Case: Lord Krishna Sugar Mills Vs. Municipal Committee, Saharanpur

The appellant, Lord Krishna Sugar Mills, carries on the business of manufacturing sugar and cloth. It is situate outside the limits of the Saharanpur municipality. A large quantity of cloth is exported by the appellant to various places in India. Motor lorries loaded with bales of packed cloth leave the appellants premises and carry these bales to the railway station where the bales are unloaded and booked by rail to various destinations without any sorting or change of bulk. The railway station of Saharanpur is situate within the municipal limits and, therefore, the lorries have to enter the municipal limits when they carry bales to the railway station. Further after the bales are unloaded at the railway station they remain within the municipal limits till they are taken away by rail to destinations for which they are booked2. Rule 2 of the Rules on Tolls as in 1949 with which we are concerned provided that "no person shall enter the toll limits of the Saharanpur Municipalities............with any headload, bahangi load, laden vehicle or any laden pack animal, on or in respect of which terminal toll is leviable, until the toll due has been paid to such persons and at such places as the Municipal Board may from time to time appoint". Rule 3 provided that "when a laden man, laden vehicle or laden pack animal subject to terminal toll arrives at one of the barriers fixed by the Board, the terminal toll due shall be paid at once by the person incharge of the head-load, bahangi load, laden vehicle or laden pack animal to the moharrir stationed at the barrier". Rule 8 (a) with which we are particularly concerned reads thus:"If the person in-charge of any motor lorry laden with taxable goods declares in writing to the moharrir at the import barrier that the goods he is importing into the limits of the Municipality are meant for immediate export from such limits without sorting and change of bulk, the moharrir shall issue a transit pass in Form 61 of the M. A. C. to such person incharge of the motor lorry, who shall present the same together with the motor lorry carrying the goods covered thereby to the moharrir at the barrier of export within half an hour from the time of issue of the transit pass."3. Dispute arose between the appellant and the municipality on the question whether the appellant was entitled to the benefit of R. 8 (a) which would exempt it from the payment of toll tax when it sent its goods to the railway station at Saharanpur for booking to various destinations by rail. It appears that there is a municipal barrier near the railway station and the appellants lorries carrying goods first entered municipal limits at some place near the appellants premises and then proceeded towards the railway station. Before reaching the station, the lorries had to pass out of the barrier near the station. This barrier apparently was meant to serve two purposes. It was an import barrier for goods coming into the municipality from the railway station and from that side. It was also an export barrier for goods going outside the municipality. But the barrier was not placed exactly where the municipal limits ended: it was at some distance inside the municipal limits so that the lorries of the appellant going out of the barrier and proceeding to the railway station were still within the municipal limits and the goods when unloaded at the railway station for booking were still within municipal limits. It is at some distance beyond the railway station that the municipal limits come to an end. It was not in dispute that the lorries of the appellant carrying the goods to the railway station never went out of the municipal limits and the goods were unloaded at the railway station and remained within the municipal limits. The municipality claims that it was entitled to charge the toll tax as the goods never left the municipal limits within half an hour of entry. The appellant on the other hand contended on an interpretation of R. 8 (a) that it was entitled to the transit pass as the railway station was beyond the municipal barrier on that side and the lorris passed that barrier and in the circumstances if the lorries passed that barrier within half an hour of their entry into the municipal limits, R. 8 (a) was complied with and the appellant was entitled to a transit pass which would then exempt it from toll tax. The Municipal Board did not accept this interpretation of R. 8 (a). The appellant, therefore, had to pay the toll tax and did so under protest. It, however, filed a writ petition in the High Court inter alia contending that its interpretation of R. 8 (a) was correct and it was entitled to get transit passes for its lorries. There were other grounds also on which R. 8 (a) was assailed, but we are not concerned in the present appeal with those grounds4. The learned Single Judge rejected all the contentions of the appellant. He also rejected the interpretation placed on R. 8 (a) on behalf of the appellant. He held that what R. 8 (a) contemplated was that the goods should leave the municipality; as the appellants lorries did not leave the municipal limits but were unloaded at the railway station which was admittedly within the municipal limits the appellant was not entitled to transit passes for its lorries5. The appellant then went in appeal to a Division Bench, and the Division Bench upheld the interpretation put on R. 8 (a) by the learned Single Judge. In consequence the appeal was dismissed. Thereupon the appellant applied for a certificate which was granted by the High Court; and that is how the matter has come up before us.

Reasoning:
The drafting of R. 8(a) is not very happy and the difficulty has arisen because the export barrier in the present case is well within municipal limits. But it seems to us clear that what R. 8 (a) intends, when it says that on a declaration that the goods are meant "for immediate export from such limits without sorting and change of bulk", a transit pass would be granted is that the goods would be taken out of municipal limits as soon as possible after entry. What the latter part provides is the method of checking that the goods are taken out immediately from municipal limits. When, however, the goods are not taken out immediately from municipal limits and may lie at the railway station which is within the municipal limits for a length of time, the benefit of transit pass under R. 8 (a) cannot be allowed. We agree with the High Court that the intention of the rule is that motor lorries to which the rule applies after entering municipal limits are to pass out of the same with the least possible delay, and before a person can claim the benefit of the rule it is necessary to satisfy the condition that the lorry reached the export barrier within the time limited by the rule. The intention of the rule obviously is that lorry which enter the municipal limit at one end and gets a transit pass should go out of the municipal area as soon as possible with the goods in the same condition in which they were when the lorry entered the municipal area, and half an hours period provided in the latter part of the rule is merely for the purpose of checking at the export barrier that this is actually done. Where, as in the present case, lorries were never meant to proceed beyond the railway station, and the railway station was within the municipal area, there could be no question of grant of transit passes to such lorries. As we have said already the crucial words in R. 8 (a) are "for immediate export from such limits without sorting and change of bulk" and these mean that the goods must go out of the municipal limits as soon as possible on the lorry on which they have entered and unless that is done the lorry would not be entitled to a transit pass. The latter part of the rule is merely a method for checking that this has happened.