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PETITIONER: THE CENTRAL INDIA SPINNING ANDWEAVING AND MANUFACTURING COMP

       Vs.

RESPONDENT: THE MUNICIPAL COMMITTEE, WARDHA

DATE OF JUDGMENT: 18/12/1957

BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. BHAGWATI, NATWARLAL H. SINHA, BHUVNESHWAR P. IMAM, SYED JAFFER GAJENDRAGADKAR, P.B.

CITATION:  1958 AIR  341            1958 SCR 1102

ACT:    Terminal  tax-Goods in transit passing through  Municipal limits-If  can  be taxed-Imported into  and  exported  from- Connotation of-C.  P. & Berar Municipalities Act, 1922 (C.P. 11 Of 1922), s. 66(1)(0).

HEADNOTE:    Section  66(1)(0) of the C. P. and  Berar  Municipalities Act,  1922,  empowered  the  municipalities  to  impose   "a terminal  tax on goods or animals imported into or  exported from  the limits of a municipality".  The respondent  framed rules  for  the imposition of terminal tax.   The  appellant transported  bales of cotton from Yeotmal to Nagpur by  road and  the  vehicles  carrying the goods  passed  through  the limits  of respondent municipality.  The goods were  neither unloaded  nor  reloaded at Wardha bat  were  merely  carried across through the municipal area.  The respondent collected terminal  tax  on these goods on the ground that  they  were exported by the appellant from the limits of the  respondent municipality.   The appellant disputed his liability to  pay terminal tax, and claimed a refund :    Held,  that  the  goods which were in  transit  and  were merely  carried across the limits of the  municipality  were not liable to terminal tax.  Terminal tax on goods  imported into or exported                             1103 from  the limits of a municipality was payable on  goods  on their   journey  ending  within  the  municipal  limits   or commencing therefrom and not where the goods were merely  in transit  and  had their terminus  elsewhere.   Terminal  tax leviable  under  s.  66(1)(o) must have  reference  to  some activity  within the municipal area i.e., the entry for  the purpose of remaining within that area or the commencement of the journey from that area.     The  words "imported into" do not merely mean  "bringing into"but  comprise  something more i.e.,  incorporating  and mixing up of   the  goods with the mass of the  property  in the local area. Similarly, the words "exported from" do  not merely  indicate,  "taking out" but have  reference  to  the

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taking out of goods which’ had become part and parcel of the mass of the property of the local area and will not apply to goods in transit i.e. brought into the area for the  purpose of being transported out of it.

JUDGMENT:    CIVIL  APPELLATE  JURISDICTION: Civil Appeal No.  119  of 1953.    Appeal  by special leave from the order  dated  September 11,  1950, of the Nagpur High Court in  Miscellaneous  Civil Case No. 77 of 1946.    C.K.  Daphtary,  Solicitor-General of India and  M.S.  K. Sastri, for the appellants.    A.V. Vishwanatha Sastri, G. J. Ghate and Naunit Lal,  for the respondent.    1957.  December 18.  The following Judgment of the  Court was delivered by    KAPUR  J.-This  is an appeal by Special Leave  against  a Judgment and order of the High Court of Judicature at Nagpur dated February 14, 1950 and the question for decision  turns upon  the construction of s. 66(1)(0) of the C. P.  &  Berar Municipalities  Act (Act II of 1922) which in this  judgment will be termed the Act.    A short recital of the facts of the case will suffice for its  decision.   The appellant is a company  which  has  its spinning  and  weaving mills at  Yeotmal.   The  appellant’s bales  of cotton are transported from Yeotmal to  Nagpur  by road  and vehicles carrying them pass through the limits  of Wardha  Municipality.   The  goods  being  in  transit,  the vehicles  carrying them do no more than use the  road  which traverses  the  municipal limits of Wardha and is  a  P.W.D. road.  The goods are neither unloaded nor reloaded at 1104 Wardha  but are merely carried across through the  municipal area.   The Municipal Committee purporting to act  under  s. 66(1)(0)  of the Act and r. I of the rules  made  thereunder collected  Rs.  240 as terminal tax on these  goods  on  the ground  that they were ex ported by the appellant  from  the limits  of  the  Municipality  of  Wardha.   The   appellant thereupon  claimed a refund of this sum.  On refusal by  the Municipality  the  appellant took an appeal  to  the  Deputy Commissioner, Wardha which was sent for disposal to the Sub- Divisional  Officer,  who, on March 11, 1946,  referred  the following  two  questions under s. 83(2) of the Act  to  the High Court for its opinion:    (1)Whether  goods  passing through the limits  of  Wardha Municipality  by  road  despatched  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 collect-ed on  such goods ?    The  reference in the first instance came up for  hearing before  Sheode,  J., who referred the matter to  a  Division Bench  and the Division Bench in turn referred it to a  Full Bench.   The  High  Court after referring  to  a  number  of decided  cases  was  of the opinion that the  tax  had  been validly imposed and the appellant was therefore not entitled to a refund.    The  powers  of the Municipality to  impose,  assess  and collect  taxes  are set out in chapter 9 of the Act  and  s. 66(1) enumerates the taxes which may be imposed.  Clause (d) of  sub-section (1) deals, with tolls; cl. (e)  with  octroi

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and cl. (o) with terminal tax.  The sub-section provides:    "  66(1) 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:-    (a)  a  tax payable by the owners of buildings  or  lands situate within the limits of the municipality,                             1105 with reference to the gross annual letting value of the buildings or lands;    (b)    a tax on persons exercising any profession or art, or  carrying on any trade or calling, within the  limits  of the municipality;    (c)    a  tax,  payable  by the owner,  on  all  or  any( vehicles  or  animals used for riding, driving,  draught  or burden, or on dogs, where such vehicles, animals or dogs are kept within the limits of the municipality ;    (d)    a  toll on vehicles and animals used as  aforesaid entering the limits of the municipality, and on boats moored within those limits:    Provided  that  a  toll under this clause  shall  not  be payable on any vehicle or animal on which a tax under clause (c) has been imposed.    (e)    an  octroi on animals or goods brought within  the limits  of  the municipality for sale,  consumption  or  use within those limits;    (f)market  dues  on persons exposing goods  for  sale  in market or in any place belonging to or under the control  of the Government or of the committee ;    (g)    fees on the registration of cattle sold within the limits of the municipality;    (h)    a  latrine  or  conservancy  tax  payable  by  the occupier  (or  owner)  upon  private  latrines,  privies  or cesspools,  or  upon  premises  or  compounds  cleansed   by municipal agency;    (j)    a  tax  for the construction  and  maintenance  of public latrines;    (k)    a  water-rate,  where  water is  supplied  by  the committee ;    (l)    a  lighting  rate  where the  lighting  of  public streets,places and buildings is undertaken by the  committee ;    (m)    a  drainage  tax, where a system of  drainage  has been introduced;    (n)    a  tax  payable by the occupiers of  buildings  or lands  within the limits of the municipality,  according  to their circumstances and property within those imits; 1106     (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; and    (p) a tax on-    (i)    persons  travelling  by  railway  to  or  from   a municipality to which pilgrims resort, or    (ii)   pilgrims visiting a shrine within the limits ’of a municipality Rule I of the Terminal Tax Rules made under the Act  relates to exports and r. 2 to imports.  They provide:     (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..................     (2)   On the following goods imported by rail or road  a

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terminal tax shall be levied at the rate noted against each.   Then follows the schedule.   The High Court was of the opinion that "The words ’ export ’  and  I 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 ’. "   The appellant’s contention is that the words’imported into or  exported from’ do not merely mean ’to bring into’ or  to carry  out  of or away from but also have reference  to  and imply the termination or the commencement of the journey  of the goods sought to be taxed and therefore goods in  transit which  are  transported  across the limits  of  a  Municipal Committee are neither imported into the municipal limits nor exported  therefrom.  It is also contended that even if  the words  ,imported into or exported from’ are used  merely  to mean  "to bring into" or "to carry out of or away from"  the qualifying of the tax by the adjective "terminal"                             1107 is  indicative of the terminus ad quem or terminus a quo  of the journey of the goods and excludes the goods in  transit. The  respondent  on the other hand submits that the  tax  is leviable merely on the entry of the goods into the municipal limits or on their exit there. from and the word  "terminal" has reference to the termini of the jurisdictional limits of the  municipality and not to the journey of the goods.   The efficacy   of  the  relative  contentions  of  the   parties therefore requires the determination of the construction  to be  placed  on  the  really important  words  of  which  are "terminal  tax", "imported into or exported from" and "  the limits  of the Municipality".  In construing these words  of the  statute if there are two possible interpretations  then effect  is to be given to the one that favours  the  citizen and not the one that imposes a burden on him.   ’Import’  is derived from the Latin word  importare  which means’to  bring  in’  and  ’export’  from  the  Latin   word exportare  which means to carry out but these words are  not to   be   interpreted  only  according  to   their   literal derivations.    Lexico-logically  they  do  not   have   any reference  to goods in’transit’a word derived from  transire bearing a meaning similar to transport, i.e., to go  across. The dictionary meaning of the words ’import’ and ’export’ is not  restricted to their derivative meaning but  bear  other connotations  also.   According to  Webster’s  International Dictionary  the  word  "import" means to  bring  in  from  a foreign  or  external  source; to  introduce  from  without; especially  to bring (wares or merchandise) into a place  or country  from  a  foreign country  in  the  transactions  of commerce;  opposed to export.  Similarly "export"  according to Webster’s International Dictionary means "to carry  away; to  remove;  to carry or send abroad especially  to  foreign countries  as  merchandise  or commodities  in  the  way  of commerce;  the opposite of import ". The  Oxford  Dictionary gives a similar meaning to both these words.    The  word  "transit" in the Oxford Dictionary  means  the action or fact of passing across or through; passage 141 1108 or  journey from one place or point to another; the  passage or carriage of persons or goods from one place to another  ; it  also  means  to pass across or  through  (something)  to traverse, to cross.  Even according to the ordinary  meaning of  the words which is relied upon by the respondent,  goods which are in transit or are being transported can hardly  be

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called  goods ’imported into or exported from’ because  they are neither being exported nor imported but are merely goods carried across a particular stretch of territory or across a particular  area  with the object of  being  transported  to their  ultimate  destination which in the instant  case  was Nagpur.    The  respondent’s counsel sought to support his  argument by  referring  to  the following cases  decided  by  various Indian  High  Courts where the words ,import’  and  ’export’ were construed as meaning ’bring in’ or ’take out of or away from’  and it was also held that goods in transit  are  also covered by the words ’imported into’or ’exported from’.    In  Re Rahimu Bhanji (1) which was a case of  a  criminal prosecution  for  refusal to pay octroi on the  ground  that octroi  was  not due on goods in transit, the court  gave  a literal  meaning to the word "import" and held that  as  the goods had been brought within the limits of the Municipality they  were liable to octroi under the Rules  which  provided for a refund, which could be applied for.  The definition of octroi seems to have been ignored in that case. In Narottamdas Harjivandas & Co. v. Bulsar Town Municipality    (2)  the  tax  was imposed on goods in  transit  and  the argument  raised was that the municipality had no  power  to impose a terminal tax upon such goods as were not meant  for consumption  within  the limits of  the  Municipality.   The court held:    "In  our  opinion there is no force in  this  contention. The  Municipal Rules and Bye-laws dealing with the  terminal tax  define it as ’an octroi levied on the import  into  the said  Municipality  of goods specified in the  Terminal  Tax Schedule, such octroi not    (I) (1897) I.L.R. 22 Bom. 843.    (2) I.L.R. (1941) Bom. 97, 103. 1109 being  liable  to be refunded.’ ’Import’ is defined  in  the Rules  as meaning ’conveying goods by Railway or by Ship  or otherwise  into  Municipal limits’.  It is  clear  therefore that  the  tax is leviable on all goods  entering  Municipal limits whether they are intended for consumption within  the city  or  whether they are’, merely in transit  through  the city to some other place ".    This  decision  rested on the definition of the  words  " import   "  and  "  terminal  tax  "  without  taking   into consideration   the  meaning  of  ’octroi’   which   implies consumption,  use or sale.  Besides these observations  were really  obiter because the court held that the  goods  never entered  the limits of the Municipality and consequently  no tax was chargeable.    Dalvadi  -Maganlal Bhagwandas v.  Ahmedabad  Municipality (1)  was  a  case in which bricks  manufactured  within  the limits  of  the Ahmedabad Municipality had in  order  to  be carried to the place of business of the manufacturer,  which was in another part of the town, to be temporarily taken out of the limits of the Municipality and re-entered at  another point.  The re-entry was held to be " import " on the  basis of the dictionary meaning of the word and because "  import" had   no  reference  to  and  was  not  qualified   by   any consideration  of  the  place of  manufacture  or  place  of consumption.  Rajadhyaksha J., said at p. 137:   "  There is no such limitation on the meaning of the  word import " which must be given its ordinary meaning and at p. 140 the learned Judge observed:   " We are of the opinion that the word " import in r.  380, Ahmedabad Municipal Code must be given its ordinary meaning, and that is " to bring something within the Municipal limits

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from  a place without its boundaries ", irrespective of  the consideration  as  to whether the  goods  were  manufactured within  the  Municipal limits, how long  they  were  outside those limits and for what purpose". (1)  I.L.R. (1945) Bom. 132. 1110    The   two  Nagpur  cases  relied  upon  were   Bhagwandas Harikishandas  v.  Municipal  Committee,  Yeotmal  (1)   and Kashiram Jhabarmal Firm v. Municipal Committee, Nagpur  (2). In  the former case the decision was again based  solely  on the literal dictionary meaning of the words " imported  into or  exported from ", and a further argument relying  on  the existence of the word " or " between "imported and  exported "  instead  of  "and........  as  an  argument  against  the ,imposition  of  the  tax  on  goods  in  transit  was  also repelled.   In the latter case where the goods were  brought into  the municipal limits for being despatched by rail  the court  again  relied  on the " plain meaning  of  the  words "imported  into  or  exported from "  and  also  on  certain government   instructions  which  were  in  favour  of   the imposition of tax on goods in transit.  There are also  some unreported  judgments  of  the Nagpur High  Court  taking  a different view of the words" imported into or exported from" and those have been referred to in the judgment of Grille C. J.  in  Kashiram’s case (2) and in the  referring  order  of Sheode J., in the present case.   Emperor v. Har Dutt (3) was a case of payment of toll  tax in  respect  of  a lorry brought within the  limits  of  the Municipality  through  the toll barrier.  The word  used  in Rule  I  in  that case was " bring " and it  was  held  that bringing  has no element of pause or repose.  This  case  is hardly relevant to the facts of the case now before us.   In  an  earlier case Nek Mohammad v. Emperor  (4)  to  the words  "  bring  " and " import " an element  of  pause  and repose  was attached, but this case was not approved  of  in Hardwarimal  Harnath  Das v. Municipal Board,  Dehradun  (5) which  also  was  a case of goods in transit.   The  word  " import  " was there given the meaning " carried into ".  But the  decision  was  based on the definitions  given  in  the Statutory Rules to the word " import " which was "  bringing into the terminal tax limits from outside those limits ".    (1) A.I.R (1945) Nag. 197.        (2) I.L.R. (1946)  Nag. 99.    (4) A. I. R. (1936) All. 83. (3)A.I.R. (1936) All. 743. (5) I. L. R. (1940) All. 4.                             1111    In  none  of  these  cases was the  argument  as  to  the qualification  stemming from the use of the words  "terminal tax"  considered  nor  was the  signification  of  the  word "terminal " as a prefix to the word tax discussed.    The respondent also relied on Muller v. Baldwin (1) where it  was  held that " coals exported from the Port"  must  be taken to have been used in its ordinary meaning of " carried out of the Port " and therefore included coals taken out  of the  port  in a steamer as " bunker coals " that  is,  coals taken on board for the purpose of consumption on the voyage. The  argument  that  the term " exported "  must  receive  a qualified  interpretation and that it means taken  for  the. purpose  of trade only was rejected. Lush J. said at p.  461 :-    "  There  is nothing in the language of the Act  to  shew that  the  word "exported " was used in any other  than  its ordinary sense............. Construing the words of the  Act upon  this  principle,  we feel bound  to  hold  that  coals

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carried away from the port, not on a temporary excursion, as in a tug or pleasure-boat, which intends to return with more or less of the coals on board, and which may be regarded  as always  constructively within the port, but taken  away  for the  purpose of being wholly consumed beyond the  limits  of the  port, are coals " exported " within the meaning of  the Act ".    Now  three  things clearly emerge  from  that  (Muller’s) case;  (1) that the word "export " was not applied to  coals in  transit because the coals were taken from the  port  and started  journey  from there and would be  included  in  the phrase "taken out" of the port and (2) that temporary taking out was not " export " as was held in Maganlal Bhagwandas v. Ahmedabad  Municipality  (2);  (3)  that  the  test  is  the intention with which the goods were brought in or taken out.    It  was  urged  that  in  accordance  with  the   current authority  of  the different courts of  India,  a  different interpretation  should  not be placed on the  words  of  the section but this argument is of little avail in a case    (1) (1874) 9 Q B- 457.    (2) I.L.R. (1945) Bom. 132. 1112 where  the decision has not been acquiesced in for  long  or the  authorities are not absolutely unanimous.  Moreover  it is not a case of disturbing the course of construction which has  continued unchallenged for such a length of time as  to acquire the sanction of continued decisions over a very long period  and  there  is therefore  no  principle  which  will preclude this court from correcting the error.  See  William Hamilton  and  John  Hamilton v.  William  Baker  (1).   The Lancashire  and  Yorkshire  Railway Company  v.  The  Mayor, Alderman, and Burgesses of the Borough of Bury (2).  Pate v. Pate (3).    In  another  case  Wilson v.   Robertson  (4)  under  the statute the duty was imposed on all goods "imported into  or exported from Berwick harbour" which extended down the Tweed to  the  sea but no part of it extended  above  the  bridge. Goods were brought up the river in a sea-going vessel  which having  first  used rings and posts put up  by  the  Harbour Commissioners  in  order to moor while lowering  the  masts, passed through Berwick Bridge, and unloaded her cargo  about two hundred yards above the bridge and beyond the limits  of the  harbour.   It was held that goods were not  "  imported into " the harbour so as to make any dues payable in respect of them.  The argument raised there was that as there was no harbour  down the Tweed except Berwick and though the  goods were  actually unloaded above the Berwick bridge and out  of the limits of the harbour it was substantially imported into the  harbour.  The vessel in that case was obliged  to  stop before passing the bridge and avail herself of the  benefits of the machinery and works provided by the Commissioners and that was part of the means used towards the unloading of the vessel  and it was argued that this would amount to  import. Lord Cambell C. J. said:    "  The argument on behalf of the plaintiff would be  very pertinent  if  addressed  to a Committee  of  the  House  of Commons in favour of making the harbour dues payable in such a case as the present.  We can,    (1)  (1889) 14 App.  Cas. 209, 220, 222.  (2)  (1889)  14 App.  Cas. 417, 420.     (3) (1915) A. C. 1100, 1108.  (4) (1855) 24 L. J. Q.  B. 185.                             1113 however,  look only to what the legislature has enacted,  in order  to  see  whether  this  burthen  is  cast  upon   the

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defendants.   The  dues  are  only to  be  paid  upon  goods imported  into the harbour of Berwick, the limits  of  which are defined by the Act, and which does not extend above  the bridge.   Now,  has  this  iron been so  imported  ?  It  is admitted that, if it had been carried through the bridge  to a port higher up the river, no dues would have been payable; and  the plaintiff’s counsel by that admits himself  out  of court..............    These   observations   support    the submissions against the meaning of " export " or " import  " being merely taking out of or bringing into.    Mersey  Docks and Harbour Board v. Twigge (1) was a  case of goods shipped from a foreign port under a through bill of lading to Liverpool, landed in London and sent from there to Liverpool  in another ship and it was held that  such  goods were  imported into Liverpool ports beyond the seas and  not from  London.  The transit began at Singapore and  ended  at Liverpool and was not broken by the transhipment in London.    By giving to the words " imported into or exported from " their  derivative  meaning  without  any  reference  to  the ordinary   connotation  of  these  words  as  used  in   the commercial  sense, the decided cases in India have  ascribed too  general a meaning to these words which it appears  from the  setting,  context  and history of the  clause  was  not intended.  The effect of the construction of " import " or " export " in the manner insisted upon by the respondent would make  railborne  goods  passing through  a  railway  station within the limits of a Municipality liable to the imposition of  the  tax  on their arrival at  the  railway  station  or departure  therefrom  or both which would not only  lead  to inconvenience  but  confusion,  and  would  also  result  in inordinate delays and unbearable burden on trade both  inter State  and intra State.  It is hardly likely that  that  was the  intention of the legislature.  Such  an  interpretation would lead to absurdity which has, according to the rules of interpretation, to be avoided.   (1)     (1898) 67 L.J. Q. B. 604. 1114    Chief  Justice  Marshall  dealing with  the  word  "  im- portation " said in Brown v. State of Maryland (1):    The practice of most commercial nations conforms to  this idea.   Duties, according to that practice, are  charged  on those   articles  only  which  are  intended  for  sale   or consumption in the country.  Thus seastores, goods  imported and re-exported in the same vessel, goods landed and carried over  land  for the purpose of being re-exported  from  some other  port,  goods  forced in by  stress  of  weather,  and landed,  but not for sale are exempted from the  payment  of duties.   The  whole course of legislation  on  the  subject shows  that in the opinion of the legislature the  right  to sell is connected with the payment of the duties ".    Continuing the learned Chief Justice at p. 447 observed:    "Sale  is the object of importation, and is an  essential ingredient   of  that  intercourse,  of  which   importation constitutes  a part.  It is as essential an  ingredient,  as indispensable to the existence of the entire thing, then, as importation  itself..................  " This  supports  the contention raised that " import " is not merely the bringing into  but comprises something more i.e. " incorporating  and mixing  up  of  the  goods imported with  the  mass  of  the property " in the local area.  The concept of " import "  as implying  some.  thing brought for the purpose  of  sale  or being  kept is supported by the observations of Kelly C.  B. in  Harvey v. The, Mayor and Corporation of Lyme Regis  (2). There  the claim for a toll was made under the  Harbour  Act and  the  words  for construction were  "  goods  landed  or

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shipped  within  the same cobb or harbour  Construing  these words Kelly C. B. said:     "  The  ordinary  meaning and purport of  the  words  is perfectly clear, namely, that tolls are to be paid on  goods substantially  imported; that is, in fact, carried into  the port for the purpose of the town and neigh- bourhood."    Similarly the word " export " has reference to taking out of goods which had become part and parcel of the mass of the property of the local area and will not    (1)    (1827) 12 Wheat 419, 442; 6 L. Ed 678, 686.    (2)    (1869) 4 EX. 260, 262.                             1115 apply to goods in transit i.e. brought into the area for the purpose  of being transported out of it.  If  the  intention was to tax such goods then the word used should have been  " re-exported " which means to export (imported goods)  again; Re-exportation means the exportation of imported goods.    Even assuming that the words "imported into or " exported from " could be restricted only to their derivative  meaning and  thus construed to mean only "brought into or taken  out or  away from" this general meaning it was submitted by  the appellant  is qualified by the use of the prefix  "terminal" used  adjectively  with  the word "  tax",  which  makes  it necessary to determine the meaning of the term terminal  tax ".  And the question then arises does it have  reference  to the  jurisdictional  limits of the Municipality  or  to  the ultimate  termination or the commencement of the journey  of the goods as the case may be.  In dealing with this the High Court said:   "  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 ".   According  to the Oxford Dictionary " terminal means  end, boundary  ; situated at or forming the end or  extremity  of something; situated at the end of a line of railway; forming or belonging to, a railway terminus.   "  Terminus  " means the point to which motion  or  action tends, goal, end, finishing point; sometimes that from which it starts; starting point.  An end; extremity; the point  at which something comes to an end.    In  Corpus  Juris  Vol. 62 it is stated at  p.  729  that terminal  "  in connection with transportation  means  inter alia " the fixed beginning or ending point of a given run 142 1116     if  "  terminal  "  besides the  above  meaning  has  an additional  meaning  also  and that  meaning  signifies  the termini  or the jurisdictional limits of the municipal  area even  then the construction to be placed on the term  should be  the one that favours the tax-payer, in  accordance  with the principle of construction of taxing statutes, which must be strictly construed and in case of doubt must be construed against the taxing authorities and doubt resolved in  favour of the taxpayer.  In Crawford on Statutory Constructions  in para.  257  at p. 504 the following  passage  pertaining  to construction of taxing statutes taken from Bedford v.  Johnson (1) is quoted:    " Statutes levying taxes or duties upon citizens will not be  extended by implication beyond the clear import  of  the language used, nor will their operation be enlarged so as to

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embrace  matters  not  specifically  pointed  out,  although standing  upon a close analogy, and all questions  of  doubt will be resolved against the government and in favour of the citizen,  and because burdens are not to be, imposed  beyond what the statute expressly imparts".   In  that  case  the court  refused  to  regard  automobile parking lots as falling within the scope of a statute  which imposed  a tax on general warehouse storage  establishments. On this principle the word " terminal " must in the  context be  construed as having reference to terminus and has to  be read  to connote the idea of the end of something  connected with  motion  and  not that of an intermediate  stage  of  a journey.   It  would be quite legitimate to examine  the  legislative history of these " terminal taxes " which would be a  useful aid to construction of clause (o) of s. 66(1).  In the  last century a tax known as Octroi payable on the entry of  goods in  a  local area for consumption, use or sale  therein  was introduced.  In 1920 an optional substitute called "terminal tax " came into existence by virtue of item 8 of Schedule 11 of  the Scheduled Tax Rules framed under s. 80 A  (3)(a)  of the Government    (1)    I02 COIO 203, 78 Pac (2) 373.                             1117 of India Act, 1915 as amended in 1919.Item 8 was as follows:   Item 8 "A terminal tax on goods imported into or  exported from, a local area, save where such tax is first imposed  in a  local area in which a octroi was not levied on or  before the  6th July, 1917." In the Government of India  Act,  1935 this  item  was  replaced by two items one  dealing  with  " terminal tax " and the other with the right of a local  area to  impose  tax on entry of goods into a  local  area.   The former  was put in the Central List (List 1) and the  latter in the Provincial List (List II). (1) Item No. 58 in List  I of Schedule 7 of the Constitution Act was:    "  Terminal  taxes  on goods  or  passengers  carried  by railway  or air ; taxes on railway fares and  freights"  and (2) in the Provincial List another item was  introduced-item No. 49 which was as follows:    "  Cesses  on the entry of goods into a  local  area  for consumption, use or sale therein." The Constitution of India maintains this distinction in  the Seventh Schedule and item No. 89 in List I corresponding  to the above mentioned item No. 58 is "terminal taxes on  goods or  passengers,  carried by railway, sea or  air;  taxes  on railway fares and freights."   In the State List the item No. 52 which is as follows :   "Taxes  on  the  entry  of goods into  a  local  area  for consumption, use or sale therein and Item No. 56 is: " Taxes on goods and passengers carried by road or on inland waterways ". The  legislative history of this tax thus shows that  octroi was leviable on the entry of goods in a local area when  the goods  were  for  consumption, use  or  sale  therein.   The substituted  tax was terminal tax on goods imported into  or exported from a local area and by rules this tax in the case of  Wardha Municipal Committee was imposed on certain  class of goods imported and on others exported by railway or road. In 1935 the terminal tax was made leviable on goods 1118 carried by railway or air but the tax on entry of goods  was imposable  on goods for consumption, use or sale in a  local area.    Both  these  taxes  have  been  continued  by   the Constitution.  If the pre 1920 octroi and the post 1935 cess or  tax  on  entry  of  goods  is  payable  on  -goods   for

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consumption,   use  or  sale,  can  it  be  said  that   the Constitution  Act  of 1915 as amended in 1919 or  the  Rules made  thereunder intended to vary the nature of the  tax  by the introduction of item 8 in Sch.  II ,under the  Scheduled Tax Rules i.e. the tax became leviable on entry of goods  or on  their  being  taken  out  without  their  acquiring  the qualification of incorporation with the mass of property  of the  local area.  The presumption is against the  imposition of  new burdens.  In the absence of clear intention  to  the contrary  the incidence of the tax leviable under item 8  of Sch.  II of the Schedule Tax Rules is incapable of having  a different  complexion from that which it had before 1920  or that which was clearly given after 1935.  It was said in  U. S. v. Fisher (1):    "that  it  is  in the last  degree  improbable  that  the legislature would overthrow fundamental principles, infringe rights,  or depart from the general system of law.,  without expressing      its      intention      with      irrestible clearness.................... It  is  also  a recognised principle  of  construction  that general  words  and phrases however wide  and  comprehensive they may be in their literal sense must usually be construed as being limited to the actual objects of the Act.  There is no evidence that the actual object of the Act in the present case  was  to  extend the powers of  the  Municipalities  to imposing  the  tax on articles which were in the  course  of transit.    That  by  the  substitution  of  terminal  tax  on  goods imported  into  a local area the nature of the tax  had  not been  altered from what it was when octroi was in  force  or when instead of " terminal tax " octroi (without refund, was substituted is clear from the decision of the Federal  Court in  Punjab  Flour  and  General Mills’  case  (2)  which  is discussed in a later part of (1)  (1804) 2 Cranch 358, 390; 2 L. Ed.’ 304. (2)  [1947] F.C.R. 17.                             1119 this judgment.  Therefore terminal tax on goods imported  or exported is similar in its incidence and is payable on goods on  their  journey  ending within the  municipal  limits  or commencing therefrom and not where the goods were merely  in transit through the municipal limits and had their  terminus elswhere.    The  vires  of  the tax has not  been  assailed  but  the difference in the language of the two items in List I and II has  been pressed before us for the purpose of showing  that the word " terminal " implies the terminus of a journey  and not the end of the jurisdictional limits of a  Municipality. Terminal  in item No. 58 of List I of the 1935  Constitution Act  has  reference to the terminus of  carriage  of  goods. There is no reason to give to this word a different  meaning in item No. 8 of Scheduled Tax Rules under the Government of India  Act of 1915 or in clause (o) of s. 66(1) of the  Act. The  two  sets  of taxes in Lists I and  11  have  different qualities.   The "terminal tax" under item No. 58 of List  I arises at the end of journey by railway wherever the end may be in relation to particular goods’ and under item No. 49 of List  11  the  tax or cess on entry of  goods  whatever  the nomenclature is imposable when the goods enter a local  area for consumption, use or sale therein.  The two sets of taxes are so distinct that they may be imposed simultaneously, one when  they reach their destination at the end of  a  railway journey and the other when they enter the limits of a  local area for the object above mentioned.  But in both cases  the activity  in regard to the motion of the goods ends, in  the

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one case as the goods are carried no further by railway  and in the other as their entry is for consumption, use or sale. Keeping  in view the terms and language and the  legislative history  of the section 66(1) we are unable to  enlarge  the terms  of the section by mere construction so as to  include within  its  operation goods which are in  transit  and  are being  transported across the jurisdictional limits  of  the Municipality.    The  Federal Court in Punjab Flour and General Mills  Co. Ltd.  v.  Chief Officer, Corporation of City of  Lahore  (1) considered the meaning of the word (1)  [1947] F.C.R. 17. 1120 " terminal" in a case which was brought from Lahore.   There the  Municipality of Lahore imposed a terminal tax  in  1926 calculated  on the gross weight Of Consignments or per  tail as  the  case  might be, at the rates and  on  the  articles specified in the schedule, imported into the Municipality by rail or by road.  By a notification of 1938 the Municipality in supersession of that tax imposed a new tax called "Octroi (without  refund)" which was to be similarly  calculated  on the  gross weightage of the consignments imported  into  the limits  of the Municipality.  This in turn was  replaced  by the  imposition  of a new tax also called  "Octroi  (without refund)"  on  consignments imported into the limits  of  the Municipality.   The appellant’s contention in that case  was that the tax imposed was a " terminal tax " on goods carried by  railway  and as such not  imposable.   The  Municipality argued  on  the  other hand that it was  a  tax  within  the provisions  of Entry No. 49 of List 11 and as such could  be imposed  with  the  previous  sanction  of  the   Provincial Government under s. 61(2) of the Punjab Municipalities  Act. The following passage from the judgment of Spens C. J. shows the meaning to be attached to the word " terminal ":    " There appears to us a definite distinction between  the type of taxes referred to as terminal taxes in Entry No.  58 of  List  I of Sch. 7 and the type of taxes referred  to  as cesses on the entry of goods into a local area in Entry  No. 49  of List II.  The former taxes must be (a)  terminal  (b) confined to goods and passengers carried by railway or  air. They  must  be chargeable at a rail or air terminus  and  be referrable  to services (whether of carriage  or  otherwise) rendered  or  to be rendered by some rail or  air  transport Organisation.  The essential features of the cesses referred to  in Entry No. 49 of List II are on the other hand  simply (a)  the entry of goods into a definite local area  and  (b) the requirement that the goods should enter for the  purpose of         consumption,         use         or          sale therein..................................................... In  our  judgment there is no limitation to  be  implied  in Entry  No.  49, List II, in regard to the  manner  in  which goods may be transported into a local area.  It follows                             1121 that so far as rail-borne goods are concerned the same goods may well be subjected to taxation under Entry No. 58 of List I  as well to local taxation under Entry No. 49 of List  II. The  grounds  of  taxation under the  two  entries  are,  as indicated  above, radically different, and there is no  case for  suggesting that taxation under the one entry limits  or interferes in any way with taxation under the other." Therefore  according  to the Federal Court "  terminal"  has reference  to the terminus of the railway or air  i.e.,  the end  of journey.  The tax imposed in that case was held  not to  be  a terminal tax but merely a cess on entry  of  goods into  the  local area within Entry No. 49 of  List  II  even

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though  it  was  imposed on  railborne  goods  entering  the municipal area.    It  is a noticeable feature of s. 66(1) that  apart  from the  terminal  tax  there are 14  other  heads  of  taxation imposable by the Municipality and in the case of each one of these 14 heads the tax is on some activity which takes place within the jurisdictional limits of the Municipality.   This supports  the contention of the appellant that the  terminal tax  leviable  under cl. (o) properly  construed  must  have reference  to some activity within the municipal area  i.e., the  entry for the purpose of remaining within that area  or commencement of journey from that area.    We  are, therefore, of the opinion that the terminal  tax under  s.  66(1)(o) is not leviable on goods  which  are  in transit  and  are  only carried across  the  limits  of  the Municipality, and would therefore allow this appeal, reverse the  decision of the Nagpur High Court.  The appellant  will have its costs in this court and in the High Court.                       Appeal allowed. 1122