- (1.) This appeal by special leave arises from the judgment of the Gujarat High Court dated January 27, 28 and 30, 1967. The two petitioners before the High Court were firms trading in certain commodities within the limits of the Municipal Borough of Broach. The grievance in one of the petitions was that the Municipality had collected certain amounts wrongfully, and the grievance in the other petition was that the Municipality had refused to refund some amounts even though they were refundable under its bye-laws. Both the petitions concerned goods which were "imported" within the octroi limits of the Municipality but came to be "exported" therefrom. The first petition was in respect of a consignment which was designated as a through consignment, and the second petition concerned goods in transit and goods for export other than those which could be called goods in transit. The amounts in dispute related to the levy of octroi under Section 73(1) of the Bombay Municipal Boroughs Act, 1925, hereinafter called the Act, which provides as follows : "73(1). Subject to any general or special orders which the State Government may make in this behalf and to the provisions of Sections 75 and 76, a Municipality may impose for the purposes of this Act any of the following taxes, namely :- x x x x (iv) an octroi on animals or goods or both, brought within the octroi limits for consumption, use or sale therein;" The word "sale" was included within the ambit of octroi when the Act was amended in 1954. The High Court took note of the rules and the bye-laws and held that it was not possible to take the view that the rules contemplated that no refund was payable in case the goods had undergone a sale during the course of their stay in octroi limits. It accordingly came to the conclusion that in regard to goods meant for export in the sense defined in the rules, refund was claimable even if a sale transaction in the larger sense (i.e. in a sense other than a sale to a consumer or with the intention that the goods must pass into hands of the ultimate consumer) took place in regard thereto, provided that the other conditions were satisfied. The High Court then examined the correct interpretation of the word "sale" in clause (iv) of Section 73(1) of the Act and after considering this Court's judgment in Burmah Shell Oil Storage and Distributing Co. India Ltd. v. Belgaum Borough Municipality, (1963) Supp (2) SCR 216 = (AIR 1963 SC 906) it held that the word "sale" could not be given the narrow meaning of a sale for consumption to the ultimate consumer because, in that sense, the Legislature would be guilty of having introduced a word which it was not necessary for it to introduce. The High Court made a reference to the definition of "sale" in Section 4 of the Sale of Goods Act and held that the expression "sale" as used in the definition of "through consignments" in the rules had the same connotation as in the Sale of Goods Act and therefore "if a consignment is brought within the octroi limits and if the Municipal authorities are satisfied that the consignment has been brought in for the purpose of effecting a sale in the aforesaid sense, then the consignment does not become a through consignment". According to the High Court, it was not enough merely to prove that the consignment left the octroi limits within six hours after the goods were imported and that it was necessary to show that the goods were intended only to pass through in the sense that they were not meant for consumption, use or sale, and that in regard to such goods there was no intention of changing hands by way of sale or that there was no intention of breaking their bulk or detaining them beyond six hours or unloading them. In the view it took, the High Court issued some directions for compliance by the authorities concerned. The writ petitioners felt dissatisfied with the view taken by the High Court and applied for a certificate under Articles 132(1) and 133(1)(c) of the Constitution. The High Court held that no certificate could be granted under Article 133 as there was no final order. The petitioners however applied to this Court for special leave on the ground, inter alia, that the High Court put a wrong interpretation on the expression "sale" in Section 73(1)(iv) of the Act inspite of the decision of this Court in Burmah Shell's case (supra). As has been stated, they succeeded in obtaining special leave from this Court. When the case came up for hearing before a Division Bench, it noticed the decision in Burmah Shell's case (supra) and felt that there were "blurred areas" of sale within the territory which may attract a tax under Entry 52 (List II of Seventh Schedule) left uncertain by the aforesaid decision of this Court so that the matter deserved consideration by a larger Bench. This is how the case has come up before us for hearing. We have allowed Municipal Council, Jodhpur, to intervene in the hearing at its request.
(2.) The short question before us is whether this Court's decision in the Burmah Shell's case (AIR 1963 SC 906) (supra) squarely covers the present controversy or whether that decision requires reconsideration. The learned counsel have in fact confined their arguments to this narrow field.
(3.) In order to appreciate the controversy, it will be desirable to refer to the basic facts of the Burmah Shell's case (AIR 1963 SC 906) (supra). The Burmah Shell Oil Storage and Distribution Co. India Ltd., hereinafter referred to as the Company, was a dealer in petrol and other petroleum products which it manufactured in its refineries situated outside the octroi limits of Belgaum Municipality. It brought those products inside that area either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn sold them to others. According to the Company, the goods brought by it within the octroi limits could be divided into four categories as follows: 1. Good consumed by the Company; 2. Good sold by the Company through its dealers or by itself and consumed within the octroi limits by persons other than the Company; 3. Goods sold by the Company through its dealers or by itself inside the octroi limits to other persons but consumed by them outside the octroi limits; and 4. Good sent by the Company from its depot inside the octroi limits to extra-municipal points where they are bought and consumed by persons other than the company. This Court examined the scheme of taxation under the Act and rules and the bye-laws made by the Municipality for the levy of octroi. It also took note of the fact that the words "use or sale" were substituted for the words "or use" by Bombay Act 35 of 1954, which are the subject-matter of a fresh controversy before us, and made a reference to the Legislative Lists in the Government of India Act, 1935 and the Constitution. After examining the history of octrois and terminal taxes, this Court held that "octrois were taxes on goods brought into the local area for consumption, use or sale", and that "they were leviable in respect of goods put to some use or other in the area but only if they were meant for such user." It was specifically clarified that the word "sale" was included only in 1954 in order to bring the description of octroi in the Act in line with the Constitution, and that the expressions "consumption" and "use" together "connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes or uses them up.";