ICG TEXTURING INDUSTRY Vs. SURAT MUNICIPAL CORPORATION
HIGH COURT OF GUJARAT
SURAT MUNICIPAL CORPORATION
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(1.) The question which arises in this petition relates to the true and correct interpretation of rule 17 of the octroi Rules and Standing orders of the respondent (Surat Municipal Corporation) (hereinafter referred to as the octroi Rules).
(2.) The first petitioner is a Company incorporated and registered under the provisions of the Companies Act 1956 The second petitioner is the Director of the first petitioner-Company. For the sake of brevity the petitioner will be referred to as the petitioner in the course of this judgment. The petitioner is engaged in the business of manufacturing crimped texturised yarn. The registered office of the petitioner is situate at Surat but its factory is situate at Ankleshwar which is outside the local limits of the city of Surat. For the purpose of carrying on its manufacturing activities the petitioner imports synthetic yarn. In respect of such imported yarn which lands at the Bombay Port a bill of entry is prepared and filed with the customs authorities at the Bombay Port. The yarn is thereafter sealed by the customs authorities and it is transported by the petitioner to Surat for being stored in the public respondent Corporation. The transport vouchers in respect of such goods are prepared by the customs authorities wherein the consignor is the Assistant Collector of Customs Bombay and the consignee is the Assistant Collector of Customs Surat. Under the relevant law governing the levy of custom duty it is permissible to store such yarn in the bonded ware-house initially for a period of one year. The time limit is however extendable by the customs authorities. Having stored the yarn in the bonded ware-house the petitioner clears the requisite quantity and quality of yarn from the bonded ware-house as and when required for the purpose of manufacture in the factory situate at Ankleshwar. Be it stated that the imported yarn is required to be brought to Surat for the purposes of storage because the only bonded ware-house in the vicinity is situate within the local limits of the respondent-Corporation.
(3.) When the imported yarn enters within the limits of the responddent-corporations the petitioner pays octroi duty on the consignments in question although the goods are not imported within such limits for the purpose of consumption use or sale. According to the petitioner the respondent-CorPoration authorities are not allowing refund of the said octroi duty although the goods brought for the purpose of storage in the bonded warehouse are Dot consumed used or sold within the limits of the respondent-Corporation and are taken out of such limits after a period of six months from the date of their import on the ground that under rule 17 of the octroi Rules the octroi paid on any goods is refundable only if such goods are exported beyond the octroi limits within a period of six months from the date of their import. The grievance of the petitioner is that octroi is leviable only if the goods are consumed used or sold within the local limits of the respondent-corporation and that since no such event takes place in connection with the imported goods of the petitioner which are brought within such limits merely for the purpose of storage in the bonded warehouse and which are exported beyond such limits after a period of six months from the date of their import the refusal of the respondent-Corporation to refund the octroi duty collected at the stage of entry goods of amounts to levy of tax without authority of law. The petitioner submit that the time limit . six months for the export of goods prescribed in rule 17 of the octroi Rules for the export of goods out of the octroi limit is a arbitrary and unreasonable and that it permits the respondent-Corporation to levy octroi duty illegally and without authority of law in cases where goods are not exported out of the octroi limits within specified time limit.;
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