SHIVARAJ V.PATIL, J. - (1.)THE appellant is a company engaged in the manufacture of various kinds of IMFL/potable liquor. For manufacture of its products, it requires raw materials such as Rectified Spirit, Compound Alcoholic preparation, Cane Juice Spirit, Grape Spirit, Malt Spirit Barley Malt, Molasses, Coal etc. It imports these raw materials into the octroi limits of Aurangabad Municipal Corporation, the respondent herein. THE controversy raised in this appeal is confined to the rate of octroi duty levied on the Rectified Spirit imported by the appellant.
(2.)ON the Rectified Spirit imported by the appellant, the local authorities had been charging octroi duty @ 1.5% falling under Entry 37 of Class III of the Schedule "O" annexed to the Aurangabad City Municipal Corporation Octroi Rules (for short the 'Rules') even before the establishment of the respondent-Corporation which came into force on 1-3-1984. Thereafter also, it continued to collect octroi duty at the same rate. Surprisingly, the appellant received a letter dated 5/08/1986 from the respondent stating that the Rectified Spirit which the appellant had been importing was chargeable to octroi duty @ 5% falling under Entry 7 of Class I of the Schedule "O" and consequently the appellant was directed to pay balance of octroi duty @ 3.5%.
In reply to the said letter, it was brought to the notice of the respondent that the Entry 7 in Class I of the Schedule relates to articles of food and drinks consumed by men and animals; Rectified Spirit was not potable and could not be directly consumed by human-beings so as to be covered by it. This contention was rejected. The appellant received a letter on 16-10-1986 along with the bill of demand to the tune of Rs. 8.87, 538.95 from the Octroi Superintendent of the respondent. The appellant by its letter dated 20/10/1986 tried to convince the Administrator of the Corporation but failed.

Hence, the appellant filed Writ Petition No. 1080/86 which was dismissed by the High Court taking a view that Rectified Spirit is fit for human consumption which clearly fell under Entry 7 of Class I of the Schedule. Hence, this appeal by special leave.

(3.)THE relevant entries in the Schedule "O" therein showing the goods liable to octri and the rates leviable read as under:- JUDGEMENT_228_JT4_2002Html1.htm
From 1983, the Rectified Spirit was being declared and accepted under Entry 37 collecting octroi duty @ 1.5%. The respondent by the letter dated 16-10-1986 retrospectively revised octroi duty stating that the goods were liable to octroi under Entry 7 in Class I of the Schedule.