Civil Appeal No 1386 of 1976
From the Judgment and Order dated 21 9 76 of the Karna taka High Court in WA No 150 of 1976
HB Datar Sanjeev Aggarwal and RB Datar for the Appel lant
ST Desat SK Mehta KR Nagaraa and PN Puri for Respondent
661 The Judgment of the Court was delivered by JASWANT SINGH J
This appeal by certificate which is directed against the judgment and order dated September 21 1976 of the High Court of Karnataka at Bangalore reversing the judgment and order dated March 3 1976 of a Single Judge of that Court dismissing writ petition No6945 of 1975 filed by the respondent involves a substantial question of law of general public importance relating to the validity of the levy of what is styled as supervision fee  under section 124 of the Karnataka Municipalities Act 1964 hereinafter referred to as the Act  read with rule 26 of the Karnataka Municipalities Taxation Rules 1965 herinafter referred to as the Rules 
The facts of the case lie in a short compass and may be stated as follows Iron ore which is extracted from its mine heads in Hospet Taluka is brought over and stocked in Hubli Railyard by the Mysore Minerals Limited which is a Government undertaking
Having taken up the contract of transhipment of the iron ore from Hubli Railyard to Karwar and Belekeri harbours the Mysore Minerals Limited has sublet the same to the West End Minerals and Exports Private Limited
The latter has in turn entrusted the execution of the contract to
the re spondent which is engaged in transport business
The iron ore is accordingly lifted by the respondent in its trucks from Hubli Railyard and carried to Karwar and Belekeri harbours
The trucks of the respondent carrying the iron ore have en route to pass
in the course of transit through the limits of various town municipalities situate on the highway of which the appellant happens to be one but they do not unload and reload the iron ore at any intermedi ary point or stop
The appellant on the basis of a resolution passed by it on January 25 1975 and approved by the State Government levies the aforesaid fee of Re 1 per truck under section 124 of the Act read with rule 26 of the Rules
The trucks of the respondent using the State highway within the munici pal limits of Kalghatgi District Dharwar are accordingly made to pay the fee for each of their trips
Feeling that the fee realised by the appellant was invalid the respondent filed a writ petition being writ petition No 6945 of 1975 in the High Court of Karnataka challenging the levy of the fee and seeking the issuance of a writ of mandamus restraining the appellant from realising the said fee
A Single Judge of the High Court upheld the fee in question and dismissed the writ petition holding that the expression importer  place of import  and place of export  as used in section 124 1  of the Act are compre hensive enough to describe a person who merely brings the goods within the municipal limits for immediate exportation and the respondent who answered that description was bound to pay the fee
Aggrieved by this judgment and order the respondent took the matter in appeal to a Division Bench of the High Court which allowed the appeal and issued the writ prayed for by the respondent by its 662 judgment and order dated September 21 1976
It is against this judgment and order that the present appeal is direct ed
At the hearing of the appeal counsel have reiterated the contentions urged on behalf of the parties in the High Court
The sole question that arises for determination in this appeal relates to the validity of the aforesaid levy
For a proper detemination of this question it is necessary to advert to section 124 of the Act and rule 26 of the Rules
Section 124 Non liability for octroi and refund of octroi ongoods in transit 1 Any article or animal brought into the municipal limits for the purpose of immediate exportation may at the option of the importer not to be subjected to levy of octroi if such article or animal be conveyed direct from the place of import to the place of export by such routes within such time and under such supervision as the municipal council may by resolution determine
For purposes of this subsection the municipal council shall on payment of the prescribed fees issue promptly the necessary transport permits
2 When any article in respect of which octroi has been paid is exported from the municipal limitS in the same condition in which it was brought into or received from beyond the municipal limits the amount of octroi paid Shall subject to such rules as may be prescribed be refunded
 Rule 26 
In case the person bringing the goods wishes to transport the goods at once beyond the limits of the municipality he shall do so only after obtaining a transport permit in Form IV on payment of a fee of rupees two for each lorry and rupee one in other cases in the case of a city municipal council and rupee one for each lorry and fifty paise in other cases in the case of a town municipal council
 The opening words of section 124 of the Act viz any article or animal brought into the municipal limits for the purpose of immediate exportation on the construction of which the up shot of the case depends are very important
They imply processes of importing into  and exporting from  the municipal limits of goods or animals and are indicative of an element of repose and rest of the goods within the municipal limits
As rightly held by the Divi sion Bench of the High Court the expressions brought into  and immediate exportation  do not comprehend within their sweep the continuous process of transit of goods by vehi cles which merely use the State highways passing through the areas which lie within the municipal limits
In the
instant case the iron ore is carried in the trucks of the respondent which merely pass through the areas which lie within the municipal limits and is not unloaded and reload ed at any place within the municipal 663 area
As such the important element of repose and rest which the words brought into the municipal limits for the purpose of immediate exportation  imply is absent in the instant case
In The Central India Spinning and Weaving and Manufac turing Company Limited The Empire Mills Nagpur vs The Municipal Committee Nagpur1 this Court while discussing the meaning of the expression a terminal tax on goods or animals imported into or exported from the limits of the municipality  occurring in section 6610 of the CP and Berar Municipalities Act 1922 held that the goods which were in transit and were merely carried across the limits of the municipality were not liable to terminal tax
The following observations made therein which have an impor tant bearing on the decision
of the present appeal are worth quoting  The efficacy of the relative contentions of the parties requires the determination of the construction to be placed on the really important words of which are terminal tax imported into or exported from and the limits of the Municipality
In construing these words of the statute if there are two possible interpretations then effect is to be given to the one that favours the citizen and not the one that imposes a burden on him
 Lexico logically they the words import  and export do not have any refer ence to goods in transit  a word derived from transit bearing a meaning similar to trans port ie to
go across
The dictionary meaning of the words import  and export  is not restricted to their derivative meaning but bear other connotations also  
The word transit in the Oxford Dictionary means the action or fact of passing across or through passage or journey from one place or point to another the passage or carriage of persons or goods from one place to another it also means to pass across or through some thing to traverse to cross
Even according to the ordinary meaning of the words which is relied upon by the respondent goods which are in transit or are being transported can hardly be called goods imported into or exported from because they are neither being exported nor imported but are merely goods carried across a particular stretch of terri tory or across a particular area with the object of being transported to their ulti mate  destination which in the instant case was Nagpur  
By giving to the words imported into or exported from their deriva tive meaning without any reference to the ordinary connotation of these
words as used in the commercial sense the decided cases in India have ascribed too general a meaning to these words which it appears from the setting context and history of the clause was not intended
The effect of the construction of import 
or export in the manner in sisted upon by the respondent would make rail borne goods passing through a railway station within the limits of a Municipality liable to the imposition of the tax on their arrival at the railway station or  1958 SC 352 664 departure therefrom or both which would not only result in inordinate delays and unbearable burden on trade both inter State and intra State
It is hardly likely that that was the intention of the Legislature
Such an interpretation would lead to absurdity which has according to the rules of interpretation to be avoided
 The enunciation of law in the above case fully covers the present case
In the present case also the iron ore which is in transit from Railyard at Hubli to Karwar and Belekeri harbours can hardly be characterised as goods brought into or exported from the municipal limits of Kalghatgi because they are neither imported into nor export ed from any point within the municipal limits but are merely carried across a particular stretch of territory or across a particular area with the object of being transported to its ultimate destination
In Brown vs State of Maryland1 Chief Justice Marshall dealing with the word importation  said as follows  The practice of most commercial nations conforms to this idea
Duties according to that practice are charged on those articles only which are intended for sale or consump tion in the country
Thus sea stores goods imported and re exported in the same vessel goods landed and carried over land for the purpose of being re exported from some other port goods forced in by stress of weather and landed but not for sale are exempted from the payment of duties
The whole course of legislation on the subject shows that in the opinion of the legislature the right to
sell is connected with the payment of the duties
 In Wilson vs Robertson2 where section 33 of The 48 Geo 3 c civ imposed a duty on all goods imported into or exported from Berwick Harbour and the harbour extend ed from Berwick Bridge down the Tweed to the sea but not above the bridge and goods were brought up the river in a seagoing vessel which having first used the Harbour Commis sioners  rings and posts in order to moor the vessel while lowering the masts passed through Berwick Bridge and un loaded her cargo about 200 yards above the bridge and beyond the limits of the harbour it was held that these goods were not imported into  the harbour and as such liable to duty
Bearing in mind the above authoritative enunciation of law we are  of opinion that as the continuity or continuous process of the carriage of iron ore is not in any way in fact broken within the municipal limits of Kalghatgi the respondent cannot be said either to bring in or export the iron ore as contemplated by section 124 of the Act read with rule 26 of the Rules and as such is not liable to pay the octroi or what is styled as supervision fee 
A contrary interpretation would make rail borne goods passing through the Railway Stations within the 1  L Ed 678 686
2 665 limits of the municipality liable to the imposition of the fee on their arrival at these Railway Stations and depar ture therefrom which could not be the intention of the Legislature
The High Court was therefore perfectly justified in allowing the appeal and issuing the writ sought for
In the result the appeal fails and is hereby dismissed but in the circumstances of the case without any order as to costs
PHP Appeal dismissed


Summary:
The respondent is a transporter
The respondent lifts the iron ore in his trucks from Hubli Railway yard and carries it to Karwar and Belekeri harbours
The trucks of the respondent have to pass in the course of transit through he limits of various Town Municipalities situate on the highway of which the appellant happens to be one
The respondent does not unload or re load the iron ore at any intermediary point or stop
The appellant passed a resolu tion in purported exercise of section 124 of the Karnataka Munic ipalities Act 1964 read with rule 26 of the
Karnataka Municipalities Taxation Rules 1965 imposing a fee of Re 1 per trip of each truck
The respondent filed a writ petition challenging the levy of the fee
The learned single Judge of the High Court dismissed the writ petition
The Division Bench however allowed the appeal
Dismissing the appeal by certificate HELD The present case is not covered by any article or animal brought into the municipal limits for the purpose of immediate exportation mentioned in section 124
Brought into and immediate exportation do not comprehend within their sweep the continuous process of transit of goods by vehicles which merely use the State High Way passing through the areas which lie within the municipal limits
In the instant case the iron ore is carried in the trucks of the respond ent which merely pass through the areas which lie within the municipal limits and is not unloaded and reloaded at any place within the municipal areas
The continuity or contin uous process of the carriage of iron ore is not in any way in fact broken within the municipal limits
The respondent cannot be said either to bring in or export the iron ore as contemplated by section 124 of the Act read with Rule 26 of the Rules and as such is not liable to pay octroi or what is styled as supervision fee
A contrary interpretation would make rail borne goods passing through the Railway Station within the limits of the municipality liable to the imposi tion of the fee on their arrival at the Railway Station and departure therefrom which could not be the intention of the Legislature
662 G H 664 B G H 665 A B The Central India Spinning and Weaving and Manufactur ing Company Limited the Empire Mills Nagpur vs The Munic ipal Committee Nagpur  1958 SC 352 fol lowed
Brown vs State of Maryland   442   686 and Wilson vs Robertson  quoted with approval