SCA/3795/1988 of MULJIBHAI CHAMPAKLAL SHAH Vs STATE OF GUJARAT on 19 July 1995

ORAL JUDGMENT

The judgment and the order passed by the learnedAdditional Sessions Judge of Bharuch at Rajpipla Camp on 22ndApril 1988 in Criminal Revision application No. 96 of 1987

are under challenge in this petition under Art. 227 of theConstitution of India. By his impugned judgment and order,the learned Additional Sessions Judge set aside the judgmentand the order passed by the learned Judicial Magistrate(First Class) at Rajpipla on 19th September 1987 in MunicipalAppeal No. 3 of 1987. By his aforesaid judgment and order,the learned Magistrate had accepted the petitioner's appealagainst the levy of penalty on the amount of octroi payableby the petitioner on the goods imported by him within themunicipal limits of Respondent No.2 Municipality.

2. The facts giving rise to this petition move in a narrowcompass. The petitioner has been carrying on his business ingrains and provisions. It appears that he received goodsfrom Jagdish Oil Industries of Ahmedabad on 7th July 1987 inone tempo bearing RTO Regn. No. GRS 3252. It appears thatthe driver of the vehicle did not pay octroi on the goods inquestion while bringing the goods within the municipal limitsof respondent No.2 Municipality. On realizing this fact, thepetitioner went to pay the amount of octroi payable on thesaid goods. It was not accepted on the ground that theproceedings for non-payment of octroi were in contemplation.Later on a notice of 9th July 1987 bearing No. 1260 wasserved to the petitioner claiming the amount of octroitogether with 10 times the penalty in all in the sum of Rs.17,587/-. The petitioner paid that amount on 10th July 1987under protest. He thereafter preferred an appeal againstsuch claim under sec. 138 of the Gujarat Municipalities Act,1963 ('the Municipalities Act' for brief). It came to beregistered as Municipal Appeal No. 3 of 1987. After hearingthe parties, by his judgment and order passed on 19thSeptember 1987 in the aforesaid appeal, the learned JudicialMagistrate (First Class) at Rajpipla accepted the appeal andordered refund of the balance amount to the petitioner afterdeducting from the amount paid by the petitioner pursuant tothe aforesaid notice the amount of octroi and the expensesfor recovery thereof. Its copy is at Annexure B to thispetition. Respondent No. 2 was aggrieved by the judgmentand the order at Annexure B to this petition. It thereforecarried the matter in revision before the Sessions Court atBharuch. It came to be registered as Criminal RevisionApplication No. 96 of 1987. It appears to have beenassigned to the Additional Sessions Judge of Bharuch on hiscamp at Rajpipla. By his judgment and order passed on 22ndApril 1988 in the aforesaid revisional application, thelearned Additional Sessions Judge accepted it and set asidethe judgment and the order at Annexure B to this petition. Acopy of the judgment and the order passed by the learnedAdditional Sessions Judge as aforesaid is at Annexure C tothis petition. The aggrieved petitioner thereupon invokedthe extra-ordinary jurisdiction of this court under Art. 227

of the Constitution of India by means of his Special CriminalApplication No. 462 of 1988. By the order passed by thiscourt on 14th July 1988 therein, it was permitted to beconverted into a special civil application and it has beenregistered as such. The petitioner has questioned thecorrectness of the judgment and the order at Annexure C tothis petition in this case.

3. It may be mentioned at this stage that the learnedAdditional Sessions Judge accepted the revisional applicationmainly on the ground that the dispute involved in appealunder sec. 138 of the Municipalities Act partook thecharacter of a civil dispute and the learned Magistrate hadno jurisdiction to grant the declaration that respondent No.2Municipality had no authority to levy penalty on the octroiamount. According to the learned Additional Sessions Judge,such a relief of declaration could have been granted by thecompetent civil court in an appropriate civil proceeding.

4. It may be mentioned at this stage that the learnedMagistrate in his judgment and order at Annexure B to thispetition has correctly examined the position of law in thelight of sec.125 of the Municipalities Act. It reads:Where any animal or goods passing into a municipal borough are liable to the payment of octroi, any person who, with the intention of defrauding the municipality, causes or abets the introduction of or himself introduces or attempts to introduce within the octroi limits of the said borough any such animal or goods upon which payment of the octroi due on such introduction has neither been made nor tendered, or who fails to comply with any direction given by the officer referred to in section 124 with reference to the introduction of any animal or goods within the octroi limits, shall be punishable with fine which may extend to ten times the amount of such octroi or to fifty rupees, whichever may be greater.

It becomes clear from its bare perusal and reading that thepower to impose penalty is on conviction of the personcharged with evasion of octroi. Such power can be exercisedby the court convicting the person guilty of evasion ofoctroi amount in an appropriate proceeding taken out for thepurpose. The aforesaid statutory provision could not havebeen resorted to by respondent No.2 Municipality or by any ofits officer for levying penalty on the octroi amount payableby the petitioner. No other provision in the MunicipalitiesAct is brought to my notice empowering respondent No.2Municipality or any of its officers to levy any penalty onthe amount of octroi payable by the petitioner on the groundof its evasion. In absence of any such provision, respondent No.2 Municipality or its officer could not have claimed anypenalty amount from the petitioner with respect to the goodsimported by him or on his behalf on 7th July 1987 in theaforesaid tempo vehicle within the municipal limits ofrespondent No.2 Municipality.

5. I am fortified in my view by the unreported ruling ofthis court in Special Civil Application No. 3287 of 1982decided on 2nd December 1982 (per R.C. Mankad, J. as hethen was). In that case, a businessman in Ahmedabad wascharged with evasion of octroi on the goods imported withinthe municipal limits of Ahmedabad and he was required to paythe octroi amount due on such goods wit penalty five timesthe octroi amount. Such levy of penalty was challenged bythe concerned businessman by means of the aforesaid writpetition. Section 392 of the Bombay Provincial MunicipalCorporations Act, 1949 ('the BPMC Act' for brief) was pressedinto service for the purpose of justifying the levy ofpenalty on the octroi amount. On interpretation of theaforesaid statutory provision, this court came to theconclusion that sec. 392 of the BPMC Act would not authoriseor empower the Municipal Corporation of Ahmedabad or any ofits officers to levy any penalty amount on the octroi payableby the concerned businessman on the ground of its evasion.

6. The aforesaid unreported ruling of this court is on allfours applicable in the present case by analogy. Section 125of the Municipalities Act is in pari materia with Sec. 398of the BPMC Act. In that view of the matter, the aforesaidunreported ruling of this court will squarely apply in theinstant case. Sitting as a single Judge I am bound by theaforesaid unreported ruling of this court in interpreting astatutory provision. Even otherwise I am in respectfulagreement therewith.

7. In order to appreciate the ground on which therevisional application was accepted by the learned AdditionalSessions Judge, it would be quite proper to look at therelevant provisions contained in Sec. 138 of theMunicipalities Act. It reads:

Section 138. (1) Appeals against any claim included in abill presented under sub-section (1) of section 132 may bemade to any Judicial Magistrate or Bench of such Magistratesby whom under the direction of the Session Judge such classof cases is to be tried.

(2) No such appeal shall be entertained unless-- (a) the appeal is brought within fifteen days nextafter the presentation of the bill complained of; and (b) in the case of a tax on buildings or land or bothan application in writing stating the grounds on which theclaim of the municipality is disputed, has been made to theexecutive committee within the time fixed in the notice givenunder section 108 or 109 of the assessment or alternationthereof, according to which the bill is prepared, and

(c) the amount claimed from the applicant has beendeposited by him in the municipal office.

(3) The decision of the Magistrate or Bench ofMagistrate in any appeal made under sub-section (1) shall, atthe instance of either party, be subject to revision by theCourt to which appeals against the decision of suchMagistrate or Bench ordinarily lie.

It appears that the term 'notice' was loosely used by thepetitioner in his appeal under sec. 138 of theMunicipalities Act. What was claimed by way of octroitogether with the penalty amount from the petitioner was bymeans of a bill issued under sec. 124 of the MunicipalitiesAct. Any dispute pertaining to such bill would certainly bewithin the purview of sec. 138 of the Municipalities Act.It may be mentioned that the subject-matter thereof is "anyclaim included in an appeal". Under Sec. 124 of the Act, abill would include a claim of octroi.

8. A claim made in the bill can be disputed on severalcounts and grounds. Such grounds could be excess billing,application of wrong principle for assessment, error incomputation of claim, and the like. A challenge to the billmay also be on the basis of levy of amount by way of claimnot authorised or empowered by law. While entertaining anddeciding such appeal under sec. 138 of the MunicipalitiesAct, the Magistrate empowered to do so will have to decidethe dispute in that regard. In the process, on beingsatisfied about unauthorised levy of a claim or a partthereof, the Magistrate empowered in that behalf might havecome to the conclusion that the levy or any part thereof wasunauthorised. It would be in the nature of a declaration.When the remedy under sec. 138 of the Municipalities Act hasbeen provided for a taxpayer, it would not be necessary forhim to approach the civil court for the purpose of obtaininga declaration inter alia about the unauthorised levy of anyamount by way of tax. It cannot be gainsaid that the word'tax' defined in sec. 2(26) of the Municipalities Act wouldinclude the levy of octroi also.

9. In the instant case, the grievance of the petitionerbefore the forum under sec. 138 of the Municipalities Actwas to the effect that respondent No.2 Municipality was neither authorised nor empowered to levy any penalty on theamount of octroi payable by the petitioner for the goodsimported on 7th July 1987 on the ground of its evasion. Evenat the cost of repetition, it may be reiterated that theclaim was made by respondent No. 2 Municipality against thepetitioner for payment of such octroi with penalty. In thatview of the matter, the petitioner was justified in movingthe forum under sec. 138 of the Municipalities Act. Thelearned Magistrate empowered to decide such appeal wasrequired to come to the conclusion whether or not respondentNo.2 Municipality was justified in levying the amount ofpenalty on the amount of octroi payable by the petitioner onthe goods imported by him on 7th July 1987 on the ground ofits evasion. As aforesaid, the learned Magistrate rightlyfound in favour of the petitioner and came to the conclusionthat respondent No.2 Municipality had no such authority orpower to claim any penalty amount on the amount of octroipayable by the petitioner as aforesaid. Such conclusion,even if it is in a declaratory form, was within thejurisdiction of the learned Magistrate deciding the disputeunder sec. 138 of the Municipalities Act. The learnedAdditional Sessions Judge was therefore in error in holdingthat such a declaration was within the competence of thecivil court and not within the competence of the learnedMagistrate empowered to decide appeals under sec. 138 of theMunicipalities Act.

10. In view of my aforesaid discussion, I am of the opinionthat the judgment and the order at Annexure C to thispetition cannot be sustained in law. They have to be quashedand set aside. As aforesaid, the judgment and the order atAnnexure B to this petition passed by the learned Magistrateis in consonance with the correct position of law in thatregard. The same deserve to be restored.

Conclusion

11. In the result, this petition is accepted. The judgmentand the order passed by the learned Additional Sessions Judgeof Bharuch on 22nd April 1988 in Criminal RevisionApplication No. 96 of 1987 at Annexure C to this petitionare quashed and set aside. The judgment and the order passedby the learned Judicial Magistrate (First Class) at Rajpiplaon 19th September 1987 in Municipal Appeal No. 3 of 1987 isrestored. Respondent No.2 Municipality is directed to act inaccordance with the judgment and the order of the learnedMagistrate at Annexure B to this petition as expeditiously aspossible but latest within six weeks from the date of receiptof the writ in this case. It would be open to the petitionerto produce a certified copy of this judgment beforerespondent No.2 or its appropriate responsible officer forexpediting the refund claim. In that case, the time-limit ofsix weeks would start from the date of production of such certified copy. Rule is accordingly made absolute with noorder as to costs.

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hn/sca.3795.88