w w w . L a w y e r S e r v i c e s . i n



The Municipal Corporation of Greater Bombay & Others v/s M/s. Gwalior Oil Mills & Others


Company & Directors' Information:- N K OIL MILLS PVT LTD [Active] CIN = U15201GJ1994PTC022669

Company & Directors' Information:- B P OIL MILLS LIMITED [Active] CIN = U15142UP1965PLC003232

Company & Directors' Information:- K P L OIL MILLS PRIVATE LIMITED [Active] CIN = U15142KL1983PTC003685

Company & Directors' Information:- N K B OIL MILLS PRIVATE LIMITED [Active] CIN = U15142KL1999PTC013095

Company & Directors' Information:- THE BOMBAY OIL PRIVATE LIMITED [Active] CIN = U15100MH1948PTC006179

Company & Directors' Information:- K K K OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15142KL2000PTC013621

Company & Directors' Information:- S N OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15142HR1986PTC025702

Company & Directors' Information:- G. B. OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15326HR1985PTC019817

Company & Directors' Information:- R. OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15141DL1992PTC047883

Company & Directors' Information:- J K OIL MILLS COMPANY LIMITED [Strike Off] CIN = U15143UP1955PLC002570

Company & Directors' Information:- N N OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15147MH1999PTC117989

Company & Directors' Information:- J & T OIL MILLS PRIVATE LIMITED [Strike Off] CIN = U15141KL2006PTC019754

Company & Directors' Information:- A AND R OIL MILLS PVT LTD [Strike Off] CIN = U15315CH1994PTC014265

    First Appeal No.86 of 1990 with First Appeal No.93 of 1990

    Decided On, 28 January 2008

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE ABHAY S. OKA

    For the Appellants: A.S. Rao, Advocate. For the Respondents: R1, R.T. Walawalkar, J.J. Xavier, Advocates.



Judgment Text

Oral Judgment:


1. The submissions of the learned counsel appearing for the parties were heard on the last date. These appeals can be conveniently disposed of by a common judgment and order.


2. First Appeal No.86 of 1990 and First Appeal No.93 of 1990 have been preferred by the Municipal Corporation of Greater Bombay (hereinafter referred to as the said Corporation) for taking an exception to common judgment and order dated 29th September, 1989 passed by the Additional Chief Judge of the Court of Small Causes at Bombay in Appeal No.104 of 1986 and First Appeal No.272 of 1986. The said two appeals were preferred by M/s.Gwalior Oil Mills (hereinafter referred to as the said Mills) under section 217 of the Bombay Municipal Corporation Act, 1888 (hereinafter referred to as the said Act). First Appeal No.863 of 1990 has been preferred by the said Mills for challenging the same judgment and order in so far as the Municipal Appeal No.104 of 1986 is concerned.


3. With a view to appreciate the submissions made by the learned counsel appearing for the parties, it will be necessary to refer to the facts of the case in brief. Both the appeals are filed by the said Mills. The Municipal Appeal No.104 of 1986 is preferred by the said Mills which relates to recovery of octroi from the said Mills for the period between 01st August, 1981 to 30th September, 1983. The prayer in the said appeal is for quashing and setting aside order dated 03rd April, 1986 passed by the Assessor and Collector of the said Corporation. The further prayer is for refund of a sum of Rs.17,98,403.72/- with interest thereon at the rate of 18% per annum.


4. According to the case of the appellant, they imported raw linseed oil and refined linseed oil within limits of the said Corporation from time to time during period from 01st August, 1981 to 30th September, 1983. According to the case made out by the said Mills in the Appeal No.104 of 1986, the recovery of octroi made by the Corporation during the said period was illegal. A reference has been made in the memorandum of appeal to the correspondence between the said Mills and the Municipal Corporation. A claim was made by the said Mills for refund of the octroi amount which according to the said Mills was recovered illegally from the said Mills by the said Corporation. The appeal challenges the order passed by the Assessor on 03rd April, 1986. It must be stated here that in so far as Municipal Appeal No.272 of 1986 is concerned, the octroi relates to a different period. The amount of octroi recovered by the Municipal Corporation which is subject matter of the said appeal is for period between 17th December, 1985 to 05th March, 1986 and the appeal has been preferred against an order dated 25th September, 1986 passed by the Assessor of the said Corporation. In the said appeal also, a prayer is made for quashing the said order and for refund of the octroi.


5. At this stage, it will be necessary to refer to certain orders passed by this Court in the Writ Petition filed by the said Mills. It appears that for seeking refund of the aforesaid octroi amount recovered by the Municipal Corporation a Writ Petition was filed in this Court, which was not entertained by the learned single Judge of this Court. In an appeal preferred by the said Mills for challenging the order of the single Judge, by order dated 11th October, 1986 a Division Bench directed that a speaking order shall be passed by the Assessor. Accordingly, a speaking order was passed by the Assessor and Collector on 03rd April, 1986 rejecting the claim made by the said Mills for refund. The appeal preferred before the Division Bench was disposed of order dated 11th April, 1986. The appeal was summarily dismissed. The Division Bench observed that the remedy of the said Mills consist either in filing appeal in the Court of Small Causes or a refund claim to the Municipal Commissioner. I am referring to the said order in detail in the later part of the judgment. In the appeals preferred by the said Mills various contentions were raised by the Municipal Corporation. One of the said contentions was that the appeals were not maintainable under section 217 of the said Act as the appeals were essentially against an order rejecting the claim of refund made by the said Mills. It was submitted that even assuming that the appeals were maintainable, separate appeals ought to have been preferred in respect of every cause of complaint i.e every demand of octroi. It was submitted that the appeals were barred by limitation. Various other contentions were raised on merits of the liability of the said Mills to pay octroi. By the impugned judgment and order, delay in preferring both the said appeals was condoned by the learned Additional Chief Judge of the Small Causes Court. By the same judgment and order, the appeals were partly allowed directing refund of the octroi amount together with interest thereon at the rate of 6% per annum. In one of the two appeals i.e Appeal No.104 of 1986 the claim for refund was partly held to be barred by limitation. Therefore, the said Mills has preferred First Appeal No.863 of 1990. The First Appeal No.86 of 1990 and First Appeal No.93 of 1990 are preferred by the Municipal Corporation for challenging the impugned judgment and order. In Appeal No.93 of 1990 there is a cross-objection filed by the said Mills.


6. Various submissions have been made before me by the learned counsel for the parties. The first submission made by the learned counsel appearing for the Municipal Corporation is that under section 217 of the said Act an appeal is maintainable against a ratable value or the tax fixed or charged under the said Act. He invited my attention to section 217 as well as section 218 of the said Act. He pointed out that the first two prayers in the appeals preferred by the said Mills are clearly not within the scope of Section 217. The first prayer is for setting aside an order made by the Assessor rejecting the claim for refund and the second prayer is for grant of refund. He submitted that obviously the said order was not appealable under section 217 read with section 218 of the said Act. Placing reliance on a decision of the learned single Judge of this Court in the case of Deputy Assessor and Collector and others Vs. M/s. Frizair Corporation (1984 (1) Bombay Cases Reporter Page 234) he submitted that the appeals were not maintainable in law. He submitted that even assuming that the appeals were against a tax, a separate cause of complaint arose favour of the said Mills on the basis of every demand for octroi made by the said Corporation when the goods were brought by the said Mills within the limits of the said Corporation from time to time. He submitted that in any event, an appeal under section 217 of the said Act has to be brought within 15 days after accrual of the cause of complaint. Inviting my attention to the relevant provisions of the Octroi Rules, 1965 he submitted that every time the octroi was recovered from the said Mills, a cause of complaint arose to prefer an appeal under section 217 of the said Act and therefore a separate appeal ought to have been filed in case of each demand separately made by the Municipal Corporation. He submitted that the appeals preferred by the said Mills in the present form were not maintainable in law. He pointed out that in case of Appeal No.104 of 1986 the refund is claimed in respect of different consignments brought into the limits of the said Corporation during the period between 01st August, 1981 to 30th September, 1983. He submitted that apart from the fact that appeal was not maintainable, it was barred by limitation as the same was preferred on 15th April, 1986. Similarly, he pointed out that in Appeal No.272 of 1986 the refund claim was as regards the octroi paid on consignments brought into corporation limits between 17th December, 1985 to 05th March, 1986 and the appeal was preferred on 13th October, 1986. He submitted that there was no provision in the said Act empowering the Court of Small Causes to condone the delay in preferring an appeal under section 217 of the said Act and therefore, the appeals were liable to be dismissed. It must be stated here that since the aforesaid contentions were raised which go to the root of the matter, I have not heard the counsel appearing for the parties on merits of the claim made in the aforesaid two appeals filed by the said Mills.


7. The submission of the learned counsel appearing for the said Mills is that a consistent stand was taken by the said Corporation in the Writ Petition and in the appeal preferred before the Division Bench for challenging the order passed in Writ Petition that the remedy available to the said Mills was by way of an appeal under section 217 of the said Act and therefore, it was not open for the Municipal Corporation to urge that the appeals were not maintainable. He invited my attention to the order dated 11th April, 1986 passed by the Division Bench of this Court in appeal and submitted that the issue of maintainability of the appeals under section 217 of the said Act has been already concluded by the said order of the Division Bench. He submitted that the challenge in the appeals preferred by the said Mills was in substance to the demand of octroi. He submitted that the demand was relating to consignments containing the similar goods and therefore, the said Mills could have preferred one appeal for challenging several similar demands. He submitted that in view of section 29 of the Limitation Act, 1963 the Court of Small Causes was possessing a power to condone the delay and therefore, the delay has been rightly condoned by the Court of Small Causes. He submitted that Court of Small Causes found that the levy of octroi was illegal and therefore after holding that levy of octroi was illegal, consequential order of refund has been passed. He submitted that in so far as Appeal No.104 of 1986 is concerned, entire claim of the said Mills ought to have been allowed. He has placed reliance on the decision of Division Bench of this Court in the case of Wandleside National Conductors Ltd.Vs.Municipal Corporation for the City of Pune and others (1989 Maharashtra Law Journal Page 755). He submitted that the levy of octroi by the Corporation was unconstitutional as the demand was in contravention of the Article 265 of the Constitution of India. As the demand was itself unconstitutional, the impugned judgment and order cannot be interfered with on the grounds of non-maintainibility of the appeal and bar of limitation.


8. Considering the submissions made, following points arise for my consideration:


(i) Whether the appeals preferred by the said Mills were maintainable under section 217 of the said Act?


(ii) If the appeals were maintainable, whether one appeal could have been preferred by the said Mills challenging the levy of octroi on various consignments brought into the city by the said Mills from time to time?


(iii) Whether there was a power vesting in the Court of Small Causes to condone the delay in preferring an appeal under section 217 of the said Act?


9. It will be necessary to refer to provisions of sections 217 and 218 of the said Act. The said sections read thus:


"217. Appeals when and to whom to lie.- (1) Subject to the provisions hereinafter contained, appeals against any rateable value or tax fixed or charged under this Act shall be heard and determined by the Chief Judge of the Small Cause Court.


(2) But no such appeal [shall be entertained] by the said Chief Judge, unless- (a) it is brought within fifteen days after the accrual of the cause of complaint;


(b) in the case of an appeal against a rateable value a complaint has previously been made to the Commissioner under section 163, and such complaint has been disposed of;


(c) in the case of an appeal against any amendment made in the assessment book under section 167 during the official year, a complaint has been made by the person aggrieved within fifteen days after he first received notice of such amendment, and his complaint has been disposed of:


(d) in the case of an appeal against a tax, or in the case of an appeal made against a rateable value [the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the dispute rateable value, up to the date of filing of the appeal, has been deposited by the appellant with the Commissioner.]


[(3) In the case of any appeal entertained by the Chief Judge, but not heard by him, before the date of commencement of the Maharashtra Municipal Corporations (Amendment) Act, 1975, the Chief judge shall not hear and decide such appeal, unless the amount of the disputed tax claimed from the appellant, or the amount of the tax chargeable on the basis of the disputed rateable value, as the case may be, upto the date of filing the appeal, has been deposited by the appellant with the Commissioner within thirty days from the date of publication of a general notice by the Commissioner in this behalf in the local newspapers. The Commissioner shall simultaneously serve on each such appellant a notice under sections 484 and 485 and other relevant provisions of this Act, for intimating the amount to be deposited by the appellant with him.


(4) As far as possible, within fifteen days from the expiry of the period of thirty days prescribed under sub-section (3), the Commissioner shall intimate to the Chief Judge the names and other particulars of the appellants who have deposited with him the required amount within the prescribed period and the names and other particulars of the appellants who have not deposited with him such amount within such period on receipt of such intimation, the Chief Judge shall summarily dismiss the appeal of any appellant who has not deposited the required amount with the Commissioner within the prescribed period.


[(5) In the case of any appeal against any rateable value of property tax fixed or charged under this Act, which have been entertained by the Chief Judge before the commencement of the Act aforesaid or which may be entertained by him after the said date the Chief Judge shall not heard and decide such appeal unless the property tax, if any, payable on the basis of the original rateable value plus eighty per centum, of the property tax claimed from the appellant on the increased portion of the rateable value of the property out of the property tax claimed under each of the bills, which may have been issued, from time to time, since the filling of appeal, is also deposited with the Commissioner within the period prescribed under the Act. In case of default by the, appellant, on getting an intimation to that effect from the Commissioner, at any time before the appeal is decided, the Chief Judge shall summary, dismiss the appeal;


Provided that, in case the appeal is decided in favour of the Corporation, interest at 6.25 per centum per annum shall be payable by the applicant on the balance amount of the property tax from the date on which the amount of property tax was payable:


Provided further that, in case the appeal is decided in favour of the appellant and the amount of property tax deposited with the Corporation is more than the property tax payable by him, the Commissioner shall adjust the excess amount of the property tax with interest at 6.25 per centum per annum from the date on which the amount is deposited with the Corporation towards the property taxes payable thereafter.]


218. Cause of complaint when to be deemed to have accrued.- For the purposes of the last preceding section, cause of complaint shall be deemed to have accrued as follows, namely:-


(a) in the case of an appeal against a rateable value, on the day when the complaint made to the Commissioner under section 163 against such value is disposed of;


(b) in the case of an appeal against any amendment made in the assessment book, under section 167, during the official year, on the day when the complaint made to the Commissioner by the person aggrieved against such amendment is disposed of;


(c) in the case of an appeal against a tax, on the day when payment thereof is demanded or when a bill therefor is [served].


10. It will be also necessary to refer to Rules forming part of the Octroi Rules, 1965 of the Corporation. Rule 12 of the said Rules is relevant which lays down the procedure for recovery of octroi. Rule 12 reads thus:


"12. Procedure.


In respect of articles liable to Octroi imported by road, the Octroi Inspector shall direct the importer to fill in an application to pay octroi Form ?A? and an Octroi Import Bill on Form ?B? annexed to these rules. The importer shall submit these forms together with the original invoice to the Octroi Inspector who shall check the particulars of the articles mentioned in the said documents with the articles themselves and shall determine the weight or the value of the articles in accordance with the provisions of these rules. The Octroi Inspector shall thereafter demand in cash from the importer the amount of octroi due and on receipt of the same prepare octroi receipt in duplicate in the form provided by the Commissioner and sign form ?B? and register the same in a Register to be maintained for the purpose. The original octroi receipt and the form ?B? shall then be handed over to the importer who shall thereafter be allowed to take the articles into Greater Bombay".


11. The other Rule which is relevant for deciding the questions involved in the appeals is Rule 26 which reads thus:


"26. Repayment or refund of Octroi paid wrongly or in excess.


When octroi has been wrongly recovered or has been recovered in excess through inadvertence, error, misconstruction, misinterpretation or any other reason on the part of the Municipal Octroi staff or that of the agents appointed by the Commissioner under Section 213 of the Bombay Municipal Corporation Act. Such excess may be refunded to the importer provided that a claim for such refund accompanied by the original invoice, octroi import bill, octroi receipt if any is lodged in the office of the Deputy Assessor and Collector (Octroi) within a period, of three months from the date of such recovery or within such longer period as the Commissioner may in any special case or class of cases allow. The said officer may, after being satisfied about the correctness and genuineness of the claim, grant refund of octroi wrongly recovered or recovered in excess".


12. Under the Rule 12, when articles liable to octroi are imported by road, the importer has to fill in an application to pay octroi Form ?A? and an octroi import bill in Form ?B?. The importer has to submit the said forms together with the original invoices to the Octroi Inspector who checks the particulars of the articles mentioned in the said documents with the articles themselves. He thereafter determines the weight or value of the articles in accordance with the provisions of the Rules. The Octroi Inspector has to thereafter demand in cash from the importer the amount of octroi due and on receipt of the same, prepare octroi receipt in duplicate form. After receiving the cash amount, the Octroi Inspector has to hand over the original receipt and Form B to the importer who thereafter becomes entitled to take the articles within the limits of the city.


13. Under section 217 of the said Act, an appeal is provided against any ratable value or tax fixed or charged under the said Act. In the present case we are not dealing with any ratable value and we are dealing with octroi which is a tax charged under the said Act The sub-section 2 of section 217 provides for a period of limitation and certain other constraints. Clause (a) thereof is relevant. It provides that no appeal shall be entertained by the Court unless it is brought within 15 days after the accrual of cause of complaint. The section 218 of the said Act provides that in case of an appeal against tax, the cause of complaint shall be deemed to have accrued on the day the payment thereof is demanded or when a bill therefor is served.


14. In case of octroi payable on the goods imported in the city, as per Rule 12 referred to above, the octroi is demanded at the entry point of the city by the Octroi Inspector and same is to be paid at the entry point against which a receipt is to be issued by the Octroi Inspector. Therefore, the cause of complaint within the meaning of section 218 will arise on the day when a demand for payment of octroi is made by the Inspector at the entry point. Thus, a separate cause of complaint arises when the octroi is demanded while importing every consignment. Clause (a) of sub-section 2 of section 217 provides that appeal shall not be entertained unless it is brought within 15 days of the accrual of the cause of complaint. Thus, in a case dealing with octroi, the appeal has to be preferred within the period of 15 days from the date on which the octroi is demanded and paid.


15. At this stage it will be necessary to refer to the memorandum of the appeal purportedly preferred by the said Mills under section 217 of the said Act. For the sake of convenience, I am referring to the memorandum of appeal in Municipal Appeal No.104 of 1986. It is not in dispute that except the period for which octroi is recovered and the date of the order passed by the Assessor, there is no difference between the prayers made in both the appeals. The prayers in Appeal 104 of 1986 read thus:


"The Appellant, therefore, prays:- (The prayers are without prejudice to one another)


(a) the impugned order dated 03.04.1986 passed by Shri D.R.Joshi, the Assessor and Collector, in charge, be set aside and cancelled;


(b) The respondent Nos.1 and 2 be ordered and directed to refund to the Appellant the said sum of Rs.17,98,403.72 for the period from August 1, 1981 to September 30, 1985 with interest @ 18% per annum from the respective dates of collection till refund, and further amount collected from the appellant from October 01, 1985 onwards with interest at 18% per annum from the respective dates of collection till refund".


At this stage, it will also be necessary to refer to paragraph No.59 of the memorandum of appeal which reads thus:


"59. Being aggrieved by the said order dated 03.04.1986, passed by Shri D.R. Joshi, Assessor and Collector, in-charge, Bombay Municipal Corporation, Bombay, the Appellant begs to file the present Appeal under section 217 of the Bombay Municipal Corporation Act, 1888 for the reliefs prayed for hereunder, on the following amongst other grounds (the grounds being without prejudice to one another)."


Thus, the challenge in the appeal is not to a demand for tax but to an order rejecting a prayer for refund.


16. It will be necessary to refer to an order passed by the Division Bench of this Court in Appeal No.161 of 1986. In order dated 11th March, 1986 what has been observed by the Division Bench is as under:


"An Appeal can only lie from a speaking decision and not a mere determination or adjudication without supporting reasons. The Assessor or the Officer empowered by the Assessor must either pass an speaking order of must tile an affidavit indicating positively the reasons which weighed with the concerned Officer or the Department in rejecting the contentions of the Appellant. Such affidavit will then be treated as the order of the Assessor. A copy of the same to be given to the Advocate for the Appellants by 5 p.m on 04th April, 1986.


Mr Dalal says that the Municipal Corporation (Assessor is prepared to give an opportunity to the Appellants to make personal submissions or submissions through an Advocate on the pleas to be considered and for that purpose fixes hearing on the 21st March, 1986 at 3 p.m in the office of the Assessor".


On the basis of the said order, written submissions were filed by the said Mills on 21st March, 1986. Perusal of the written submissions shows that a demand was made for refund of the octroi levied, charged and collected from the said Mills for the period from 01st August, 1981 to 30th September, 1983 totally amounting to Rs.17,98,403.73/-. The other submission made therein is that Rule 26 of Octroi Rules was ultra virus the provisions of the Constitution of India. The order dated 03rd April, 1986 was passed by the Assessor and Collector which has the result of rejecting the prayer made by the said Mills for grant of refund.


17. It will be also necessary to refer to the final order passed by the Division Bench in the appeal. The said order was made on 11th April, 1986. The said order of the Division Bench reads thus:


". We have not been impressed with the argument on behalf of the Appellant that the Appellant should not be driven to the remedy provided under the Municipal Act read with the Octroi Rules, 1965, which remedy would consist either in filing an appeal in the Court of Small Causes or a refund claim to the Municipal Commissioner. It has been urged that the period fixed of three months under Rule 26 of the Octroi Rules is ultra vires. But apart from submitting that any period cannot be fixed, we have heard no argument as to why or how the said provision could be ultra vires. It has been submitted that the provision of an alternative remedy would not bar the jurisdiction of this Court under Article 226 of the Constitution which can be invoked in appropriate cases. We have no quarrel with the proposition.


It has been urged finally that the position as to the Appellant?s remedy is not clear and this Court should decide as to whether the proper thing for him to do is to make an application for refund under Rule 26 or file an Appeal to the court of Small Causes. It is no part of the Court?s duty to advise the Appellant as to his remedy under the law or Rules. It has also been submitted that filing of many refund applications and/or many Appeals would involve multiplicity of proceedings. This is normal in such cases and merely because several consignments are being imported by the Appellant and several claims for refund or Appeals would have to be preferred cannot be factor for allowing the Appellant to invoke the Writ Jurisdiction of the High Court.


In this view of the matter, we dismiss the Appeal summarily."


(Emphasis supplied)


Thus, the Division Bench has noted that a submission was made on behalf of the said Mills that the position as to remedy available was not clear and this Court should decide as to whether proper thing for the said Mills was to make an application for refund or to prefer an appeal in the Court of Small Causes. This Court declined to answer the said submission by observing that it is not part of the court?s function to advise the litigant as to his remedy under the law. This Court noted that in such a case it is inevitable that several appeals will have to be filed as several consignments were imported by the said Mills.


18. At this stage, it will be necessary to refer to a decision of the learned single Judge of this Court in the case of M/s. Frizair Corporation (supra). The learned single Judge of this Court was dealing with an order made by the Court of Small Causes in appeal preferred under section 217 of the said Act. In the case of the appeal before the learned single Judge, the appellant in the appeal under section 217 had made applications under Rule 26 of the Octroi Rules for refund of a part of the octroi recovered. The said applications were rejected by the Deputy Assessor of the said Corporation by order dated 09th March, 1977 and the appeals were filed for challenging the said order dated 09th March, 1977. The learned single Judge in the said decision also referred to accrual of cause of complaint in case of recovery of octroi by the Municipal Corporation. In paragraph No.18 of the said decision, the learned single Judge held thus:


"18. Firstly, there was no basis for the respondents? contention that the officer at the Octroi Naka was merely doing an administrative act of collecting octroi duty. It was not the case that under whatever item of the Schedule the respondents placed their goods, the officer at the octroi naka just had to accept it an merely collect octroi on that basis. If that were so no cause would arise for refund of octroi on the ground of error, misconstruction or misinterpretation. As a matter of fact, in this case although the respondents had claimed that their goods were ?machinery? falling under item 50, the officer had charged and collected octroi from them on the basis of the goods being ?appliances? falling under item 52. The basis of the respondents? application for refund was also that the officer at the Naka had wrongfully collected excess octroi from them because of error, misinterpretation or misconstruction. In my view, therefore, it was clear that at the Octroi Naka, when the respondents? goods entered the jurisdiction of the Bombay Municipal Corporation, it was the officer of the Corporation being so empowered by the Municipal Commissioner who fixed, demanded and charged the tax, octroi being always payable on demand and collected it. The cause of the complaint for the respondents as envisaged under section 218 of the said Act arose at the time when such tax was demanded at the Naka and the time of 15 days mentioned under section 217 of the said Act would begin to run from that date only.


19. Further contention of the learned Counsel for the respondent was the period of limitation of 15 days for appeal, provided by section 217 (2)(a) of the said Act, was to be calculated from the date of rejection of the respondents? application for refund. The said contention is based on the premise that the officer at the Octroi Naka was an agent merely for collection of octroi and nothing more which I have negatived above. As is evidenced from the refund applications of the respondents made under Rule 26 of the Octroi Rules, the basis of the said application against the officer was for having wrongfully demanded, charged and collected excess octroi as a result of error or misinterpretation or misconstruction. The making of an application for refund was discretionary and there was no provision either in the Act or in the Rules making the filing of an application for refund a condition precedent to the filing of an appeal under section 217. There does not appear to exist any nexus between the two proceedings one being application for refund and the other being filing an appeal, both other. being independent of each other." (Emphasis supplied)


19. The learned single Judge also rejected an argument made that by passing an order on refund application, tax was fixed by the Deputy Assessor giving a cause of complaint to prefer an appeal under section 217. The learned single Judge also observed that making wof an application for refund under Rule 26 was discretionary and there was no provision either in the Act or in the Rules for filing of an application for refund as a condition precedent to the filing of an appeal under section 217 of the said Act. The learned single Judge also held that there does not appear to exist any nexus between the two proceedings, one being application for refund and the other being filing of an appeal as both are independent of each other.


20. Thus, going by the said decision of the learned single Judge, in the present case the cause of complaint for preferring an Appeal as under section 217 of the said Act arose at the time when the octroi was demanded at the octroi naka and thus time of fifteen days mentioned in clause (a) of sub-section 2 of section 217 began to run from the aforesaid dates of demand.


21. In any case the challenge in both the Municipal Appeals subject matter of these First Appeals was not to a tax but to an order rejecting an application for refund. The rejection of the said application did not give a cause of complaint to prefer an appeal under section 217 of the said Act. The said Mills ought to have preferred separate appeals under section 217 of the said Act for challenging every demand of octroi within a period of 15 days from the date of demand ma

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de at the Octroi Naka against every consignment. However, such appeals were not preferred by the said Mills. There is no appeal provided under section 217 of the said Act or under any other provision of the said Act against an order rejecting an application for refund of octroi. An appeal is always a creation of the statute. Therefore, both the municipal appeals filed by the said Mills being against an order rejecting a prayer for refund were not maintainable under section 217 of the said Act. Even assuming that the demand for the octroi already recovered was unconstitutional being contrary to Article 265 of the Constitution of India, in the appeals which were not maintainable in law, the said contention cannot be gone into. Moreover, the said Mills was required to prefer separate appeals against every separate demand made of Octroi from time to time. 22. The learned counsel for the said Mills has placed reliance on a decision of Division Bench of this Court in the case of Wandleside National Conductors Ltd (supra). This Court dealt with provision of section 406 of the Bombay Provincial Municipal Corporation Act, 1949 which is to a great extent pari materia with section 217 of the said Act. The said decision will not help the said Mills as the controversy involved before Division Bench was totally different. By filing a Writ Petition under Article 226 of the Constitution of India, levy of octroi on certain items relating to copper and aluminium was challenged before the Division Bench. In the said Writ Petition the issue which is involved in the present appeals regarding maintainability of an appeal against an order rejecting the claim for refund did not arise. Therefore, the ratio of the said decision has hardly any relevance to the present cases. 23. Considering the challenge in the memorandum of appeals preferred by the said Mills, it was obvious that the said appeals were not maintainable under section 217 of the said Act as the said appeals cannot be treated as appeals against tax fixed or charged under the said Act. As pointed out earlier, in substance the appeals were for challenging the order declining the grant of refund of octroi. 24. As the appeals preferred by the said Mills were not maintainable in law, it is not necessary to deal with the submissions made regarding the bar of limitation etc. Only on the ground that the appeals preferred by the said Mills were not maintainable, the impugned judgments and orders deserve to be quashed and set aside. 25. Hence, I pass the following order: (i) The First Appeal No.86 of 1990 and First Appeal No.93 of 1990 are allowed. The impugned judgment and order dated 29th September, 1989 is quashed and set aside and Appeal Nos.104 of 1986 and 272 of 1986 stand dismissed. (ii) The cross-objection filed in First Appeal No.93 of 1990 stands dismissed. (iii) The First Appeal No.863 of 1990 is also dismissed. (iv) There will be no orders as to costs. At this stage, the learned counsel appearing for M/s. Gwalior Oil Mills prays that the Municipal Corporation should be restrained from encashing the bank guarantees submitted by the said Mills to this Court. The said prayer is opposed by the counsel for the Municipal Corporation. Considering the facts and circumstances of the case, the respondent-corporation will not encash the bank guarantee for a period of 16 weeks from today subject to condition that the bank guarantees shall be kept alive by M/s.Gwalior Oil Mills for a period of 14 weeks from today.
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