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Issues: (i) Whether terminal tax could be levied on goods merely because the manufacturing plant was situated within municipal limits when the export journey of the goods commenced outside those limits; (ii) Whether refund of terminal tax already paid could be granted in the writ proceedings.
Issue (i): Whether terminal tax could be levied on goods merely because the manufacturing plant was situated within municipal limits when the export journey of the goods commenced outside those limits.
Analysis: Terminal tax under the relevant municipal law is attracted only where goods are actually exported from the municipal area or where their journey commences or terminates within those limits. The presence of the manufacturing unit within municipal limits is not the decisive test. Goods in transit, or goods whose export begins from a place outside the municipal limits, do not answer the description of goods exported from the municipality. Taxing provisions must be strictly construed, and any doubt must operate against the taxing authority. On the facts found, the petitioners did not export the goods from the respondent municipality, and the impugned demands proceeded on an erroneous assumption of jurisdiction.
Conclusion: The levy of terminal tax was jurisdiction and the demand notices were liable to be quashed; this issue was decided in favour of the assessee.
Issue (ii): Whether refund of terminal tax already paid could be granted in the writ proceedings.
Analysis: The claim for refund was not pressed on a fresh statutory footing and was considered against the background of the petitioners' delayed challenge after having made the payments. The Court held that the petitioners were barred from seeking refund at that stage on account of their conduct and delay.
Conclusion: The refund claim was rejected and this issue was decided against the assessee.
Final Conclusion: The writ petitions succeeded on the core question of jurisdiction, and the impugned terminal tax demands were set aside, while the separate refund claim did not survive.
Ratio Decidendi: Terminal tax can be imposed only when goods are actually exported from, or their journey begins or ends within, the municipal limits; mere location of a manufacturing unit within those limits or mere transit through them does not create liability, and taxing provisions must be construed strictly in favour of the taxpayer.
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