EAGLE FLASK INDUSTRIES LTD. versus TELEGAON DABHADE MUNICIPAL COUNCIL AND ORS.

Citation: [2004] SUPP. 5 S.C.R. 137 · Decided: 06-10-2004 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

EAGLE FLASK INDUSTRIES LTD. 
v. 
TELEGAON DABHADE MUNICIPAL COUNCIL AND ORS. 
OCTOBER 6, 2004 
[ARIJIT PASAYAT AND C.K. THAKKER, JJ.] 
Maharashtra Municipalities (Octroi) Rules, 1968; Entries 14(a), (b), 49, 
53(c), 56, 86 and Rule 15(1) and (3): 
A 
B 
Levy of octroi on plastic powder, plastic component and glass refills- C 
Payment by assessee under protest-Municipal Council did not refund excess 
amount of duty paid by the assessee-High Court dismissed the writ petition 
filed by the assessee-On appeal, Held: Though goods are covered under 
Entry 56, yet reference to the Entry not made before High Court-Hence, 
High Court rightly dismissed the petition. 
D 
Sick Industrial Companies (Special Provisions) Act, 1985; Section 22 & 
166: 
Section 22-Recovery of octroi-Scope of-Held: Since question of 
recovery would arise only when Municipal Council could make an assessment E 
and quantification of the octroi duty on the imported raw material in question, 
provisions of Section 22 could be considered at that stage-Directions iisued 
Respondent No.I-Municipal Council levied octroi on raw-material, 
namely, plastic powder, plastic component and glass refills imported by 
Appellant-industry. Appellant had made payment of octroi under protest F ' 
and filed application before the authorities concerned for determination 
of correct amount of the duty and for refund of the differential amount. 
Since the authorities failed to refund the differential amount, a writ 
petition was filed by the appellant, which was dismissed by the High Court 
directing the appellant to pay the duty at correct rates applicable with G 
interest thereon for the relevant period. Hence the present appeal. 
It was contended for the appellant that the headings of the entries 
are relevant in the matter of levy of octroi; that since appellant was a sick 
industry, no recovery of the duty could be directed; that it should be left 
137 
H 
138 
SUPREME COURT REPORTS [2004] SUPP. 5 S.C.R. 
A open to the Municipal Council to decide whether interest could be charged 
on the amount of duty. 
Respondent No.I submitted that iri view of Entry 56, the levy is in 
order; that since duty was levied on ad hoc basis, the plea relating to 
recovery under Section 22 of the Sick Industrial Companies (Special 
B Provisions) Act is premature. 
Disposing of the appeal, the Court 
HELD: 1. The goods are clearly covered under Entry 56 of 
Maharashtra Municipalities (Octroi) Rules. However, no reference of the 
C Entry was made before the High Court. The view of the High Court is 
confirmed, though on a different basis. (141-G] 
2.1. The effect of Section 22 of Sick Industrial Companies (Special 
Rules) Act has to be considered only when there is a demand for recovery. 
The question of recovery would arise only when there is .i quantified 
D demand on assessment. However that stage has not reached. Therefore, 
it is open to the Municipal council to make an assessment and 
quantification of the octroi duty .p!lyable, if not already done. Only after 
the quantification is done an~ assessment made as provided in law, the 
question of recovery would atise. At that stage the effect of Section 22 of 
' 
E the Act could be consideted in the background of the decided cases. 
! 
(142-A, BJ 
F 
Real Value Applicance Ltd v. Canara Bank and Ors., (1998] 5 SCC 
554 and Rishabh Agro Industries Ltd v. PNB Capital Services Ltd, (2000) 5 
sec 515, relied on. 
2.2. It is open to the appellant to move the Municipal Council for 
waiver/remission of octroi duty in terms of Section 166 of the Act. The 
direction given by the High Court for payment of interest in terms of 
Section 166 of the Act shall not be the determinative factor to deny the 
waiver/remission if it is found entitled thereto. However, no opinion is 
G expressed on the appellant's entitlement to such waiver or remission. 
(142-D] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1388 of2004. 
From. the Judgment and Order dated 16.10.2003 of the Bombay High 
H Court in W.P. No. 295 of 1992. 
EAGLE FLASK INDUS.LTD. v. TELEGAON DABHADE MUNI. COUNCIL [PASAYA T, 1.113 9 
Ashish Dholakia, U.A. Rana, Madhup Singhal for M/s. Gagrat & Co. A 
for the Appellant. 
Subrat Birla and Subhash Chandra Birla for the Respondents. 
The Judgment of the Court was delivered 
ARIJIT PASAYA T, J. The challenge in this appeal is to the judgment 
rendered by a Division Bench of the Bombay High Court dismissing the writ 
petition filed by the appellant. Chal

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