Case: The Municipal Committee, Raipur Vs. Phoolchand And Others

These two appeals by special leave have been filed by the Municipal Committee, Raipur, against two different respondents who carry on business of extraction of oil from oil seeds. The case involves an interpretation of the Byelaws of the Municipal Committee and the determination of octroi duty which was payable by the respondents in the relevant years of assessment on sarso oil seeds brought by them within the area of the appellant Committee for purposes of their business. The Municipal Committee demanded an ad valorem octroi duty Rs. 4-11-0 per cent from the respondents, claiming to levy it under item 44 of the Schedule of goods liable to octroi duty in the Raipur Municipality, appended to the Rules framed on June 4, 1951. The respondents, on the other hand contended that a duty of 2 annas per maund was leviable under item 4 of the same Schedule, which covered the case of oil seedsThe respondents made representations described as appeals, but were unsuccessful. Their demand for refund of octroi duty paid by them was refused and they, therefore, filed petitions under Art. 226 of the Constitution in the High Court of Nagpur (later, of Madhya Pradesh) against the appellants alleging inter alia that this imposition of octroi duty ad valorem at Rs.4-11-0percent on sarso oil seeds as against other oil seeds was ultra vires the Municipal Committee under Art. 14 of the Constitution. They also averred that octroi duty was properly leviable under item 4 and not under item 44. In the High Court, the petition out of which Civil Appeal No. 356 of 1961 arises, was heard by a learned single Judge, who held that sarso oil seeds were chargeable to duty under item 44 and not under item 4. From the order of the learned single Judge, it does appear that the constitutional question was urged beforet this order, a Letters Patent Appeal was filed, and the Divisional Bench, which heard the appeal, held, disagreeing with the learned single Judge, that duty was properly leviable only under item 4. Before the Divisional Bench also, it does not appear that the constitutional question was argued. The petition, out of which Civil Appeal No. 357 of 1961 arises was heard by a Divisional Bench, which, following the earlier decision, decided against the appellant Committee.

Reasoning: In our opinion, the Divisional Bench of the High Court was right when it said that the specific mention elsewhere must be as oil seeds and not as something else. Class V deals with spices and groceries and the concluding words of item 44 known as "kirana" determine the ambit of that item. Though sarso might be mentioned there, it must be taken to have been mentioned as a spice or as kirana and not as oil seed. The extent of item 4, which deals with oil seeds of every descrip- tion, could only be cut down by a specific mention elsewhere of an item as an oil seed. No doubt, sarso as an oil seed is the same article as sarso sold as kirana but we must take into account the intention behind the bye-law and give effect to it. If it was intended that sarso as an oil seed was to be taxed in a special way, it would be reasonable to expect that it would have be found a specific in mention as an oil seed with a different duty. One would not expect that it would be included in a long list of articles of kirana and in this indirect way be taken out from a very comprehensive entry like item 4, where oil seeds of every description are mentionedFinally, it may be said that if there be any doubt, the Divisional Bench of the High Court very properly resolved it in favour of the taxpayer.