Bombay High Court
THE MUNICIPAL CORPORATION OF GREATER BOMBAYversusM/S. HINDUSTAN PETROLEUM CORPORATION LIMITED
- Decided
- Disposal
- Dismissed
- Bench
- KAMAL KHATA
Holding
The additives are not liable to octroi duty under Entry 22(a) of Schedule ‘H’ as they do not fall within any taxable entry prior to the legislative amendment, and the appeal is dismissed.
Summary
The appeal concerned whether chemical additives imported by Hindustan Petroleum Corporation Ltd (HPCL) were subject to octroi duty under Entry 22(a) of Schedule ‘H’ of the Mumbai Municipal Corporation Act, 1888, as petroleum products or their by‑products. The Small Causes Court had held that the additives were not liable to octroi and ordered the Municipal Corporation of Greater Bombay (MCGM) to refund Rs. 72,69,946.84. Both parties admitted that Schedule ‘H’ was amended in 1993 to introduce a residuary entry (Entry E(59) under Group F) and that HPCL had been paying octroi on the additives thereafter. The Court observed that the amendment itself confirms that, prior to the amendment, no entry in Schedule ‘H’ covered the additives, so they could not be taxed under Entry 22(a). Consequently, the Court found no need to examine the parties' arguments on classification or burden of proof. The respondent also disclosed that it had already received a refund of Rs.85,00,000 from the appellant, leaving no further issue. The appeal was therefore dismissed.
Issues considered
- Whether the chemical additives imported by HPCL fall within Entry 22(a) of Schedule ‘H’ of the Mumbai Municipal Corporation Act, 1888, and are liable to octroi duty as petroleum products or by‑products.
Legislation cited
- Mumbai Municipal Corporation Act, 1888 — s. Schedule 'H' Entry 22(a), Schedule 'H' Entry E(59) (Group F Residuary)
Subjects
- octroi duty
- Schedule H
- petroleum products
- tax classification
- legislative amendment
- municipal corporation
- refund
Judgment
sumedh 904-FA-1005-1989.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.1005 OF 1989
The Municipal Corporation of ]
Greater Bombay, having its of5ce ]
at Mahanagarpalika Marg, Bori Bunder ]
Fort, Bombay-400001 through the ]
Municipal Commissioner ]…Appellant/
Org. Respondents
V/s.
Hindustan Petroleum Corporation ]
Limited a Company registered ]
Under the Companies Act and having its ]
registered of5ce at Petroleum ]
House, 17, Jamshedji Tata Road, ]
Churchgate, Bombay -400 020 ]… Respondent/
Org. Appellant
______________________________________
Mr. P. M Patil i/by Ms. Komal Punjabi for the Appellant.
Mr. Javeed Hussein a/w Mr. Mubashir Hussein, Mr. Munzir Hussein,
Mr. Munibah Iram i/by Hussein and Co. Advocates and Legal
Counsels for the Respondent.
_____________________________________________
CORAM : KAMAL KHATA, J.
RESERVED ON : 5th February 2026.
PRONOUNCED ON : 17th February 2026.
JUDGEMENT:
1. The short but signi5cant question that arose for determination
in the present First Appeal is whether the chemical additives /
additives imported by the Respondent, Hindustan Petroleum
Digitally
signed by
SUMEDH
SUMEDH
NAMDEO
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NAMDEO SONAWANE
SONAWANE Date:
2026.02.18
09:45:20
+0530
sumedh 904-FA-1005-1989.doc
Corporation Limited ("HPCL"), are liable to payment of octroi duty
under Entry 22(a) of Schedule 'H' of the Mumbai Municipal
Corporation Act, 1888 ("MMC Act") as "petroleum products" or their
by-products.
2. The above question was the subject matter of Municipal Appeal
No. 157 of 1988, preferred by the HPCL before the Ld. Additional
Chief Judge, Small Causes Court, Bombay. By its judgment and order
dated 29th July 1989 and 1st August 1989 ("the impugned order"),
the Ld. Small Causes Court held that the additives listed in
Annexure-A to the appeal memo were not liable to payment of octroi
duty as petroleum products or by-products of mineral oil under Entry
22(a) of Schedule 'H' of the MMC Act, and further that they were not
shown to be liable under any other article of the said Schedule.
Consequently, the Ld. Small Causes Court directed the Appellant,
Municipal Corporation of Greater Bombay ("MCGM"), to refund the
octroi duty collected on consignments imported on or after 11 th June
1983, including those on which octroi duty had already been paid by
the HPCL, amounting to Rs. 72,69,946.84/-.
3. During the course of hearing of the present First Appeal, both
parties have candidly admitted that Schedule 'H' of the MMC Act was
amended in the year 1993, whereby a speci5c residuary entry was
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sumedh 904-FA-1005-1989.doc
introduced under Group F (Residuary) as Entry E(59), covering "All
Articles other than those speci5ed in the preceding entries of the
Schedule 'H' and Schedule 'H-1'". It is also admitted that, pursuant to
the said amendment, the Respondent-HPCL has duly and regularly
been paying octroi duty on the said additives from the year 1993
onwards, until the eventual abolition of octroi by the Government.
4. In light of the aforesaid admitted position, the legal
consequence is unambiguous. The introduction of a speci5c residuary
entry in the year 2002 to cover goods not falling under any
preceding entry is a clear and unequivocal legislative
acknowledgment that, prior to the said amendment, there existed no
entry in Schedule 'H' under which the said additives could be
subjected to octroi duty. The amended Schedule itself makes it amply
clear that the additives imported by the HPCL did not fall within any
taxable entry including Entry 22(a) prior to the 2002 amendment.
5. In view of the admitted amendment to Schedule 'H' and the
unequivocal legal position Iowing therefrom, it is neither necessary
nor appropriate to enter into a detailed analysis of the rival
submissions advanced by the learned Advocates for the respective
parties including the contentions relating to the applicability of the
common parlance test, the burden of proof on the taxing authority,
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sumedh 904-FA-1005-1989.doc
or the classi5cation of the additives as petroleum products or their
by-products. The amendment to Schedule 'H' is, by itself,
determinative of the issue.
6. Apart from the above, and without this Court having found if
necessary to independently examine or rely upon the reasoning of
the learned Additional Chief Judge, Court of Small Causes, Bombay, it
is nonetheless worthy of note that the learned trial Court, on its own
analysis, arrived at the same conclusion as Iows from the legislative
amendment to Schedule ‘H’. The reasoning and 5ndings recorded by
the trial Court, though not the basis of the present order, reIect a
sound and careful appreciation of the legal position, and the trial
Court deserves commendation for the manner in which it approached
and decided the matter.
7. The Respondent in the present Appeal has 5led an Af5davit
dated 3rd February 2026 through its authorized representative
Shubham Kumar Jain, whereby it has been admitted on record that
the Respondent has received a refund of Rs.85,00,000/- from the
Appellant. In view of the aforesaid admissions, nothing further
remains in the present Appeal for adjudication, and the Appeal
stands disposed off accordingly.
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sumedh 904-FA-1005-1989.doc
:: ORDER ::
i. The First Appeal No. 1005 of 1989 is dismissed;
ii. There shall be no order as to costs.
(KAMAL KHATA, J.)
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