CANTONMENT BOARD, DEHU ROAD & ANR. versus MAHINDRA OWEN LTD. & ANR.

Citation: [1986] 1 S.C.R. 961 · Decided: 31-03-1986 · Supreme Court of India · Bench: V. BALAKRISHNA ERADI · Disposal: Dismissed

Judgment (excerpt)

CANTONMENT BOARD, 
DEHU ROAD & ANR. 
v. 
MAllINDRA OWEN LTD. & ANR. 
MARCH 31, 1986 
[V, BALAKRISllNA ERADI AND D.P. MADON, JJ.] 
961 
The Bombay Cantonment Board Act read with Notification 
No.SRO 318 dated 29.L0.59 - Items 3, 11, 14 and 16(b) of the 
First Schedule· thereto, scope of - Whether trailers and water 
tankers manufactured by the Respondent and supplied to the 
Defence Department falls under the aforesaid items - Whether-
the levy of octroi duty ia illegal, in view of the specific 
provision (vi) contained in Schedule II. 
The first reapondent company manufactures trailers and 
water tankers at its factory at Pimpri in . the District of 
Poone. Pursuant to the acceptance of the tenders submitted to 
the Defence Department of the Union of India, the first 
reapondent sold different quantitiea of 100 C.W.D. and 10 
c.w.D. trailers and two-wheeled water tankers. Under the telWI 
of the contract, the ownership passed to the Government of 
India on inspection of the goods at the first respondent's 
factory premises at Pimpri and appropriation thereof to the 
contract consequent on approval of the goods but delivery was 
to be effected by the company free of charge within the 
cantonment limits of Dehn Road. 
The first appellant Board claimed from the reapondent 
company payment of octroi-duty aggregating Rs.3,37,628-08 on 
the 
trailers/water 
tankers 
so supplied to the Defence 
Department. In the appeal preferred by the first respondent 
under section 84 of the Cantonment Boards' Act, the District 
Magistrate held that the trailers/water tankers supplied did 
not fall within the- scope of any of the items enumerated in 
the 
First Schedule to the Notification No. 
SltO 318 dt. 
29.10. 59 and therefore the levy of octroi-duty l(ll8 illegal. 
The appellants preferred a batch of Writ Petitions before the 
High Court which were dismissed upholding the Magistrate's 
judgment. Hence the appeal by certificate granted by the 
Bombay High Court under Article 133(1)(a) and (c) of the 
Constitution. 
A 
B 
c 
D 
E 
F 
G 
H 
A 
B 
c 
962 
SUPREME COURT REPORTS 
[1986] 1 s.c.R. 
Dismissing the appeals, the Court, 
llELD : 1.1 None of the items 3, 11, 14 and 16(b) of the 
First Schedule to the Notification No. SRO 318 dt. 29.10. 59 
' 
will take within its scope the trailers/water tankers in 
respect of which the notices of demand of octroi-duty were 
issued to the first respondent company. The imposition and 
demand of the octroi duty in relation to thelll was wholly 
unwarranted. Entry No.3 read as a whole contains clear 
indication of the nature and type of the articlea intended to 
be 
comprehended 
by 
the 
description 
"All 
articles 
of 
Galvanised, Iron or steel", Entries 11 and 14 deal with 
"machinery" and "machines" and the trailers/water tankers by 
themselves cannot be regarded as "machinery" or "machines". 
Under Entry 16(b), they cannot be regarded as "accessories" of 
conveyances either. (965 E; 966 C-G] 
1,2 Even if it is assUllled that any of the entries in the 
o 
First Schedule to the Notification did cover the trailers/ 
water tankers, the levy of octroi duty in respect of them 
110Uld still be illegal in view of clauae (vi) of Schedule 11 
to the Notification since no octroi duty shall be levied on 
"Military Stores" etc. (966 G-H; 967 A] 
E 
1.3 The expression ''Military Stores" used in Schedule 
Il is 
comprehensive enough to cover articles essential for 
military use inclusive of trailers/water tankers' supplies of 
which are acc:unmilated in the depot for being drawn upon when-
ever needed. The matter is placed beyond doubt by the signifi-
cant fact that in the Schedule to the acceptance of tenders 
p 
Annemre 'A' , pursuant to which the trailers/water tankers 
were supplied, paragraph 12 which contains "despatch instruc-
tions" specifically refers to the trailers/water tankers as 
'stores'. Further, as per the tender terms the trailers/water 
tankers supplied to the Defence Department of the Governmmt 
of India, had become the property of the Defence Department 
G 
even prior to their entry into the Dehu Boad cantonment Board. 
H 
The requirement regarding certification by the Superintendent 
of Police has no application in respect of the ''Military 
Stores". (967 G-H; 968 A-<:] 
CANTONMENT BOARD v. MAHINDRA OWEN [ERADI, J,] 
963 
CIVIL APPELLATE JURISDICTION 
Civil Appeal Nos. 48, 362 
to 379 of 1972, 
From the Judgment and Decree dated 23/24.11.1970 of the 
Bombay High Court in Special Civil 

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