Holding

Filing Form 14 is a mandatory condition for availing the concessional octroi rate; non‑compliance disqualifies the taxpayer from claiming any concession or refund.

Summary

The Indian Aluminium Company imported aluminium raw material into its Thane factory and paid octroi at the normal rate because it did not file the mandatory Form 14 required for the concessional rate of 0.25%‑1.25% under the Maharashtra Municipalities (Octroi) Rules, 1968. After discovering the mistake, it sought a refund of the excess octroi paid, claiming that the procedural lapse should not bar its claim. The Thane Municipal Corporation rejected the refund, stating that the concession could be availed only upon filing Form 14, which enables verification of the raw material’s use. The High Court upheld the corporation’s view, and the Supreme Court dismissed the Special Leave Petition, holding that the declaration in Form 14 is a condition precedent and its non‑filing disqualifies the company from any concession or refund. Consequently, the petition was dismissed with costs.

Issues considered

Whether the failure to file Form 14, as required by the Maharashtra Municipalities (Octroi) Rules, bars a claim for refund of octroi paid at a higher rate.
Whether a concession on octroi can be claimed retrospectively after the statutory period and without the prescribed declaration.
Whether the authorities can verify the use of raw material at a later date in the absence of the statutory declaration.
Whether the procedural requirement of filing Form 14 is a condition precedent to the right to claim a concession or refund.

Legislation cited

Maharashtra Municipalities (Octroi) Rules, 1968s. Rule 4, s. Schedule I Entry 77, s. Schedule II Part IA

Subjects

octroiconcessiontax refundprocedural requirementForm 14verificationmunicipal taxMaharashtra Municipalities (Octroi) Rulescondition precedent

Judgment

A INDIAN ALUMINIUM COMPANY LIMITED
v.
THANE MUNICIPAL CORPORATION
~
SEPTEMBER 25, 1991

B (S. RATNAVEL PANDIAN AND K. JAYACHANDRA REDDY, JJ.)

Maharashtra Munieipalities (Octroi) Rules, 1968-Schedule I, Entry
No.77 read with Schedule II, Part IA, Rule 4, Form 14 -Octroi-- Pay-
ment-E:xcess from 1.10.1982 to 14.4.1987-Failure to submit Form 14
,..4._
c -Claim of refund of octroi made on 8.3.1988 ~gality of.
The petitionei'·Company was engaged in the business of
manufa~ure of aluminium products and its factory was located at Kalwa
in Thane District, obtaining aluminium as raw materials from its another
factory, situated in a different State.
D With effect from 1.10.82 the Company at Kalwa was included In the
municipal jurisdiction of Thane, and prior to that date, the Company did
not have to pay any octroi on the raw materials brought into its factory at
Kalwa. r
E The respondent • Corporation was levying octroi duty on the imports
of aluminium raw materials made by the petitioner·Company at the rate of
1.3% from 1.10.1982 to 14.4.1987 and from 15.4.87 at the rate of 2% •

On 18.S.87 the Thane Manufacturer's Association made a
representation to the respondent-Corporation about the increase in octroi
F rates.

The respondent-Corporation in its letter dated 20.11.1987 pointed
out that when raw material specified in Entry 77 in Schedule I to the
Maharashtra Municipalities (Octrol) Rules imported for use in the
manufacture of finished goods, it would be subject to the levy of octroi not
G exceeding 1.25% and not less.

On receipt of this letter, the petitioner-Company made detailed
enquiiies and was informed that under Rule 4 of the Rules the goods
mentioned in Part IA of the Schedule II, which were imported, were liable
to be subjected to octroi at a lower rate. The Company also noticed further
H 208 ,?-
t:.':!lm
I

...•
ALUMINIUM CO. v. MUNICIPAL CORPN. 209

that Part IA of the Rules provided that the goods specified in Entry 77, A
7( when imported by an industrial undertaking for use as a raw material for
processing within that undertaking and if a declaration in Form 14 was
filed, the levy of octroi in such cases would not exceed 1.25% and would not
be less than 0.25'7'c.

The petitioner, however, had not filed any·Fonn 14 duly filled in and B
according to it, it acted under a mistake of law and under the bonafide
Impression that the octroi levied on and recovered by the Corporation at
_,.l_
the rate of 1.3% in respect of the period from 1.10.82 to 14.4.87 and at the
rate of 2% from 15.4.87 onwards, represented the correct rate.
c
. On 8.3.1988 the petitioner-Company In its letter to the
respondent-Corporation stated that under a mistake of law it paid excess
amount and same should be refunded.
I On 16.5.1988, the respondent-Corporation replied that as the
.. petitioner-Company had not complied with the procedure specified in Part D
~
IA of the Schedule II to the Rules for availing such concessional rates and
therefore the refund could not be sanctioned.

On 19.4.1989 the petitioner-Company claimed a refund of total
amount of Rs. 13,54,101.79 p. The respondent rejected the claim, against
E
which the Company flied a writ petition In the High Court, seeking refund.

A Division Bench of the High Court dismissed the writ petition
~~ holding that the concessional rate of octroi duty was available only if the
declaration in Form 14 was tilled with the octroi authorities.
F
Questioning the High Court's Order, this Special Leave Petition was
filed.

The petitioner-Company contended that a procedural failure should
not disentitle the petitioner-Company, provided, if otherwise the Company
could have legitimately claimed. G
~-;--

The respondent-Corporation submitted that the concessional rate
would be available only if the raw material was utilised by the Company for
manufacturing goods within the industrial undertaking; that if a
declaration had been tiled in proper Form 14 there could have been a H
210 SUPREME COURT REPORTS [1991) SUPP. 1 S.C.R.

A scope for verification and in the absence of such a declaration the question
of refunding at this distance of time did not arise; and that the concession
should have been availed at the time when it was available, and having
failed to avail, the question of claiming the same later did not arise.

Dismissing the petition, this Court,
B
HELD: 1. A verification at the relevant time by the octroi authorities
becomes very much necessary before a concession can be given. In the
absence of filing such a declaration in the required Form 14, there is no
opportunity for the authorities to verify. Therefore the
C petitioner-Company has definitely failed to fulfil an important obligation
under the law though procedural. (214 F]

2. The verification at the time when the raw material was still there
is entirely different from a verification at a belated stage after it has seized
to be there. May be that the raw-material was used in the industrial
D undertaking as ~laimed by the petitioner-Company or it may not be. In
any event the failure to file the necessary declaration has necessarily r·
prevented the authorities to have a proper verification. (214 ff, 215 A]

3. A concession has to be availed at the time when it was available
and in the manner prescribed. [216 D]
E
4. The concession can be granted only if the raw material is used in
the industrial undertaking seeking such concession. For that a verification
was necessary and that is why in the rule itself it is mentioned that a
declaration has to be filed in Form 14 facilitating verification. Failure to
F file the same would automatically disentitle the Company from claiming
any such concession. [218 C-DJ

5. In the instant case the octroi duty paid by the petitioner-Company
would naturally have been passed on to the consumers. Therefore, there is
no justification to claim the same at this distance of time and the court in
G its discretion can reject the same. (218 G]
Kirpal Singh Duggal v. Municipal Board, Ghaziabad, (1968] 3 SCR
I_
551; HMM Limited and another v.Administrator, Bangalore City Corpora-
tion and another, (1989]4 sec 640, distinguished.

H Kedarnath Jute Manufactunng Co. v. Commercial Tax Officer, Calcutta
ALUMINIUM CO. v. MUNICIPAL CORPN. [REDDY,J.) 211

and Ors., (1965] 3 SCR 626, followed. A
Orissa Cement Ltd. v. State of Orissa & Ors., AIR 1991 SC 1676,
referred to.

Dictionary ·Of English Law by Earl Jowitt; Ha/sbury's Laws of
England, 4th Edn. Para 198, referred to. B
CIVIL APPELLATE JU~ISDICTION: Special Leave Petition
(Civil) No. 6497of1991.

From the Judgment and Order dated 18.4.1990 of the Bombay High
Court in W.P. No. 419of1990. C
S. Ganesh, Ravinder Narain, P.K. Ram and Ms. Amrita Mitra for the
Petitioner.

K.K Singhvi and AK Gupta for the Respondent.
D
The Order of the Court was delivered by:

K. JAYACHANDRA REDDY, J. The petitioner Company is
engaged in the business of manufacture of aluminium products and its
factory is located at Kalwa in Thane District (Maharashtra). The Com-
pany obtains aluminium as. raw materials for consumption from another E
factory of theirs situated in a different State. With effect from 1.10.82 the
Company at Kalwa was included in the municipal jurisdiction of Thane.
Prior to that date the factory was not within the jurisdiction of Thane
Municipality and did not have to pay any octroi on the raw materials
brought into its factory at Kalwa. By a notification dated 23.8.82, the·
Government of Maharashtra constituted the Municipal Corporation of the F
City of Thane and Kalwa was brought within the jurisdiction of the Thane
Municipal Corporation, the respondent herein and all goods imported into
the area of the Thane Municipal Corporation were subjected to octroi at
the rates mentioned in Schedule I to the Maharashtra Municipalities
(Octroi) Rules, 1968 ('Rules' for short). Schedule I to the said.Rules con-

--, tains description of various goods and articles which were liable to octroi
and minimum and maximum rates are prescribed. Item No.77 in the said
G
Schedule I to the said Rules covered non-ferrous metals, including
aluminium and the Entry provided for the levy of octroi duty on the
aluminium and other goods mentioned therein at the minimum rate of
0.5% and at the maximum of 4%. The respondent Corporation was levying
octroi duty on the imports of aluminium raw materials made by the H
212 SUPREME COURT REPORTS [1991) SUPP. 1 S. C.R.

A petitioner Company into Kalwa at the rate of 1.3% from 1.10.1982 to
14.4.1987. Then with effect from 15.4.87 the respondent Corporation was
levying octroi at the rate of 2%. On 18.5.87 the Thane Manufacturer's
Association made a representation to the respondent Corporation about
the increase in octroi rates pointing out that the increase was having a
disastrous effect on their industrial units located within t~e limits of the
B Corporation. In reply to the said representation, the respondent Corpora-
.lion addressed a letter dated 20.11.1987 in which it was pointed out and
clarified inter alia that goods specified in Entry n in Schedule I to the said
Rules, ·when raw material is imported for use in the manufacture of
finished goods it would be subject to the levy of octroi not exceeding 1.25%
and not less. On receipt of this letter the petitioner Company made
C detailed enquiries and. was informed that under Rule 4 of the said Rules
· the goods mentioned in Part IA of that Schedule which were imported by
certain industrial undertakings are liable to be subjected to octroi at a
lower rate. The Company also noticed further that Part IA of the Rules
provided that the goods specified in Entry 77 when imported by an in-
dustrial undertaking for use as a raw material for processing within that
D undertaking and if a declaration in Form 14 is filed, the levy of octroi in
such cases would not exceed 1.25% and would not be less than 0.25%. The
petitioner, however, did not file any such Form 14 duly filled in and accord-
ing to them they acted under a mistake of law and under the bonafide
impression that the octroi levied on and recovered by the Corporation at
the rate of 1.3% in respect of the period from 1.10.82 to 14.4.87 and at the
E rate of 2% from 15.4.87 onwards, represented the correct rate. The
petitioner however having later realised by going through the records and
the financial accounts and other documents which are duly audited
claimed refund of the excess of octroi duty which has been paid by them.
On 83.88 the petitioner Company addressed a letter to the respondent
Corporation pointing out that under a mistake of law they paid excess
F amount and therefore the excess amount so paid should be refunded. The
respondent Corporation in their reply dated 16.5.88 stated that the
petitioner company had not complied with the procedure specified in Part
IA of the Schedule II to the said Rules for availing such concessional rates
therefore the refund cannot be sanctioned. However, the petitioner Com-
pany by their letter dated 19.4.89 claimed a refund of total amount of Rs.
G 13,54,101.79 p. The respondent again rejected the claim reiterating that the
procedure specified in Part IA of Schedule II to the Rules was not com-
plied with. Being aggrieved the Company filed a writ of mandamus seeking'
refund. A Division Bench of the High Court dismissed the same holding
that the concessional rate of octroi duty was available only if the declara-
H tion in Form 14 was filed with the octroi authorities. Questioning the said
ALUMINIUM CO."· MUNICIPAL CORPN. [REOOY,J.) 213

Order, this special Leave Petition has been filed and it is being disposed of A
at the admission stage itself after notice. ·

Most of the facts in this case· are not in dispute. Admittedly the
aluminium raw material was imported by the petitioner Company and
octroi duty at the normal rate was paid and no declaration in Form 14 was
filed. It is only after the lapse of long time that the petitioner Company has B
made a claim for refund. The learned counsel for the petitioner Company
submitted that a procedural failure should not disentitle the petitioner
Company provided if otherwise the Company could have legitimately
claimed. The learned counsel appearing for the respondent Municipal
Corporation submitted that the concessional rate would be available only if
the raw material was utilised by the Company for manuf~cturing goods C
within the industrial undertaking. If a declaration had been filed in proper
Form 14 there could have been a scope for verification and in the absence
of such a declaration the question of refunding at this distance of time does
not arise. It is also his further submission that the concession should have
been availed at the time when it was available. Having failed to avail the
question of claiming the same later does not arise and consequently no D
refund can be claimed.

The amended Rules came into force in 1970. Rule 4(2) provides for
payment octroi at a lower rate by certain industrial undertakings in respect
of the goods mentioned in Part IA of Schedule II to the Rules. Aluminium
is at Entry No.77. Part I-A reads thus: E
"PART I-A

of
List goods on which octroi shall be payable at a lower rate
by Certain industrial undertakings.
(1) All goods specified in entries 6(c), 35, 40, 64, 65, 71, 77 and F
86 in Schedule I, and khobra mentioned in entry 25, raw rubber
and latex mentioned in entry 70 in that Schedule, when im-
ported by an industrial undertaking for use as raw material for
processing within that undertaking and when declaration in
respect thereof is issued by the undertaking in Form 14, shall
be subject to octroi by any Council at a rate not exceeding 1.25 G
per cent and not less than 0.25 per cent.

xx xx xxtt

.
It can be seen from the above rule that to avail the concession , a
declaration in Form 14 has to be made in respect of the raw material
. .
H
214 SUPREME COURT REPORTS [1991) SUPP. 1 S. C.R.

A imported. Form 14 is as under:
"F0RM14

(Part I-A and II of Schedule II )

B Declaration to be made by an importer importing dutiable
·goods as raw material for his industrial undertaking
I ............. do hereby declare that the goods in respect of which I
have separately given a declaration under rule 14 have been
imported by me as raw material to be used in the manufacture
of ............ .in my industrial undertaking, viz. (here give full
c name and address of the undertaking ) ................. and I shall
not use them for any other purpose for sale or otherwise dis-
pose them of to any other party for any other purpose, except
having previously paid the difference between the octroi due
on such goods at ordinary rates and the octroi paid on conces-
sional rates u'nder Schedule II to the Maharashtra
D Municipalities (Octroi) Rules, 1968.
Date ..............;..Signature of the Importer"

The declaration contemplated in Form 14 is to the effect that the
goods imported shall not be used for any other purpose for -sale or other-
E wise etc. It can thus be seen that an incentive is sought to be given to such
entrepreneurs by such concession if the raw material which is imported is
also utilised. in the industrial undertaking without selling or disposing of
otherwise. That being the object a verification at the relevant time by the
octroi authorities becomes very much necessary before ~·.concession can be ).,...-
given. In the absence of filing such a declaration in the required Form 14,
F there is no opportunity for the authorities to verify. Therefore the
petitioner Company has definitely failed to fulfil an important obligation
under the law though procedural. The learned counsel, however, submitted
that even now the authorities can .verify the necessary records which are
audited and submitted to the authorities and fmd out whether the material
was used in its own undertaking or not. We do not think we can accede to
G this c ntention. Having failed to file the necessary declaration he cannot ·
now turn-around and ask the authorities to make a verification of some
records. The verification at the time when the raw material was still there
is entirely different from a verification at a belated stage after it has ceased
to be there. May be that the raw-material was used in the industrial under-
taking as claimed by the petitioner Company or it may not be. In any .event
H the failure to file the necessary declaration has necessarily prevented the
ALUMINIUM CO. v. MUNICIPAL CORPN. [REDDY, J.) 215

authorities to have a proper verification. A
Shri Ganesh, learned counsel for the petitioner Company relied on
the judgment of this Court in ](jrpal Singh Duggal v. Municipal Board,
Ghaziabad, (1968) 3 SCR 551 in support of his submission that the non-ful-
filment of procedural requirement does not bar the claimant from persuing
his remedy in a court of law. That was a case where the appellant entered B
into a contract and supplied the goods to the Government. The Municipal
Board collected toll when the trucks were passing through the toll barrier.
~ The appellant obtained a certificate that the transported goods were meant
for Government work. The· appellant claimed exemption on the basis of
the certificate but not within time. The Court obse~ed thus:
c
"But counsel for the re.spondent contended that the rules
framed by the Government regarding the procedure con-
stituted a condition precedent to the exercise of the right to
claim refund and recourse to the civil court being conditionally
strict compliance with the procedure prescribed the civil court
was incompetent to decree the suit unless the condition was D
fulfilled. We are unable to agree with that contention. The
rules framed by the Government merely set up the procedure
to be followed in preferring an application to the Municipality
for obtaining refund of the tax paid. The Municipality is under
a statutory obligation once the procedure followed is fulfilled, E
to grant refund of the toll. The application for refund of the
toll must be made within fifteen days from the date of payment
f the toll. It has to be accompanied by the original receipts.
If these procedural requirements are not fulfilled, the
Municipality may decline to refund the toll and relegate the
claimant to a suit. It would then be open to the party claiming F
a refund to seek the assistance of the court, and to prove by
evidence which is in law admissible that the goods transported
by him fell within the order issued under s. 157(3) of the Act.
The rules framed by the Government relating to the procedure
to be followed in giving effect to the exemptions on April 15,
1939, do not purport to bar the jurisdiction of the civil court if G
the procedure is not followed."

Relying on these observations, Shri Ganesh, learned counsel for the
petitioner Company contended that in the instant case though the proce-
dural requirement is not fulfilled by filing a declaration in Form 14, still
that is not a bar to invoke the jurisdiction of the civil court or the High H
216 SUPREME COURT REPORTS (1991) SUPP. 1 S.C.R.
A
Court by way of a writ and seek a refund~ We are unable to agree. In
Duggal's. case, the appellant, as a matter of fact, obtained certificate but ~·
failed to make the application for refund within time. It is in that context
· this Court observed that the Municipality was under a statutory obligation
once the procedure followed is fulfilled and if it is noc fulfilled the
B Municipality may decline. The granting of a certificate that the appellant
used the goods for Government work made all the difference. But, in the
instant case, the non-fulfillment of the requirement even though proce-
dural, has disentitled the petitioner Company because there was no way to
verify whether it was entitled for such concession. In HMM Limited and ~
another v.Administrator, Bangalore City Corporation and another,[1989] 4
C S C C 640 no doubUhe view taken in Dugal's case was confirmed but it
does not make any difference so far as the present case is concerned for
the reasons stated above. In that case the question was whether the goods
namely Horlicks was consumed within the city or not and there was no
dispute as to the quantum which was credited pursuant to the directions of
the High Court. Hence no further'verification was necessary. Therefore
D these two cases are distinguishable.
However, a concession has to be availed at the time when it was y
available and in the manner prescribed. The common dictionary meaning
of the word "concession" is the act of yielding or conceding as to a demand
or argument , something conceded; usually implying a demand, claim, or
E .request, "a thing yielded", "a grant".

In the Dictionary of English Law by Earl Jowitt, the meaning of "con-
cession" is given as under:

"Concession, a grant by a central or local public authority to a
F private person or private persons for the utilisation or working
of lands, an industry, a railway waterworks, etc."

The expressions "rebate" and "concession" in the commercial par-
lance have the same concept. In Halsbury's Laws of England, 4th edn.
Para 198 it is observed as under:
G
"Application for rebate. When a rating authority receives an
applicttion for a rebate it has a duty to determine whether the
residential occupier is entitled to a rebate. and, if so, the
amount to which he is entitled; and it must request him in
writing to furnish such information and evidence as it may
H reasonably require as to the persons who reside in the
hereditament, his income, and the income of his spouse. Unless
ALUMINIUMCO. v. MUNICIPAL CORPN. (REDDY,J.] 217

the rating authority is satisfied that the residential occupier has A
furnished all the information and evidence it requires, it is under
no duty to grant a rebate."

(emphasis supplied)

In Kedamath lute Manufacturing Co. v. Commercial Tax Officer, Cal- B
cutta and Ors. [1965) 3 SCR 626, the appellant which was a public limited
Company, sought exemption under the provisions of the Bengal Finance
(Sales Tax) Act, 1941 in respect of certain sales but did not produce before
the Officer the declaration forms from the purchaser dealers required to
be produced under the proviso to that sub-clause granting exemption. It
was contended on behalf of the appellant that proviso to the sub-clause was C
only directory and the dealer is not precluded where the proviso is not
strictly complied with from producing other relevant evidence to prove that
the sales were for the purposes mentioned in the said sub-clause. The
contention on behalf of the respondent was that the dealer can claim ex-
emption under the sub-clause but he must comply strictly with the condi-
tions under which the exemption can be granted. Rejecting the appellant's D
contention, this Court held thus:
"Section 5(2)(a) (ii) of the Act in effect exempts a specified
turnover of a dealer from sales tax. The provision prescribing
the exemption shall, therefore, be strictly construed. The sub-
stantive clause gives the exemption and the proviso qualifies E
the substantive clause. In effect the proviso says that
part of the turnover of the selling dealer covered by the terms
of sub-clause (ii) will be exempted provided a declaration in
the form prescribed is furnished. To put it in other words, a
dealer cannot get the exemption .unless he furnishes the
declaration in the prescribed form."
F
It was further held as under:
"There is an understandable reason for the stringency
of the provisions. The object of S. 5(2) (a) (ii) of the Act and
the rules made thereunder is self-evident. While they are ob-
viously intended to give exemption to a dealer in respect of
sales to registered dealer~ of specified classes of goods, it G
seeks also to prevent fraud and collusion in an attempt to
evade tax. In ·the nature of things, in view of innumerable
transactions that may be entered into between dealers, it will
wellnigh be impossible for the taxing authorities to ascertain in
each case whether a dealer has sold the specified goods to
another for the purposes mentioned in the section. Therefore, H
218 SUPREME COURT REPORTS [1991) SUPP. 1 S.C.R.

A presumably to achieve the twofold object, namely, prevention
of fraud and facilitating administrative efficiency, the exemp-
tion given is made subject to a condition that the person claim-
ing the exemption shall furnish a declaration form in the
manner prescribed under the section. The liberal construction
suggested will facilitate the commission of fraud and introduce
administrative inconveniences, both of which the provisions of
B the said clause seek to avoid."
It can th'l,IS be seen that the submission namely that the dealer, even
without filing a declaration, can later prove his case by producing other ...,__
evidence, is also rejected. This ratio applies on all fours to the case before
us. As already mentioned the concession can be granted only if the raw
C material is used in the industrial und~rtaking seeking such concession. For
that a verification was necessary and that is why in the rule itself it is
mentioned that a declaration has to be filed in Form 14 facilitating verifica-
tion. Failure to file the same would automatically disentitle the Company
from claiming any such concession.

D . In any event the petitioner Company cannot claim concession at this
distance as a matter of right. In Orissa .Cement Ltd. v. State of Orissa & 'f
Ors, A I R 1991 SC 1676, it was observed thus: .

"We aie inclined to accept the vi~w urged on behalf of the
State that a finding regarding the invalidity of a levy need not
E automatically result in a direction for a refund of all collections
thereof made earlier. The declaration regarding the invalidity
of a provision and the determination of the relief that should
be granted in consequence thereof are two different things
and, in the latter sphere, the Court hrui, and must be held to
have, a certain amount of discretion. It is well-settled proposi-
F tion that it is open to the Court to grant, mould or restrict the
relief in a manner most appropriate to the situation before it in
. such a way as to advance the interests of justice."
in the instant case the octroi duty paid· by the petitioner Company
would naturally have been passed on to the consumers. Therefore there
G is no justification to claim the same at this distance of time and the court
in its discretion. can reject the same. For the above reasons, this Special ,-
Leave Petition is· dismissed with costs. ·

V.P.R. Petition dismissed.