TaxTMI 
TaxTMI 
2000 (3) TMI 190
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....t the appellant is liable to pay octroi duty under Section 99 of Gujarat Municipal Act, 1963 (for short the Act). 2. The appellant, a textile manufacturing company, brought cloth pieces of 100 meters length within the octroi limits of Nadiad town. To meet the requirement of relevant excise rules and also demands in the market, cloth pieces were cut into smaller pieces of different sizes and thereafter sent outside the octroi limits of the said town. 3. On the above facts, the High Court held that in the process of cutting, the cloth pieces are used as well as consumed, therefore, the cloth pieces brought into the octroi limits for this purpose, would attract actroi duty. 4. The Act is relatable to Entry 52 of List-II (State List) o....
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....ed the term consumption with reference to explanation to sub-clause (a) of clause (1) to Article 286 of the Constitution, which was omitted by the Constitution (6th Amendment Act), 1956. The said explanation is extracted below :- "Explanation. - For the purposes of sub-clause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State." 7. The facts of that case were that tobacco was purchased and in the State of Bombay th....
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....process and new articles of commerce, namely cashew-nut oil and edible cashew-nut kernels, are obtained. It follows, therefore, that the raw cashew-nut is consumed by the respondents....................." The above observation was also made while considering the explanation to Article 286(1)(a) of the Constitution. 9. This Court in Khatiawar Industries Ltd. v. Jaffrabad Municipality [1979 (4) SCC 56] considered the question whether the salt manufactured by the appellant outside the octroi limits and brought within those limits for the purpose of being crushed into powder in the appellant's factory situated within those limits and then exported was liable to octroi. Applying test laid down by this Court in M/s. Anwarkhan Mahboob Co. (s....
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....he above conclusion inasmuch as it ignored the fact that due to above cutting of the cloth, no different commercial commodity was shown to have been produced. 13. We may refer to decision in HMM Limited and Anr. v. Administrator, Bangalore City Corporation and Anr. [1997 (91) E.L.T. 27 (S.C.) = 1989 (4) SCC (640)]. The facts were that "Horlicks" milkfood powder was brought into the octroi limits in bulk containers (large steel drums) and packed at the packing station in unit containers (glass bottles) and thereafter exported outside those limits. On the above facts, this Court held that in the process of putting powder from drums to the bottles for the purpose of exporting or taking out of the municipal limits, the Horlicks powder was ne....