TaxTMI 
TaxTMI 
1989 (8) TMI 73
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....bject-matter of challenge before the High Court and before us was framed, a transporter who brought goods within the limits of the Municipal Corporation, in view of section 147 of this Act, was to pay the octroi duty chargeable on tile goods on the assumption that the goods had been imported for sale or consumption in the limits of the City of Baroda. Under the scheme as it was in force, if the goods were not consumed or sold within the limits of the Municipal Corporation and were taken out on the other end, and if the octroi post authority was satisfied that the goods which had entered were being taken out, then the transporter had to get the tax which he had paid at the octroi post refunded. According to the appellant-Corporation, this procedure took time at both ends and those transporters who were carrying goods which were only in transit in the City of Baroda still had to suffer the inconvenience of paying the octroi duty when they entered the city limits and then satisfying the authorities at the post from where they went out of town and also had first to pay the tax and then claim a refund. In order to avoid inconvenience and the burden on the transporter, this Standing Orde....
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....antage of this standing order, it was not compulsory and it was open to the transporter to pay the octroi in accordance with the normal rule and follow the normal procedure by satisfying the checkpost authorities on the other end and claim refund and get it after following the due procedure. It was, therefore, contended that, in fact, this was an option given to the transporter so that, if they so choose, they may follow this standing order and save themselves from the hardship of paying the octroi and then claiming the refund and, for that purpose, stopping at the entry checkpost and again at the exit checkpost and also to satisfy the checkpost authorities that the goods which had entered the corporation limits are being taken out in the same state and it also involved handling of money by the transporter so that it may be possible for him to pay the octroi at the entry checkpost itself. It was, therefore, contended firstly that it being an option given to the transporter, it could not be said to be an imposition or a tax and the question of the authority of the Commissioner does not arise. That in view of the language of section 466(1)(A)(f), it is clearly within the authority of....
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....termining the supervision under which, the routes by which and the time within which goods intended for immediate exportation shall be conveyed out of the City and the fees payable by persons so conveying the goods ;" This contemplates the authority with the Commissioner to make standing orders consistent with this Act, rules or bye-laws in respect of the Act. Clause (f) talks of supervision under which and the routes by which and the time when goods introduced for immediate exportation shall be conveyed out of the City and the fee is payable by the person carrying the goods. It is, therefore, clear that this clause (f) contemplates that the Commissioner may, by a Standing Order, prescribe the procedure for the goods which are introduced in the city limits, for immediate exportation and also the fees which could be charged. It is, therefore, clear that this provision which confers authority on the Commissioner to frame Standing Orders does not talk of goods on which octroi is payable. But section 466 pertains to collection of octroi. Sub-section (2) of this section provides: " (2) No order made by the Commissioner under clause (A) of subsection (1) shall be valid unless it is app....
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....rden, however, lay on the transporter to establish that the goods are not for consumption or sale. So far as this scheme before the introduction of disputed Standing Order is concerned, there is no controversy. The only controversy is about the standing order which has been introduced. It is also clear that so far as this Standing Order No. 3 is concerned wherein the transporter is to pay supervision fee, it is not compulsory as it is the option of the transporter to take advantage of this Standing Order if he so chooses or otherwise to follow the normal procedure of payment of octroi and claiming refund as is clear from the affidavit filed before the High Court by the appellant's Officer, i.e., Octroi Superintendent. Paragraph 14 of this affidavit reads : "Thus the system of clearing the through traffic on charging normal supervision fees is really in the larger interest of the importers. As I have pointed out hereinabove this is not obligatory but purely voluntary and optional. Those who do not want to avail of this facility need not avail of it and may follow the other procedure already indicated hereinabove." It is, therefore, clear that there is no compulsion on the transpor....
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....d to help the transporter in saving time and also in payment of the octroi at one end and later on claiming a refund at the other end. This, in fact, was service rendered by the Corporation for the benefit of the transporter and the fee which was charged was just to meet the approximate expenses that the Corporation may have to incur to provide this facility as has been clearly stated by the Corporation Officer in his affidavit before the High Court and, in fact, even the Corporation accepted the suggestion of the petitioner association when the association suggested to the appellant-Corporation to reduce the fee from Rs. 5 to Rs. 2 which is clear from the letter written by the association to the Corporation dated March 31, 1970. As regards this aspect of the matter, the learned judges of the High Court came to the conclusion that there was no quid pro quo established which could justify the levy of this fee as a fee for the services rendered, in the interest of the transporter. In Southern Pharmaceuticals and Chemicals v. State of Kerala [1982] 1 SCR 519, 541 ; AIR 1981 SC 1863, this court, after considering the various decisions, distinguished fee from tax in these words (at page....
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....f the service. It is now increasingly realized that merely because the collections for the services rendered or grant of a privilege or licence are taken to the Consolidated Fund of the State and not separately appropriated towards the expenditure for rendering the service this is not by itself decisive. Presumably, the attention of the court in the Shirur Mutt's case, AIR 1954 SC 282, was not drawn to article 266 of the Constitution. The Constitution nowhere contemplates it to be an essential element of fee that it should be credited to a separate fund and not to the Consolidated Fund. It is also increasingly realized that the element of quid pro quo in the strict sense is not always a sine qua non for fee. It is needless to stress that the element of quid pro quo is not necessarily absent in every tax : Constitutional Law of India by H. M. Seervai, Volume 2, 2nd edition, page 1252, para 22.39." It is, therefore, clear that, in order to establish a quid pro quo concept, it is not necessary to establish exactly that the amount collected is spent on the services rendered as it was further observed in this decision (at page 1261 of AIR 1983 SC) : "The traditional view that there mu....