Nagar Mahapalika,
Meerut Vs. M/S.Prem Nath Monga Bottlers
Pvt. Ltd. & Anr [1996] INSC 416 (18 March 1996)
Jeevan
Reddy, B.P. (J) Jeevan Reddy, B.P. (J) Ahmad Saghir S. (J) B.P.Jeevan Reddy,J.
CITATION:
1996 AIR 1302 JT 1996 (3) 389 1996 SCALE (2)816
ACT:
HEAD NOTE:
This
appeal is preferred by the Nagar Mahapalika, Meerut against the judgment of a learned Single Judge of the
Allahabad High Court dismissing the writ petition filed by it. The matter
arises under the Uttar Pradesh Municipalities Act, 1960 [the Act] and pertains
to levy of octroi.
The
respondent is a company which runs a bottling plant in Meerut. Inter alia, it bottles a drink
known as "Double Seven" under a franchise agreement with M/s.Modern
Bakeries Limited, New
Delhi, a Government
of lndia Undertaking. The bottles are sent out of the Meerut local area to various dealere for
sale. According to the respondent, the sale is subject to the condition that
after the drink is consumed, the bottle is to be returned to it. Accordingly,
bottles were being returned to it from time to time. The appellant proposed to
levy octroi on the entry of such bottles un the ground that the said bottles
were being brought into the Meerut local area for the purpose of
"use", i.e., for being filled with the drint "Double
Seven". According to the appellant-corporation, the empty bottles being
"articies made of glass" within the meaning of Entry 138 of the
Notification dated january
4, 1975 were subject
to the levy of entry tax. The respondent resisted the levy on two grounds,
viz., (1) that the entry of empty bottles into the local area for the purpose
of being filled with the said drlnk and meant for being taken out for sale
outside the tocal area does not amount to entry of goods for "use"
within the meaning of the expression "consumption", use or sale
therein" which alone attracts the levy within the meaning of Section
128(1)(viii) of the Act and (2) that in any event, the said empty bottles are
covered by the exemption clause contained in the said notification and in particular
by Entry 13 thereof. Both the contenta were rejected by the appellant whereupon
the respondent filed an appeal before the learned District Juage under Section
472 of the Act. The learned District Judge upheld the contention of the
appellant, which led the appellant-corporation to approach the High Court by
way of a writ petition. The High Court did not go into first of the two
contentions mentioned above. lt dismieeed the writ petition upholding the
second contention urged by the respondent.
The Notification
dated January 4, 1975 appears to be in two parts. The
first part mentions the articles subject to entry tax. They are as many as 190
entries [according to the copy placed before us.]. The second part contains a
list of articles which are exempt from octroi and this part contains 37
entries. Entry 40 of the taxable items (first part) mentions "aerated
water, cold drinks of all kinds" among other goods. The entry reads:
"Lime
juice and lime cordid gas of all kinds and aerated water, cold drinks of all
kinds and sweetened milk." Entry 13 of the second part (exempted articles)
reads:
"Empty
milk cans, mineral water bottles, kerosine oil tins and drums, gas cylinders,
wine bottles and drums and gunny bags if imported for being refilled with the
commodities for which they are in ordinary use." The contention of the
respondent which has been accepted by the High Court is that the words
"mineral water bottles" in Entry 13 of the Exempted Articles are the
empty bottles of "aerated water (and) cold drinks of all kinds"
mentioned in Entry 40 of the Taxable Articles. It is pointed out that
"mineral water" is not found in any of the taxable entries and that
the said expression was contemplated as referring to aerated waters and cold
drinks. It is submitted that in the year 1975, when the said notification said
issued, mineral water as is now understood was not in use at all. On the other
hand, the contention of the appellant- corporation was tnat "mineral
water" and "aerated water (and) cold drinks of all kinds" are
two distinct articles as understood sn common parlance and in the commercial
world by people who deal in them. The submission is that the mineral water can
never be understood as comprising either aerated water or cold drinks and,
therefore, the bottles in question are not exempted under Entry 13 of the Exempled
Articles. It is also brought to our notice by learned counsel for both the
parties that since 1987, the relevant entries have undergone a change and that
this question would not arise after the year 1987.
While
we agree with the learned counsel for the appellant-corporation that
"mineral water" and "aerated water/cold drinks" are
different and distinct articles, whether in common parlance or in the
commercial parlance, we are not inclined to interfere in the matter in view of
the following findings recorded by the learned Single Judge:
"In
the list of exemptions drawn up in the year 1956 at item No.15 there was an
entry corresponding to entry 13 which runs as follows:
'Empty
milk cans, mineral water bottles, kerosine oil tins and drums, gas cylinder,
wine bottles and drums and gunny bags if imported for being refilled with the
commodities for which they are in ordinary use.' Judicial notice can be taken
of the fact that there are no natural waters found within the Meerut
Corporation limits. When the entry of mineral water was made mineral water was
not prepared artificially in the year 1956. Thus the above entry in 1956 also
could not have contemplated mineral water as the learned counsel for the cotemporation
would have the court understand the term. In the circumstances, the meaning
suggested by the counsel for the Company that mineral water be held to include efforscent
(effervescent?) drinks, should be accepted.
The
Corporation admits that Double Seven prepared by the Company is an aerated
drink which means that it is an efforscent (effervescent?) drinks and it would
be a mineral water.
Thus
the mineral water bottled by the Company would be taxable under Item 138 of the
VII Schedule and it can only escape octroi if it is shown that it is to be
found in the list of exempted articles I hold that the empty Double Seven
bottles being bottled by mineral water are exempted under entry 15 of the list
of exemption from octroi." The decision of the High Court was rendered on January 13, 1983. lt may be noted that the learned
District Judge was also of the same opinion. We are inclined to presume that
the High Court and the learned District Judge were aware of the factual
situation obtaining in that State both in 1956 and in 1975 aHd that at this
distance of time, it would not be proper and advisable to interfere with their upinion.
They have pointed out that the said notification of 1975 was preceded by a
notification of 1956 and that in 1956 mineral water as we know today was not
known in commercial circles and, therefore, when the notification used the
expression "mineral water", it meant aerated water or the cold
drinks. This course we are adopting also because it is stated that after 1987
this question would not arise.
In
view of the above, it is not necessary for us to go into the question whether
the entry of empty bottles for the purpose of being filled with cold
drinks/aerated water constitutes "use" within the meaning of the
expression "consumption, use or sale therein" occurring in Section
128(1)(viii) of the Act or for that matter in Entry 52 of List-II of the
Seventh Schedule to the Constitution of India.
The
appeal is accordingly dismissed but in the circumstances with no order as to
costs.
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