
On August 19 1955 the Court ordered the relevant records to be called for
The only thing the respondents could at long last produce before the High Court was the letter of the Under Secretary Finance to the Excise Commissioner dated December 14 1954 to which reference has already been made
Learned Solicitor General appearing for respondents 1 to 4 pointed out that the order which is sought to be quashed was the grant of L 2 license for the year 19541955 which has long expired and suggested that the writ petition and consequently the appeal had become infructuous
It appears that the usual practice in such matters is that once a license in Form L 2 is granted by the Chief Commissioner it is almost automatically renewed by the Collector from year to year unless of course the licensee is found guilty of breach of any excise rule and that in such cases of renewal there arises no question of vacancy entitling any outside competitor to apply for a license in Form L 2
That being the position and this is not in dispute it is vitally important for the appellants that we should consider the validity of the grant of the L 2 licence for 19541955 to Messrs Gainda Mall Hem Raj for in case of our holding that the order granting the same was a nullity on account of its not having been made by the competent authority the vacancy caused by the closure of business by Messrs Army and Navy Stores will still remain to be filled up and the appellants will yet have a chance of having their application considered by the competent authority
We accordingly proceeded to hear the appeal on merits
The principal question urged before us as before the High Court is whether the Chief Commissioner of Delhi made any order under r 1 of Ch
5 of the Delhi 1435 Liquor License Rules 1935
It is significant that although the Chief Minister the Excise Commissioner the Secretary of Delhi State the Under Secretary Finance and the Chief Commissioner have been impleaded in the present proceedings as respondents Nos 2 3 3A 3B and 4 respectively and although they or at least some of them could have deposed to the material facts of their own personal knowledge none of them ventured to file an affidavit dealing with the categorical statement of the appellants that no order had at any time been made by the Chief Commissioner for granting the L 2 license to Messrs Gainda Mall Hem Raj or rejecting the appellants  application
Instead of adopting the simple and straight forward way these respondents have taken recourse to putting up the Finance Secretary to give obviously evasive replies which are wholly unconvincing
It is needless to say that the adoption of such dubious devices is not calculated to produce a favourable impression on the mind of the court as to the good faith of the authorities concerned in the matter
We must also point out that when a superior court issues a rule on an application for certiorari it is incumbent OD the inferior court or the quasi judicial body to whom the rule is addressed to produce the entire records before the court along with its return
The whole object of a writ of certiorari is to bring up the records of the inferior court or other quasi judicial body for examination by the superior court so that the latter may be satisfied that the inferior court or the quasi judicial body has not gone beyond its jurisdiction and has exercised its jurisdiction within the limits fixed by the law
Non production of the records completely defeats the purpose for which such writs are issued as it did in the present case before the High Court
We strongly deprecate this attempt on the part of the official respondents to bye pass the court
We are bound to observe that the facts appearing on the records before us disclose a state of affairs which does not reflect any credit on the administration of the erstwhile State of Delhi
We must however say in fairness to the learned Solicitor General that he promptly produced 1436 the entire records before us during the hearing of this appeal
As already stated the principal question on which arguments have been addressed to us is whether the Chief Commissioner had made any order for granting the L 2 license to Messrs Gainda Mall Hem Raj
The High Court answered the question in the affirmative on two grounds namely 1 that the Finance Secretary had made an affidavit stating that the decision regarding the grant of the license to Messrs Gainda Mall Hem Raj had been taken by the Chief Commissioner and 2 that the learned Solicitor General stated in specific terms that the matter had in fact been decided by the Chief Commissioner
On the facts as they now emerge it appears to us that the High Court was under some misapprehension on both these points
We have already summarised all the statements and affidavits affirmed by the Finance Secretary and it is quite clear that the only thing that he did not say was that the Chief Commissioner had considered the applications or made any order
The learned Solicitor General with his usual fairness also informed us that except relying on the letter of December 14 1954 lie did not say that the Chief Commissioner had taken any decision in the matter
This being the position we are free to go into the matter and come to our own decision thereon
The records including the documents now produced before us do not show that the applications had ever been placed before the Chief Commissioner
There is nothing in the files showing any order or note on the subject made or signed or initialled by the Chief Commissioner
What transpires is that the Excise Commissioner respondent No 3 had by his letter dated August 31 1954 recorded the reasons why the appellants  applications could not be entertained one of the reasons being that they had no premises in the Connaught Place area in New Delhi that a note was then put up by the Under Secretary Finance on September 3 1954 suggesting that the appellants  application should be rejected if for nothing else for their not having any premises in New Delhi which 1437 according to the appellants was not a correct statement in view of their letters referred to above and that the L 2 license should be granted to Messrs Gainda Mall Hem Raj that the Chief Minister on September 14 1954 made an order on the file accordingly and finally that the Under Secretary Finance wrote the letter dated December 14 1954 to the Excise Commissioner intimating that the Chief Commissioner had been pleased to approve the grant of the license to Messrs Gainda Mall Hem Raj
There is nothing on the record to show that the concurrence with the order of the Chief Minister was obtained from the Chief Commissioner
The inexorable force of the aforesaid facts now appearing on the record inevitably led the learned Solicitor General to concede that on the records as they are it is not possible for him to say that the Chief Commissioner had actually made the order but he contends that in view of the letter of the Under Secretary Finance dated December 14 1954 the fact that the Chief Commissioner had made the order could not be questioned in any court
In other words the learned Solicitor General submits that that letter embodies the order of the Chief Commissioner and the court cannot be asked to go behind it and enquire whether the Chief Commissioner had in fact made the order
In order to succeed in this contention the learned Solicitor General has to satisfy us that this letter is the embodiment of the Chief Commissioner s order and that it has been duly authenticated
On the second point he is clearly right for under a rule Made on March 17 1952 by the then Chief Commissioner in exercise of powers conferred on him by section 383 of the Government of Part C States Act 49 of 1951 an Under Secretary is also a person competent to authen ticate an order or instrument of the Government of Delhi
The only question that remains for us to consider is whether the letter in question is the order of the Chief Commissioner
The letter on which the entire defence of the respondents rests is expressed in the following words 1438 DELHI STATE SECRETARIAT DELHI STATE No F 1013954 G A  R Dated the 14th December 54
From Shri M L Batra M A P C section Under Secretary Finance Expenditure to Government Delhi State
To Shri Dalip Singh M A 1
R section Commissioner of Excise Delhi State Delhi
Subject Grant of L 2 License
Sir With reference to your letter No 295C54 dated the 31st August 1954 on the above subject I am directed to say that the Chief Commissioner is pleased to approve under Rule 5 1 of Delhi Excise Manual Vol
11 the grant of L 2  license to Messrs Gainda Mall Hem Raj New Delhi in place of the L 2 License surrendered by Messrs Army  Navy Stores New Delhi
Necessary License may kindly be issued to the party concerned under intimation to this Secre tariate
Yours faithfully Sd
M L Batra Under Secretary Finance Exp to Government Delhi State In the first place it is an inter departmental com munication
In the second place it is written with reference to an earlier communication made by the Excise Commissioner that is to say ex facie it purports to be a reply to the latter s letter of August 31 1954
In the third place the writer quite candidly states that he had been  directed to say  something by whom it is not stated
This makes it quite clear that this document is not the order of the Chief Commissioner but only purports to be a communication at the direction of some unknown person of the order which 1439 the Chief Commissioner had made
Indeed in paragraph 7 of the respondents  statement filed in the High Court on February 21955 this letter has been stated to have  conveyed the sanction of the Chief Commissioner of the grant of license to the 5th respondent 
A document which conveys the sanction can hardly be equated with the sanction itself Finally the document does not purport to have been authenti cated in the form in which authentication is usually made
There is no statement at the end of the letter that it has been written  by order of the Chief Commissioner 
For all these reasons it is impossible to read this document as the order of the Chief Commissioner
Learned counsel for Messrs Gainda Mall Hem Raj relied on our decision in Dattatreya Moreshwar Pangarkar vs The State of Bombay 1
In that case there was ample evidence on the record to prove that a decision had in fact been taken by the appropriate authority and the infirmity in the form of the authentication did not vitiate the order but only meant that the presumption could not be availed of by the State
That decision did not proceed on the correctness of the form of authentication but on the fact of an order having in fact been made by the appropriate authority and has thus no application to the present case where it is conceded that the Chief Commissioner had not in fact made or concurred in the making of an order granting the license to Messrs Gainda Mall Hem Raj
In the view we have taken it is not necessary for us to consider whether the action taken under the Excise Act and the rules thereunder was a judicial or an executive action for even if it were of the latter category the letter of December 14 1954 cannot be treated as an order properly authenticated to which the presumption raised by article 166 of the Constitution will attach
For reasons stated above we hold that there was no valid order granting the L 2 license to Messrs Gainda Mall Hem Raj and that in the eye of the law the vacancy arising on the closure of the 1  183 1440 business by Messrs Army and Navy Stores still remains unfilled
The applications of the appellants and other applicants were for a grant of L 2 license for 1954 1955
That year has gone past and accordingly in the changed circumstances we direct the Chief Commissioner to fill up the vacancy caused by the closure of the business by Messrs Army and Navy Stores by inviting applications from intending licensees including the appellants and Messrs Gainda Mall Hem Raj and granting the same to the most suitable party
We therefore accept this appeal reverse the order of the High Court and issue a mandamus to the effect aforesaid and also direct the respondents Nos
1 to 4 to pay the appellants  costs of this appeal and of the proceedings in the High Court out of which this appeal has arisen
Messrs Gainda Mall Hem Raj are to bear their own costs throughout
Appeal allowed


Summary:
Ms Parekh Automobiles Ltd respondent No 1 had been allotted retain outlet by Indian Oil Corporation respondent No 2 for sale of its petroleum products at Dangiawas which was outside the limits of the appellant
Respondent No 2 had its depot near Raikabag Station at Jodhpur where it stored petroleum products for supply to various pump stations situated within the limits of the appellant as well as situated outside its limits
Respondent No 2 being a public sector undertaking was provided current account facilities under section 133 of the Rajasthan Municipalities Act 1959 and so respondent No 2 had not to pay octroi tax on such consignments at the time of entry of goods within the limits of the appellant
For this purpose respondent No 2 was provided with the export facilities and supplied with entry passes under Rule 13 of the Rajasthan Municipal Octroi Rules 1962
Under rule 134 the amount of duty payable in the case or persons who had the current account facilities was determined and collected on the basis of the total amount of goods that had come in as reduced by the total amount of goods that had gone out the balance being presumed to have been consumed used or sold within the municipal limits
It was alleged that the appellant suspended the current account facility under section 133 of the Act and took the stand that octroi would be charged from Respondent No 2 on the goods brought within the municipal limits if these were sold within the limits of the appellant although such goods were mean for use and consumption of the consumers outside the municipal limits
As a consequence of this action of the appellant respondent No 2 charged octroi duty on supplies made to respondent No I at Dangiawas by adding the amount of octroi tax in the bills
Respondent No 1 filed a writ petition in the High Court praying inter alia for a direction or an order restraining the Municipal Council from realising any tax on diesel etc
which were supplied to respondent No1 at Dangiawas by respondent No 2 and for refund of octroi tax already paid
It was contended on behalf of respondent No 1 in the High Court that the Municipal Council had no jurisdiction to levy octroi on the goods brought within the municipal limits but not sold consumed or used therein and subsequently exported outside the said limits that actual sale took place only at Dangiawas and since neither the sale nor the consumption nor the use of the petroleum products in ques tion took place within the limits of the municipa 50 lity of Jodhpur and Municipal Council was not entitled to levy any octroi thereon alternatively even if the sale was held to have taken place at Jodhpur still octroi could not be levied as the goods so sold were meant for use of con sumption outside the municipal limits and that the word sale  occuring under section 104 of the Municipalities Act could not be read without reference to use or consumption as sale simplicitor by itself did not attract the levy of octroi unless the goods were meant for use or consumption of the ultimate consumer in the area of the Municipal Council
The defence of the Municipal Council was that because the sale took place at Jodhpur octroi was chargeable irre spective of the fact where it was consumed or used that as soon as the goods entered the octroi limits it gave rise to taxable event unless a declaration as contemplated under rule 9 had been made that respondent No 2 did not make the declaration as required by rule 9 and rule 134 of the Octroi Rules and that under sub rule 4 of rule 13 the goods exported were to be lessened only if such goods had not been sold within the municipal limits and were exported out within a period of six months from the date of entry
The claim of refund was contested on the ground that there was no privity of contract between respondent No 1 and the Municipal Council as the demand of octroi was not made from respondent No 1
The case of the Indian Oil Corporation respondent No 2 was that under the terms of the agreement respondent No 2 was obliged to transport petroleum products out of its depots and supply petroleum products to its dealers at the destination in its own truck tankers and till the supplies were made at the destination the goods were at the risk of respondents No 2 and therefore the goods were sold at the retail outlet where the deliveries were made and not at Jodhpur
The learned Single Judge did not permit the petitioners to raise the question that the sale took place only outside the municipal limits of Jodhpur since that involved an investigation into facts which could not be undertaken in a writ petition and proceeded on the footing that the sale of the products in question took place within the limits of Jodhpur
He however accepted the contention of IOC and the dealer that even if the sale was taken to have been effected within Jodhpur no octroi was leviable as admittedly the goods had been sold in Jodhpur only for their onward trans mission for use and consumption in Dangiawas outside the municipal limits
The prayer for refund of the octroi tax was however refused
The Division Bench dismissed the appellant s appeal and partly allowed the appeal filed by respondent No 1
On the basis of the judgments of this Court in Burmah Shell Oil Storage  Distribution Co India Ltd vs The Belgaum Borough Municipality 1963 Supp 2 SCR 216 and Hiralal Thakorlal Dalai vs Broach Municipality 1976 Supp
SCR 82 wherein it was held that the sine qua non for levy of octroi was con sumption and that the sale in order to attract levy of octroi shall be for the purpose of use or consumption 51 of the ultimate consumer the Division Bench held that sale simplicitor would ot attract the levy of the octroi that the word sale  in this context had to be read with refer ence to the use or consumption and use consumption and sale  had to read in a disjunctive manner
The Division Bench further held that rule 13 was a special provision in regard to the persons who had been granted current account facilities and this rule was not subject to either rule 6 or rule 9 but was an overriding rule independent of rules 6 and 9
The Division Bench was of the opinion that section 133 of the Municipalities Act alongwith rule 13 of the octroi Rules left no doubt that no conclusive presumption of the goods having been brought within the municipal limits for consumption use or sale therein could be drawn in cases where special current account facilities had been given to a person
The Division Bench also held that the claim of refund by respondent No 1 was not maintainable
The Bench however directed that the Municipal Council would have to refund to the Indian Oil Corporation respondent No 2 the amount of octroi duty paid on the petroleum products re exported by it to Dangiawas outlet for supply to respondent No 1 who would recover the same from the Indian Oil Corporation
Ms Motilal Padampat Sugar Mills Co Ltd vs State of Uttar Pradesh  Ors  and State of Madhya Pradesh  Anr
vs Bhailal Bhai   relied upon
Before this Court the parties reiterated their conten tions raised before the High Court
In addition it was contended on behalf of the appellant that there was nothing in the two judgments of this Court to the effect that if goods were brought into a local area for sale to a dealer who then transported the goods outside the local area for sale to consumers no octroi would be chargeable
It was further contended that during the period in dispute as also today there was no current account facility to the respond ent No 2 under rule 13 of the Octroi Rules and as admitted ly the respondent No 2 was not complying with the require ments of rules 6 and 9 of the said Rules and not filing any declaration the Municipal Council had the right to treat the goods brought within the Municipal limits as those brought for consumption use or sale under sub rule 2 of rule 9 of the said Rules and thereby attracting octroi
On the other hand it was contended on behalf of the respond ents that it was incorrect to say that the current account facility was suspended or withdrawn
Dismissing the appeal this Court HELD Sabyasachi Mukharji and MH Kania JJ
Per Sabyasachi Mukharji J
1 The High Court was right in holding that it was difficult and inappropriate under Article 226 to determine the question as to where the sale 52 took place and that even if the sale took place within the octroi limits of Jodhpur Municipal Council for the use or consumption of the ultimate consumer outside the octroi limits of Jodhpur then the taxable even did not take place in the octroi limits of Jodhpur
66F G 2 In view of the decisions of this Court and in view of the language of section 104 of the Municipalities Act and the facts the High Court was right in holding that no octroi was leviable on petroleum products re exported out side the municipal limits for consumption and use outside the municipal limits
65F Burmah Shell Oil Storage  Distributing Co Ltd vs The Belgaum Borough Municipality 1963 Supp 2 SCR 216 and Hiralal Thakorelal Dalai vs Broach Municipality  Ors 1976 Sup
SCR 82 followed
3 In view of the facts of this case the title passed to the goods outside the municipal limits even in respect of the petroleum products which were sold within the municipal limits
If the goods were brought within the municipal limis for the purpose of sale sale means passing of the title to the purchaser then different considerations might have applied
73D 4 Analysis of Section 133 and the current account facility therein indicates that only on the goods for use consumption or sale octroi is leviable
Under this provi sion octroi tax is paid at the tune of settlement of peri odical account say after every month
Thus question of complying with rule 6 or rule 9 does not arise as they apply when octroi tax is paid at the time of entry of goods
The delivery of entry passes and transport passes is only to facilitate settlement of octroi account on goods which have been retained in Municipal area for use and consumption
73H 74A 5 A perusal of section 133 would show that current account facility is provided by substantive section whereas rule 13 is procedure provided with  the object of providing facility of settlement of account of payment of octroi tax
In other words according to rule 134 octroi tax is charged on quantity mentioned in entry passed minus the quantity mentioned in transport passes ie on quantity of petroleum products used or consumed within the Municipal limits of Jodhpur Municipality
75A B 6 In view of the confused state of pleadings and averments it was not possible to hold that current account facilities were withdrawn or cancelled
If that is the position then there is no question that the High Court was right in the order it passed and the direction it gave
75E Per Ranganathan J 1 When goods arrive at an octroi outpost they may be coming in either for consumption use or sale within the municipal limits or for transportation outside these limits
Rule 9 requires every person bringing goods within the municipal limits to make a declaration as to what the goods are intended for
77E 53 2 Under the normal procedure for the assessment and collection of octroi duty the declaration under Rule 9 becomes important and the terms of the declaration deter mines the incidence of the duty
Rule 13 however contem plates a totally different scheme for the assessment and collection of octroi for the special type of cases
78C D 3 A comparison of the two sets of provisions will make it clear that they are two independent and mutually exclu sive modes of assessment and collection of duty
Under the cash system of payment a declaration under rule 9 is abso lutely essential
The mode of collection of duty in respect of a person having current account facilities however does not depend upon any such declaration or upon the mode of utilisation of the goods as indicated in such declaration because in the case of the current account holders the duty payable in respect of the entirety of the goods brought in is straightaway debited to his account on the basis of entry passes
The duty payable in respect of the goods transported outside is later on credited to his account on the basis of the transport passes
79E G 4 The High Court was fully justified in holding that the terms of rules 6 and 9 have no relevance to the payment of duty in cases covered by the current account facility envisaged under rule 13 and that the present case cannot be brought within the terms of proviso to rule 92 on the basis of a deemed consumption use or sale within the munic ipal limits
In cases where rule 13 applies rule 9 is excluded
80B 5 The present case is governed by the terms of rule 13 and the Indian Oil Corporation is entitled to go on paying octroi duty on the basis of the goods brought by it within the Municipality less the goods transported outside the Municipality may be in pursuance of a sale within the Municipality so long as such sale is in pursuance of an intention that the goods should be consumed or used outside the Municipal limits
80G 6 The appellant should not be permitted to raise at this stage a new plea that the current account facility granted to the Indian Oil Corporation had been revoked when all along in the earlier proceedings in the High Court the case had proceeded on the footing that the Indian Oil Corpo ration had been having and continued to have current account facilities