Municipal Corporation Act cannot be interpreted so as to justify imposition of terminal tax even on goods which merely passed through the territory of Delhi although their destination is not Delhi but places beyond Delhi
908 F G 32
Merely because the goods after having been unloaded in the godown of appellant Tuli are sorted reloaded in different trucks and thereafter pass through the territory of Delhi they do not become exigible to terminal tax
908 G H 33
Rule 26 of the Terminal Tax cannot be interpreted so that exemption could be granted only if the goods are exported immediately which means within a very short time irrespective of any other consideration
Terminal tax can be leviable only if it is proved that the goods remained at the godown for an indefinite and unexplained period which could not be said to be reasonable in the circumstances
908 H 909 A B 34
Where the goods are carried by trucks into the territory of Delhi and unloaded there and are also meant for Delhi and soon thereafter may be re booked by the receiver of the goods to some other place terminal tax would be leviable because in this case there are two separate transactions i by which the goods are meant for Delhi and ii by which after having reached and having been unloaded at Delhi they are rebooked and reloaded for some other place and which therefore is a fresh and different transaction
In such a case terminal tax would be leviable at the entry point in the territory of Delhi
909 B C 35
The direction given by the High Court to the Terminal Tax Officer to fix a reasonable time for unloading sorting and reloading the goods which are 897 meant for different destinations taking into consideration the quantity of the goods
the time for unloading sorting etc
and for further reloading and transhipment should be done within a time to be fixed by a Terminal Tax Officer is correct
909 E F  CIVIL APPELLATE JURISDICTION Civil Appeal Nos
2004 2005 Of 1980
Appeals by Special Leave from the Judgment and Order dated 13 10 1978 of the Delhi High Court in LPA Nos
7377 and 10377
Madan Bhatia and Sushil Kumar for the Appellant in both the appeals
RB Datar Lalit Bhardwaj and Miss Madhu Mulchandani for Respondent Nos
PR Rao SR Venkataraman PC Kapur RC Bhatia and SL Sharma for Respondent No 5 in Civil Appeal No 200480
NB Sinha and SK Sinha for Respondent No 4
The Judgment of the Court was delivered by FAZAL ALI J
These appeals by special leave are directed against a Division Bench common judgment dated October 13 1978 of the High Court of Delhi by which the Letters Patent Appeals were allowed and the impugned Orders dated May 23 1975 and July 7 1975 passed by the Terminal Tax Officer Municipal Corporation of Delhi were quashed
The facts of the case lie within a very narrow compass and may be summarized as follows
Manmohan Tuli appellant in CA No 200480 is the owner of a piece of land situate on the Grand Trunk Road near the sixth milestone as one goes from Delhi to Ghaziabad
Appellant Tuli has constructed various buildings on his land for use as godowns and has rented them out to various transport companies engaged in bringing good from other States and storing them before their transhipment to Delhi and other States beyond Delhi
The trucks carrying the goods for various destinations pass along the GT Road and move into Tuli s land
It is not disputed that after the trucks enter the land the goods are unloaded into the godowns sorted out and reloaded into the respective trucks meant for various destinations
Thereafter the trucks move out of the land and passing through the Union Territory of Delhi after crossing the border line proceed to their destinations
The Municipal Corporation of Delhi hereinafter referred to as the Corporation by its Orders dated May 23 1975 and July 7 1975 hereinafter referred to as the inpugned orders  directed that a Terminal Tax post be sets up at the entrance to Tuli s land in order to collect 898 terminal tax on goods carried into that land
The Ghaziabad Nagar Palika also purported to levy terminal tax on such goods but this levy was neither assailed before the High Court nor has been challenged before us and is therefore left out of consideration
A writ was filed before the High Court by the owners of transport companies as also by Tull for quashing the orders of the Corporation seeking to levy terminal tax on the goods which were not meant for Delhi but for places beyond Delhi
Further details are not necessary for the decision of these appeals and both the appeals CA Nos 2004 and 2005 of 1980 will be disposed of by a common judgment
The High Court vide the impugned judgment was of the opinion that even though the goods were stored in the godown of Tull sorted out and reloaded but as they while passing through the territory of Delhi undoubtedly entered the said territory the Corporation was legally entitled to levy terminal tax at the point of entry into the Union Territory of Delhi
The case of the appellant was that the goods were not meant either to be used or consumed in Delhi nor was Delhi the final destination of the goods
It was a different matter that as the goods were to be sent to destination beyond Delhi the transport carrying the goods had perforce to pass through the territory of Delhi
It was thus contended that the goods were not carried into the territory of Delhi but were merely carried through the territory of Delhi to other destinations which were beyond Delhi
It was argued that section 178 of the Delhi Municipal Corporation Act 1957 hereinafter referred to as the Act  had in terms no application to the case and that therefore the terminal tax imposed by the impugned orders was legally invalid
The counsel for the respondent however submitted that even though the goods may have been meant for other destinations but as they were unloaded in the godown and reloaded in various trucks and actually entered into the territory of Delhi they were factually carried into the Delhi territory and that was sufficient to empower the Corporation to levy the terminal tax
According to the argument of the counsel for the Corporation the question of destination was not at all germane for the purpose of adjudicating the competency of the Corporation to levy terminal tax at the point of entry into Delhi
Thus the entire question turns upon the interpretation of s178 of the Act and some Rules framed under the Act
Relevant portion of section 178 runs thus 1781
On and from the date of the establishment of the Corporation under section 3 there shall be levied on all goods carried by railway or road into the Union Territory of Delhi 899 from any place outside thereof a terminal tax at the rates specified in the Tenth Schedule Emphasis supplied The crucial words which have to be interpreted are goods carried by railway or road into the Union Territory of Delhi from any place outside Delhi 
The contention of the appellant is that the words goods carried into the Union Territory  clearly indicate that the final destination of the goods must be Delhi and by virtue of this fact the natural consequence would be that the goods should be carried from other places either by rail or by road into the territory of Delhi
This argument was reinforced by the words terminal tax  used in section 178 which imply that the terminus of the journey of the goods must be Delhi and only in that event the Corporation would be competent to levy a terminal tax
This argument was sought to be rebutted by the respondents on the ground that the words carried into the Union Territory of Delhi  should be interpreted independently and literally so as to indicate that even if the goods passed through Delhi the moment they entered into the territory of Delhi terminal tax became exigible
So far as this aspect of the argument is concerned we are unable to accept the same because it is well settled that taxing statutes must be strictly interpreted giving every benefit of doubt to the tax payer
Before however examining the respective contentions of the parties it may be necessary to refer to the authorities dealing with the history of terminal tax or octroi duty
To begin with it is not disputed that the power to subject the goods either to octroi or to terminal tax squarely falls within entries numbers 52 and 56 of List II to the Seventh Schedule of the Constitution
In Punjab Flour  General Mills vs Lahore Corporation the Court while drawing a distinction between the type of taxes referred to as terminal taxes in Entry No 58 of List I of Schedule 7 to the Government of India Act and those described as cesses in Entry No 49 of List II thereof observed as follows There appears to us a definite distinction between the type of taxes referred to as terminal taxes in Entry No 58 of List I of Sch 7 and the type of taxes referred to as cesses on the entry of goods into a local area in Entry No 49 of List II
The former taxes must be a terminal b confined to goods and passengers carried by railway or air
They must be chargeable at a rail or air terminus and be 900 referable to services whether of carriage or otherwise rendered or to be rendered by some rail or air transport organisation
The essential features of the cesses referred to in Entry No 49 of List II are on the other hand simply a the entry of goods into a definite local area and b the requirement that the goods should enter for the purpose of consumption use or sale therein
The grounds of taxation under the two entries are as indicated above radically different and there is no case for suggesting that taxation under the one entry limits or interferes in any way with taxation under the other In The Central India Spinning  Weaving  Manufacturing Co Ltd The Empress Mills Nagpur vs The Municipal Committee Wardha this Court examined the entire matter exhaustively and after giving the history of terminal tax or octroi observed as follows If terminal  besides the above meaning has an additional meaning also and that meaning signifies the termini or the jurisdictional limits of the municipal area even then the construction to be placed on the term should be the one that favours the tax payer in accordance with the principle of construction of taxing statutes which must be strictly construed and in case of doubt must be construed against the taxing authorities and doubt resolved in favour of the tax payer   The legislative history of this tax thus shows that octroi was leviable on the entry of goods in a local area when the goods were for consumption use or sale therein
The substituted tax was terminal tax on goods imported into or exported from a local area and by rules this tax in the case of Wardha Municipal Committee was imposed on certain class of goods imported and on others exported by railway or road   That by the substitution of terminal tax on goods imported into a local area the nature of the tax had not been altered from what it was when octroi was in force or when instead of terminal tax octroi without refund was substituted  
Therefore terminal tax on goods imported or exported is similar in its incidence and is payable on 901 goods on their journey ending within the municipal limits or commencing therefrom and not where the goods were merely in transit through the municipal limits and had their terminus elsewhere   Therefore according to the Federal Court terminal has reference to the terminus of the railway or air ie the end of journey
 A close analysis of this decision therefore clearly discloses that a terminal tax signified that there must be a terminus for the journey of the goods
The word terminus  according to Oxford Dictionary means a point situated at or forming the end or extremity of something situated at the end of a line of railway
In other words terminus means the point to which main action tends goal end finishing point the point at which something comes to an end
In Corpus Juris Vol
62 at p 729 the word terminal  in connection with transportation means the fixed beginning or ending point of a given run
It would thus appear that a terminal tax could be levied only by the Corporation or the State which is the final destination of the goods sent from any other area
A similar view was taken by a later decision of this Court in Bangalore Woollen Cotton  Silk Mills Co Ltd Bangalore vs Corporation of the City of Bangalore where Kapur J speaking for the Court observed as follows The history of these taxes therefore shows that in the Devolution Rules under the Government of India Act 1915 octroi terminal tax and taxes on professions and callings were three distinct heads of taxation
Therefore when section 142 A was added in the Government of India Act 1935 its operation was limited to entry 46 of List II and had no reference to entry 49 which deals with cesses on entry of goods
The position under the Constitution is exactly the same and therefore neither section 142 A of the Government of India Act 1935 nor article 276 has any effect on entry 49 in the Government of India Act 1935 or entry 52 in the Constitution
 In this case also a distinction between a terminal tax and octroi was clearly brought out
In Diamond Sugar Mills Ltd  Anr
vs The State of Uttar Pradesh  Anr
while defining a local area within 902 the meaning of Entry 52 of List II of Seventh Schedule to the Constitution the Court observed as follows We are of opinion that the proper meaning to be attached to the words local area  in Entry 52 of the Constitution when the area is a part of the State imposing the law is an area administered by a local body like a municipality a district board a local board a union board a Panchayat or the like In Burmah Shell Oil Storage  Distributing Co India Ltd vs The Belgaum Borough Municipality this Court again fully discussed the matter and Hidayatullah J speaking for the Court stressed the essential distinction between octroi and terminal tax in the following words Octrois and terminal taxes were different taxes though they resembled in one respect namely that they were leviable in respect of goods brought into a local area
While terminal taxes were leviable on goods imported or exported  from the Municipal limits denoting thereby that they were connected with the traffic of goods octrois according to the legislative practice then obtaining were leviable in respect of goods brought into a Municipal area for consumption or use or sale 
The history of these two taxes clearly shows that while terminal taxes were a kind of octroi which were concerned only with the entry of goods in a local area irrespective of whether they would be used there or not octrois were taxes on goods brought into the area for consumption use or sale
They were leviable in respect of goods put to some use or other in the area but only if they were meant for such user In Khyerbari Tea Co Ltd  Anr
vs The State of Assam Gajendragadkar J speaking for the Court drew a very apt distinction regarding the concept of import and observed as follows In that connection the legislative history of the octroi duty was examined and it was held that the concept of import requires that the goods which are brought into must mix up with the mass of the property in the local area where the goods are alleged to have been imported
If the goods are just carried and not mixed with the mass of the property in the area through which they are carried they cannot be said 903 to have been imported into that area 
The word carried is of much wider denotation and it would be unreasonable to limit its scope by introducing considerations which are relevant in dealing with the question of import
 Thus from a consideration of the cases cited above the following propositions emerge 1 Terminal tax and octroi are similar kinds of levies which are closely interlinked with 1 destination of the goods 2 the user in the local area on arrival of the goods
Where the goods merely pass through a local area without being consumed therein the mere fact that the transport carrying the goods halt within the local area for transhipment or allied purposes would not justify the levy of either the terminal tax or octroi duty
This is because the halting of the goods is only for an incidental purpose to effectuate the journey of the goods to the final destination by unloading sorting and reloading them at a particular place
2 There is a very thin margin of difference between a terminal tax and octroi
In the case of the former terminal tax the goods reach their final destination and their entry into the area of destination immediately attracts payment of terminal tax irrespective of their user
In the case of octroi however the tax is levied on goods for their use and consumption
3 But at the same time the goods while halting at a local area should leave for their destination within a reasonable time which may depend on circumstances of each case and if the goods are kept within the area for such a long and indefinite period that the purpose of reaching the final destination lying in a different area is frustrated or defeated they may be exigible to terminal tax
4 Where the goods enter into a local area which is also the destination of the goods either temporarily or otherwise the terminal tax would be leviable
For instance if A consigns goods from Patna in Bihar to Delhi in the name of X and X after having received the goods at Delhi re books or reloads the same on a transport for Chandigarh in the name of Y terminal tax would be leviable by the Corporation at Delhi because the goods in the first instance was Delhi and that by itself would attract the imposition of terminal tax
The fact that X 904 rebooks them to Chandigarh would not make any difference because the act of rebooking by X at Delhi would constitute a fresh transaction by which the goods after having been carried into Delhi are further exported to Chandigarh
On the other hand when there is one continuous journey of the goods from Patna to Chandigarh without any break the final destination would be halted in Delhi for the purpose of unloading sorting and reloading and may have to be kept in Delhi for a reasonable time
In such a case terminal tax would not be exigible
These principles are also spelt out by the American law on the subject which deals with inter state transport of goods
In American Jurisprudence 2d Vol
15 p689 para 49 the following statement is made which is spelt out from various American decisions including those of the US Supreme Court In the determination of whether a transportation of persons or property constitutes interstate or intrastate commerce the essential character or unity of the movement is the decisive factor While the intention of the shipper or passenger is probably the most important single factor in determining whether transportation is interstate or intra state intention alone has been said not to be a controlling factor in making such determination
Inter state journeys are to be measured by the commonly accepted sense of the transportation concept 
The parties cannot by descriptive terms of contract convert a local business serving as an agency of a transportation company into an interstate commerce business nor conversely may a through shipment be transformed into intrastate commerce by separating the rate into its component parts charging local rates and issuing local waybills Similar observations are to be found in the same volume of American Jurisprudence p 697 para 56 which relate to the continuity of transit of goods and may be extracted thus The crucial question to be settled in determining whether Personal property moving in interstate commerce is subject to local taxation is that of its continuity of transit and this question is to be determined by various factors among which are the intention of the owner the control he retains to change destination
the agency by 905 which the transit is effected and the occasion or purpose of the interruption during which the tax is sought to be levied Intent while not alone conclusive is probably the most important single determinant of continuous carriage
If a break in the interstate journey is caused by the exigencies or conveniences of the safety of the goods during transit or natural causes over which the taxpayer has no control the continuity of the transit remains unimpaired
The following statement of law occurs in the same volumepara 57 p 698 If during transit property is stored for an indefinite time for other than natural causes or for lack of facilities for immediate transportation it is subject to state or local laws including inspection laws
On the other hand if the entry of goods into a warehouse is a convenient in termediate step in the process of getting them to their final destination they remain in interstate or foreign commerce until they reach those points
In the case of Champlain Realty Co vs Town of Brattleboro one important aspect of the matter has been dealt with viz the fact that if the goods halt in an intermediate State whilst on their journey to their destination for a long period due to circumstances beyond the control of the owner whether or not the goods lose the nature of the interstate transaction and could be free from the state taxation was clearly highlighted by he following observations Longs of pulp wood which have been placed in a river to be floated into another state are in interstate commerce so as to be free from state taxation although because of the high water in a connecting river into which they will ultimately pass it is unsafe to permit them to enter that river and they are temporarily held in a boom near the mouth of its tributary
In the same case CJ Taft indicated the various aspects of interruptions in the journey and the incidence thereof and observed as follows The doubt arises when there are interruptions in the journey and when the property its transportation is 906 under the complete control of the owner during the passage If the interruptions are only to promote the safe or convenient transit then the continuity of the interstate trip is not broken
   
Chief among these are the intention of the owner the control he retains to change destination the agency by which the transit is effected the actual continuity of the transportation and the occasion or purpose of the interruption during which the tax is sought to be levied
In Volume 78 L Ed at p 138 the test laid down was that if the shipment was made in good faith to a destination and the interruption was not indefinite but reasonable the continuity of the journey cannot be said to be broken
It was also pointed out that where the interruption of the movement of commodities at an intermediate point is not incidental to the transportation the shipment loses the character of interstate commerce so as to be exigible to local taxation
In this connection the following observations were made If the shipment has been made in good faith to a destination the interruption is not indefinite but is reason able and solely in furtherance of the intended transportation of the shipment to its ultimate destination then the continuity of the journey is not broken by the delay nor by the mere power of the owner there to destroy its character as interstate commerce any interruption of the movement of commodities at an intermediate point between origin and final destination that is not incidental to the transportation or the means of transportation or being so incidental is used or extended for purposes of the owner not incidental to the transportation or the means used therefor breaks the continuity in transit and subjects the shipment to local taxation at the point of interruption
We have laid special stress on the circumstances under which the terminal tax becomes leviable if the halt or interruption of the goods at an intermediate point is for an indefinite and unexplained period
The answer to the question as to what would be a reasonable time for interruption of the goods or halting in the instant case at the godown of Tuli will naturally depend on the special features or circumstances of each case viz the nature of the goods 907 the time taken in loading sorting and unloading the obstacles or difficulties which may be faced by the transporters and similar other factors
Normally a time of two to three days or even a week should be sufficient to clear the goods for its journey to the ultimate destination
It may sometimes happen that goods may have to be kept in the godowns in the territory of Delhi for circumstances beyond the control of the consignee or the consignor eg while the goods are lying in a godown at Delhi a dispute occurs between the concerned parties as a result of which an injunction is issued by a court restraining the transporters from moving the goods
In considering what is reasonable time these circumstances would have to be taken into consideration
It was however argued before us that according to the Terminal tax Rules framed under the Act Rule 26 exempts goods from terminal tax if the same are exported immediately and are declared to be intended for immediate export
In view of the interpretation we have placed on section 178 it is obvious that the word immediately appearing in Rule 26 has to be liberally construed so as to imply a reasonable period and if the export is delayed the rules may apply if a reasonable explanation has been given
So far as rules regarding taking of passes etc at the barrier are concerned they would of course apply but subject to the conditions under which terminal tax can be imposed under s178 of the Act which is the main charging section
The High Court appears to have placed some reliance on Amrit Banspati Co Ltd vs The Union of India in coming to the conclusion that in the instant case the Corporation was legally entitled to levy terminal tax
With due respect to the Judges of the High Court who decided the Appeals we would like to point out that the case just above referred to is clearly distinguishable from the present appeals
The most crucial fact in the Delhi decision was that the goods were being carried into the Union Territory of Delhi for the purpose of sale at Delhi
Thus the case proceeded on the admitted position that the goods were carried from Ghaziabad into the Delhi territory for sale at Delhi
The final destination of the goods being Delhi there can be no doubt that the Corporation was fully entitled to levy terminal tax on such goods
In this connection the High Court observed as follows The Petitioner company was incorporated under the companies Act 1956 and it had its registered office at GTRoad Ghaziabad in the State of Uttar Pradesh 908 It has a factory inter alia at Ghaziabad for manufacturing the said Vanaspati products
In the course of its business the company carried and still carries its products by railway andor road into the Union Territory of Delhi from Ghaziabad for the purpose of sale at Delhi
    The words shall be levied on all goods carried by rail way or road in sub section 1 show clearly that the section imposes terminal tax on the carriage or movement of goods from outside the Union Territory of Delhi into the said Territory
In other word the taxable event is the carriage or movement of goods into the Union Territory of Delhi
The observations last extracted must be understood in the light of the admitted facts in Amrit Banaspati Companys case supra
We are unable to accept that case as an authority for the proposition that even if the final destination of the goods was not Delhi but as the goods were carried through the territory of Delhi they would still be exigible to terminal tax
In the impugned Judgment the High Court however seems to have laid undue emphasis and special stress on the fact that the goods were carried into the Union territory of Delhi the moment they passed through it even though the destination of the goods may be some other area
This appeared according to the High Court
the real purport and intention of section 178
We are however unable to agree with this view which is patently wrong and does not at all flow from the plain and unambiguous language of section 178 of the Act nor does s178 warrant such an interpretation
Thus our conclusions are follows 1 The High Court was wrong in interpreting section 178 of the Act so as to justify imposition of terminal tax even on goods which merely passed through the territory of Delhi although their destination is not Delhi but places beyond Delhi
2 The High Court was wrong in holding that merely because the goods after having been unloaded in the godown of appellant Tuli are sorted reloaded in different trucks and thereafter pass through the territory of Delhi they become exigible to terminal tax
3 The High Court was wrong in interpreting Rule 26 literally and holding that exemption could be grant 909 ed only if the goods are exported immediately which means within a very short time irrespective of any other consideration
In view of our interpretation of section 178 Rule 26 must be interpreted in the light of the object of section 178 and terminal tax can be leviable only if it is proved that the goods remained at the godown for an indefinite and unexplained period which could not be said to be reasonable as discussed by us in the circumstances
4 Where the goods are carried by trucks into the territory of Delhi and unloaded there and are also meant for Delhi and soon thereafter may be rebooked by the receiver of the goods to some other place terminal tax would be leviable because in this case there are two separate transactions 1 by which the goods are meant for Delhi and 2 by which after having reached and having been unloaded at Delhi they are rebooked and reloaded for some other place and which therefore is a fresh and different transaction
In such a case terminal tax would be leviable at the entry in the territory of Delhi
We might mention that the High Court while holding that terminal tax is exigible has construed the word immediately  in Rule 26 literally and directed the Terminal Tax Officer to fix a reasonable time for unloading sorting and reloading the goods which are meant for different destinations taking into consideration the quantity of the goods the time for unloading sorting etc and has further directed that reloading or transhipment should be done within a time to be fixed by the Terminal Tax Officer
Though the directions given are correct but they will have to be construed in the light of the various factors which we have referred to
Rule 26 will have to be interpreted on the footing that section 178 of the fact does not contemplate levy of terminal tax for goods meant for destinations other than Delhi
For the reasons given above we allow these appeals set aside the impugned judgment except the portion quashing the impugned orders
That portion we uphold though on grounds different from the ones given by the High Court in the light of the decision given and the observations made by us regarding the interpretation of section 178 of the Act
In the special circumstances of the case there will be no order as to costs


Summary:
Man Mohan Tuli appellant in CA 200480 is the owner of a piece of land situate on the Grand Trunk Road near the sixth milestone as one goes from Delhi to Ghaziabad
Appellant Tuli has constructed various buildings on his land for use as godowns and has rented them out to various transport companies engaged in bringing goods from other States and storing them before their transhipment to Delhi and other States beyond Delhi
The trucks carrying the goods for various destinations pass along the GT Road and move into Tuli s land
After the trucks enter the land the goods are unloaded into the godowns sorted out and reloaded into the respective trucks meant for various destinations
Thereafter the trucks move out of the land and passing through the Union Territory of Delhi after crossing the border line proceed to their destinations
The Municipal Corporation of Delhi by its Orders dated May 23 1975 and July 7 1975 directed that a Terminal Tax post be set up at the entrance to Tuli s land in order to collect terminal tax on goods carried into that land
A writ was filed before the High Court by the owners of transport companies as also by Tuli for quashing the orders of the Corporation seeking to levy Terminal Tax on the goods which were not meant for Delhi but for places beyond Delhi
The High Court held that the Corporation was legally entitled to levy Terminal Tax at the point of territory of the Union Territory of Delhi even though the goods were sorted out in the godown of Tuli resorted out and re loaded since as they while passing through the territory of Delhi undoubtedly entered the said territory
Hence the appeals by special leave by appellant Tuli and others
Allowing the appeal in part the Court  HELD 1
It is well settled that taxing statutes must be strictly interpreted giving every benefit of doubt to the tax payer
A Terminal Tax could be levied only by the Corporation or the State which is the final destination of the goods sent from any other area
A Terminal Tax signifies that there must be a terminus for the journey of the goods
Terminus means the point to which main action tends goal end finishing point the point at which something comes to an end
899 D 901 B D 21 From a consideration of the decided cases of the Supreme Court the following propositions emerge i Terminal tax and octroi are similar kinds of levies which are closely interlinked with a destination of the goods b the user in the local area 895 on arrival of the goods
Where the goods merely pass through a local area without being consumed therein the mere fact that the transport carrying the goods halt within the local area for transhipment or allied purposes would not justify the levy of either the terminal tax or octroi duty
This is because the halting of the goods is only for an incidental purpose to effectuate the journey of the goods to the final destination by unloading sorting and reloading them at a particular place
803 A C ii There is a very thin margin of difference between a terminal tax and octroi
In the case of the former terminal tax the goods reach their final destination and their entry into the area of destination immediately attracts payment of terminal tax irrespective of their user
In the case of octroi however the tax is levied on goods for their use and consumption
903 D E iii But at the same time the goods while halting at a local area should leave for their destination within a reasonable time which may depend on circumstances of each case and if the goods are kept within the area for such a long and indefinite period that the purpose of reaching the final destination lying in a dicerent area is frustrated or defeated they may be exigible to terminal tax
903 E F iv Where the goods enter into a local area which is also the destination of the goods either temporarily or otherwise the terminal tax would be leviable
For instance if A consigns goods from Patna in Bihar to Delhi in the name of X and X after having received the goods at Delhi rebooks or reloads the same on a transport for Chandigarh in the name of Y terminal tax would be leviable by the Corporation at Delhi because the destination of the goods in the first instance was Delhi and that by itself would attract the imposition of terminal tax
The fact that X rebooks them to Chandigarh would not make any difference because the act of rebooking by X at Delhi would constitute a fresh transaction by which the goods after having been carried into Delhi are further exported to Chandigarh
On the other hand when there is one continuous journey of the goods from Patna to Chandigarh without any break the final destination would be Chandigarh even though the goods may have to be halted in Delhi for the purpose of unloading sorting and reloading and may have to be kept in Delhi for a reosonable time
In such a case terminal tax would not be exigible
903 G H 904 A C Punjab Flour  General Mills vs Lahore Corporation  The Central India Spinning  Weaving  Manufacturing Co Ltd The Empress Mills Nagpur vs The Municipal Committee Wardha   Bangalore Woollen Cotton  Silk Mills Co Ltd Bangalore vs Corporation of the City of Bangalore  Diamond Sugar Mills Ltd  Anr
vs The State of Uttar Pradesh   Burmah Shell Oil Storage  Distributing Co India Ltd vs The Belgaum Borough Municipality 1963 Supp 2 SCR 216 Khyerbari Tea Co Ltd Champlain Realty Co vs Town of Brattleboro 67 L Ed
US 309 quoted with approval
896 22
What would be a reasonable time for interpretation of the goods or halting in the instant case at the godown of Tuli will naturally depend upon the special features or circumstances of each case namely the nature of the goods the time taken in loading sorting and unloading the obstacles or difficulties which may be faced by the transporters and similar other factors
Normally a time of two to three days or even a week should be sufficient to clear the goods for its journey to the ultimate destination
It may sometimes happen that goods may have to be kept in the godowns in the territory of Delhi for circumstances beyond the control of the consignee or the consignor for example a garnishee order
In considering what is reasonable time these circumstances would have to be taken into consideration
906 H 907 A C 23
Rule 26 of the Terminal Tax Rules will have to be interpreted on the footing that section 178 of the Delhi Municipal Corporation Act 1957 does not contemplate levy of terminal tax for goods meant for destinations other than Delhi
The word immediately appearing in Rule 26 has to be liberally construed so as to imply a reasonable period and if the export is delayed the rules may apply if a reasonable explanation has been given
So far as rules regarding taking of passes etc at the barrier are concerned they would of course apply but subject to the conditions under which terminal tax can be imposed under section 178 of the Act which is the main charging section
907 C E Amti Banaspati Co Ltd vs The Union of India ILR 1973 Delhi 237 distinguished