Supreme Court Upholds Octroi Duty on Uncrushed Salt for Export

The Supreme Court dismissed two Civil Appeals by a company against the Gujarat High Court's decision, affirming the company's liability to pay octroi duty on uncrushed salt brought within municipal limits for crushing and export. The Court held that uncrushed salt brought for crushing and export within municipal limits qualifies as goods for consumption or use, making it subject to octroi duty. The Court emphasized that the act of commercially crushing uncrushed salt transforms it into a different article, constituting consumption. Therefore, the company was deemed liable to pay octroi duty on such salt.

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Issues:
The liability to pay octroi duty on uncrushed salt brought within municipal limits for crushing and export.

Summary:
The Supreme Court considered two Civil Appeals by a company against the Gujarat High Court's judgment holding the company liable to pay octroi duty on uncrushed salt brought within municipal limits for crushing and export. The company operated a salt manufacturing works outside municipal limits, with a part of the trolly track and grinding mill within municipal limits. The High Court allowed the appeals partially, exempting uncrushed salt directly sent to the jetty from octroi duty. The main issue was whether salt brought for crushing and export within municipal limits is liable to octroi duty.

The Court analyzed the relevant ordinance and rules empowering the imposition of octroi duty on goods brought for consumption or use within municipal limits. It was found that the uncrushed salt brought for crushing and export within municipal limits qualifies as goods for consumption or use as per the rules. The Court discussed the meanings of "consumption" and "use" in legal contexts, emphasizing that the act of crushing uncrushed salt commercially transforms it into a different article, constituting consumption. The Court concluded that octroi duty is leviable on uncrushed salt brought for crushing and export within municipal limits due to both consumption and use of the salt.

In conclusion, the appeals were dismissed, affirming the liability of the company to pay octroi duty on uncrushed salt brought within municipal limits for crushing and export.

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