B. P. Jeevan Reddy, J. - (1.) This appeal is preferred by the Hindustan Petroleum Corporation Limited, successor to the ESSO Standard Eastern Corporation against a common judgment of the Gujarat High Court in three writ petitions. Writ Petition No. 1650 of 1969 was filed by the Gram Panchayat. Okha. The other two writ petitions Nos. 191 and 192 of 1970 were filed by the appellant. The dispute pertains to levy of octroi duty by the Gram Panchayat. The writ petitions were filed against the orders passed by the Development Commissioner who was approached by the appellant by wax of two Revision Applications. The writ petition filed by the Gram Panchayat has been allowed. In writ petition (Special Civil Applications) Nos. 191 and 192 of 1970, the High Court negatived the challenge to the validity of Rule 32 of the Gujarat Gram and Nagar Panchayats Taxes and Fees Rules, 1964 (Rules). At the same time, the Gram Panchayat was directed to entertain the appellant's claim for refund of octroi duty and to decide it according to law and in the light of the observations made in the judgment, after permitting the appellant to lead evidence in support of its claim and after giving it a reasonable opportunity of being heard in the matter. It directed further that if the appellant had not made a formal application to the Panchayat in that behalf, the Panchayat shall permit it to do so.
(2.) ESSO, a company incorporated in U.S.A. had been dealing in petroleum products in India. It had oil terminals in different Ports in India where it had storage facilities. One such storage facility was located within the limits of Okha Gram Panchayat in the State of Gujarat. Petrol, diesel oil and furnace oil were stored there. The ESSO was importing products at Okha from Bombay. It had bonded warehouses both at Bombay and Okha, maintained under the provisions of the Central Excises and Salt Act. 1944. When the goods were removed from the bonded warehouse at Okha for the purpose of sale or for marketing, excise duty was payable and was paid. Of the total quantity stored at the storage facility within the Okha Gram Panchayat, only about 5% was released for consumption, use or sale within the territorial limits of the Gram Panchayat. The rest was taken out to places outside the Gram Panchayat for distribution and sale.
(3.) The Gujarat Gram Panchayat Act, 1961 was made applicable to Okha on and with effect from April 1, 1965. Since that date, ESSO has been paying octroi to the Panchayat on the goods consumed, used or sold within the limits of the Panchayat. ESSO was also maintaining a current account facility as contemplated by Rule 34(B) of the Rules. In July, 1966, a dispute arose between the Panchayat and the ESSO. Panchayat claimed octroi duty on all goods imported into Okha Panchayat limits, irrespective of the fact whether they were consumed, used or sold within the limits of Panchayat or were taken out for being sold and distributed outside the Panchayat limits. Further while determining the value of the goods for the purpose of octroi duty, the Panchayat added the excise duty to their value, even though by that date of import, excise duty had not yet been paid by the appellant. (This was for the reason that transfer from the bonded warehouse and to the bonded warehouse at Okha did not call for payment of excise duty). ESSO contested both the claims of the Panchayat. When demand notices were served by the Panchayat on the above basis, ESSO filed revisions before the Development Commissioner which were disposed of on November 13, 1969. It is against the said order that both the Panchayat and ESSO filed writ petitions in the Gujarat High Court.;