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of <h1>Supreme Court Ruling on Octroi Duty for Exported Petroleum Products</h1> <h3>Indian Oil Corporation Versus Municipal Corporation, Jullundhar And Others</h3> The Supreme Court upheld the validity of Section 113 of the Punjab Municipal Corporation Act, 1976, when read in conjunction with Entry 52 of List II of ... - Issues Involved:1. Validity of Section 113 of the Punjab Municipal Corporation Act, 1976.2. Liability of the appellant to pay octroi duty on petroleum products exported outside the municipal limits.Summary:1. Validity of Section 113 of the Punjab Municipal Corporation Act, 1976:The appellant (IOC) challenged the validity of Section 113 of the Punjab Municipal Corporation Act, 1976, arguing that it authorized the levy of octroi on articles and animals imported within the municipal limits without reference to their use, consumption, or sale, which was beyond the power of the state Legislature. The High Court held that Section 113 had to be read in conjunction with Entry 52 of List II of Schedule VII of the Constitution, which restricts the levy of octroi to goods imported for consumption, use, or sale within the local area. The Supreme Court agreed with the High Court, stating that Section 113 is not beyond the competence of the state Legislature when read with Entry 52, and thus, it is intra-vires.2. Liability of the Appellant to Pay Octroi Duty on Petroleum Products Exported Outside the Municipal Limits:The appellant disputed the authority of the Municipal Corporation to impose octroi duty on petroleum products imported within the municipal limits but exported to dealers outside those limits. The High Court initially held that the property in the goods passed to the dealers at the IOC depot, making the sale complete within the municipal limits, thus justifying the levy of octroi duty. However, the Supreme Court found that the High Court did not adequately consider the affidavits and other material evidence indicating that the goods were transported at the risk of the IOC and that the property in the goods passed to the dealers only upon delivery outside the municipal limits. The Supreme Court concluded that the transactions in question were in the nature of re-export and did not attract octroi duty. Consequently, the levy and collection of octroi duty on such goods by the Municipal Corporation were not justified.Conclusion:The Supreme Court set aside the High Court's judgment, allowing the appeal without any order as to costs. It clarified that the IOC would not be liable to pay octroi duty on re-exported goods, provided it did not collect such duty from its dealers or agents. If the IOC collected octroi duty, it would be required to deposit the same with the Municipal Corporation. The question of refund of octroi duty already deposited did not arise, as the IOC had collected the duty from its dealers and agents, who passed it on to the consumers.
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