Octroi as an entry tax cannot be expanded into a possessory or exit levy based solely on alleged evasion.

Octroi under the Orissa Municipal Act is an entry tax, and the taxable event is the bringing of goods into municipal limits without payment. The bye-law expression "evasion" applies to the person who enters the goods and avoids payment; mere possession of fish and prawn within municipal limits does not, by itself, establish that the possessor is the evader. The levy could not be enlarged into a possessory tax or an exit tax merely because municipal authorities faced practical difficulty in maintaining check-posts at all points. On that construction, octroi could not be demanded from a person found only in possession of the goods or while taking them out through exit points.

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Issues: Whether, under bye-law 11(2) framed under the Orissa Municipal Act, 1950, octroi could be levied from a person merely in possession of fish and prawn within the municipal limits or while taking them out through exit points, on the footing that such possession itself amounted to evasion of octroi.

Analysis: Octroi is an entry tax, and the taxable event is the bringing of goods into municipal limits without payment of octroi. The expression "evasion" in the bye-law refers to the conduct of the person who brings the goods into the municipal area and avoids payment. A person who is merely found in possession of the goods inside the municipal limits cannot, for that reason alone, be presumed to be the evader, because he may not be the person who caused the entry. The taxing provision could not be expanded into a possessory tax or an exit tax, and municipal inconvenience in setting up check-posts at all points could not justify a construction contrary to the text of the levy.

Conclusion: Octroi could not be levied on mere possession or exit of the goods on the footing of evasion, and the challenge to the municipal action failed.

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