Disposed

M/S. Swachatha Corporation through Authorized Poa Shri Prashant Raj S/O Sudhakarrao Rathkanthiwar v. the Corporation of the City of Nagpur and Others

Bombay HC16 Apr 2013WP/1529/2013

Case brief

AI extract

What is this about?

In a writ petition, the petitioner challenged the recovery of ten times octroi duty and penalty for importing a machine intended for municipal cleaning work under a five-year contract. The court, relying on a precedent, remanded the factual questions to the Municipal Commissioner to decide liability and potential penalties, directing interim relief to prevent coercive steps.

What did the court decide?

Petition disposed by directing the Municipal Commissioner to decide the liability and penalty within two weeks; no coercive steps until further orders.

M/S. Swachatha Corporation through… — Contract and Commercial Disputes | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH AT NAGPUR

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WRIT PETITION NO.1529 OF 2013

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[M/s. Swachatha Corporation .vs. The Corporation of the City of Nagpur, Civil Lines, Nagpur and others]

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- - - - Office Notes, Office Memoranda of Coram, Court's or Judge's orders appearances, Court's orders of directions and Registrar's orders

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CORAM : B.P. DHARMADHIKARI AND

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A.B. CHAUDHARI, JJ.

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DATED : APRIL 16, 2013.

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Heard finally Shri S.V. Purohit, learned counsel for the petitioner and Shri J.B. Kasat, learned counsel for respondent nos.1 to 4.

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The petitioner has questioned recovery of ten times octroi duty from him, as per communication dated 5.2.2013 and 12.2.2013. A subsequent bill of demand dated 19.3.2013 has also been questioned.

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It is not in dispute that the octroi is charged upon a vehicle/machine imported within the city limits by the petitioner for discharging his obligation as per contract between the petitioner and the respondents for cleaning the city.

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According to Advocate Shri Purohit, perusal of

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various documents on record, reveals that a

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understanding that octroi was not to be charged as machine was being imported for Corporation work and its ownership is to pass to Corporation after five years, it is after expiry of contract period. He is relying upon the decision reported in the case of Indian Oil Corporation Limited .vs. Nagpur Municipal Corporation and another, 2012 (1) Bom.C.R. 526 to urge that in some what similar situation, this court has not upheld the order levying ten times penalty.

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Shri Kasat, learned counsel appearing on behalf of the respondents, submits that the contract between the parties nowhere exempt the petitioner from paying octroi charges and documents also nowhere show that the vehicle/machine imported was to be used or is to be used for cleaning work. He is relying upon the provisions of Rule 14 (h) of the Nagpur Municipal Corporation Octroi Rules for the assessment, collection and refund of cess (octroi duty) framed under the provisions of the City of Nagpur Corporation Act, 1948 to show that Assistant Municipal Commissioner is authorised to levy the penalty. He also points out that the petitioner has also

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submitted false declaration/information while paying single octroi duty.

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Shri Purohit, learned counsel for the petitioner, in reply, submits that under Rule 14 (h), there has to be delegation by the Municipal Commissioner to the Deputy Municipal Commissioner or any other officer. He, however, points out that here only Rule 44 is applicable and under Rule 44, the jurisdiction is vested with only Municipal Commissioner. He further clarifies on 4.2.2013

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while paying single octroi duty, no declaration as such or no false information has been furnished.

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We have perused the judgment reported in the case of Indian Oil Corporation Limited .vs. Nagpur Municipal Corporation and another, 2012 (1) Bom.C.R. 526. The act of Municipal Commissioner in delegating various powers conferred upon him under above mentioned Octroi Rules is looked into and this court has found delegation unsustainable.

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The petitioner has to use that machine for cleaning Nagpur city and his contract is for period of five

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years. Advocate Purohit has stated that the petitioner has been paid for cleaning work from November 2011

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onwards till end of December 2012 and payment from January 2013 onwards is still not released.

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In this situation, we find that several disputed questions arise. But in the light of judgment (supra) the decision about the liability of the petitioner to pay penalty and duty needs to be reached by the Municipal Commissioner only. Hence, only for that purpose, we direct the petitioner to appear before respondent no.2– Municipal Commissioner on 22.4.2013. The Municipal Commissioner shall, after looking into the facts and law, find out whether the octroi is payable or any penalty can be imposed. The said authority can also consider whether penalty, if any, can be recovered in monthly instalment from the bills payable to the petitioner as a contract. Petitioner has already paid single octroi duty.

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The Municipal Commissioner shall take necessary decision on lines mentioned above within further period of two weeks from 22.4.2013. The Municipal Commissioner may also consider the request of the petitioner to release the machine for using the same in cleaning work daily in the meanwhile.

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With these directions and observations, we

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dispose of the petition. No costs. Till then, no further coercive steps shall be taken.

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JUDGE

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JUDGE

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Gulande

M/S. Swachatha Corporation through Authorized Poa Shri Prashant Raj S/O Sudhakarrao Rathkanthiwar v. the Corporation of the City of Nagpur and Others

Case brief

What is this about?

What did the court decide?

M/S. Swachatha Corporation through Authorized Poa Shri Prashant Raj S/O Sudhakarrao Rathkanthiwar v. the Corporation of the City of Nagpur and Others

Case brief

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What did the court decide?

What the court decided

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Issues for consideration

Cases cited

Statutes considered

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Coram

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