Case: Municipal Committee, Khurari Vs. Dhannalal Sethi &amp; Ors

goods by rail.4. Counsel for the Committee, however, urged that the view taken by the High Court was erroneous and that if the rules regarding refund were read together, it would be clear that a person claiming refund would not be entitled to it unless he has followed the procedure thereunder prescribed. To appreciate this contention it would be necessary to turn to those rules. The rules dealing with refund of octroi are Rr 27 to 43. Rule 27 provides that on exportation of dutiable goods outside the municipal limits an exporter shall be entitled to a refund equal to 7/8th of the duty paid on them at the time of their import. We do not detain ourselves on the proviso to this rule as it is not relevant for the purposes of this appeal. The object of Rule 27 is clear, viz. that in case of dutiable goods the Committee has to refund to the person who has exported them 7/8th of the duty paid thereon at the time when they were brought into the municipal limits. The rule does not require such an exporter to produce receipts of payment of duty levied at the time of their entry. Obviously, the Committee was wrong in insisting upon respondents 1 and 2 to produce receipts before they could he granted the refund, no could it justify its demand that respondents 1 and 2 should prove that duty had been paid on the said goods at the time of their entry as the rule does not lay down any such obligation on the exporter. Rules 28 to33 are not relevant and need not, therefore, be set out. Rule 34 provides that an application for refund is to be made in the prescribed form and that the exporter after filling in the particulars has to present his application at the office appointed for that purpose. Rules 36 to 39 provide an elaborate procedure to be followed at the time of exportation. Rule 35 provides that on receipt of an application for refund, the Octroi Officer must satisfy himself that the goods brought for export agree with those mentioned in the application and if satisfied, he must prepare a challan showing the amount of refund and hand it over to the exporter who then shall take the goods beyond the municipal limits. Under Rule 36, the exporter has to present the challan in which the refund amount is calculated at the exit post within the time prescribed which shall not exceed twelve hours from the examination of the goods under Rule 35 to their exportation. Under Rule 37, the Muharir has to check the goods at the exit post and ascertain that the goods agreed with those mentioned in the challan and then issue a certificate to the exporter on which the refund would be paid to him. Rule 38 provides that where the goods are not presented at the out-post as provided by Rule 35, the exporter may get them verified by the officer who would then make an endorsement on the application and on such endorsement made the exporter would get the refund. Under Rule: 313 when goods are exported by rail, the exporter has to produce the railway receipt as well as the refund challan bearing the certificate of the Muharir at the exit post.5. It is clear from Rules 35 to 39 that they lay down the procedure for claiming refund. Counsel for the Committee therefore, appears to be right in his contention that an exporter desiring to claim refund has to make his application at the time of exportation of the goods and in the manner prescribed in these rules. It appears also that there is considerable force in his contention that Rules 42 and 43 deal with only two categories of goods, viz., cloth and articles locally produced or manufactured and that Rule 43 is confined to those two kinds of goods only and, therefore, when it provides that no further proof of duty having been paid on them is required, it means that no proof of such payment other than the one mentioned in Rule 42 would be needed in respect of the said two categories of goods. In our view, Rule 43 has to be read in the context of Rule 42 and must, therefore, be read to mean that no further proof of payment other than the one mentioned in Rule 42 would be required in respect of those two classes of goods and, therefore, Rule 43 does not apply to other kinds of goods. The reason is that if Rule 43 is read in the manner in which the High Court has read it, it would render Rules 35 to 39 totally nugatory, a construction which a court having to construe these rules, would be loath to adopt.6. It would seem, therefore, that these rules do provide a procedure which an exporter wishing to claim refund has to follow. But the question is whether in a case where an exporter has not done so, is he disentitled from claiming the refund.The real difficulty in the way of the appellant Committee is that though the rules lay down a procedure which such an applicant has to follow, they do not provide at the same time that an applicant for refund who has failed to follow the procedure laid down in Rules 35 to 39 would be disentitled to claim the refund. In the absence of such a provision coupled with the categorical language of Rule 27 giving a right to an exporter of dutiable goods to claim 7/8th of the duty paid on such goods on their import, it becomes difficult to uphold the denial by the appellant Committee of the right of respondents 1 and 2 to such a refund.We are, therefore of the opinion that in the present state of the rules, the appeal must fail though for reasons different from those given by the Board of Revenue and the High Court.

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

Explanation:
0[ds]5. It is clear from Rules 35 to 39 that they lay down the procedure for claiming refund. Counsel for the Committee therefore, appears to be right in his contention that an exporter desiring to claim refund has to make his application at the time of exportation of the goods and in the manner prescribed in these rules. It appears also that there is considerable force in his contention that Rules 42 and 43 deal with only two categories of goods, viz., cloth and articles locally produced or manufactured and that Rule 43 is confined to those two kinds of goods only and, therefore, when it provides that no further proof of duty having been paid on them is required, it means that no proof of such payment other than the one mentioned in Rule 42 would be needed in respect of the said two categories of goods. In our view, Rule 43 has to be read in the context of Rule 42 and must, therefore, be read to mean that no further proof of payment other than the one mentioned in Rule 42 would be required in respect of those two classes of goods and, therefore, Rule 43 does not apply to other kinds of goods. The reason is that if Rule 43 is read in the manner in which the High Court has read it, it would render Rules 35 to 39 totally nugatory, a construction which a court having to construe these rules, would be loath to adopt.6. It would seem, therefore, that these rules do provide a procedure which an exporter wishing to claim refund has to follow. But the question iswhether in a case where an exporter has not done so, is he disentitled from claiming thereal difficulty in the way of the appellant Committee is that though the rules lay down a procedure which such an applicant has to follow, they do not provide at the same time that an applicant for refund who has failed to follow the procedure laid down in Rules 35 to 39 would be disentitled to claim the refund. In the absence of such a provision coupled with the categorical language of Rule 27 giving a right to an exporter of dutiable goods to claim 7/8th of the duty paid on such goods on their import, it becomes difficult to uphold the denial by the appellant Committee of the right of respondents 1 and 2 to such a refund.We are, therefore of the opinion that in the present state of the rules, the appeal must fail though for reasons different from those given by the Board of Revenue and the High Court.