MAXSPIN ENGINEERS AHMEDABAD Vs. AHMEDABAD MUNICIPAL CORPORATION
HIGH COURT OF GUJARAT
(M/S) Maxspin Engineers
AHMEDABAD MUNICIPAL CORPORATION
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(1.)This Special Civil Application is for issue a writ of mandamus or any other appropriate writ order or direction declaring the levy of octroi on the entry of the goods i.e. rings supplied for the purpose of turning and machining to the petitioner as illegal and ultra vires to the Bombay Provincial Municipal Corporations Act. There is a further prayer to direct the respondent to refund the amount of Rs. 55 491 with interest at the rate of 18% from the date of recovery of the octroi amount to the petitioner.
(2.)It is the case of the petitioner that the firm is carrying on business of job work of turning and machining of rings supplied by M/s. Tata Iron & Steel Co. Ltd. Calcutta and M/s. Mipco Seamless Rings (Guj.) Ltd. Broach. For this purpose the petitioner receives rough rings and makes them smooth by doing turning and machining work. In his petition the petitioner has specifically stated that the business that the petitioner is carrying on is of turning and machining of the rings supplied by these companies. It is further stated that the rings which are forged one even after turning and machining remain the same which does not result into final product for use. According to the petitioner the said ring has to undergo further process such as hardening grinding and assembling with other parts such as outer ring cage and rollers and/or balls are necessary to make it usable in the final product of the Company. Mr. Kapadia the learned Counsel appearing for the petitioner presses into service two points in support of his petition.
(3.)Mr. Kapadia states that the definition of Octroi is as under: Octroi:
"Octroi means a cess on the entry of goods into the limits of a city for consumption use or sale therein".
In the present case according to Mr. Kapadia there is neither consumption nor sale. As regards the use of the forged ring Mr. Kapadia states that the same cannot be used even after turning and machining since it does not result into a final product for use. Hence this article cannot attract the levy of octroi. In this connection Mr. Kapadia cited the case Arbuckle Smit & Co. Ltd. v. Greenock Corporation reported in 1960 (1) All England Law Reporter 568. That is a case which came in appeal to the House of Lords wherein the appellants therein purchased a warehouse premises with possession on 1/03/1957 for use as a bonded store for spirits. The premises could not be so used without the approval of the commissioners of Customs and Excise. After purchase and before getting the approval alterations to the premises were made to comply with the requirements of the Commissioner. The provisional approval was granted by the Commissioner only on 13/06/1958 Thereafter the appellants therein began to use the premises as bonded store. The question arose as to whether the rates were payable in respect of the premises even if it was not occupied as a bonded store house during the period when it remained unoccupied owing to the alterations effected to the warehouse for the purpose of getting the approval of the Commissioner. In those circumstances the House of Lords held;
"The appellants were not in rateable occupation of the premises during the year in question because their use for the purpose of effecting alterations was a preparing of them for future occupation but was not occupation for the purpose for which they were bought".
The House of Lords further held:
"It is evident therefore. that there will not be occupation in the context of rating unless some use is made of the hereditament in the course of the relevant year. Use is not a word of precise meaning but in general it conveys the idea of enjoyment derived by the user from the corpus of the object enjoyed".
From this decision Mr. Kapadia states that there is absolutely no use of the forged ring got from outside for the purpose of turning and machining.
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