Case: M/S. Acqueous Victuals Pvt. Ltd Vs. State Of U.P.

t will be necessary to keep in view a few relevant facts leading to these proceedings. The writ petitioner is a Private Limited Company incorporated under the Indian Companies Act, 1956. under an agreement with M/s Parle (Exports) pvt. Ltd., Bombay, the writ petitioner is engaged in the business of bottling soft drinks like Gold Spot, Limca, Thumps-up, soda, Rim-Zim etc. Which are manufactured by Parle Exports. After bottling these beverages at its Plants at Bareilly, the writ petitioner distributes the same to wholesalers in ten districts of Uttar Pradesh, which include amongst others, the respondent-Municipalities, namely, the Municipal Boards of Moradabad, Rampur, Sahajahanpur and Pilibhit. According to the writ petitioner-company after the beverages are consumed the consumers within the municipal limits the bottles empty state are returned to it and the title and ownership in the bottles also remain with it. The Uttar Pradesh State Legislature enacted an Act in 1916 called the U.P. Municipalities Act, 1916 (hereinafter referred to as the Act). Under Section 128 thereof powers were conferred on the Municipal Board governed by the State Act to impose an octroi on goods or animals brought within the municipality for consumption, use or sale therein. Under Section 298 of the Act, the Municipal Boards are empowered to frame bye-lays for various purposes of the Act. The bye-laws o f Municipal Boards of Moradabad, Rampur, Pilibhit and Sahajahanpur were enforced during the period from 12.05.1977 to 01.09.1982. According to the writ petitioner, these bye laws provided for levying octroi on soft drinks like Cococola, Fanta, Vimgo, Soda Water, Lemon etc. but they did not permit levying octroi on the weight of bottles which contained these soft drinks. As the respondent- Municipalities were seeking to levy octroi on the basis of gross weight not only of the beverages contained but also of the bottles containing the beverages which were brought within the municipal limits of the aforesaid Municipalities, the writ petitioner company filed three writ petitions in the High Court of judicature at Allahabad in the year 1983. The grievance made in the writ petition was that from 1980 onwards the respondent- Municipalities were illegally recovering octroi also on the weight of bottle-containers which they were not entitled to do and hence t he respondent- Municipalities were required to be ordered to refund the requisite amount of octroi levied on the basis of the gross weight of bottles from 1980 onwards. During the pendency of the writ petitions in the High Court from 1983 till 1987, by interim orders, the respondent-Municipalities were restrained from recovering octroi on the gross weight of bottles meaning thereby the octroi duty was required to be confined only on the net weight of the beverages contained in these bottles that were imported by the writ petitioner within the municipal limits of the aforesaid four Municipalities . During the pendency of these writ petitions, the State of Uttar Pradesh issued a Government Order on 06.04.1987 directing all the Municipalities functioning under the Act in the State not to charge octroi on the basis of gross weight but only on the weight of beverages contained in the bottles. Thus, from 06.04.1987 onwards, the weight of bottles and crates containing the bottles got exempted from the octroi duty. Consequently, it must be held that dispute got confined only from 1980 till 06.04.1987. We may also note a further development, namely, that after 1991 the provision of Section 128 ( i) (viii) got deleted, therefore, from that date in the State of Uttar Pradesh no octroi duty is levied by any of the Municipalities on any goods or animals imported within the municipal limits of the Municipalities .In the light of t his factual backdrop, the main grievance put forth by learned counsel for the writ petitioner has to be examined.

Court's reasoning:
>It is