TaxTMI 
TaxTMI 
2007 (10) TMI 727
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....erred to as the Act, and the penalty was 10 times the octroi payable. This is the notice, the legality and validity of which is questioned by the petitioner before this court. The facts as they emerge from the petition are that the petitioner is in possession of Toyota Land Cruiser bearing Registration No. MH01 PA 0047 which has been hypothecated to the petitioner by one Vasu Pandri Thamalla, who is stated to be the owner of the vehicle. The said owner had imported the vehicle to India at Port of Chennai, Tamil Nadu on transfer of residence basis, whereafter the vehicle was brought to Mumbai and was registered with the Regional Transport Office, Mumbai Central, on or about 16th of April 2005. The extract of registration book is at Exhibit A to the petition. The bill of entry showed that the vehicle was for home consumption. Keeping in mind the invoice value, the custom authorities levied customs duty at Rs.11,52,012/-, including inter alia excise duty, countervailing duty thereon, education cess and all other levies and duties leviable at the time of the import of the said vehicle. This amount was paid by the owner of the vehicle. After registration of the vehicle in Mumbai, the ow....
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....upon their illegal demands which resulted in filing of Civil Writ Petition No. 2555 of 2006 challenging the notice dated 4th August, 2006, issued by respondent No.2 as aforestated. The said writ petition was disposed of by an order dated 20th October, 2006. The operative part of the order containing the directions issued and the relief granted to the petitioner reads as follows :- "(i) The Petitioner to pay the basic octroi of Rs. 2,16,989/- within a period of three weeks from today. (ii) In so far as the Respondents claiming additional octroi and penalty the Respondents to give a fresh notice to the Petitioner and after hearing the Petitioner to pass appropriate orders according to law. (iii) Consequently, the notice dated 4th August, 2006 does not subsist. (iv) To secure the Respondents the Petitioner to furnish a bank guarantee of any Nationalised Bank within three weeks from today in a sum of Rs. 10.00 lakhs. That bank guarantee will not be encashed without the orders of this Court. Rule made absolute accordingly. No order as to costs." 3. In pursuance of the above order of the Court, the petitioner furnished a Bank Guarantee for ....
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.... number and the date of manufacture. Pursuant to the letter dated 5th June, 2006, the Assistant Director of DRI mentioned the physical chassis Number as UZJ 100-0046370 and engine number as 2 UZ 9116472. The petitioner being in possession of the vehicle was liable to pay the octroi and penalty which she refused to pay despite notice and order passed by the competent authority. According to the respondents, order dated 20th April, 2007, is in accordance with law and does not call for any judicial interference. 5. In the further affidavit, certain misrepresentations and discrepancies have been pointed out by the respondents. The following facts have been highlighted in the reply: "5. I say that before the Petitioner's case is considered by this Honourable Court, she should be called upon to explain how she came into possession of the concerned Toyota Land Cruiser bearing registration number MH-01-PA-0047, with all relevant details and particulars supported by documentation to support her case that she is in possession of the said car as she "had advanced some money to Mr. Vasu Pandri Thamalla against the same"(this is the explanation given by her in her letter dated 1....
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...."New" in the Registration Document; (f) A false Chassis Number UZJ 100-0046370 has been declared in the Bill of Entry dated 17.03.2005, apparently to support the false declaration that it was a used car, whereas the actual Chassis Number if UZJ 100- 0148254; (g) By falsely declaring that the car was a "Used" vehicle with a fraudulently altered Chassis Number, the purchase price of the car in Dubai was falsely shown as USD ($) 6000/- with a CIF value of USD 13,057/- whereas the actual purchase price as estimated by the DRI was about USD 36,000/- with a CIF value of about USD 43,075/ -; (h) Though the car was admittedly brought from Chennai to Mumbai, a false declaration was made to the Registration Authority (RTO) in Mumbai that the vehicle had not come in via migration from another State; (i) Till date it has not been explained how the car was brought from Chennai to Mumbai without a registration number, and without declaring it at the Octroi Entry Post or paying any octroi thereon; (j) There appears to be no specimen signature of the alleged owner Mr. Vasu Pandri Thamalla on the Registration Document though it is required, nor does ther....
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....ither of these documents. The loan transaction relied upon by the petitioner was totally disbelieved by the authorities and it is the case of the respondent-Corporation that the vehicle has been brought into Mumbai by the petitioner and thus she was liable to pay the octroi duty as well as the penalty imposed. The penalty imposed was stated to be ten times of the payable amount. As per the particulars supplied by the Director of Revenue Intelligence, Mumbai Zone, to respondent No.2, the vehicle was stated to be in possession of the petitioner and other details had been given. Besides arguing that the conduct of the petitioner is such that would disentitle her for claiming any relief in exercise of power of this Court under Article 226 of the Constitution of India, it was submitted that te order passed by the authorities is in accordance with law and need not be interfered with by this Court and the petitioner should be directed to pay the said amount. The authorities have held that the petitioner is liable to pay octroi duty as claimed with penalty ten times within 15 days. 7. We may now refer to certain provisions, a reference to which would be necessary for proper adjudication....
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....the offence has been committed. Section 478-1A talks about penalty for evasion of octroi in terms of this provision where any article is imported into Brihan Mumbai are liable to payment of octroi and the person with intention of evading payment of the tax introduces or attempts to introduce or causes or abets the introduction of any such articles within the limits of Brihan Mumbai, upon which payment of octroi due on such introduction has neither been made nor tendered, shall, on conviction, be punished with fine(which shall not be less than five times but) which may extend to ten times the amount of the tax payable. Section 478-1B provides for penalty where the rates specified under section 195-1B are not complied with. Under section 96-1B the Commissioner has power to frame rules with the approval of the Standing Committee in relation to the examination of articles liable to payment of octroi; the inspection, weighing or examining the contents of any conveyance of package for the purpose of ascertaining whether it contains any articles in respect of which octroi is payable; the seizure and confiscation of articles liable to octori in case of refusal to pay such tax; measures to ....
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....ory that those conditions are followed before the penalty is levied and consequently if the Corporation failed to initiate criminal prosecution it had no authority in law to levy the penalty for evasion of octroi payment., There cannot be an agreement contrary to the provisions of law and it is high time that the Municipal Administration is awakened to fallow the provisions of law meticulously. 6. From the affidavit in reply we have also noticed that the petitioner has been issued notice in Form No. V under rule 24 of the Octroi Rules for recovery of octroi in respect of 29 vehicles. There is no denial to this demand till this date and, prima facie, it has to be accepted that there are some outstanding payments on account of octroi due to the Corporation from the petitioner". 11.Plain reading of the aforestated relevant provisions it is clear that the provisions of sections 478 and 478-1A are definite in expression and unambiguous and do not refer to the Municipal Corporation any where. Furthermore, even for the sake of argument, it is assumed that the Municipal Corporation has any jurisdiction to impose fine/penalty in terms of section 478-1A, even then the condition p....
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....ity, particularly when the provision itself refers to the discretion of the court. The language of section 478 or 478-1A is quite in contra- distinction to the language of section 398 of the Bombay Provincial Municipal Corporation Act, 1949, where the section dealing with the penalty for evasion of octroi or toll, does not refer to the court but mentions the word 'Corporation'. Even there the person who evades or does not pay the octroi or defrauds the Corporation of such octroi which duty has neither been tendered nor paid, on conviction is liable to fine, which may extent 10 times the amount of such octroi. Even there the Courts have taken a view that the Corporation can impose such fine only when the person has been convicted. In other words conviction shall be a condition precedent to the imposition of fine under that provision. 13. The learned counsel for the respondents while relying upon the judgments of the Supreme Court in the case of State of Maharashtra and ors vs. Prabhu, (1994) 2 SCC 481, State of Maharashtra vs Digambar, (1995) 4 SCC 683, and M.P. Mittal vs State of Haryana and ors, (1984) 4 SCC 371, contended that because of the conduct of the petitioner, ....