THE MUNICIPAL COMMISSIONER, THANE AND ANOTHER versus H. AND R. JOHNSON (INDIA) LTD. AND ANOTHER

Citation: [1996] SUPP. 4 S.C.R. 301 · Decided: 06-08-1996 · Supreme Court of India · Bench: S.P. BHARUCHA, K.T. THOMAS · Disposal: Dismissed

Judgment (excerpt)

THE MUNICIPAL COMMISSIONER, THANE AND ANOTHER 
A 
v. 
H. AND R. JOHNSON (INDIA) LTD. AND ANOTHER 
AUGUST 6, 1996 
(S.P. BHARUCHA AND K.T. THOMAS, JJ.] 
B 
Municipalities : Maharashtra Municipalities Act, 196~Section 
JO~Maharaslztra Municipalities (Octroi) Rules, 196/f-Enoy 45 and 47 of 
Schedule-I-Clay-import of-Levy of octroi duty on-Held, clay falls under 
Entry 47 of Schedule I of the Rules-Hence octroi duty at lower C 
rate-Municipal C01poration failed to prove that clay is "stone powder" under 
Ent1y 45 attracting higher rate of duty-Plea that refund would erode financial 
position of the Municipal Corporation not accepted-Refund ordered by the 
High Cowt upheld. 
Words and Phrase;-!'Clay'Yfeaning of in the context of Maharashtra D 
Municipalities (Octroi) Rules, 1968. 
The respondent imported clay for manufacturing ceramic tiles. The 
Municipal Corporation was empowered to levy octroi duty on the goods 
brought into the territorial limits of Municipal Corporation. RespJndents E 
were liable to pay octroi duty at the rate of Re. 1 as "clay" being "earth of 
any other kind" falls under Entry No. 47 of the Schedule. But the Municipal 
Corporation insisted on payment of higher octroi duty as "clay" was stone 
powder under Entry 45 of the Schedule. The Respondents filed a petition 
in the High Court. The High Court held that "clay" falls within Entry No. 
47 and directed the appellant Corporation to refund the excess amount F 
collected. Aggrieved by the order of the High Court, the present appeal is 
preferred by the Municipal Corporation. 
Dismissing the appeal, this Court 
HELD : 1. There is no merit in the contention of the appellant G 
Corporation that the "clay" imported by respondents must be kept outside 
the ambit of Entry 47 of Schedule I of the Maharashtra Municipalities 
(Octroi) Rules. The burden was on the appellant Corporation to show that 
clay imported by the respondent was stone powder when they insist on the 
application of higher duty. But no material has been produced by the H 
301 
302 
SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R. 
A 
appellant either before the High Court or before this Court in proof of 
their stand. [304-F; 305-A] 
B 
c 
2. The plea of the appellant Corporation that refund would badly 
erode its financial position cannot be accepted. Levy '~'as coH~cted under 
interim orders of the High Court wherein it was specifically ordered that 
in case the petitioner succeeds, the Corporation would refund the excess 
duty. Parties are bound by the order. [305-B-E] 
State of West Bengal and Otlte1:< v.Jagdamba Prasad Singh and Others, 
AIR (1969) Cal. 281 and Mis. Amar Singh Modi/al v. State of Ha1ymw and 
Others, AIR (1972) Punjab and Haryana 356, distinguished. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2185 of 
1993. 
From the .I udgment and Order dated 3.2.93 of the Bombay High 
D Court in W.P. No. 6037 of 1991. 
E 
A.M. Khanwilbr for the Appellants. 
D.A. Dave, Sanjay Karol and Ms. Meenakshi Arora for the Respon-
dents. 
The Judgment of the Court was delivered by 
THOMAS, J. The question to be determined in this appeal has boiled 
down to a very narrow compass , whether the "clay" imporled by the 
respondents for manufacturing ceramic tiles can be brought within the 
F 
ambit of the item described as "earth of any other kind", in Entry No. 47 
of Class IV of Schedule I of the Maharashtra Municipalities (Octroi) 
Rules, 1968, (for short 'the Rules'). Respondents contended that the clay 
imported by them falls within the said category which contention was 
found favour with the High Court of Bombay in the writ petition filed by 
G the respondents. The said decision is now being challenged in this appeal. 
The question came up through the facts of this case which are 
summarised as follows : 
Respondents are manufacturing ceramic tiles in their factory situated 
H within the limits of Thane Municipal Corporation (Maharashtra State). The 
MUNICIPAL COMMR. v. HAND RJOHNSON (I) LTD. [THOMAS, J.] 303 
main ingredient used for the said product is clay which respondents get A 
down from Rajasthan and Andhra Pradesh. Under Section 105 of the 
Maharashtra Municipalities Act, 1965, the municipal corporation is em-
powered lo levy octroi duty on the goods brought into the territoriai limits 
of the muni,cipal corporation at a rate not exceeding the maximum limit 
prescribed by the Rules. Goods are classified in Schedule I of the Rules 
for fixing different rates of octroi duty. In this cas

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