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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Yashoda Nandan and Har Nandan Prasad
  • Ambika Prasad and Raja Ram Agarwala
Judges
  • Hon'ble Mr. Gopalji Mehrotra
Acts
  • provisions of the Municipalities Act and the Municipal Account Code. Sec. 128 of the Municipalities Act
  • Sec. 296 of the Municipalities Act. Paragraph 131 of the Municipal Account Code
  • Rule 159 of the Municipal Account Code
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Yashoda Nandan and Har Nandan Prasad
  • Ambika Prasad and Raja Ram Agarwala
Judges
  • Hon'ble Mr. Gopalji Mehrotra
Acts
  • provisions of the Municipalities Act and the Municipal Account Code. Sec. 128 of the Municipalities Act
  • Sec. 296 of the Municipalities Act. Paragraph 131 of the Municipal Account Code
  • Rule 159 of the Municipal Account Code
See more information ...
Smart Summary

Structured Summary of the Opinion — Mehrotra, J.

Factual and Procedural Background

The Municipal Board, Allahabad filed a petition under Article 226 of the Constitution seeking certiorari to quash an order of the Additional Commissioner dated 20 August 1955 and asking that Jay Engineering Works Ltd. (opposite party No. 1) be restrained from applying for a refund pursuant to that order.

Factual matrix (as presented in the affidavit): Jay Engineering Works Ltd. (the Company) sells Usha sewing machines and, in June 1954, received 28 sewing machines brought within the octroi limits of the Allahabad Municipality. On 17 June 1954 the Company produced the railway receipt and invoice at the Head Octroi Office under Rule 159 of the Municipal Account Code for stamping and payment of octroi. The Company declared the value at Rs. 3,600 and paid octroi of Rs. 112/8; the receipt and invoice were stamped and returned to enable collection of the goods.

The Octroi Superintendent assessed and realised the octroi at the Central Barrier. The Company appealed that assessment to the Additional Commissioner, who allowed the appeal, holding that the Municipal Board was not competent to impose octroi on the import of these sewing machines and ordered the octroi realised by the Board to be refunded. The Municipal Board then approached the High Court under Article 226 seeking to quash the Additional Commissioner's order.

Legal Issues Presented

  1. Whether the Municipal Board, being a statutory body, is entitled to invoke the High Court's jurisdiction under Article 226 of the Constitution to challenge the Additional Commissioner's order.
  2. Whether sewing machines imported into the municipal octroi limits are liable to octroi under the Municipal Account Code (in particular paragraph 131 and paragraph 132, item No. 17), or whether they are exempt as "machines worked by manual power when used for industrial or educational purposes" (with sewing machines expressly mentioned).
  3. If exemption applies under paragraph 132(17), whether the exemption depends on the ultimate use of the machine (i.e., whether it will be used for industrial or educational purposes) or on the character of the machine itself as falling within the exempt category.

Arguments of the Parties

Petitioner's (Municipal Board) Arguments

  • The Municipal Board contended that sewing machines are articles made wholly or partly of metal (Class VIII under paragraph 131) and hence are ordinarily liable to octroi under paragraph 131 of the Municipal Account Code.
  • The Board argued that exemption in paragraph 132(17) applies only to "machines worked by manual power when used for industrial or educational purposes," and that a dealer claiming the exemption must prove that the particular machines imported are to be used for industrial or educational purposes. Thus, until such use is shown, the machines would remain liable to octroi.
  • The Municipal Board sought to quash the Additional Commissioner's order which had held that the Board was not competent to impose octroi on the import of sewing machines and had ordered refund of the octroi realised.

Opposite Party's (Jay Engineering Works Ltd.) Arguments

  • Substantive argument: The Company maintained that sewing machines fall within paragraph 132, item No. 17 of the Municipal Account Code — "Machines worked by manual power when used for industrial or educational purposes, e.g., sewing machines, and typewriters" — and therefore are exempt from octroi.
  • Factual assertions: The Company described itself as a manufacturer with a Calcutta head office and a selling branch at Hewett Road, Allahabad. It stated that sewing machines received at the Allahabad branch had been sent from the head office for sale and for use in a training school run by the branch; historically no octroi had been paid on similar receipts.
  • Preliminary procedural argument: The Company raised a preliminary objection that the Municipal Board, as a statutory body, could not maintain a petition under Article 226 because Article 226 was argued (by the Company) to be intended for citizens claiming fundamental rights under Part III; thus the Board (not being a "citizen") allegedly could not invoke Article 226. (This preliminary objection was pressed before the Court and rejected by the Court.)
  • Administrative history: The Company paid the disputed octroi under protest to avoid business interruption, pursued discussions with municipal officers without relief, and then appealed to the Additional Commissioner, who allowed the appeal and ordered refund.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court addressed the case in two principal stages: (A) the preliminary question of the Municipal Board's right to invoke Article 226, and (B) the merits concerning construction of the Municipal Account Code's provisions on octroi exemption.

A. On the Municipal Board's standing under Article 226

The Court rejected the preliminary objection that a statutory body (the Municipal Board) could not approach the High Court under Article 226. The judge observed that Article 226 empowers the High Court to issue writs, directions or orders in favour of "any person or authority" for enforcement of rights conferred by Part III and "for any other purpose." The Court reasoned:

  • Article 226 is not confined to enforcement of fundamental rights nor limited to citizens alone; it may be used for enforcement of other rights as well.
  • The Municipal Board qualifies as a "person" for the purposes of Article 226; if its non-fundamental rights are infringed, it can seek relief under Article 226 like any other person.
  • Separately, Article 14 (quoted as being in Chapter III) protects "any person" and is not confined to citizens, thereby affording the Board at least that constitutional protection.

On these bases the Court found the preliminary objection to be without force and proceeded to consider the merits.

B. On the merits — statutory construction of the Municipal Account Code

The legal issue turned on construction of the Municipalities Act and the Municipal Account Code:

  • Section 128 of the Municipalities Act empowers a Municipal Board to impose octroi on goods or animals brought within the municipality for consumption or use therein.
  • Section 296 permits the State Government to make rules consistent with the Act, and Section 153 lays out matters to be regulated by those Rules, including assessment and collection of taxes and determination of octroi limits.
  • The Municipal Account Code provisions dealing with octroi were framed under Section 296. Paragraph 131 ordinarily levies octroi on commodities listed therein; Class VIII includes metals and articles made wholly or partly of metal.
  • Paragraph 132 lists articles which, though otherwise leviable, shall be exempt; item No. 17 reads: "Machines worked by manual power when used for industrial or educational purposes, e.g, sewing machines, and typewriters." The phrase explicitly names sewing machines and typewriters as illustrations in item No. 17.

The Court's interpretive analysis proceeded as follows:

  • The Municipal Board's argument that the exemption applies only when the particular machine is proved to be used for industrial or educational purposes was rejected. The Court considered the language and structure of paragraph 132 and its item No. 17, concluding that the framers intended to enumerate articles exempt from octroi and to specify sewing machines and typewriters as examples of "machines worked by manual power when used for industrial or educational purposes."
  • The Court emphasized that octroi is charged as soon as goods enter municipal limits; at that stage it is difficult to ascertain ultimate use. Therefore exemption cannot be made dependent on proof of future or ultimate use; rather, exemption must be determined by the character of the article as one of the exempted types.
  • In consequence, the inclusion of "sewing machines and type-writers" within item No. 17 places them squarely within the exempt category; they are to be regarded as machines worked by manual power when used for industrial or educational purposes as contemplated by that provision.
  • The Court also held it improper to treat the listed examples as limited only to the initial phrase of item No. 17; the illustration was intended to identify machines that fall within the exempt class described.
  • Accordingly, sewing machines such as those imported by the Company were exempt from octroi under paragraph 132(17), and the Municipal Board was not entitled to realise octroi from the Company on those imports.

The Court noted that the Additional Commissioner had allowed the Company's appeal and that objections that the Additional Commissioner had no power to hear the appeal or that the order was without jurisdiction were not pressed strongly before the Court; nor was any other remedy suggested on behalf of the Municipal Board. The Court therefore confined its decision to construction of the Code and the correctness of the exemption finding.

Holding and Implications

Holding: The petition by the Municipal Board was rejected. The Court concluded that sewing machines are exempt from octroi under paragraph 132, item No. 17 of the Municipal Account Code, and therefore the Municipal Board was not entitled to realise the octroi charged on the 28 sewing machines. The Additional Commissioner's order allowing the Company's appeal and ordering refund stands effectively undisturbed by the petition.

Direct consequences for the parties:

  • The Municipal Board's challenge to the Additional Commissioner's order failed; the Board must not realise octroi on the imported sewing machines in question and the refund ordered by the Additional Commissioner is justified according to the Court's construction of the Code.
  • The petition was dismissed with costs against the Municipal Board.

Broader implications: The opinion confines itself to statutory construction of the Municipal Account Code and the application of Article 226 to a statutory municipal body. The Court did not purport to state any new broad precedent beyond its interpretive conclusions; no other broader implications were discussed in the opinion.

Disposition in the opinion's words: "The petition therefore has no force and is rejected with costs. Petition rejected."

Show full summary ...

    The Municipal Board Allahabad v. Jai Engineering Works Ltd., And Another Opposite Parties.

    Mehrotra, J.:— This is a petition on behalf of the Municipal Board, Allahabad under Art. 226 of the Constitution praying that a writ of certiorari be issued quashing the order of the Additional Commissioner dated the 20th of August, 1955 and that the opposite party No. 1 Jay Engineering Works Ltd., be directed not to apply for refund in enforcement of the above order.

    2. The facts mentioned in the affidavit are that Messrs Jay Engineering Works Ltd. opposite party No. 1 carry on the business of sale of Usha Sewing Machine. In the course of their business they import sewing machines within the octroi limit of Allahabad Municipality. In June, 1954 the opposite party No. 1 received 28 sewing machines and the dealers from whom the opposite party No. 1 had purchased the machines sent the railway receipt and the invoice. On the 17th of June, 1954 the opposite party No. 1 brought the railway receipt and the invoice to the Head Octroi Office, Allahabad, under Rule 159 of the Municipal Account Code for the stamping of the railway receipt and for payment of the octroi payable thereon.

    3. The value of the goods declared by them has been Rs. 3,600 and thereupon an octroi of Rs. 112/8 was assessed and received from them, and according to Rule 159 the railway receipt and the invoice were stamped with the Municipal Stamp and returned to the opposite party No. 1 to enable them to obtain the goods from the railway. The octroi as determined by the Octroi Superintendent was paid by the opposite party No. 1 at the Central Barrier. An appeal was filed by the opposite party No. 1 from the order dated the 17th of June, 1954 under which the octroi had been assessed to the Additional Commissioner. The appeal was allowed by the Additional Commissioner and it was held by him that the Board was not competent to impose any octroi duty on the import of sewing machines. The octroi realised by the Board was ordered to be refunded. An objection had also been taken before the Additional Commissioner that no appeal lay to him.

    4. Notices were issued to the opposite parties and a counter-affidavit has been filed on their behalf. In the counter-affidavit it was stated that Messrs Jay Engineering Works Ltd. manufacture Usha sewing machines and fans etc. at Calcutta where its Head Office is also located. Various selling branches have been opened at different places and there is a selling branch of the Company at Hewett Road, Allahabad, for over 12 years. The Company sends sewing machines and other manufactured goods to the selling branches where the paid servants of the Company sell the sowing machines and other goods. The Allahabad Branch of the Company also runs a school where the training in sewing is imparted and the machines sent to Allahabad Branch are utilized for this purpose as well. It is admitted by the apposite party that in June, 1954 twenty-eight sewing machines had been received. Several years past Allahabad Branch had been receiving sewing machines from the Head Office at Calcutta and no octroi duty had ever been paid by the Allahabad Branch. In June, 1954 when the railway receipt and the invoice were sent to the Head Octroi Office for stamping and for making a free pass a demand for the payment of octroi was made. In order however to have any business inconvenience the octroi demanded was paid as a protest. Thereafter the opposite party No. 1 discussed the matter with the Executive officer and the Administrator but as no relief was granted to him he filed an appeal to the Additional Commissioner which was allowed. The right of the Municipal Board to charge octroi on the sewing machines has been challenged by the opposite party No. 1.

    5. A preliminary point was raised by the opposite party No. 1 to the maintainability of the present petition. The contention raised by the opposite party No. 1 is that the Municipal Board being a statutory body has no right to approach this Court under Art. 226 of the Constitution. Art. 226 gives power to the High Court throughout the territories in relation to which it exercises jurisdiction to issue to any person or authority, including in appropriate cases any Government within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them for the enforcement of any of the rights conferred by Part III and for any other purpose. The main argument of the opposite party No. 1 was that the Municipal Board not being a citizen could not claim any fundamental rights under Chapter III and thus it has no right to claim any relief under Art. 226 of the Constitution. In my judgment there is no force in this preliminary objection.

    6. A power has been given to the High Court under Art. 226 of the Constitution to issue any direction or writ in favour of any person for the purpose of enforcing any fundamental right as well as for any other purpose. It is not denied that the Municipal Board is a person and if any of its rights which are other than the fundamental rights are infringed the Board has as much a right to approach this Court for the enforcement of that right by means of a direction as any other person. Art. 226 of the Constitution is not confined to the enforcement of a fundamental right, nor it can be interpreted to mean that only a citizen who has been granted fundamental rights under Chapter III can approach this Court both for the enforcement of the fundamental right as well as for the enforcement of other rights, but anyone who has not been guaranteed any fundamental right under Chapter III has no right to enforce even his other rights by means of a petition under Art. 226 of the Constitution. Apart from this Art. 14 of the Constitution which is in Chapter III confers a guarantee on any person and is not confined to a citizen and as such the Municipal Board is at least entitled to the protection of Art. 14. In any view of the matter therefore the Municipal Board is entitled to a relief under Art. 226 of the Constitution and there is no force in the preliminary objection raised by the opposite party No. 1.

    7. Coming to the merits of the case it has not been seriously pressed before me that the Additional Commissioner had no power to hear the appeal and that the order of the Additional Commissioner is without jurisdiction. It has also not been pressed before me that the opposite party No. 1 had any other remedy available to him.

    8. The main contention raised by the petitioner is that under the Municipal Account Code sewing machines were liable for octroi duty and the octroi was validly levied and realised from the opposite party No. 1. The decision of the Additional Comimissioner to the contrary is palpably and manifestly erroneous. In order to appreciate this point it is necessary to refer to some of the provisions of the Municipalities Act and the Municipal Account Code. Sec. 128 of the Municipalities Act gives power to the Municipal Board to impose an octroi duty on goods or animals brought within the municipality for consumption or use therein. Sec. 296 of the Act gives power to the State Government to make rules consistent with the Act in respect of the matters described in Secs. 29, 95, 127 and 153. Sec. 153 of the Act lays down the matters which would be regulated and governed by the Rules, and one of the matters is the assessment, collection or compensation of taxes and in the case of octroi or toll the determination of the octroi or toll limit. The provisions of the Municipal Account Code dealing with the assessment and realisation of the octroi dues have been framed in the exercise of powers under Sec. 296 of the Municipalities Act. Paragraph 131 of the Municipal Account Code provides that subject to the exceptions contained in the proviso below, octroi shall ordinarily be levied on commodities included in the list given under that paragraph. Class VIII of the list enumerated in paragraph 131 provides for metals and articles made wholly or partly of metal, Paragraph 132 of the Municipal Account Code provides that the following articles, on which octroi would be otherwise leviable, shall be exempt, from the payment of such octroi and item No. 17 of this paragraph is as follows:—

    “Machines worked by manual power when used for industrial or educational purposes, e.g, sewing machines, and typewriters.”

    9. The contention raised by the petitioner Municipal Board is that the sewing machines are articles made wholly or partly of metal and as such are liable to octroi under paragraph 131. No octroi however would be realisable in case sewing machines are covered by any of the items of the articles mentioned in paragraph 131 and sewing machines in the present case imported by the opposite party No. 1 are not covered by paragraph 132, item No. 17. The opposite party's contention however is that the sewing machines are covered by item No. 17 of paragraph 132. I have already quoted the language of item No. 17. The Municipal Board's contention is that all machines worked by manual power are not exempt from octroi duty but machines worked by manual power when used for industrial or educational purposes are exempt and unless the person who claims exemption proves that the particular machine which he has imported is to be used for industrial or educational purposes he cannot claim that exemption. This contention ignores the latter part of paragraph 132(17). The framers of the Rules after laying down that machines worked by manual power when used for industrial or educational purposes are exempt have further given illustration of such machines and have specifically mentioned sewing machines and typewriters as machines answering the description. If the interpretation put by the Board is accepted then it will have to be held that the illustration given in this item, namely, sewing machines and type writers, is only an illustration of machines worked by manual power. To my mind the whole scheme of paragraph 132 is that it enumerates the articles which are liable to be exempt from octroi duty and one of the articles is machines worked by manual power when used for industrial or educational purposes. As an illustration of such a machine sewing machines and type-writers are specified. The octroi duty is charged as soon as the goods enter the municipal octroi limits. At this stage it is difficult to ascertain whether the particular goods would be used for industrial or educational purposes or not and therefore it cannot be said that the exemption can only be claimed if and when any particular machine is used for industrial or educational purposes. Item No. 17 of paragraph 132, as I have already pointed out, specifies the nature of the article which is exempt and if the words, viz., sewing machines and type-writers, were not in that class it would not have been open to a dealer to claim exemption on the ground that sewing machines and type-writers were such as would be used for industrial or educational purposes. The framers of the Rules having specifically mentioned sewing machines and type-writers as an illustration have put it beyond controversy that they can be regarded as machines worked by manual power when used for industrial or educational purposes. It is not a proper method of construction to take the illustration as only indicating the first part of item No. 17 and not as an illustration of the article contemplated by item No. 17 as a whole. Emphasis was laid on the words “when used for industrial or educational purposes” by the counsel for the petitioner. But as I have already pointed out the octroi is payable as soon as the goods enter the municipal limits and therefore the imposition of octroi cannot depend upon the ultimate use of the machinery. It will depend upon the nature and the character of the machinery itself. If it is a machinery which has been exempted from payment of octroi under paragraph 132, item No. 17, the fact that it may ultimately be used for non-industrial or non educational purposes will not make it liable for payment of the said octroi. In my judgment therefore the sewing machines and type-writers were exempt under paragraph 132, sub-sec. 17 of the Municipal Account Code from payment of octroi duty and the Municipal Board was not entitled to realise such an octroi from the opposite party No. 1.

    10. The petition therefore has no force and is rejected with costs.

    11. Petition rejected.

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    The Municipal Board Allahabad v. Jai Engineering Works Ltd., And Another Opposite Parties.
    (Nov 14, 1956)