TaxTMI 
TaxTMI 
1957 (12) TMI 23
X X X X Extracts X X X X
X X X X Extracts X X X X
....question for decision turns upon the construction of s. 66(1)(0) of the C. P. & Berar Municipalities Act (Act II of 1922) which in this judgment will be termed the Act. A short recital of the facts of the case will suffice for its decision. The appellant is a company which has its spinning and weaving mills at Yeotmal. The appellant's bales of cotton are transported from Yeotmal to Nagpur by road and vehicles carrying them pass through the limits of Wardha Municipality. The goods being in transit, the vehicles carrying them do no more than use the road which traverses the municipal limits of Wardha and is a P.W.D. road. The goods are neither unloaded nor reloaded at Wardha but are merely carried across through the municipal area. The Municipal Committee purporting to act under s. 66(1)(0) of the Act and r. I of the rules made thereunder collected ₹ 240 as terminal tax on these goods on the ground that they were ex ported by the appellant from the limits of the Municipality of Wardha. The appellant thereupon claimed a refund of this sum. On refusal by the Municipality the appellant took an appeal to the Deputy Commissioner, Wardha which was sent for disposal to the Sub- D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e committee ; (g) fees on the registration of cattle sold within the limits of the municipality; (h) a latrine or conservancy tax payable by the occupier (or owner) upon private latrines, privies or cesspools, or upon premises or compounds cleansed by municipal agency; (j) a tax for the construction and maintenance of public latrines; (k) a water-rate, where water is supplied by the committee ; (l) a lighting rate where the lighting of public streets,places and buildings is undertaken by the committee ; (m) a drainage tax, where a system of drainage has been introduced; (n) a tax payable by the occupiers of buildings or lands within the limits of the municipality, according to their circumstances and property within those imits; (o) a terminal tax on goods or animals imported into or exported from the limits of a municipality : Provided that a terminal tax under this clause and an octroi under clause (e) shall not be in force in any municipality at the same time; and (p) a tax on- (i) persons travelling by railway to or from a municipality to which pilgrims resort, or (ii) pilgrims visiting a shrine within the limits 'of a municipality Rule I of the Terminal Tax Rul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s'to bring in' and 'export' from the Latin word exportare which means to carry out but these words are not to be interpreted only according to their literal derivations. Lexico-logically they do not have any reference to goods in'transit'a word derived from transire bearing a meaning similar to transport, i.e., to go across. The dictionary meaning of the words 'import' and 'export' is not restricted to their derivative meaning but bear other connotations also. According to Webster's International Dictionary the word "import" means to bring in from a foreign or external source; to introduce from without; especially to bring (wares or merchandise) into a place or country from a foreign country in the transactions of commerce; opposed to export. Similarly "export" according to Webster's International Dictionary means "to carry away; to remove; to carry or send abroad especially to foreign countries as merchandise or commodities in the way of commerce; the opposite of import ". The Oxford Dictionary gives a similar meaning to both these words. The word "transit" in the Oxford Dictionary means the ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is leviable on all goods entering Municipal limits whether they are intended for consumption within the city or whether they are', merely in transit through the city to some other place ". This decision rested on the definition of the words " import " and " terminal tax " without taking into consideration the meaning of 'octroi' which implies consumption, use or sale. Besides these observations were really obiter because the court held that the goods never entered the limits of the Municipality and consequently no tax was chargeable. Dalvadi -Maganlal Bhagwandas v. Ahmedabad Municipality (1) was a case in which bricks manufactured within the limits of the Ahmedabad Municipality had in order to be carried to the place of business of the manufacturer, which was in another part of the town, to be temporarily taken out of the limits of the Municipality and re-entered at another point. The re-entry was held to be " import " on the basis of the dictionary meaning of the word and because " import" had no reference to and was not qualified by any consideration of the place of manufacture or place of consumption. Rajadhyaksha J., s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of goods in transit. The word " import " was there given the meaning " carried into ". But the decision was based on the definitions given in the Statutory Rules to the word " import " which was " bringing into the terminal tax limits from outside those limits ". (1) A.I.R (1945) Nag. 197. (2) I.L.R. (1946) Nag. 99. (4) A. I. R. (1936) All. 83. (3)A.I.R. (1936) All. 743. (5) I. L. R. (1940) All. 4. In none of these cases was the argument as to the qualification stemming from the use of the words "terminal tax" considered nor was the signification of the word "terminal " as a prefix to the word tax discussed. The respondent also relied on Muller v. Baldwin (1) where it was held that " coals exported from the Port" must be taken to have been used in its ordinary meaning of " carried out of the Port " and therefore included coals taken out of the port in a steamer as " bunker coals " that is, coals taken on board for the purpose of consumption on the voyage. The argument that the term " exported " must receive a qualified interpretation and that it means taken for the. purpose of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er to moor while lowering the masts, passed through Berwick Bridge, and unloaded her cargo about two hundred yards above the bridge and beyond the limits of the harbour. It was held that goods were not " imported into " the harbour so as to make any dues payable in respect of them. The argument raised there was that as there was no harbour down the Tweed except Berwick and though the goods were actually unloaded above the Berwick bridge and out of the limits of the harbour it was substantially imported into the harbour. The vessel in that case was obliged to stop before passing the bridge and avail herself of the benefits of the machinery and works provided by the Commissioners and that was part of the means used towards the unloading of the vessel and it was argued that this would amount to import. Lord Cambell C. J. said: " The argument on behalf of the plaintiff would be very pertinent if addressed to a Committee of the House of Commons in favour of making the harbour dues payable in such a case as the present. We can, (1) (1889) 14 App. Cas. 209, 220, 222. (2) (1889) 14 App. Cas. 417, 420. (3) (1915) A. C. 1100, 1108. (4) (1855) 24 L. J. Q. B. 185. however, lo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....only which are intended for sale or consumption in the country. Thus seastores, goods imported and re-exported in the same vessel, goods landed and carried over land for the purpose of being re-exported from some other port, goods forced in by stress of weather, and landed, but not for sale are exempted from the payment of duties. The whole course of legislation on the subject shows that in the opinion of the legislature the right to sell is connected with the payment of the duties ". Continuing the learned Chief Justice at p. 447 observed: "Sale is the object of importation, and is an essential ingredient of that intercourse, of which importation constitutes a part. It is as essential an ingredient, as indispensable to the existence of the entire thing, then, as importation itself.................. " This supports the contention raised that " import " is not merely the bringing into but comprises something more i.e. " incorporating and mixing up of the goods imported with the mass of the property " in the local area. The concept of " import " as implying some. thing brought for the purpose of sale or being kept is supported by the obser....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng to, a railway terminus. " Terminus " means the point to which motion or action tends, goal, end, finishing point; sometimes that from which it starts; starting point. An end; extremity; the point at which something comes to an end. In Corpus Juris Vol. 62 it is stated at p. 729 that terminal " in connection with transportation means inter alia " the fixed beginning or ending point of a given run if " terminal " besides the above meaning has an additional meaning also and that meaning signifies the termini or the jurisdictional limits of the municipal area even then the construction to be placed on the term should be the one that favours the tax-payer, in accordance with the principle of construction of taxing statutes, which must be strictly construed and in case of doubt must be construed against the taxing authorities and doubt resolved in favour of the taxpayer. In Crawford on Statutory Constructions in para. 257 at p. 504 the following passage pertaining to construction of taxing statutes taken from Bedford v. Johnson (1) is quoted: " Statutes levying taxes or duties upon citizens will not be extended by implication beyond the clear impo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tioned item No. 58 is "terminal taxes on goods or passengers, carried by railway, sea or air; taxes on railway fares and freights." In the State List the item No. 52 which is as follows : "Taxes on the entry of goods into a local area for consumption, use or sale therein and Item No. 56 is: " Taxes on goods and passengers carried by road or on inland waterways ". The legislative history of this tax thus shows that octroi was leviable on the entry of goods in a local area when the goods were for consumption, use or sale therein. The substituted tax was terminal tax on goods imported into or exported from a local area and by rules this tax in the case of Wardha Municipal Committee was imposed on certain class of goods imported and on others exported by railway or road. In 1935 the terminal tax was made leviable on goods carried by railway or air but the tax on entry of goods was imposable on goods for consumption, use or sale in a local area. Both these taxes have been continued by the Constitution. If the pre 1920 octroi and the post 1935 cess or tax on entry of goods is payable on -goods for consumption, use or sale, can it be said that the Constitution A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... limits of a Municipality. Terminal in item No. 58 of List I of the 1935 Constitution Act has reference to the terminus of carriage of goods. There is no reason to give to this word a different meaning in item No. 8 of Scheduled Tax Rules under the Government of India Act of 1915 or in clause (o) of s. 66(1) of the Act. The two sets of taxes in Lists I and 11 have different qualities. The "terminal tax" under item No. 58 of List I arises at the end of journey by railway wherever the end may be in relation to particular goods' and under item No. 49 of List 11 the tax or cess on entry of goods whatever the nomenclature is imposable when the goods enter a local area for consumption, use or sale therein. The two sets of taxes are so distinct that they may be imposed simultaneously, one when they reach their destination at the end of a railway journey and the other when they enter the limits of a local area for the object above mentioned. But in both cases the activity in regard to the motion of the goods ends, in the one case as the goods are carried no further by railway and in the other as their entry is for consumption, use or sale. Keeping in view the terms and langua....