NAGAR MAHAPALIKA BAREILLY versus STATE OF U.P. & OTHERS

Citation: [1988] 2 S.C.R. 865 · Decided: 02-02-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

Judgment (excerpt)

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NAGAR MAHAPALIKA BAREILLY 
A 
v. 
STATE OF U.P. & OTHERS 
FEBRUARY 2, 1988 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
B 
U.P.Nagar Mahapalika Adhiniyam, 1959: Section 172 (2)(b) and 
Notification dated April 30, 1986, Schedule Class III Item No. 7 & 
Class VI Item No. 6-'Foreign imported liquor and all kinds of wine 
made in India' -Interpretation of-Levy and realisation of octroi-
Taxable event is entry-Nature and type of goods the relevant factor-
C 
Country spirit/rectified spirit-Levy of octroi duty. 
Statutory Interpretation: Taxing Statute-Taxable items mentwned 
in Schedule to enactment-Court to give meaning intended by framers 
of schedule-All items in one group to be considered in a generic sense. 
The Nagar Mahapalika, Bareilly petitioner imposed octroi duty 
on goods brought within its limits for 'consumption, use or sale therein' 
through a Notification dated April 30, 1986 in exercise of powers under 
section 172(2)(b) of the U.P. Nagar Mahapalika Adhiniyam, 1959. In 
the Schedule forming part of this notification are mentioned the articles 
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on which octroi duty is payable and the rates thereof. The articles have 
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been grouped together in different classes from Class I to Class X. Class 
III which hears the Heading "Articles of lighting, fuel, washing and 
lubricants contains the entry Item No. 7 as "7. Methalated denatured 
and rectified spirit-Rs.0.05 per litre." Class VI with the heading 
"Tobacco and other intoxicating goods" contains the entry at Item 
No. 6: as "6. Foreign imported liquor and all kinds of wines made in 
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India-Re. I per litre." 
Kasturi Lal Satantra Kumar and his partner-respondents 3 and 
4 by a bid in the auction held for retail vend of country liquor for the 
excise year 1987--SS ending on March 31, 1988 obtained the necessary 
licence under the U.P. Excise Act for a group of shops in the district of G 
Bareilly. One of the conditions of the auction which also formed part of 
the licence was that the licensee would obtain supply of country liquor 
for retail vend from the bonded warehouse in respect of Bareilly 
district. 
The Nagar Mahapalika sought to realise octroi duty on the 
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865 
866 
SUPREME COURT REPORTS 
[1988) 2 S.C.R. 
A 
country spirit supplied by the bonded warehouse at the rate of Re. l per 
litre treating it to be 'liquor fit for human consumption' under Entry 6 of 
Class VI of the Notification. 
B 
c 
The respondents filed a writ-petition for a direction to restrain the 
N agar Mahapalika from collecting octroi at the rate of Re .1 per litre 
contending that. country spirit is nothing but rectified spirit and that 
octroi duty could not be charged in excess of Rs.0.05 per litre under 
Item No. 7 of Class III of the Notification. 
The High Court allowed the writ petition and restrained the 
Nagar Mahapalika from requiring payment of octroi duty at Re. l per 
litre upon the country spirit brought within its limit under Item No. 6 of 
Class VI of the Schedule to the Notification. 
Dismissing the SLP of the Nagar Mahapalika, this Court, 
HELD: l. The taxable event for the imposition of octroi is the 
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entry, and the nature and type of the goods at the point of entry on the 
relevantfactors. [870A) 
2. The normal meaning of the expressions "foreign imported 
liquor or all kinds of wine made in India" would not fit in the descrip-
tion of the rectified spirit. Ordinary people would not consider rectified 
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spirit to be 'foreign imported liquor or all kinds of wines made in 
India'. That is not the natural meaning as understood by common 
people. That is the yardstick by which this should be judged. The dic-
tionary meaning also corresponds to the same view. [868E-F] 
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3. While giving a meaning to an Item contained in the Schedule of 
articles, the Court should normally give it a meaning intended by the 
framers of the Schedule by looking at the various articles mentioned in 
a particular group. All the items in one group should be considered in a 
generic sense. l868H; 869A) 
In the instant case, having regard to the nature of the duty and the 
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type of the goods, rectified spirit is dutiable at the rate of Rs.0.05 per 
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litre and not on the basis that it was 'foreign wine or liquor.' l870B) 
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State of U.P. and others v. Synthetics and Chemical Ltd. etc. etc., 
A.I.R. 1980 S.C. 614, referred to. 
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Heeralal and others v. State, A.I.R. 1979 Rajasthan 133, 
approved. 
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NAGAR MAHAPALIK

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