Case: Baladin Ram &amp; Others Vs. State of Uttar Pradesh &amp; Others

2. The appellant Baladin Ram is the proprietor of Kashi Iron Foundry. That foundry was located in the neighbourhood of the railway goods shed of Varanasi Cantonment Station. It was within the limits of the Nagar Mahapalika but it was outside the octroi barrier. The goods taken from the railway shed to the premises of the foundry did not have to cross the barrier. On various dates in 1964 the foundry imported pig iron etc. under railway receipts. These were taken by Ram Nath who is an employee of the appellant from the shed and transported to the premises of the foundry without payment of the octroi dues. The procedure which should have been necessarily followed was that the railway receipt should have been taken to the octroi barrier and octroi paid according to the assessment made by the octroi authorities. Thereafter the railway receipt had to be taken to the railway goods shed and delivery obtained of the goods. This admittedly was not done and the defense which was put up on behalf of the appellant Baladin was that for the last thirty years he had, by arrangement with the concerned authorities, transported the goods directly from the railway shed. Thereafter whatever articles which were manufactured at the foundry out of the raw material were taken inside the city of Varanasi, octroi was paid on them and no octroi was paid on articles which were sent out to other places and which never entered the jurisdiction of the municipal authorities. It was maintained that in the year 1960, an attempt was made on the part of the municipal authorities to depart from this practice. Baladin filed a suit in the Civil Court claiming a perpetual injunction restraining the Municipal Board which was the predecessor of the Nagar Mahapalika, Varanasi, from compelling payment of the octroi in a manner other then the one which had been followed for so many years. A compromise took place between the parties in that suit.

Court's reasoning:
4. It has not been shown that Baladin sent any reply to this notice or even took any steps to carry out the essential terms of the agreement. It is not, therefore, possible to accede to the contention raised before us by Mr. Chari for the appellants that there was no intention of defrauding the Mahapalika within the meaning of Section 466 of the Adhiniyam.It seems to us that the appellant Baladin had to rightly bear the consequences of not availing himself of the arrangement which he had made of obtaining the bonded warehouse facilities. That was clearly indicative of his intention of evading the payment of the octroi duty.