HIRALAL THAKORLAL DALAL versus BROACH MUNICIPALITY & ORS.

Citation: [1976] SUPP. 1 S.C.R. 82 · Decided: 15-04-1976 · Supreme Court of India · Bench: A.N. RAY · Disposal: Appeal(s) allowed

Judgment (excerpt)

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82 
HIRALAL THAKORLAL DALAL 
v. 
IlROACH MUNICIPALITY & ORS. 
April 15. 1976 
[A. N. RAY, C.J., M. H. BEG, R. S. SARKARIA, P. N. SJIINGHAL AND 
JASWANT SINGH, JJ.] 
Bombay Municipal Boroughs Ac1· 1925 S. 73(i) (iv)-Scope-of-Octroi July 
-If could be le\lit!d-on-"through consignments". 
·Section 73(i)(iv) of the Bombay Municipal Boroughs Act 192.S empowers a 
municipal borough to impose octroi on animals or goods or both brought wit.hilt 
the octroi limits for consumption, use of sale therein. The appellant imported 
certain consignments of goods within the octroi Ii1nits of the municipality and 
exported them, the consignments being termed as "through consignments" or 
.. goods in transit" or .. goods for export'". 
Octroi duty was imposed on the 
goods and the appellant f.led a petition befo:re the High Court challen~ing the 
levy. The High Court held that the expression 'sale' used in the definition of 
"through consignments" in the rules had the same connotation as in the Sale of 
Goods Act and, lhe-refore, if a consignment was brought within the octroi 
limits and if the municipal authorities were satisfied that the consignment bad 
been brought in for the purpose of sale, then the consignment did not becom• 
a through consignment. 
Allowing the appeal to this Court. 
HELD : 
The law on the subject has been clearly laid down in Burmali 
Shell Oil Storage and Distributing Company (India) Ltd. 
v. 
The Belgaum 
Borough AJunicipality and the present case is governed by that decision. lt 
was held in that case that the company was liable to pay octroi on .goods 
brought into the local area. if t.he Roods are : 
(a) to be consumed by the Compan)I itself or sold by it to consumers 
direct and (b) for sale to dealers who in their turn sold the goods to consumers 
within the municipal area and irrespective .of \\o-hetlrer such consumer boush,t 
them for use in the area or outs de it; but it was not liable to octroi in respect 
of goods l'.-·hich were brouRhl into tf.e _tocal area and were re-exported. [86 C-D] 
Bu~nwh Shell O:I Stdrc.+ge and Distributing Co. India Ltd. v. The Be/gaurn 
Borou:xh 1\.funicipality [1963] Supp]. 2 S.C.R. 216, explained and 2pp1kd. 
CIVIL APPELLATG JURISDICTION : Civil Appeal No. 1823 
of 
1969. 
Apeal by Special Leave from the Judgment 11nd Order dated the 
27th/28th/30th January, 1967 of the Gujarat High Court in Special 
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Civil Application No. 163 of 1962. 
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B. R. Agarwa/a for the Appellant. 
I. N. Shroff for the Respondent•. 
Dr. L. M. Singhvi. Advocate Gmeral, Rajasthan, V. S. Da1•e . 
and S. M. Jain for Intervener, Mtt.licipal Council, Jodhpur. 
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The Judgment o( the Court was delivered by 
SmNGHAL, J.-This appeal by special 
ju0[Jnent o~ the Gujarat High Court &ted 
le:ivc uise. from ·the 
January 27, 28 .and 30, 
) 
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HIRALAL v. BROACH MUNICIPALITY (Shinghal, J.) 
8 3 
1967. The two petitioners before the High Court were firms trad-
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ing 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 
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" 
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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 thari those 
which could be called goods in transit. 
The amounts 
in 
dispute 
related to the levy of octroi under section 73(i) of the Bombay 
Municipal Boroughs Act, 1923, hereinafter called the Act, which 
provides as follows : 
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"73 (i) 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 :-
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(iv) an octroi on animals 
or 
goods 
or 
both, 
brought, within the octroi limits for consump-
tion, 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 
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that the rules contemplated that no refund was pa

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