Case: Town Municipal Council Vs. Urmilla Kothari

1102=A. I.R. 1958 S.C. 352:), 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 66(1)(0) of the C.P. 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 important 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 tran sit bearing a meaning similar to trans- port, i.e. 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 territory or across a particular area with the object of being transported to their ultimate destination which in the instant case was Nagpur ..... By giving to the words "imported into or exported from" their derivative 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 thro ugh a railway station within the limits of a Municipality liable to the imposition of the tax .on their arrival at the railway station or 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 f rom 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 v. State of Maryl and (1827 12 Wheat 419=442=6 L. Ed. 678, 686.), 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 consumption 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."6. In Wilson v. Robertson(24 L. J.QB. 185.) 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 t he 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 p ay the octroi or what is styled as supervision fee. A contrary interpretation would make rail borne goods passing through the Railway Stations within the limits of the municipality liable to the imposition of the fee on their arrival at these Railway Stations and departure 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.7.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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 b y 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 vehicles 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 t he municipal limits and is not unloaded and reloaded at any place within the municipal 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 instantenunciation 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 f rom 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 ultimatein 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 p ay the octroi or what is styled as supervision fee. A contrary interpretation would make rail borne goods passing through the Railway Stations within the limits of the municipality liable to the imposition of the fee on their arrival at these Railway Stations and departure 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.