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The Municipal Commissioner, Thane & Anr Vs. H & R Johnson (India) Ltd. & Anr [1996] INSC 899 (6 August 1996)

Thomas K.T. (J) Thomas K.T. (J) Bharucha S.P. (J) Thomas. J.

CITATION: JT 1996 (7) 473 1996 SCALE (5)590



The question to be determined in this appeal has boiled down to a very narrow compass-whether the "clay" imported by the respondents for manufacturing ceramic tiles can be brought within the ambit of the item described as "earth of any other kind ", in Entry No.47 of class IV of Schedule I of the Maharashtra Municipalities (Octroi) Rules,1968. (for short the Rules. Respondents contended that the clay imported by them within the said category which contention was found favour with the high Court of Bombay in the writ petition filed by the respondent.The said decision is now being challenged in this appeal.

The question came up through the facts of this case which are summarized as follows;

Respondents are manufacturing ceramist tiles in their factory situated within the limits of Thane Municipal Corporation (Maharashtra State) . The main ingredient used for the said product is clay which respondent used get down from Rajasthan and Andhra Pradesh. Under Section 105 of the Maharashtra Municipalties Act, 1965, the municipal corporation is empowered to levy octroi duty on the goods brought into the territorial limits of the municipal corporation at a rate not exceeding the maximum limit prescribed by the Rules.Goods are classified in Schedule I of the Rules for fixing different rates of octroi duty. In this case, we are only concerned with the classified in Entries 45 and 47 of the Schedule.

Entry No.45 thereof consists of coal tar,asphait, bitumen, flooring stone, mangenese, emery stone or powder, chalk powder, stone chips, stone powder, Agra stone, stone for building clinker and coal ash. In respect of those goods Thane Municipal Corpration decided to levy the maxmium octroi duty of 4% on the value prescribed by the Rules.

Entry 47 consists of yellow earth and earth of any other kind, sand, metal, rubble, murum and gravel, for which the Corporation is empowered to levy a maximum of Rs. 2/- per metric tonne. However, as for those goods. Thane Municipal Corporatiopn has resolved to levy octroi duty only at the rate of Re.1/- per metric tonne.

Respondents pleaded that the clay imported by them shall be counted as "earth of any other kind". But the Municipal Corporation insisted that the respondents should pay higher octroi duty as the clay is "stone power" mentioned in Entry No.45.

Respondents filed the writ petition in the High Court contending that the sand of municipal corporation is erroneous and hence they may be inhibited from collecting octroi duty at the higher rats. The High Court found in the impugned judgment that this clay would fall within Entry No.47 and as such respondents are liable to pay octroi duty only at the lesser rate of Re.1/- per metric tonne. On the strength of the said finding the High Court directed the Corporation to refund the excess amount collected from the respondents on and after the date of writ petition.

Learned counsel for the appellant Corporation assailed the conclusion of the High Court contending that the expression "clay" as understood in common parlance is contradistinct the meaning attached to the word "earth".

Counsel also contended that the raw material used by the respondents being a special guilty of chins clay, the same could only have been classified as "stone power" mentioned in entry 45 of the Schedule. Alternatively, it was contended that High Court should not have ordered refund if the amount already collected.

In support of the first contention a reference was made to the observation contained in the decision of a Division Bench of the Calcutta High Court in state and ors. (AIR 1969 Calcutta High Court in state of west Bengal & ors.vs. Jagdamba Prasad Singh and ors. (AIR 1*969 Calcutta 281) that "ordinary earth is not ordinary clay and cannot be called a minor mineral and the word clay is not identical with "earth". Counsel brought to our notice that the aforesaid observation was approved by the full Bench of the Punjab and Haryana High Court in M/s. Amar Singh Modi Lal vs. State of Haryana and ors. (AIR 1972 Punjab & Haryana 356.) After going through the relevant passage in the decisions cited before us, we do not think that any such passing observation would be of help to decides this dispute. That apart, the Calcutta High Court was not inclined to extricate clay from earth for all purposes by pointing out in the decision that there are some kind of earth which may be clay. The full in Amar Singhs case (supra) has in fact skipped that issue by observing that the said aspect does not have even a remote connection with the question involved in the case before them.

Amount the goods catalogued in Entry No.45 of the Schedule only one item need be considered in this context and that is "stone power" because no other item mentioned in the said entry in the said entry has even a semblance with the clay involved in this case. Nor did the appellant make any attempt to; show that is clay anything other than power.

We must point out in this context that the burden is on appellant to show that clay imported by the respondents is stone power when they entry . But no material, whatsoever, has been produced in proof of their stand.

The meaning or definition provided in standard dictionaries to word "clay" would not help the appellant who made an endeavor to trace out some support from such lexicons. In the websters Dictionary "clay" is shown "a" natural earthy material ...used chiefly for making bricks:

used in earth or mud". In the Concise Oxford Dictionary "clay" is given the meaning as "stiff tenacious earth." In Chambers (Twentieth Century )Dictionary it is defined as "earth in fine particles." Therefore, we find no merit in the contention of the appellant Corporation that the clay imported by the respondents must be kept outside the amount of Entry 47 of Schedule I of the Rules.

The alternative contention regarding refund of the amount (as ordered by High Court ) was advanced before us on the premiss that it would badly erode the financial position of the Corporation-at any rate, the appellant may be denied of the higher duty only from the date when the controversy is set at rest. and all that is done or collection till then need not be reimbursed.

We may point out that when respondents maved for an interim order before the High Court of Bombay for stay of collection of octroi duty at the higher rate the following order was passed on the application on 13th March 1992.

"Heard counsel. Interim relief refused. The payment of Octroi duty be stayed. In case petitioner succeeds the respondents will refund the excess duty." Parties are bound by the said order it is too late in the day for the appellant to make a plea on the strength of financial burden etc. Refund has rightly been ordered by the High Court and it calls for no intervention by us.

We dismised this appeal without any order as to costs.


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