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PETITIONER: CANTONMENT BOARD,DEHU ROAD & ANR.

       Vs.

RESPONDENT: MAHINDRA OWEN LTD. & ANR.

DATE OF JUDGMENT31/03/1986

BENCH: ERADI, V. BALAKRISHNA (J) BENCH: ERADI, V. BALAKRISHNA (J) MADON, D.P.

CITATION:  1986 AIR 1114            1986 SCR  (1) 961  1986 SCC  Supl.  301     1986 SCALE  (1)633

ACT:      The Bombay  Cantonment Board Act read with Notification No.SRO 318 dated 29.10.59 - Items 3, 11, 14 and 16(b) of the First Schedule  thereto, scope  of -  Whether  trailers  and water tankers manufactured by the Respondent and supplied to the Defence  Department falls  under the  aforesaid items  - Whether the  levy of  octroi duty is illegal, in view of the specific provision (vi) contained in Schedule II.

HEADNOTE:      The first  respondent company manufactures trailers ant water tankers  at its  factory at  Pimpri in the District of Poone. Pursuant  to the  acceptance of the tenders submitted to the  Defence Department  of the Union of India, the first respondent sold  different quantities  of 100  C.W.D. ant 10 C.W.D. trailers  and two-wheeled  water tankers.  Under  the terms  of   the  contract,   the  ownership  passed  to  the Government of  India on inspection of the goods at the first respondent’s factory  premises at  Pimpri and  appropriation thereof to  the contract consequent on approval of the goods but delivery  was to  be effected  by the  company  free  of charge within the cantonment limits of Dehu Road.      The first  appellant Board  claimed from the respondent company payment of octroi-duty aggregating Rs.3,37,628-08 on the  trailers/water  tankers  so  supplied  to  the  Defence Department. In  the appeal preferred by the first respondent under section 84 of the Cantonment Boards’ Act, the District Magistrate held that the trailers/water tankers supplied did not fall  within the scope of any of the items enumerated in the First Schedule to the Notification No. SRO 318 Dt. 29.10.59 and therefore the levy of octroi-duty was illegal. The appellants  preferred a  batch of  Writ Petitions before the  High   Court  which   were  dismissed   upholding   the Magistrate’s  judgment.  Hence  the  appeal  by  certificate granted by the Bombay High Court under Article 133(1)(a) ant (c) of the Constitution. 962      Dismissing the appeals, the Court, ^      HELD 1.1  None of  the items 3, ll, 14 and 16(b) of the First Schedule  to the  Notification No SRO 318 dt 29 .10.59 will take  within its  scope the  trailers/water tankers  in

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respect of  which the  notices of demand of octroi-duty were issued to  the first  respondent company. The imposition and demand of  the octroi  duty in  relation to  them was wholly unwarranted. Entry  No.3 read  as  a  whole  contains  clear indication of  the nature  and type of the articles intended to be  comprehended by  the  description  "All  articles  of Galvanised, Iron  or steel".  Entries 11  and 14  deal  with "machinery" and "machines" and the trailers/water tankers by themselves cannot  be regarded  as "machinery" or "machines" Under Entry  16(b), they cannot be regarded as "accessories" of conveyance either. [965 E; 966 C-G]      1.2 Even  if it  is assumed  that any of the entries in the  First  Schedule  to  the  Notification  did  cover  the trailers/ water  tankers, the levy of octroi duty in respect of them  would still  be illegal  in view  of clause (vi) of Schedule II  to the  Notification since no octroi duty shall be levied on "Military Stores" etc. [966 G-H 967 A]       1.3  The expression "Military Stores" used in Schedule II is  comprehensive enough  to cover articles essential for military use  inclusive of  trailers/water tankers’ supplies of which  are accumulated  in the depot for being drawn upon when ever  needed The  matter is  placed beyond doubt by the significant fact  that in  the Schedule to the acceptance of tenders Annexure  ’A’, pursuant to which the trailers/water- tankers were supplied, paragraph 12 which contains "despatch instructions"  specifically  refers  to  the  trailers/water tankers as  ’stores’. Further,  as per  the tender terms the trailers/water tankers supplied to the Defence Department of the Government  of India,  had become  the property  of  the Defence Department  even prior  to their entry into the Dehu Road   cantonment    Board   The    requirement    regarding certification  by   the  Superintendent  of  Police  has  no application in  respect of  the "Military Stores". [967 G-H; 968 A-C] 963

JUDGMENT:      CIVIL APPELLATE  JURISDICTION :  Civil Appeal  Nos. 48, 362 to 379 of 1972.      From the Judgment and Decree dated 23/24.11.1970 of the Bombay High Court in Special Civil Appln. No. 2217 of 1969.      V.M. Tarkunde and K.L. Hathi for the Appellants.      F.J.S. Talyarkhan, B.H. Wahi, A.N. Haksar, P.K. Ram, A. Narayan and S. Sukumsran for the Respondents.      The Judgment of the Court was delivered by      BALAKRISHNA ERADI,  J. These  appeals which  have  been filed on  the strength  of a certificate dated September 14, 1971 granted  by the  High Court  of  Bombay  under  Article 133(1)(a) and  (c) of  the Constitution of India, as it then stood, are  directed against  the judgment of the High Court of Bombay dated November 23, 1970 dismissing a batch of Writ Petitions filed  by the  appellants herein  challenging  the order dated  May 23, 1969 passed by the District Magistrate, Poone setting  aside the  notices of  demand of  Octroi Duty issued by the appellants to the first respondent-company.      The first  appellant herein  is the  Cantonment  Board, Dehu Road and the second appellant is its Executive Officer. The  first   respondent  is   a   public   limited   company manufacturing trailers  and water  tankers at its factory at Pimpri in  the District  of Poone.  The first respondent had submitted tenders  to the Defence Department of the Union of India for  the manufacture  and supply of trailers and water tankers. Pursuant  to the  acceptance of  those tenders, the

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first respondent manufactured ant sold to the Union of India different quantities of 100 C.W.D and 10 C.W.D. trailers and two-wheeled water  tankers. Under  the terms of the contract the  ownership   passed  to   the  Government  of  India  on inspection of  the goods  at the  first respondent’s factory premises at Pimpri and appropriation thereof to the contract consequent on  approval of  the goods but delivery was to be effected by  the first  respondent-company  free  of  charge within the  Cantonment limits  of Dehu Road. Accordingly, by June-July, 1965, 8,953 trailers/water tankers were delivered by the first respondent 964 company  within   the  limits   of  the   Cantonment  Board. Thereafter, 682  more such  trailers/water tankers were also delivered by  the first  respondent-company to  the  Defence Authorities within  the Dehu  Road Cantonment  limits during 1965 and 1966.      Under the  provisions of  the Cantonment Board Act, the appellant Board  with the  previous sanction  of the Central Government could  impose Octroi  Duty in respect of articles brought into  the limits  of the  Cantonment Board.  Under a Notification dated  October 29,  1959, bearing  No. SRO 318, the first  appellant imposed a non-refundable Octroi Duty in respect  of  articles  brought  within  the  limits  of  the Cantonment Board,  for consumption,  use or  sale therein st the rates specified in the First Schedule.      Based on the aforesaid Notification the first appellant demanded from the first respondent-company payment of Octroi Duty on the trailers/water tankers which were brought within the limits  of the  Cantonment Board.  The total  amount  so claim  ed  from  the  first  respondent  aggregated  to  Rs. 3,37,628.08. Out  of the  said amount,  the first respondent paid Rs.3,18,620.08  under protest,  and approached the High Court of  Bombay by filing Special Civil Application No.1720 of 1966  challenging the  notices of  demand and praying for directions being  issued to  the first  appellant  Board  to cancel or  withdraw the  notices of demand and to refund the amount  of  Octroi  Duty  already  paid  under  protest.  On November 29,  1968, the  High Court  dismissed the said Writ Petition on  the ground  that the  matter involved  disputed question of  facts and  hence the  first  respondent  should exhaust his  alternate remedy  by referring an appeal to the District Magistrate  before seeking relief under Article 226 of the Constitution.      The  first   respondent-company  thereafter   preferred appeals before  the District Magistrate, Poone under-Section 84  of   the  Cantonment  Board’s  Act  with  a  prayer  for condonation of the delay in filing the appeals. The District Magistrate granted  the prayer  for condonation of delay and by a  very detailed  order allowed  the appeals holding that the trailers/  water tankers  manufactured and  delivered by the first  respondent-company did  not fall within the scope of any  of the  items enumerated  in the 1st Schedule to the Notification authorising  the levy  of Octroi Duty and hence the action of 965 the appellants  in demanding  the payment  of Octroi Duty in respect of  them was  illegal. He accordingly, set aside the notices of  demand and directed the appellants to refund the amount of  Duty already  collected from the first respondent company.      Aggrieved by the said decision the appellants preferred a batch  of Writ Petitions before the High Court challenging the legality  and correctness  of the aforesaid order passed by  the  District  Magistrate.  Those  Writ  Petitions  were

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dismissed by the High Court under the impugned judgment. The High Court  has upheld  the view  expressed by  the District Magistrate that  the trailers/water  tankers  did  not  fall within the scope of any of the entries in the First Schedule to the Notification authorising the levy of Octroi Duty. The correctness of  the conclusion so recorded by the High Court is challenged by the appellants in these appeals.      Having given our careful consideration to the arguments advanced by  the learned Counsel appearing on both sides, we have unhesitatingly  come to the conclusion that there is no merit in  these appeals  and that  the decision  of the High Court does not call for any interference.      The entries  in the  First Schedule to the Notification which were  relied on  by the High Court are those appearing as Item  Nos.  3,  11,  14  and  16(b).  Those  entries  are respectively in the following terms :-           "3. All articles of Galvanised iron, or steel such           as All  Machinery parts,  Buckets, channels,  Iron           Utensils, Karahi  tubs, Ordinary  country weighing           scales pipes,  safes, springs,  suit cases, tanks,           tin, containers,  trunks, tubs  and wheels  of all           vehicles (except those specified elsewhere), Axle,           Chassis, Heavy  iron chains,  Wire and Wire ropes,           hardwares such  as  barbed  wires,  bolts,  files,           Hammers,  Hinges,   Nails,  Nuts,  pipes,  Pliers,           Rivets,  Saws,   Screws,  Tools,   Washers,   Wire           Nettings, Wrench  etc. (Excepting articles of cast           iron and those mentioned elsewhere). 966           11.  All   kinds  of   machinery  (not   specified           elsewhere.           14. All other machines (not specified elsewhere).           16. Vehicles:                ...            ...             ....           (b) All parts and accessories of Motor cars, Motor           trucks  or   similar  conveyances   except  axles,           chassis, rubber  solution, springs,  tubes,  tyres           and wheels."      Entry No.3 read as a whole contains clear indication of the  nature   and  type  of  the  articles  intended  to  be comprehended by the description "All articles of Galvanised, Iron or  Steel". In our opinion the High Court was perfectly right  in   its  view   that  the   trailers/water   tankers manufactured and  delivered by  the first respondent-company did not  fall within  the scope  of the  said entry. Entries Nos. 11  and 14  deal with  ’machinery’ and  ’machines’  and those  entries   also  will  not  take  within  their  scope trailers/water tankers,  since, by themselves they cannot be regarded as either machinery or machines. While dealing with entry No. 16(b), the High Court has dwelt in detail upon the exact nature  of the  trailers/water tankers manufactured by the appellants  and the  uses to  which they  are  put,  and expressed  the   view  that   they  cannot  be  regarded  as "accessories" of  conveyances. We  are in agreement with the said view expressed by the High Court.      Thus the  position that  emerges is  that none  of  the aforesaid entries  contain in  the  First  Schedule  to  the Notification relied  on by  the appellants  will take within its scope the trailers/water tankers in respect of which the notices of  demand of  Octroi Duty  were issued to the first respondent-company. The imposition and demand of Octroi Duty in relation to them was hence wholly unwarranted.      Quite apart from what has been stated above, even if it is assumed for purpose of discussion that any of the entries in the  First Schedule  to the  Notification did  cover  the

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trailers/water tankers,  the levy  of Octroi Duty in respect of 967 them  would  still  be  illegal  in  view  of  the  specific provision contained  in Schedule II to the Notification that -           "No Octroi shall be levied on           (vi) Military  Stroes ant other articles of Police           equipment pertaining to uniforms including similar           articles of National Volunteer Corps and equipment           of  Police   Radio  Service;  provided  that  each           consignment is  certified by the Superintendent of           Police of the district concerned or in the case of           National Volunteer  Corps by an Officer authorised           by the  State Commandant, National Volunteer Corps           in this  behalf, to  be the property of Government           in the Police Department." It has  been found  by the District Magistrate as well as by the High Court that the trailers/water tankers were supplied to the  Defence Department  of the  Government of  India and that they  had become  the property  of  Defence  Department prior to their entry into the Dehu Road Cantonment Board.      The  expression   "stores"  has  been  defined  in  the Dictionaries as meaning -           "Articles  of   particular  kind  or  for  special           purpose accumulated  far  use,  supply  of  things           needed, (military,  naval etc.)  " -The    Concise           Oxford Dictionary.           "Supply or  stock of  something, especially essen-           tials,  for   a  specific   purpose:  the   ship’s           stores."Collins English Dictionary.           "Supplies of  provisions, ammunition  etc. for  an           army,  ship   etc."  Chambers   Twentieth  Century           Dictionary. G      In our opinion the expression "military stores" used in Schedule  II  is  comprehensive  enough  to  cover  articles essential  for  military  use  inclusive  of  trailers/water tankers supplies  of which  are accumulated in the depot for being drawn  upon whenever  needed.  The  matter  is  placed beyond doubt by the 968 significant fact  that in  the Schedule to the acceptance of tenders - Annexure ’A’, pursuant to which the trailers/water tankers were supplied, paragraph 12 which contains "despatch instructions"  specifically  refers  to  the  trailers/water tankers as stores while stating thus:           "The stores  after inspection will be delivered at           Vehicle Depot, Dehu." The   requirement    regarding    certification    by    the Superintendent of  Police has  no application  in respect of "military  stores".The  exemption  provision  was  therefore clearly attracted  and  the  levy  of  Octroi  Duty  on  the trailers/water tankers was clearly illegal.      These appeals  are, therefore, devoid of merit and they will accordingly  stand dismissed.  The  parties  will  bear their respective costs. S.R.                               Appeals dismissed. 969