THE MUNICIPAL COMMISSIONER, THANE AND ANOTHERversusH. AND R. JOHNSON (INDIA) LTD. AND ANOTHER

  THE MUNICIPAL COMMISSIONER, THANE AND ANOTHER                                  A
                          v.
     H. AND R. JOHNSON (INDIA) LTD. AND ANOTHER

                             AUGUST 6, 1996

              (S.P. BHARUCHA AND K.T. THOMAS, JJ.]                               B

       Municipalities : Maharashtra Municipalities Act, 196~Section
JO~Maharaslztra Municipalities      (Octroi) Rules, 196/f-Enoy 45 and 47 of
Schedule-I-Clay-import of-Levy of octroi duty on-Held, clay falls under
Entry 47 of Schedule I of the Rules-Hence octroi duty at lower                   C
rate-Municipal C01poration failed to prove that clay is "stone powder" under
Ent1y 45 attracting higher rate of duty-Plea that refund would erode financial
position of the Municipal Corporation not accepted-Refund ordered by the
High Cowt upheld.

     Words and Phrase;-!'Clay'Yfeaning of in the context of Maharashtra          D
Municipalities (Octroi) Rules, 1968.

      The respondent imported clay for manufacturing ceramic tiles. The
Municipal Corporation was empowered to levy octroi duty on the goods
brought into the territorial limits of Municipal Corporation. RespJndents        E
were liable to pay octroi duty at the rate of Re. 1 as "clay" being "earth of
any other kind" falls under Entry No. 47 of the Schedule. But the Municipal
Corporation insisted on payment of higher octroi duty as "clay" was stone
powder under Entry 45 of the Schedule. The Respondents filed a petition
in the High Court. The High Court held that "clay" falls within Entry No.
47 and directed the appellant Corporation to refund the excess amount            F
collected. Aggrieved by the order of the High Court, the present appeal is
preferred by the Municipal Corporation.

      Dismissing the appeal, this Court

      HELD : 1. There is no merit in the contention of the appellant             G
Corporation that the "clay" imported by respondents must be kept outside
the ambit of Entry 47 of Schedule I of the Maharashtra Municipalities
(Octroi) Rules. The burden was on the appellant Corporation to show that
clay imported by the respondent was stone powder when they insist on the
application of higher duty. But no material has been produced by the H
                                  301
    302                   SUPREME COURT REPORTS [1996] SUPP. 4 S.C.R.

A   appellant either before the High Court or before this Court in proof of
    their stand. [304-F; 305-A]

            2. The plea of the appellant Corporation that refund would badly
    erode its financial position cannot be accepted. Levy '~'as coH~cted under
    interim orders of the High Court wherein it was specifically ordered that
B   in case the petitioner succeeds, the Corporation would refund the excess
    duty. Parties are bound by the order. [305-B-E]

          State of West Bengal and Otlte1:< v.Jagdamba Prasad Singh and Others,
    AIR (1969) Cal. 281 and Mis. Amar Singh Modi/al v. State of Ha1ymw and
    Others, AIR (1972) Punjab and Haryana 356, distinguished.
c
             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2185 of
    1993.

             From the .I udgment and Order dated 3.2.93 of the Bombay High
D Court in W.P. No. 6037 of 1991.
             A.M. Khanwilbr for the Appellants.

             D.A. Dave, Sanjay Karol and Ms. Meenakshi Arora for the Respon-
    dents.
E
             The Judgment of the Court was delivered by

          THOMAS, J. The question to be determined in this appeal has boiled
    down to a very narrow compass , whether the "clay" imporled by the
    respondents for manufacturing ceramic tiles can be brought within the
F   ambit of the item described as "earth of any other kind", in Entry No. 47
    of Class IV of Schedule I of the Maharashtra Municipalities (Octroi)
    Rules, 1968, (for short 'the Rules'). Respondents contended that the clay
    imported by them falls within the said category which contention was
    found favour with the High Court of Bombay in the writ petition filed by
G   the respondents. The said decision is now being challenged in this appeal.

         The question came up through the facts of this case which are
     summarised as follows :

           Respondents are manufacturing ceramic tiles in their factory situated
H    within the limits of Thane Municipal Corporation (Maharashtra State). The
     MUNICIPAL COMMR. v. HAND RJOHNSON (I) LTD. [THOMAS, J.] 303

main ingredient used for the said product is clay which respondents get          A
down from Rajasthan and Andhra Pradesh. Under Section 105 of the
Maharashtra Municipalities Act, 1965, the municipal corporation is em-
powered lo levy octroi duty on the goods brought into the territoriai limits
of the muni,cipal corporation at a rate not exceeding the maximum limit
prescribed by the Rules. Goods are classified in Schedule I of the Rules
                                                                                 B
for fixing different rates of octroi duty. In this case, we are only concerned
with the goods classified in Entries 45 and 47 of the Schedule.

        Entry No. 45 thereof consists of coal tar, asphalt, bitumen, flooring
stone, manganese, emery stone or powder, chalk powder, stone chips, stone
powder, Agra stone, stone for building clinker and coal ash. In respect of C
those goods Thane Municipal Corporation decided to levy the maximum
octroi duly of 4% on the value prescribed by the Rules. Entry 47 consists
of yellow earth and emth of any other kind, sand, metal, rubble, murum and
f,>ravel, for which the Corporation is empowered to levy a maximum of Rs.
2 per metric tonne. Ho\vever, as for those goods, Thane Municipal Cor-
poration has resolved to levy octroi duty only at the rate of Re. 1 per metric D
tonne.

       Respondents pleaded that the clay imported by them shall be                   •
counted as "earth of any other kind". But the Municipal Corporation
insisted that the respondents should pay higher oclroi duty as the clay is       E
 stone powdern mentioned in Entry No. 45.
11




       Respondents filed the writ petition in the High Court contending that
the stand of the municipal corporation is erroneous and hence they may
be inhibited from collecting octroi duty at the higher rate. The High Court
found in the impugned Judgment that this clay would fall within Entry No.        F
47 and as such respondents are liable to pay octroi duty only at the lesser
rate of Re.1 per metric tonne. One the strength of the said finding the High
Court directed the Corporation to refund the excess amount collected from
the respondents on and after the date of writ petition.

      Learned counsel for the appellant - Corporation assailed the con- G
clusion of the High Court contending that the expression "clay" as under-
stood in common parlance is contradistinct from the meaning attached to
the word " earth". Counsel also contended that the raw material used by
the respondents being a special quality of china clay. the same could only
have been classified as "stone powder" mentioned in Entry 45 of the H
         304                   SUPREME COURT REPORTS [1996) SUPP. 4 S.C.R.

    A    Schedule. Alternatively, it was contended that High Court should not have
         ordered refund of the amount already collected.

             In support cf the first contention a reference was made to the
      observation contained in the decision of a Division Bench of the Calcutta
      High Court in State of West Bc11gal a11d OiJ. v. Jagdamba Prasad Singh and
    B Ors., AIR (1969) Calcutta 281 that "ordinary earth is not ordinary clay and
      cannot be called a minor mineral and the word 'clay' is not identical with
      earth''. Counsel brought to our notice that the aforesaid observation was
      approved by the Full Bench of the Punjab and Haryana High Court in M/s.
      Amar Singh Modi Lal v. State af Hmya11a a11d 01J., AIR 1972 Punjab &
    c Haryana 356. After going through the relevant passages in the decisions
      cited before us, we do not think that any such passing observation would
      be of hdp to decide this dispute. That part, the Calcutta High Court was
      not inclined to e>1ricate clay from earth for all purposes by pointing out in
      the decision that there are some kind of earth which may be clay. The Full
      Bench in Amar Sing/i's case (supra) has in fact skipped that issue by
    D observing that the said aspect does not have even a remote connection \Vith
      the question involved in the case before them .

•              Among the goods catalogued in Entry No. 45 of the Schedule only
         one item need be considered in this context and that is "stone powder 11
    E    because no other item mentioned in the said entry has even a semblance
         with the clay involved in this case. Nor did the appellant make any attempt
         lo show that clay is anything other than stone powder.

               We must point out in this context that the burden is on the appellant
    F to show that clay imported by the respondents is stone powder when they
         insist on the application of a higher duty chargeable entry. But no material,
         whatsoever, has been produced by the appellant either before the High
         Court or here in proof of their stand.

                The meaning or definition provided in standard dictionaries to the
    G word "clay" would not help the appellant who made an endeavour to trace
          out some support from such lexicons. In the Websters Dictionary "clay" is
          shown as "a natural earthy material.. .. used chiefly for making bricks; used
          in earth or mud". In the Concise Oxford Dictionary "clay" is given the
          meaning as "stiff tenacious earth." In Chambers (Twentieth Century) Dic-
     H    tionary it is defined as 11 earth in very fine particJes. 11
           MUNICIPAL COMMR. v. HAND RJOHNSON (I) LID. [THOMAS,J.] 305

            Therefore, we find no merit in the contention of the appellant - A
      Corporation that the clay imported by the respondents must be kept
      outside the ambit of Entry 47 of schedule I of the Rules.

            The alternative contention regarding refund of the amount (as or-
      dered by the High Court) was advanced before us on the premises that it
      would badly erode the financial position of the Corporation - at any rate,         B
      the appellant may be denied of the higher duty only from the date when
 1    the controversy is set at rest, and all that is done or collected till then need

-·    not be reimoursed.

            We may point out that when respondent moved for an interim order
 ·'
      before the High Court of Bombay for stay of collection of octroi duty at
                                                                                         c
      the higher rate the following order was passed' on the application on 13th
      March, 1992.

                 "Heard counsel, Interim relief refused. The payment of Octroi duty
                 cannot be stayed. In case petitioner succeeds the respondents will      D
                 refund the excess duty."

            Parties are bound by the said order and it is too late in the day for
      the appellant to make a plea on the strength of financial burden etc.
      Refund has rightly been ordered by the High Court and it calls for no
      intervention by us.                                                                E
            We dismissed this appeal without any order as to costs.

      S.V.K.I.          •                                         Appeal dismissed .