PURI MUNICIPAL COUNSEL AND ORS.versusINDIAN TOBACCO CO. LTD.

              PURI MUNICIPAL COUNSEL AND ORS.                                  A
                                     v.
                     INDIAN TOBACCO CO. LTD.

                          NOVEMBER 8, 1995

 [MADAN MOHAN PUNCHHI AND SUJATA V. MANOHAR, .J.J.j
                                                                               B

      01issa Municipal Act, 1950/Pwi Octroi Bye-laws, 1971 :

      Ss.131( I) (KK), 388(3)/Bye-lawl 1(2)-0ctroi tax-Levy of on marine
fish and prawns at ent1y points-Evasion of tax-Municipality levying tax on     C
11011-fishennen fou11d i11 possession of"fish a11d praw11s within municipal
area-Held, a person merely in possession of such items within municipal
area can11ot be presumed to be an evader because he may not have caused
the enfly and hence be not an evader.

      Words and Phrases :                                                      D

     Word 'evasion' occurring in Bye-Jaw Jl(2) of Pwi Octroi Bye-Laws
1971-Meaning of-Explained.

       The appellant, Puri Municipality, imposed Octroi tax on marine fish     E
and prawns found in possession of non-fisherman and brought within the
municipal limit without payment of Octroi tax thereon at the entry point.
The respondent-company, challenged the action of the Municipality by
filing a writ petition before the High Court. The Municipality contended
that under bye-law 11(2) of the Puri Octroi Bye-laws, 1971, it could proceed
against the possessors of fish or prawns, including exporters of the items,    F
on the premise of non-payment of Octroi tax. The High Court rejected the
plea of the Municipality and allowed the writ petition. Aggrieved, the
Municipality filed the appeal by special leave.

      On the question : Whether the taxing provmons of the Orissa              G
Municipal Act, 1950 and the Puri Octroi Bye-laws, 1971 permitted the Puri
Municipal Council to charge Octroi tax on a non· fisherman merely found
in possession of fish and prawns within the municipal area or while taking
them out through exit points or Octroi posts.

      Dismissing the appeal, this Court                                        H
                                    831
    832                    SUPREME COURT REPORTS (1995] SUPP. 4 S.C.R.

A          HELD : 1.1. The word 'evasion' when seen married to the expression
    'octroi tax', is conceivably a wrong committed by the person bringing goods
    within municipal limits, since it is an entry tax, The person bringing the
    goods without payment of Octroi is the evader and can certainly be brought
    within the grip of Bye-law 11 (2) of the Puri Octroi Bye-laws, 1971. A person
    merely in possession of such goods within a municipal area cannot be
B
    brought within the ambit of bye-law 11 (2) raising a presumption that he
    is an evader because he may not have caused the entry and hence be not
    an evader. (833-E]

            1.2. If the Municipality was not in a positfon to put up Octroi posts
C at every conceivable point alongside the sea shore, it is the concern of the
    municipality and this aspect does not relate to the subject. On such pleas,
    the tax cannot be allowed to assume the character of a possessory tax or
    an exit tax. That would be against the text and content of the taxing
    provisions and their culpable part. (833-G, F]

D           CIVIL APPELLATE JURISDICTION : Civil Appeal No. 199 of
    1979.

         From the Judgment and Order dated 21.7.78 of the Orissa High               ,-
    Court in O.J.C. No. 801of1977.

E           Ms: Uma Mehta Jain, (Ms. Mana Chakraborty) for M/s. Bagga
    Associates Advs. for the Appellants.

          Rajan Narain for JBD & Co., Raj Kr. Mehta, Vinoo Bhagat, (NP)
    for the Respondents.

F           The following Order of the Court was delivered :

          The famous city of Puri in the State of Orissa, is a municipality under
    the Orissa Municipal Act, 1950. It's limits extends upto the sea \Vaters, on
    the side of the Bay of Bengal. Fish and prawn caught by fishermen from
    the sea have all along been brought within the municipal limit, sometimes
G   through the nearest Octroi checkpost on payment of Octroi and more often
    without adopting lhat course. The fish and prawn are then taken to the
    market by fishermen where they are sold and bought by non-fishermen for
    local consumption or for export lo other destinations. In the latter course,
    the goods inevitably arc transported and have to pass out through Octroi
    checkposts. The dispute between the parties i.e. the Puri Municipal Coun-
H   cil and its officers on the one side and the Indian Tobacco Company Ltd.
           PURI MUN!CIP AL COUNCIL v. INDIAN. TOBACCO CO.LTD.                 833

    on the other, as projected before the High Court in writ proceedings             A
    centered around the question whether the taxing provisions of the Orissa
    Municipal Act and the bye-laws made thereunder, permitted the Puri
    Municipal Council to charge octroi tax on a non-fishermen merely found
    in possession of fish and prawn within the municipal area, or while taking
    them out through exist points, or Octroi posts. On challenge made by the
    respondent company to the steps taken by the Municipal Council, the              B
    Division Bench of Orissa High Court has taken the view that the invoked
    Bye-law 11(2) the Municipal Council speaks of 'evasion' authorising the
    municipality to effect recovery of octroi tax on detection of that happening
,   but that word was considered by the Bench to be distinct from 'non-pay-
    ment of octroi duty' the doubt abut which could arise when the commodity
    is found in the municipal area in the possession of someone. The straight        C
    case of the municipality was that it can, under the said Bye-law, proceed
    against the possessors of fish or prawns including exporters of these on the
    premise of non-payment of octroi tax. That plea has been negatived by the
    High Court by a well-reasoned judgment.
                                                                                     D
           The word 'evasion' when seen married to the expression 'octroi tax',
    is concievably a wrong committed by the person bringing goods within
    municipal limits, since it is an entry tax. The person bringing the goods
    without payment of octroi is the evader and can certainly be brought within
    the grip of Bye-law 11(2). A person merely in possession of such goods
    within a municipal area cannot be brought within the ambit of Bye-law            E
    11(2) raising a presumtion that he is an evader because he may not have
    caused the entry and hence be not an evader. On the pica of the
    Municipality, the tax cannot be allowed to assume the character of a
    possessory tax or an exit tax. That would be against the text and content
    of the taxing provisions and their culpable part. The High Court in this fact
    situation properly saw through the matter and, in our view, afforded             F
    appropriate relief to the respondent, throwing out the specious plea of the
    appellant-municipality based on the fact that it was not in a position lo put
    up octroi posts at every conceivable point alongside the sea shore. That
    aspect is the concern of the municipality and not that of the subject. If the
    words in the taxing statute fail, the tax must fail, without sentiment playing
    any role.                                                                        G

    For the afore reasons, the appeal fails and is hereby dismissed. There
    shall be no order as to costs.

    R.P.                                                      Appeal dismissed.