AGRAWAL, CJ. - (1.)The validity of levy of octroi duty by the Puri Municipality on the purchase and despatch of marine fish and prawn is the question falling for decision in this case referred to a larger Bench.
(2.)Petitioner 1 is a registered association of fish merchants in the town of Puri and petitioner 2 is an individual. Both carry on business in fish and prawn. In course of their business, admittedly they purchase fish, both mariner and fresh-water, from vendors and fishermen within the limits of Puri Municipality and thereafter transport them mostly to their commission agents in Howrah for onward consumption. The opposite party-Puri Muncipality, in exercise of its powers under S.131(1)(kk) of the Orissa Municipal Act imposed octroi duty on fish and prawn either caught from the sea or brought from outside. Section 131(1)(kk) reads as follows :-
"131. Power to impose taxes.- (1) The municipal council may, from time to time, at a meeting convened expressly for the purpose, of which due notice shall have been given subject to the provisions of this Act impose within the limits of the municipality the following taxes and fees or any of them - xx xx xx (kk) an octroi on goods brought within the limits of a municipality for consumption, use or sale therein"
(Underlining is mine) Obviously, this power is derived from entry 52 of list-II of the 7th schedule of the Constitution relating to tax on the entries of goods into the local area for consumption, use or sale therein. The Puri Municipality has also framed bye-laws in this regard which have been approved by the State Government. Bye-law No. 11 which is relevant reads as follows : -
"11. (1) Every person in charge of goods or articles subject to octroi shall as soon as they are brought within the octroi limits, take them to the nearest octroi check post if required by any octroi official to be dealt with in accordance with these bye-laws. (2) If any goods or articles are brought within the limits by evading payment of octroi and is proved to the satisfaction of the Octroi Superintendent that the goods or articles are liable to payment of octroi and have been brought without payment of such octroi, the said Superintendent may after giving reasonable opportunity to the owner or person in charge by serving a notice on him make the necessary assessment and on, such assessment the owner or person in charge of goods or articles shall pay the octroi. xx xx xx (3) On the arrival of goods or articles subject to octroi at a check post, the octroi official in charge of check post shall call upon the person in charge - (1) To declare whether the goods or articles are intended - (a) for consumption, use or sale within the limits, (b) for immediate transport beyond such limits, or (c) for temporary retention within such limits and eventual transport; and (2) To give their weight and description and where octroi is leviable ad valorem the value, every person making a declaration as to the nature, quantity and value of goods liable to octroi brought by him shall be bound to make a true declaration concerning them to the best of the knowledge and belief. Provided that the octroi official in charge of the check post shall presume that all the goods or articles that are brought within the limits are for use, consumption or sale until the person in custody of the goods or articles declares to the contrary."
(Underlinings are mine) Bye-law No. 24 exempts goods from octroi duties which enter the municipal limits in course of transit, i.e., for immediate transport.
(3.)The grievance of the petitioners is that the opposite parties are collecting octroi on the fish sent by the members of petitioner 1 out of Puri Municipal limits in packed baskets at Puri Railway Station on the arbitrary valuation fixed by them, and thus they are transgressing the constitutional limitations as well as the authority derived under S.131(1)(kk) of the Municipal Act by charging octroi 'on the exit of goods from the Puri Municipal limits.' In course of argument, it was stated by Mr. Misra, learned counsel for the petitioners, that procurement of fish and prawn is mostly done by the petitioners through their commission agents who collect them within the Municipal limits of Puri and then deliver them to the petitioners.