SAURASHTRA CEMENT AND CHEMICAL INDUSTRIES LIMITED Vs. GRAM PANCHAYAT ADITYANA

JUDGEMENT

(1.) Does Octroi duty cease to be octroi duty and become something else if instead of recovering the same on every consignment it is recovered in lump sum by consent in view of the authority to do so conferred by the statute ? Can it be contended by a tax payer that a higher burden can be imposed on him under the law but not a lower and that if a lower burden is imposed the levy is invalidated ? These are the questions which come to the fore in this petition under Article 226 of the Constitution of India instituted by Saurashtra Cement and Chemical Industries Limited Ranavav challenging the right of a taluka Panchayat to levy a tax (octroi duty) under sec. 183(1) of the Gujarat Panchayats Act 1961 hereinafter referred to as the Act. The right of the District Panchayat to levy a similar tax under sec. 185 is also questioned by the petitioner Company on similar grounds.

(2.) Under sec. 178 of the Act taxes enumerated in Clauses (i) (ii) and (xviii) can be levied by a gram panchayat and a nagar panchayat. One of the taxes which can be levied is Octroi on animals or goods or both brought within the gram or nagar for consumption use or sale therein as per clause (ii) of sub-sec. (1) of sec. 178. Respondent No. 1 Adityana Gram Panchayat decided to levy Octroi duty under the aforesaid provision in respect of animals or goods brought within the limits of the Panchayat. Under the relevant rules viz. Gujarat Gram and Nagar Panchayats Taxes and Fees Rules of 1964 Octroi duty could be levied within the parameters prescribed by rule 24 read with the Schedule. The Schedule prescribes the maximum as also the minimum rates at which duties could be levied on various articles. The petitioner Company imports lime stone and clay within the limits of the Gram Panchayat for the purpose of manufacturing cement. The petitioner and respondent No. 1 entered into an agreement as contemplated by sec. 179(1) which empowers the panchayat to enter into an agreement to levy lump sum contribution in lieu of the tax sought to be imposed by the panchayat. The said provision reads as under:-

(3.) It will be seen that under sec. 179(1) by agreement between the parties a lump sum contribution can be fixed taking into account factors favorable to the importer which cannot be taken into consideration for the levy of Octroi duty under sec. 178. Regard can be had to the fact that the factory itself provides some amenities. The lump sum amount may be even less than the amount which would be payable at the minimum rate prescribed by rule 24 read with the Schedule. It would therefore be more beneficial for the Company to enter into an agreement to pay a lump sum contribution instead of paying octroi duty at the prescribed rates. The petitioner Company presumably because it considered such an arrangement beneficial to it entered into an agreement for payment of lump sum compensation instead of octroi duty for the period between April 1 1976 to October 31 1979 The agreed amount was Rs. 1 27 0