Union Of India (Uoi) And Anr. vs State Of Maharashtra And Anr.
2007 Latest Caselaw 867 Bom

JUDGMENT

Naresh H. Patil, J.

1. These four writ petitions are filed by Union of India and another. These petitions could be categorized in two different sets. In Writ Petition Nos. 4035 of 1993 and 164 of 1994, the petitioners pray for directions to respondent No. 2 Aurangabad Municipal Corporation (for short "Corporation") not to realise octroi from the petitioners when the goods certified by the competent officer as contemplated under Section 146(2) of the Bombay Provincial Municipal Corporations Act, 1949 (for short the "Act of 1949") are brought within the limits of Corporation. In Writ Petition No. 164 of 1994 the petitioners sought direction against the respondent Corporation restraining it from detaining the goods for the purpose of payment of octroi which would be brought within the limits of Corporation as property of Union of India.

2. In Writ Petition Nos. 4070 of 1994 and 1330 of 1995 the goods were brought within the limits of respondent Corporation by the petitioners and octroi was also paid. In these two petitions, the petitioners claim refund of the said octroi.

3. It is stated across the bar by the learned Counsel appearing for petitioners that in Writ Petition Nos. 4035 and 164 of 1994 goods i.e. steel and electronic items were brought within the limits of Corporation but the Corporation could not demand octroi as the petitioners were protected by this Court by way of interim relief. This factual position is not disputed by the learned Counsel appearing for the contesting respondent.

4. The contentions of the petitioners in all these petitions are that the Department of Telecommunications is being run under the Ministry of Telecommunications, Government of India. Under the provisions of Article 285 of Constitution of India, the property of the Union was exempted from all taxes imposed by a State or by any authority within a State. The Telecom Division of the concerned area had undertaken the construction/expansion of Telephone Exchange. For the purposes of construction, certain goods were imported and brought within the limits of Corporation by the petitioners. The Corporation demanded octroi on the goods which were to be brought within the limits of Corporation. The petitioners resisted the said demand mainly on the ground that it being the property of Union of India, it is saved and exempted from payment of taxes imposed by local authority like the Municipal Corporation. Heavy reliance was placed on provisions of Article 285 of the Constitution of India for the said purpose.

5. Affidavits in reply were filed by the Corporation in all the petitions. The Corporation raised serious objection to the locus standi of the Executive Engineer, Telecom Civil Division, Aurangabad to file these petitions on behalf of Union of India, Department of Telecommunications. The grievance of the Corporation is that in cases of the articles imported within the municipal limits of Aurangabad city, the initial document produced at the import Naka by the transporter shows the names of the consigner and consignee. The articles do not accompany with a certificate of the Central Government Authority having a declaration that the property belongs to Central Government/Union of India. It was further averred that in the fact-situation of the case, declaration in form 'N' by the authority/officer of the Telecommunications Department would not be sufficient as further certification of the transaction and proof was required to claim exemption by the petitioners on the goods brought within the Corporation limits. It is also submitted that the petitioners will have to first pay the octroi and thereafter claim exemption, after the Corporation is satisfied that the goods are property of the Union of India on which exemption is required to be granted.

6. The learned Counsel Shri Alok Sharma appearing for petitioners had referred to the provisions of Section 146 of the Act of 1949 under which exemptions of articles belonging to Government are claimed and granted. In the submissions of counsel, the property, which is brought within the limits of Corporation under these cases, was to be used for the construction of Telephone Exchange. Therefore, the petitioners were entitled to claim exemption of octroi on the import of such goods, which was permissible even under the provisions of Section 146 of the Act of 1949. The learned Counsel submitted that the petitioners are ready and inclined to follow the procedure as set out and incorporated in the Act of 1949, the rules and bye-laws framed by Corporation seeking exemption of octroi taxes in individual cases.

7. The provisions of Article 285 of the Constitution of India read thus:

285. Exemption of Property of the Union from State taxation: (1) The Property of the Union shall, save insofar as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.

(2) Nothing in Clause (1) shall, until Parliament by law otherwise provides, prevent any authority within a State from levying any tax on any property of the Union to which such property was immediately before the commencement of this Constitution liable or treated as liable, so long as that tax continues to be levied in that State.

8. The provisions of Section 146 of the Act of 1949 read thus:

146. (1) No octroi shall be leviable on any article which, at the time of its importation, is certified by an officer empowered by the Government concerned in this behalf to be the property of Government to be used or intended to be used solely for public purposes and not to be used or intended to be used for purposes of profit.

(2) If any article on which octroi is paid is imported under a written declaration signed by the importer that such article is being imported for the purpose of fulfilling a specified contract with the Government or otherwise for the use of the Government, the full amount of the duty paid thereon shall be refunded on production at any time within six months after importation, of a certificate signed by an officer empowered by the Government concerned in this behalf certifying that the article so imported has become the property of Government is used or intended to be used solely for a public purpose and is not used or intended to be used for purposes of profit.

9. There cannot be any dispute on the proposition that the property of the Union is exempted from all taxes imposed by the State or any authority within a State. Under the provisions of Section 146 of the Act of 1949, a provision is made to the effect that octroi shall not be leviable on any article which, at the time of its importation, is certified by an officer empowered by the Government concerned to be the property of Government to be used or intended to be used solely for public purposes and not to be used or intended to be used for purposes of profit. This provision makes it clear that the petitioners will have to certify such import of goods and satisfy the officer of the Corporation regarding the purpose for which the goods were brought within the Municipal Corporation's limits and the property belongs to the Union of India. There is no dispute even on the point that Telecommunications Department is run by the Ministry of Government of India and is entitled, in the given case, to seek such exemption of octroi.

10. The learned Counsel appearing for Corporation submitted that a procedure is prescribed for seeking exemption from payment of octroi. Schedule 'N' is a certificate for exemption from Octroi to be furnished by the Local Authority. Certain details are required to be furnished under different columns under the said format. Schedule 'N' is as under:

SCHEDULE 'N'

Certificate for exemption from Octroi to be furnished by the local Authority.

Certified that the below mentioned goods belong to and are imported by__________(give here the name of the Local Authority) and be used or intended to be used for purposes of profit or for any commercial undertaking or for sale to the public or any person or persons.

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Serial      RR  No.      No. of   Descripti    Weight      Sender's    Remarks if
No.         and date     Pack     on of the                full name   any (to be
            STR No.      ages.    goods.                   and         filled in by
            and date                                       address.    the import
            & vehicle                                                  Naka
            No.                                                        Officer)
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Date                  Stamp of the Local Authority       Signature of the Chief
Address                                                  Executive Officer of the
                                                         Local Authority or of any
                                                         other Officer who is
                                                         empowered in this behalf by
                                                         the said Chief Executive
                                                         Officer.
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11. We, therefore, hold that in all these petitions, in cases where the petitioners have brought the goods within the limits of Corporation, after paying octroi, the petitioners are entitled to claim refund of said octroi paid by the petitioners to the Corporation in accordance with law and subject to compliance of necessary requirements of law.

12. In cases where the petitioners did not pay octroi on the goods brought within the Corporation's limits, the petitioners shall seek exemption from paying octroi in accordance with law and Rules framed by the Corporation.

With these observations, the petitions are disposed of. Rule made absolute in the above terms. No costs.