OPINION

Hidayatullah, J.:— The facts out of which this reference arises are briefly as follows. The Empress Mills, Nagpur, have a factory at Yeotmal, and they carry cotton bales from that factory to Nagpur either in carts or motor trucks. On way the vehicles pass through the limits of the Wardha Municipality by a road which is admittedly a Public Works Department road. The vehicles do not stop within the Municipal limits. The Municipal Committee, Wardha, realized Rs. 240 by way of terminal tax on cotton and refused to refund the amount even when a demand was made thereto by the Empress Mills.

2. The Mills appealed to the Deputy Com missioner, Wardha, and the Sub-Divisional Officer Wardha, before whom the appeal went for disposal, referred two questions under Section 83(2) of the C.P and Berar Municipalities Act. These questions are:

“(1) Whether goods passing through the limits of Wardha Municipality by road dispatched from Yeotmal to their destination at Nagpur without being unloaded or reloaded at Wardha are liable for an export terminal tax.

(2) Whether the respondent Municipal Committee is not liable to refund the export terminal tax collected on such goods.”

3. This reference came up before Shevde, J. for hearing and the learned Judge referred the matter to a Divisional Bench in view of certain conficiting decisions in this Court, to which reference would be made hereafter. While making the reference the learned Judge expressed himself strongly in favour of the case of the Mills. The learned Judge observed as follows:

“From a perusal of these provisions of the Act and the rules it is quite clear that the Municipal Committee is competent to impose a terminal tax on goods or animals only when they are imported into, or exported from, the limits of the municipality. I do not think that it can reasonably be contended that the cotton bales which are being carried through the municipal limits by the Empress Mills, Nagpur in their motor-tracks right through without any transhipment, in the course of a journey can be said to be either imported into or exported from the municipal limits of Wardha. It is manifestly a case of through traffic by a road from one place to another, i.e, from Yeotmal to Nagpur, and it would be idle to contend that because the goods happened to pass through the Municipal limits, for the time being, the said goods are either imported into or exported from the municipal limits of Wardha.”

4. The case went before a Divisional Bench consisting of Bose, J. (as he then was) and Hemeon, J. and the learned Judges referred the case for decision to this Full Bench. Section 66(1) deals with the imposition of taxes, and it is there provided that

“A committee may, from time to time, and subject to the provisions of this Chapter, impose in the whole or in any part of the municipality any of the following taxes, for the purposes of this Act, namely”.

(e) an octroi on animals or goods brought within the limits of the municipality for sale, consumption or use within those limits.”

(o) a terminal tax on goods or animals imported into or exported from the limits of a municipality.”

Provided that a terminal tax under this clause and an octroi under clause (e) shall not be in force in any municipality at the same time”.

5. Under the powers thus conferred the Wardha Municipality framed terminal tax rules, the substance of which is given below. Rule 1 deals with exports and reads: (1) On the following goods exported by rail or road a terminal tax shall be levied at the rate noted against each: at 2 as per maund of 40 seers: cotton. Rule 2 deals with imports and reads: (2) On the following goods imported by rail or road a terminal tax shall be levied at the rate noted against each. (Then follows a schedule.)

6. This reference is concerned only with the export terminal tax on cotton, but it will be necessary to refer to Rule 2 in the sequel. Rule 3 deals with certain exemptions, but we are not concerned with them. In the rules framed for regulating the collection and preventing the evasion of the payment of the terminal tax it is further provided:

“1. Articles subject to terminal tax are wherever produced liable to pay that tax as soon as they enter the municipal limits as fixed by the Local Government under Section 5, subs (2), Clause (a) of the Central Provinces Municipalities Act, 1922.”

7. Provisions then follow for establishing outposts and branch outposts, for collections, receipts, registers, checking, obtaining declarations, exemptions and punishments etc. The municipal committee claims that the demand is justified by the Act read with the rules. The Mills urge the contrary.

8. The question has arisen before, either in this form or some analogous form, both in this Court and the other High Courts. Different views have been expressed, but the general consensus of opinion seems to be that through traffic by road is liable to terminal tax. These decisions need to be analysed, and I give below in brief the rationes decidendi of these cases.

9. In In re Rahimu Bhanji, 22 Bom. 843 there was a criminal prosecution for refusal to pay octroi duty on certain articles imported within the Thana Municipal District. The plea of the accused was that goods were merely passing through on their way to some other place. It was observed by Parsons and Ranade, JJ.:

“As soon as the goods in the present case passed within the limits of the municipality, they were imported, that is, brought within those limits from a place without its boundaries.”

10. In Dalwadi Maganlal v. Municipal Borough of Ahmedabad, I.L.R (1945) Bom. 132 : (A.I.R (32) 1945 Bom. 251) the case involved the consideration of the Ahmedabad Municipal Code, which provided for the levy of terminal tax on all goods imported into the municipal limits. The plaintiff in the case had a brick kiln within the municipal limits. For taking his goods into Ahmedabad city he had, however, to leave the municipal limits to join Naroda Roal, and he thereafter entered once again the municipal limits. The question was whether he was required to pay terminal tax. The case of the plaintiff was that he had not imported the goods because the goods were manufactured inside the municipal limits and had been temporarily taken out of those limits to get to a road. It was held by Wadia and Rajadhyaksha, JJ. that terminal tax was payable: The learned Judges took into account the dictionary meaning of the word ‘import’ and observed as follows:

“It is immaterial for this purpose as to whether the goods were, in fact, manufactured within that area and whether, after being imported, they were going to be consumed in that area. For certain purposes such as Import Duties Acts, the word “import” may connote that the manufacture must be also outside the area, the import into which is subject to the imposition of duties. But the ordinary meaning of the word “import” has no reference to and is not qualified by any consideration of the place of manufacture or the place of consumption. It is true that in the present case the goods were merely being carried from one place within the Municipal limits to another place within the Municipal limits, and that it was necessary for doing so to go for some distance outside the Municipal limits; and it may appear somewhat harsh to call upon the plaintiff to pay terminal tax when he actually took the goods within the Municipal limits. But the remedy for this is not to place a strained construction on the meaning of the word “import” but for the Municipality to from a suitable rule permitting a refund of import duties in such cases or exempting such goods from this levy of the terminal tax.”

11. In Nek Mohammad v. Emperor, A.I.R (23) 1936 ALL. 83 : (37 Cr. L.J 335) 4 carts going from Kalpi to Tapri had to pass through Saharanpur Municipality and the toll was not paid. Under the rules made by the Saharanpur Municipality it was provided:

“No person shall bring within the toll limits of the Sahiranpur Municipality …. any headload … in respect of which terminal toll is leviable until the toll due has been paid ….”

12. By an amendment made in 1919 the schedule of the commodities was altered, and it was provided that the commodities mentioned would be charged toll at the rate of the terminal tax in force in the municipality, and such tax would be chargeable on the commodities ‘when imported by road through all the toll barriers’.

13. The argument was that toll was leviable only when the goods remained in the municipality, and that since the goods were in a state of transit and were not brought to be kept in the Saharanpur municipal area they could not be said to be imported. On these facts Bajpai, J. referring to Webster's Dictionary for the meaning of the words ‘import’ and ‘bring’ stated as follows:

“To my mind in both these words there is an element of pause or repose, and in the present case the carts only passed through the Saharanpur Municipality and did not rest there at all.”

14. Interpreting the rule liberally and in favour of the subject the learned Judge held that there was no intention to impose a tax under the circumstances found in that case.

15. This case was dissented from in the same year by a Divisional Bench in Emperor v. Har Datt…., A.I.R (23) 1936 ALL. 743 : (37 Cr. L.J 1147). The facts were that the Almora Municipal Board had made byelaws for the levy of certain tolls. Bye-law No. (1) provided:

“(1) No person shall bring within the limits of the Almora Municipality any laden vehicle…. until the due in respect thereof has been paid ….”

16. A passenger lorry passed through the limits of the almora municipal board, and the driver of the omnibus was asked to pay the necessary toll. The driver refused to pay and was prosecuted under the penal section. It was contended in the case that the omnibus was not stopping within the limits of the municipal board but was merely passing through, and the learned counsel for the accused relied upon Nek Mohammad v. Emperor, A.I.R (23) 1936 ALL. 83 : (37 Cr. L.J 335), Allsop and Ganganath, JJ. however observed as follows:

“The learned counsel has relied on the case in Nek Mohammad v. Emperor, A.I.R (23) 1936 All. 83 : (37 Cr. L.J 335) and has argued that the word ‘bring’ in R. 1 has an element of “pause” or “repose”. With all respect to the learned Judge we do not agree with his interpretation of the word “pause” or “repose”. As soon as vehicle enters the Municipal limits the act of bringing is complete and it comes within the provisions of R. 1 and becomes liable for the tax irrespective of the fact whether the vehicle stays within the limits of the Municipality or not.”

17. In Firm Hardwari Mal v. Dehra Dun Municipality, I.L.R (1940) ALL 4 : (A.I.R (26) 1939 ALL. 736), certain goods were received at Dehra Dun railway station and were unloaded and taken to Raipur, which was beyond the municipal limits of Dehra Dun. These goods were neither kept nor sold in Dehra Dun. Section 129(1)(xiii) of the U.P Municipalities Act provided for the levy of a tax on goods imported into any municipality. ‘Import’ was defined in the rules as ‘the bringing of goods into the terminal tax limits from outside those limits’.

18. The argument was that only those goods could be said to have been imported or brought into the municipal limits which were either kept or consumed or sold by the consignee. Bennet and Verma, JJ. observed as follows:

“We find no justification for this interpretation of the word “import.” The word “import” literally means “carried into” or “brought into.” The Rules framed by the Government explain the word “import” as “the bringing of the goods into.” It seems to us, on the plain meaning of the word, that when goods are received by a consignee and are brought by him into the municipal limits, he imports them within the meaning of the Act and of these Rules.”

19. The learned Judges also dissented from Nek Mohammad v. Emperor, A.I.R (23) 1936 ALL. 83 : (37 Cr. L.J 335), and distinguished Emperor v. Sheikh Ajmeri, 56 ALL. 241 : (A.I.R (21) 1934 ALL. 39 : 35 Cr. L.J 704), to which I will next turn.

20. The facts of that case were that the municipality was composed of two territories separated by some municipal land. Goods and animals from one part used to go to the other part across the intervening territory. The question was whether such goods or animals could be said to have been brought within the municipality from outside. It was observed by Sulai main, C.J and King, J., that the words ‘introducing within octroi limits’ in Section 155 of the U.P Municipalities Act and similar words ‘brought within the municipality’ in S. 128(1)(viii) ibid implied that the goods or animals had to be imported from some place entirely outside the municipal limits before the Act could come into play. It was held that those words were not meant to covers case where the goods were transferred from one part of the municipality to another part within its limits, and that this was so even if it happened that owing to irregular boundaries of the municipality or owing to the fact that a part of it was a detached area the goods bad to cross non-municipal land in transit. The significance of the words ‘introducing’ and ‘brought within’ was that the goods must be imported from outside the municipal limits altogether.

21. The upshot of all these cases is that according to Bajpai, J., there is an element of pause and repose in all cases where tax is levied on goods imported into an area. Unless goods are meant to stay in that area the tax cannot be levied.

22. According to the other Judges, we are not concerned with any element of pause or repose, but on the other hand must give the ordinary dictionary meaning of the words ‘import,’ ‘export,’ and ‘bring into.’ The tax, whether toll or terminal tax, was held leviable when the act of bringing in was complete.

23. This brings me to the cases decided in this Court. These refer directly to the charging sections, which I have to construe, and therefore bear directly on the present point. I shall take these cases in chronological order.

24. The first case was decided by Niyogi, J., on 27th February 1939 (Misc. Civil case No. 84 of 1938, Kanhaiyalal v. Municipal Committee, Betul). The decision was ex parte because the Municipal Committee, Betul, was not represented before the learned Judge. The decision is exceedingly brief and does not refer to any authorities, nor is there any discussion of the nature of the tax. The learned Judge served as follows:

“Goods imported are those which are brought within the limits of the municipality for consumption. The word consumption may include sale or distribution of the goods by the whole sale dealer to the retail traders residing within or outside the limits of the municipality. The term “import” does not include any goods is transit through the municipality. The fact that the goods are brought by road and are to be despatched by rail does not affect the character of the goods as being in transit.”

25. It was therefore held that goods in transit could not be treated as imports and that no terminal tax was payable.

26. In the next case Municipal Committee, Khandwa v. Abdul Samad, civil Revn. No. 608 of 1940 dated 7th October 1941—Pollock, J., was dealing in revision with a suit by the Municipal Committee, Khandwa, in which the municipal committee sought to recover from the defendant terminal tax on goods which were said to have been imported within the limits of the Khandwa municipality. The facts were that the defendant tank delivery of 7 wagon loads of fruit whish were booked to him at Khandwa and immediately re booked by him to other stations without removing them from the railway limits. The Small Cause Court had held in that case that terminal tax could not be claimed on those goods because they were merely passing through and could not be said to have been imported within the municipal limits of Khandwa. The learned Judge referred to the Government of India's instructions printed at page 122 et seq of the C.P Municipal Manual, 1936 Edn., and also to several memoranda issued by Government from time to time the learned Judge, while realizing that these instructions and memoranda could not have the effect of modifying the law appeared to have been considerably influenced by what was said in them. He, however, took the dictionary meaning of the word ‘import’ and held that goods booked to a railway station and delivered there must be treated as having been brought into the municipal limits. He opined that goon's which merely passed through a railway station on their way to some other destination to which they were booked could not be said to have been brought within the local limits of the municipality merely because the railway happened to pass through it. He did not, however, decide the point finally, because he felt that Section 25 of the Provincial Small Cause Courts Act empowered the High Court to interfere only if the decision of the lower Court was not in accordance with law, and since the decision of the Small Cause Court Judge was supported by at least one ruling Nek Mohammad v. Emperor, A.I.R (23) 1936 ALL. 83 : (37 Cr. L.J 335), he felt that he should not interfere since taxing statutes are strictly construed. The decision is not decisive and in fact creates more doubts than it settles because it actually decides nothing.

27. The next case is Bhagwandas Harkisandas v. Municipal Committee, Yeotmal, (A.I.R (32) 1945 Nag. 197) decided by Digby, J. on 21st September 1943. The learned Judge granted leave for a Letters Patent appeal, but no appeal was filed. The facts of that case were that goods were brought from Pandharkawada to Yeotmal by road and were despatched from Yeotmal railway station by rail to other places. It was contended in that case that the Yeotmal Municipality had no right to levy terminal tax on those goods. It appears that a claim for refund was made which had been turned down by the municipality.

28. It was argued in that case that since the goods were admittedly exported from Pandhar kawada they could not be said to be exported from the limits of the Yeotmal Municipality even though the goods passed through the limits of that municipality and were sent by rail from the terminal point of those limits. The learned Judge considered all the cases to which I have made reference so far, and held that there was a difference between an octroi tax and a terminal tax. An octroi tax as defined in the C.P Municipalities Act was a tax on goods brought within the limits of the municipality for sale, consumption or use. Since such limitation was not found in connection with terminal tax and the sole requisite for levying that tax was the import or export of goods it could not be said that the element of consumption was included in it.

29. The learned Judge repelled the argument that the word ‘or’ between the words ‘imported into’ and ‘exported from’ indicated that the tax was not to be imposed on goods which were imported for the purpose of reexport. He also rejected the analogy of certain English Statutes because exemption was granted in respect of such goods. The dictionary meaning of the words ‘import’ and ‘export’ weighed with the learned Judge as also the instructions issued by the Government of India. The conclusion of the learned Judge can best be stated in his own words. This is what he said:

“I have do doubt that when goods are brought in from outside the municipal limits simply for export from the terminns of those municipal limits, they are, when so exported, exported from the limits of the municipality. The meaning of the word “export” os the word “exported” seems to be clear enough and in connection with a terminal tax they are related to traffic rather than origin. One has to look at the municipal limits from which the traffic proceeds, and not to the place where the goods were originally manufactured and from which they were first exported. Under S. 69 the municipality has power to make exemptions from tax, and when this is so any argument based on the fact that in many cases of taxation through traffic is exempted has little force on the question of interpretation, the more especially when the procedure of taxing through traffic and then exempting through traffic if necessary with certain safeguards, enables a municipality to control through traffic in such a way that evasion followed by legal disputes will not occur.”

30. The next case arose before Pollock, J. and it is Seth Jagannath v. Municipal Committee, Khandwa, Misc. Civil Case no. 50 of 1943. In that case the goods were sent from Bhikangaon in Indore State to Khandwa Railway Station and were booked from there to other places outside Khandwa Municipality. Similarly, goods received from outside were unloaded at Khandwa Railway Station and taken in carts to Bhikangaon. The learned Judge referred to the dictionary meaning of the words ‘import’ and ‘export’, and on the authority of the decisions above referred held that one need not go beyond those words. He cited the memorandum of the Government of India and held that it was a sufficient answer to the contention that a terminal tax may be imposed only at the terminus and that Khandwa was not the terminus for the goods in question. He held that those instructions left no doubt that a tax on through traffic was contemplated, though a mere transit duty was to be avoided.

31. The learned Judge contrasted the wording of cls. (e) and (o) of S. 66(1) and held that if it was contemplated that the tax leviable under cl. (o) should not be levied on through traffic but only on goods brought in for sale, consumption, or use within the municipal limits, one would have expected those words to appear in cl. (o) also.

32. The learned Judge differentiated between cases in which goods in a train passed through the municipal limits and were neither loaded nor unloaded because those goods could not be said to be either imported or exported from those limits. In reaching this conclusion the learned Judge dissented from Nek Mohammad v. Emperor, A.I.R (23) 1936 ALL. 83 : (37 Cr. L.J 335) a decision which had received a tacit approval in the earlier case, thus affording an excellent illustration of the results of the narrow approach to Section 25 of the Provincial Small Cause Courts Act. The learned Judge referred to the decision of Digby, J. in S.A 549 of 1940: (A.I.R (32) 1945 Nag. 197) and the extracts from English Statutes to show that the word ‘imported’ did not necessarily mean brought into the country for sale or consumption or use there. He observed as follows:

“His quotations are: “Goods imported solely for re-exportation after undergoing a process which does not change their form or character, or after transit through, or transhipment in the United Kingdom”, and “Transit goods imported for exportation after transit through the United Kingdom or by way of transhipment” from the Safeguarding of Industries Act, 1921. To that I may add the reference in Section 13 of the Port of London Act, 1908 to goods imported for transhipment only. My conclusion then is that there is no justification for refusing to give the words “import” and “export” their natural meaning and that the goods in this case were imported into or exported from the Municipal limits of Khandwa and thus became liable to terminal tax.”

33. This brings me to the last case decided in this Court. That case is Kashiram Jhabarmal Firm v. Municipal Committee, Nagpur, I.L.R (1946) Nag. 99 : (A.I.R (33) 1946 Nag. 190), and it was heard by a Divisional Bench of Grille, C.J and Puranik, J. In point of argument it makes but little addition to the cases already noticed by me. The omission of the words ‘for sale, consumption or use within those limits’ from cl. (o) was held to be deliberate. In the opinion of the Divisional Bench terminal tax was bound to fall on through traffic, though goods in wagons (not loaded or unloaded in the Municipal area but merely passing through) were described as being like goods in a bonded warehouse. The learned Judges referred to the instructions and memoranda of Government and observed that these also showed that the intention was that through traffic by road was liable to taxation. Taking the meaning of the words ‘import’ and ‘export’ to be ‘bringing into’ and ‘take out from’ it was said that if any exemption in favour of through trade was meant, there would have been some indication in the act itself.

34. The above gives a summary of all the cases brought to the notice of the Full Bench. Only one other case was referred to, namely, Jalalpur Jattan Municipality v. Suraj Par hash, A.I.R (29) 1942 Lah. 11 : (199 I.C 130). That case need not detain us because in the bye laws I am construing there is an express exemption regarding goods sent by post which was the point for decision in that case. The case, however, supports the municipality in their general contention.

35. The incidence of a tax and the liability to pay it have to be gathered from the charging section. It is a rule of construction that fiscal statutes in common with penal statutes, whose nature the fiscal statutes in some measure partake, must be construed strictly. This strict construction means only this much that if the words construed reasonably create a liability it is not for the Courts to determine the wisdom of the enactment, but if the words do not indicate the liability of the subject, the tax must be disallowed. This does not mean that the words of the Act must be strained one way or the other, either to create a liability or to furnish a chance of escape or the means of evading the tax. All doubts must be resolved in favour of the subject, and in cases of ambiguity of the language a construction which is beneficial to the subject is to be favoured. Before, however, the Courts will hold that a liability to pay the tax exists, the language of the statute must be found to impose clearly and unambiguously the obligation.

36. The charging section with which I am concerned reads:

“A terminal tax on goods or animals imported into or exported from the limits of a Municipality: Provided that a terminal tax under this clause and an octroi under cl. (e) shall not be in force in any municipality at the same time:”

37. There is no definition either of ‘octroi’ or of ‘terminal tax’ in the Act or the bye-laws.

38. One thing, however, is clear that terminal tax and octroi are two different taxes. That they cannot exist together does not show that they are one and the same thing. It rather shows the contrary. An octroi is a tax on goods brought into a place for sale, consumption or use. The word octroi comes from ‘octroyer’ to grant, and was always meant to denote an impost, toll or town duty on goods brought into a town. In the beginning such duties were collected only at ports and sivoured of the modern customs. During the Middle Ages octroi duties became more common in towns, though they were known even before that time. These octrois were levied not only on imports but also on exports—see Buehler Public Finance, page 351 (first edition). These octrois were also known as ‘ingate’ tolls, which picturesquely describes the mode of collection because they were collected at the gates of a town or toll barriers as they were called: see Grice National and Local Finance, page 303 et seq.. These duties were generally levied on goods meant for consumption (see Encyclopaedia Britannica under ‘Octroi’) Export duties in the nature of octrois were also levied, though not so extensively, and these were regarded as helping local trade as the incidence was transferred to other people. Even from the earliest times they were regarded as customs antiqua sive magna or as custuma parva sive nova and the king also had a share. Care was however taken that they should not assume the character of a local protectionist tariff, nor of a toll on transits and transports.

39. Octrois, however, were in disfavour always because of their ad valorem character as also because refunds, which were an integral part of the scheme, were not easy to mike. There was delay in making the assessment as also in giving refunds resulting in loss to trade, much haggling, and damage to property. Various methods to overcome them were evolved such as bounded warehouses, drawbacks, passe debout, a description of all of which is given in Palgraves Dictionary of Political Economy.

40. Octrois have almost entirely disappeared in Europe and England but have persisted in India. In the Central Provinces we have thus octroi as one of the taxes leviable on goods brought into the municipal limits for sale, con-sumption or use, Unfortunately, we have no definition of octroi in the Act, though its description in clause (e) of S. 66(1) clearly establishes its accepted connotation.

41. Now, the charging section with which I am immediately concerned does not mention octroi but terminal tax. That there is some difference between the two is obvious enough, and I have already commented upon this aspect of the case the very fact that the words ‘for sale, consumption or use’ are not there mentioned makes a distinction. Since the charging section has to be expounded as a whole we have to find some definition of ‘terminal tax.’ There is no definition in the Act, and we have to turn to other sources. The Dictionary does not define a terminal tax, and we are driven to books on Economics.

42. I hesitate to turn to the economists for their definition. Economists' definitions have undoubtedly been used before, but only under exceptional circumstances and with proper safeguards. In the leading case of Bank of Toronto v. Lambe, 1887 12 A.C 575 : (56 L.J P.C 87) economists' difinitions of direct and indirect taxes were pressed upon the Privy Council, and though Mills' definition was used for special reasons given by their Lordships, Lord Hobhouse observed as follows:

“First, is the tax a direct tax? For the argument of this question the opinions of a great many writers on political economy have been cited, and it is quite proper, or rather necessary, to have careful regard to such opinions, as has been said in previous cases before this Board. But it must not be forgotten that the question is a legal one, viz., what the words mean, as used in this statute; whereas the economists are always seeking to trace the effect of taxation throughout the community, and are apt to use the words “direoct,” and “indirect,” according as they find that the burden of a tax abides mote or less with the person who first pays it.

‘… the excellence of an economists's definition will be measured by the accuracy with which it contemplates and embraces every incident of the thing defined. But that very excellence impairs its value for the purposes of the laywer. The legislature cannot possibly have meant to give a power of taxation valid or invalid according to its actual results in particular cases. It must have contemplated some tangible dividing line referable and ascertainable by the general tendencies of the tax and the common understanding of men as to those tendencies.”

43. In Attorney General for British Columbia v. Kingcome Navigation Co., (1934) A.C 45 at p. 51 : 103 L.J P.C 1) Lord Thankerton while dealing with excise and direct and indirect taxation observed as follows:

“For this construction he prays in aid S. 122 of the Act of 1867 and in order to establish that the present tax was in the nature of a customs or excise duty, he relied on the definitions of political economists and the course of custom and excise legislation in this country up to 1867. In their Lordships' opinion this contention is inconsistent with the decisions of this Board, which go back to the year 1878, and have settled that the test to be applied in determining what is “direct taxation” within the meaning of S. 92, head 2, of the Act of 1867 is to be found in Mill's definition of direct and indirect taxes.”

44. In this country also in In re, The Central Provinces and Berar Motor Spirit and Lubricants Taxation Act, 1938, (1939) F.C.R 18 : (A.I.R (26) 1939 F.C 1) Sulaiman, J. at pp. 58, 59 observed as follows:

‘Economists’ definitions of “excise” cannot he conclusive.

‘… An Act of Parliament is not a thesis on economics; and the question is really one of law and not of economics.’

45. Since, however, Lord Hobhouse commended reference to Works on Economics and resort has been had freely to economists' opinions in many cases; see for example the cases cited by me above; Peterswald v. Bartley, 1903-1. C.L.R 497 and the Commonwealth and Commonwealth Oil Refineries Ltd. v. South Australia, 38 C.L.R 408. I looked into a score or more books on municipal finance and taxation and other books on Economics (though none was cited at the Bar) to see if there is any accepted meaning to be given to the term terminal tax. I have found but little to help in the construction of the terms of the statute. Terminal lax as such is described only by Findlay Shirras in his Science of Public Finance (3rd edition). A perusal of the chapters dealing with octroi and terminal tax shows that this book seems to have furnished materials for the Government of India memorandum to which reference has been made frequently by Judges in this Court. At page 757 of his book Findlay Shirras describes a terminal tax. After stating the features (good or bad-mostly bad) of octroi he says:

“A terminal tax, which is an octroi without refunds would be productive although inconvenient 10 collect. If therefore taxes are to be levied, either octroi or terminal taxes, the rates should be low, and to prevent the tax from becoming a transit duty refunds should be promptly given on exported goods. Areas should be made also for bonding goods intended for through transit.”

46. The learned author thus makes but little distinction between octroi and terminal tax, and his definition would, if accepted, bring in its train the notions of Bale, consumption or use, which are according to one view the distinguishing features of an octori. Unfortunately, the matter is not free from doubt, because another eminent authority does not refer to these elements at all. In Seligman's Encyclopaedia of Social Soiences, vol, IX p. 570, octrois are described without any reference to the ultimate use to which goods are put after entry into towns. The learned editors describe octrois as follows:

“As compared with the facilities of the national government the possibilities of raising revenue by local bodies are quite limited. All forms of indirect taxation are practically closed to local authorities. They are unable to levy customs duties, although they may collect the so-called octrois; that is, duties levied on goods entering town.”

47. This definition of octrois is more in keeping with the historical development of the tax.

48. Whatever it may be, it is obvious that the real meaning and inoidence of octrois is not free from doubt, and there is no such clear-cut description available as was taken from John Stuart Mill in Bank of Toronto case : ((1887) 12 A.C 575 : 56 L.J P.C 87). I am, therefore, of opinion that much reliance cannot be placed upon the opinions of writers on political economy.

49. Farther, in the present case, I am not concerned so much with imports as exports, and no question of consumption, use or sale really enters into the consideration of the charging, section. I am satisfied that if there was any intention to qualify terminal tax in the manner cotrois have been qualified in cl. (e), the legislature would have found it easy to say so. Not having qualified terminal tax in the same way as cotrois, I must hold that the omission is deliberate.

50. It remains to consider what is signified by the word ‘terminal’. It is obvious that it could refer either to the termini of the goods or, the termini of the municipality. It is clear to me that the word ‘terminal’ refers not to the destination or origin of the goods but to the termini of the municipal limits. Digby, J. pointed out that it refers to the traffic rather than the origin of the goods.

51. The charging section, therefore, can only mean that the tax is to be collected at the outskirts of the municipal limits on goods imported into or exported from the municipal limits. The words export and import have no special meaning. They bear the ordinary dictionary meaning, which has been the foundation for the decisions to which I have referred in the opening portion of my opinion. These words mean only ‘taking out of’ and ‘bringing into’.

52. It was argued that when goods are known to have been exported from Yeotmal they cannot be said to be exported from Wardha. This is a powerful argument. But the legislature must be presumed to have used the word advisedly taking into consideration all such exceptional cases. I refer in this connexion to the observations of Lord Hobhouse in the Bank of Toronto case ((1887) 12 A.C 575 : 56 L.J P.C 87), quoted by me above. The word ‘export’ has been given its dictionary meaning even where it would lead to some unjust or unfair results. One such case is Muller v. Baldwin, (1873) 9 Q.B 457 : (43 L.J Q.B 164). The facts and decision there are extremely instructive. By the Tyno Coal Dues Act, 1872 (35 Vict. C. XIII) the old coal dues were abolished, and the Commissioners were empowered to levy dues, inter alia, one penny per ton on ‘coals exported from the port’. It was held that in the absence of anything in the Act to the contrary, ‘exported from the port’ must be taken to be used in its ordinary meaning of ‘carried out of the port’; and therefore included coals taken out of the port in a steamer to be consumed on board during a distant voyage. Lush, J. (with whom Mellor and Archibald, JJ. agreed) observed as follows:

“The learned Judge of the county Court considered that having regard to the usage of the corporation, while the coal dues belonged to them of treating coals taken on board for consumption as exempted from duty, the term “exported” must receive a qualified interpretation and be taken to mean coals exported for the purpose of commerce, as distinguished from what are called “bunker coals,” that is, coals taken on board for the purpose of consumption on the voyage. We agree as to the reasonableness of making a distinction between coals taken away for sale and coals taken for the necessary use of the vessel; but we are constrained to differ from the learned Judge in his construction of the Act, There is nothing in the language of the Act to shew that the word “exported” was used in any other than its ordinary sense, namely, “carried out of the port”; and considering how easily and how extensively the privilege of storing for use may be abused, and what quantities may be carried away under the name of bunker coals, we think that, if it had been intended to exempt from duty coals taken on board for fuel, some limitation as to quantity would have been imposed. Nothing would have been easier than to insert a proviso to that effect. We cannot, however, speculate upon the intentions of the legislature which are neither expressed in terms nor conveyed by implication; our duty is to interprete the words of a statute according to their plain and grammatical meaning, when, as in this case, they are act controlled by anything to be found in the context.”

53. It is no doubt true that the intention probably was not to tax through traffic, whether by rail or by road. The memoranda and instructions of the Central and the Provincial Governments clearly establish this. Even in pure theory of octrois this is avoided, and mercantilist opinion is against the imposition of a mere transit duty. But if the intention was to exclude through traffic, that intention is neither expressed nor can be implied in the charging section.

54. For a considerable time I wavered in my opinion due to the existence of these memoranda and the injustice involved, but it is clear that these memoranda cannot be allowed to influence the interpretation of the plain words of the statute. These memoranda are not law and cannot be called in aid at all. Considerations of injustice cannot be allowed to weigh when the words of the Act are clear. I would therefore hold that the Mills are liable to pay the tax.

55. Before leaving this case I would only say that an amendment of the Act would remove this hardship. I am aware that the terminal tax is much less onerous than octrois and does away with the problem of refunds. If refunds are contemplated, the French system of passe-debout merits consideration, since bonded-warehousing is too expensive for these Provinces. A passe-debout is described in Palgrave's dictionary at p. 74 vol. III, as follows:

“The permit delivered to the carrier of provisions or merchandise passing through a town in which octroi duties are levied, in transit for a locality outside the limits of the place, or on their way to a market inside the town, and to be taken back if unsold. The amount of the dues is deposited at the gatehouse on entering, and is reimbursed on presentation of the passe-debout on leaving. If the amount of the octroi tax is large the escort of an office from one extremity of the town to the other may be obtained on payment of a fee in lieu of the deposit of the duty. Goods remaining more than 24 hours must be lodged in a registered warehouse.”

56. My answers to the questions therefore are:

(1) Yes.

(2) No.

57. I would make no order about costs.

Mudholkar, J.:— I have had the advantage of reading the opinion of Hidayatullah, J. While I agree with his conclusions I would like to add a few words.

58. The question referred to us is whether export duty is leviable on cotton bales in transit through the municipal limits of Wardha town. To put it slightly differently, and broadly, the question is whether goods in transit through a place can be deemed to have been exported therefrom. Such goods being subjected to one continuous course of action, it does seem at first somewhat peculiar that they must be deemed to be exported from every point through which they pass. Upon closer examination it would, however, appear that whatever the in conveniences attendant on such a construction, that is the only one which is possible.

59. In the Shorter Oxford Dictionary the verb “to export” has been stated to mean “To take away carry of” and in commerce “To send out (commodities) from one country to another,” Strictly speaking, the second meaning cannot be assigned to the word “export” as used in the by-law in question, but the first can be. For, goods in transit are in fact taken away (or carried off) from the place through which they pass.

60. It is true that for goods to be exported from a place they must either originate there or have been imported there and goods in transit cannot be said to originate there. But then goods in transit are imported into the place when they arrive there, in the sense that they are introduced into that place. For “import” means “bring into” which in its turn means “introduced” or “bring in the course of some action.” I would, therefore, answer the two questions referred to us in the same way as my learned brother Hidayatullah, J.

Sen, J.:— I concur in the answers given by Hidayatullah, J. and have nothing to add.

61. Answers accordingly.