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PETITIONER: NAGAR MAHAPALIKA BAREILLY

       Vs.

RESPONDENT: STATE OF U.P. & OTHERS

DATE OF JUDGMENT02/02/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR  850            1988 SCR  (2) 865  1988 SCC  (2) 193        JT 1988 (1)   594  1988 SCALE  (1)307

ACT:      U.P. Nagar  Mahapalika Adhiniyam, 1959: Section 172 (2) (b) and  Notification dated  April 30,  1986, Schedule Class III Item  No. 7  & Class  VI Item  No.  6-’Foreign  imported liquor and  all kinds  of wine made in India’-Interpretation of-Levy and  realisation of  octroi-Taxable event  is entry- Nature  and   type  of  goods  the  relevant  factor-Country spirit/rectified spirit-Levy of octroi duty.      Statutory Interpretation:  Taxing Statute-Taxable items mentioned in  Schedule to  enactment-Court to  give  meaning intended by framers of schedule-All items in one group to be considered in a generic sense.

HEADNOTE: %      The  Nagar   Mahapalika,  Bareilly  petitioner  imposed octroi  duty   on  goods   brought  within  its  limits  for ’consumption, use  or sale  therein’ through  a Notification dated April  30, 1986  in exercise  of powers  under section 172(2)(b) of  the U.P.  Nagar Mahapalika Adhiniyam, 1959. In the Schedule forming part of this notification are mentioned the articles  on which  octroi duty is payable and the rates thereof.  The   articles  have   been  grouped  together  in different classes  from Class  I to Class X. Class III which bears the  Heading "Articles  of lighting, fuel, washing and lubricants contains  the entry  Item No. 7 as "7. Methalated denatured and  rectified spirit-Rs.0.05 per litre." Class VI with the  heading "Tobacco  and  other  intoxicating  goods" contains the  entry at  Item No.  6: as "6. Foreign imported liquor and all kinds of wines made in India-Re.1 per litre."      Kasturi Lal  Satantra Kumar and his partner-respondents 3 and  4 by  a bid  in the  auction held  for retail vend of country liquor  for the  excise year 1987-88 ending on March 31, 1988  obtained the  necessary  licence  under  the  U.P. Excise Act for a group of shops in the district of Bareilly. One of  the conditions of the auction which also formed part of the  licence was that the licensee would obtain supply of country liquor  for retail vend from the bonded warehouse in respect of Bareilly district.      The Nagar  Mahapalika sought  to realise octroi duty on the

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866 country spirit  supplied by the bonded warehouse at the rate of Re.1  per litre  treating it  to be ’liquor fit for human consumption’ under Entry 6 of Class VI of the Notification.      The respondents  filed a  writ petition for a direction to restrain  the Nagar  Mahapalika from collecting octroi at the rate of Re.1 per litre contending that country spirit is nothing but  rectified spirit and that octroi duty could not be charged  in excess  of Rs.0.05 per litre under Item No. 7 of Class III of the Notification.      The High Court allowed the writ petition and restrained the Nagar  Mahapalika from  requiring payment of octroi duty at Re.1 per litre upon the country spirit brought within its limit under  Item No.  6 of  Class VI of the Schedule to the Notification.      Dismissing the SLP of the Nagar Mahapalika, this Court, ^      HELD: 1. The taxable event for the imposition of octroi is the  entry, and  the nature  and type of the goods at the point of entry on the relevant factors. [870A]      2. The  normal  meaning  of  the  expressions  "foreign imported liquor  or all  kinds of  wine made in India" would not fit in the description of the rectified spirit. Ordinary people would  not consider  rectified spirit  to be ’foreign imported liquor  or all  kinds of wines made in India’. That is not  the natural  meaning as understood by common people. That is  the yardstick  by which  this should be judged. The dictionary meaning also corresponds to the same view. [868E- F]      3. While  giving a  meaning to an Item contained in the Schedule of  articles, the  Court should  normally give it a meaning intended  by the  framers of the Schedule by looking at the various articles mentioned in a particular group. All the items  in one  group should  be considered  in a generic sense. [868H; 869A]      In the instant case, having regard to the nature of the duty and the type of the goods, rectified spirit is dutiable at the  rate of  Rs.0.05 per litre and not on the basis that it was ’foreign wine or liquor.’ [870B]      State of  U.P. and  others v.  Synthetics and  Chemical Ltd. etc. etc., A.I.R. 1980 S.C. 614, referred to.      Heeralal and  others v.  State, A.I.R.  1979  Rajasthan 133, approved. 867

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: S.L.P. (CIVIL) No. 14968 of 1987.      From the Judgment and Order dated 2.11.1987 of the High Court of Allahabad in Civil Misc. Petition No.492 of 1987.      S.N. Kacker and Pramod Swarup for the Petitioner.      Soli J. Sorabjee and R.B. Mehrotra for the Respondents.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI, J. This petition under Article 136 of the  Constitution for  leave to  appeal  is  against  the decision of  the  High  Court  of  Allahabad  dated  2nd  of November, 1987.  The question involved here is regarding the levy and realisation of octroi duty by the Nagar Mahapalika, Bareilly in  Uttar Pradesh.  Kasturi Lal  Satantra Kumar and his partner,  respondents herein,  by a  bid in  the auction held for retail vend of country liquor for excise year 1987- 88 ending  on March  31, 1988 obtained the necessary licence under the  U.P. Excise  Act for  a group  of shops  known as

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Faridpur Group  in the district of Bareilly. The auction was held in  the month  of March, 1987. One of the conditions of the auction  which also formed part of the licence, was that the licensee  would obtain  supply  of  country  liquor  for retail vend from the bonded warehouse in respect of Bareilly district situated  within the  limits  of  Nagar  Mahapalika Bareilly.      Indubitably the said Kasturi petitioner in the original writ petition brought into the territory country spirit, the question was  at what  rate the  municipality was  to impose octroi duty on the rectified spirit which was brought.      It appears  that there was a notification dated 30th of April, 1986,  published in  the U.P.  Gazette in exercise of powers under  section 172(2)(b) of the U.P. Nagar Mahapalika Adhiniyam, 1959.  In  the  Schedule  forming  part  of  that notification are  mentioned the articles on which the octroi duty is  payable and  the rates  thereof. The  articles have been grouped  together in  different classes from Class I to Class X.  Class III  which bears  the heading  "Articles  of lighting,  Fuel,   Washing  and   Lubricants"  contains  the following entry as item No. 7:           "7. Methelated denatured and rectified spirit                                      .....Rs.0.05 per litre" 868 Class VI  with the  heading "Tobacco  and other intoxicating goods" contains the following entry at item No. 6:           "6. Foreign imported liquor and all kinds of wines           made in India.                                         .....Re.1 per litre"      It is  asserted on  behalf of  the respondents that the point of entry within the Nagar Mahapalika limits, the plain spirit is  nothing but rectified spirit and that octroi duty could not  be charged upon it in excess of Rs.0.05 per litre under Item  No. 7  of Class  III of  the  aforesaid  Gazette Notification. The Municipality contends otherwise that it is foreign imported liquor of all kinds of wines made in India. The base  for this  contention is that for foreign liquor or wine rectified  spirit is  used. Reliance  was placed  on  a decision of  this Court  in the  State of U.P. and others v. Synthetics and  Chemical Ltd.  etc. etc.,  A.I.R. 1980  S.C. 614, where this Court observed that the term ’liquor’ in the various Abkari Acts in the provinces of India would not only cover those  alcoholic liquids  which are generally used for beverage purposes  and produce  intoxication  but  also  all liquids containing alcohol. It is, therefore, submitted that the payment  of octroi  duty could  not be  avoided  by  the respondents saying  that the  plain country  spirit was  not liquor  in   the  sense  that  it  was  not  fit  for  human consumption at  the stage  when it  was brought  within  the limits of  the Nagar  Mahapalika. The  normal meaning of the expression "foreign  imported liquor  or all  kinds of  wine made in  India" would  not fit  in the  description  of  the rectified  spirit.   Ordinary  people   would  not  consider rectified spirit  to be foreign imported liquor or all kinds of wines  made in  India. That is not the natural meaning as understood by  common people. That is the yardstick by which this  should   be  judged.   The  dictionary   meaning  also corresponds to  the same  view. "Wine"  according to Collins Dictionary of  the English language means an alcoholic drink produced by  the fermenting  of grapes  with water and sugar and an  alcoholic drink  produced in  this  way  from  other fruits, flowers etc.      By any  common notion  it could  not be considered that the respondents  having regard  to the  nature of the goods, brought into  the territory  liquor or  wine. The High Court

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has come  to that conclusion after taking into consideration the ordinary  notion. While  giving a  meaning  to  an  item contained in  the Schedule  of articles,  the  Court  should normally give  it a  meaning intended  by the framers of the Schedule by  looking at  the various articles mentioned in a particular 869 group. All  the items in one group should be considered in a generic sense.  It appears that Class III of the Schedule in the instant  case was  intended to deal with the subjects of Methelated denatured  and rectified spirit which was brought within the  limits  of  the  Nagar  Mahapalika  for  use  as articles for  lighting, fuel,  washing and lubricants at the low rate  of Rs.0.05  per litre  while liquor brought within its limits  for  use  as  an  article  of  intoxication  was intended to  be subjected  to levy  of octroi  duty  at  the higher rate  of  Re.1  per  litre.  Class  VI  contains  the following items:           "Class VI-Tobacco and other intoxicating goods:           1.   Field dried  tobacco,  its  chura  and  roots                ordinary tobacco for eating and Hugga.           2.   Scented  tobacco   for  eating  and  smoking,                Qimam, Surti, Sugni.           3.   Leaves of bidi.           4.   Bidi tobacco, finished bidi, prepared khamira                tobacco.           5.   Cigarette cigar,  foreign  type  manufactured                tobacco which is smoked through cigarette and                pipe, cigarette  paper, pipe  and other  such                articles           6.   Foreign imported  liquor  and  all  kinds  of                wines made in India.           7.   Bear."      The  scheme   is  found  in  respect  of  the  articles mentioned in  the various other classes also. The High Court has noted  Class-I which  deals with  articles of  food  and drinks for  men and  animals. Item  No. 1  of the said class mentions wheat  and paddy;  item  No.  6  mentions  chemical fodder meant for animals and birds; item No. 16 mentions ice made of  water and item No. 17 mentions all cold drinks like Double Seven, Thumps-up, Limca, Gold-spot, etc. Likewise, in Class  III,   articles  for   lighting,  fuel,  washing  and lubricants, one finds at item 1 fuel and wood etc.      We must  reiterate that  we are  concerned with  a duty which is imposed at the time of entry and not how it is used thereafter. The 870 taxable event  for the imposition of octroi is the entry and the nature  and type  of the  goods at the point of entry is the relevant factor.      We may  note that  this view was taken by the Rajasthan High Court  in Heeralal  and others  v. State,  A.I.R.  1979 Rajasthan 133.  Having regard  to the nature of the duty and the type of the goods with which we are concerned, we are of the opinion  that the  rectified spirit  is dutiable  at the rate of  Rs.0.05 per  litre and not on the basis that it was foreign wine or liquor.      In the  premises, the  view taken  by the High Court is right. This  petition therefore,  fails and  is  accordingly dismissed. N.V.K.                                   Petition dismissed. 871