V. K. Bali, J.
1. This case has rather a chequered history. The litigation inter se parties started some where in 1988-89 which culminated, even through temporarily, when the Apex Court passed an order dated January 29, 1995 (Annexure P-7) restoring the writ petition filed in the High Court to be disposed of on merits. The High Court in turn, vide its orders dated April 11, 1996 directed the State Government to hear and decide the appeal/ revision that was preferred by the petitioner herein within a period of three months. It is after the decision rendered by the Government, which at this stage is against the petitioner, that the present writ has been filed.
2. The challenge herein is directed to orders daled March 26, 1991 (Annexure P-5) passed by Shri S. P. Lamba, IAS, Collector, Ambala dismissing the appeals of the petitioner-Indian Oil Corporation as also order dated July 10, 1996 (Annexure P-10) vide which the revisions filed by the petitioner against the orders of the Collector met with the same fate. Before, however, the grounds canvassed for setting aside the orders, An-nexures P-5 and P-10 are taken for discussion, it will be useful to give brief facts on which the parties to this litigation are holding diametrically contrary views.
3. Petitioner-Indian Oil Corporation is a limited company having its registered office at Bombay. It imports through underground pipe lines motor spirit, high speed diesel, kerosene oil and other petroleum products to their terminal/depot which is within the limits of Municipal Committee, Ambala. It also receives certain petroleum products through railway which are carried to their terminal depot. It is the case of the petitioner that it brings the aforesaid petroleum products in the limits of the Municipal Committee either for sale to its dealers, licensees, who in turn sell the same to the consumers or some petroleum products which are transferred to its depots outside the Municipal limits. In the normal course of its business, the petitioner appoints dealers and licensees and supplies petroleum products on certain terms and conditions. Earlier, the respondent-Committee used to grant ‘rahdari’ permit for goods which were brought within its limits and which were to be exported outside its limits. Thereafter, the Municipal Committee chose to eliminate the re-export pass system and asked the petitioner Corporation and other Oil Corporations situated within its limits to enter into an agreement for payment of Octroi. The letter issued by the Administrator Municipal Committee, Ambala Sadar has been placed on records as Annexure P-1. It is further the case of the petitioner that in compliance of the letter, Annexure P-1, all the Petroleum Companies having depots in Ambala entered into an agreement on May 23, 1980 (Annexure P-2). That agreement only envisaged payment of octroi which was
legally due. The petitioner Corporation started submitting statement of stocks received at its Ambala terminal monthwise showing the stocks on which Octroi was payable i.e. the stock which was either consumed or sold within the territorial limits of respondent-Committee. Similarly, the details of stocks received within the Municipal limits but neither used/consumed nor sold within the Municipal limits of Ambala Sadar and transferred outside the Municipal limits were separately shown in the statement. But the Municipal Committee claimed octroi even on the stocks detailed in Annexure P-4 which pertained to the stocks transferred outside the Municipal limits. The petitioner, however, paid a sum of Rs. 92,32,287,09/ – as Octroi during the period from April, 1988 to September, 1990 on the stock which was transferred outside the Municipal limits of the respondent-Committee for use, sale or consumption outside the Municipal limits. The monthwise details of such stocks and the octroi paid thereon, as per the case of the petitioner, is well reflected from Annexure P-4/ A. The document, Annexure P-4/ A further reflects that the octroi duty was paid under protest. The petitioner filed 30 appeals for the period April, 1988 to September, 1990 under S. 99 of the Haryana Municipal Act, 1973 (hereinafter to be referred to as the Act of 1973) challenging levy of octroi and claiming refund of the octroi recovered by the Municipal Committee for the stocks which were neither used/consumed nor sold within the Municipal limits. These appeals were filed for refund of octroi paid every month. The Deputy Commissioner, Ambala, vide its order dated March 26, 1991, dismissed all the appeals. Constrained, the petitioner filed revision petitions under S. 100-A of the Act and it is the case of the petitioner that the bunch of revision petitions came up for hearing before Shri P. K. Jain, Joint Secretary, Government of Haryana who was then exercising the powers under S. 100-A of the Act of 1973. Despite notice, the respondent-Committee did not appear and was, therefore, proceeded ex parte. On January 18, 1993 the Joint Secretary allowed the revision petitions filed by the petitioner and ordered refund of
the octroi which was illegally charged by the Municipal Committee for the stocks which were transferred outside the Municipal limits and were neither used/consumed nor sold within the territorial limits of the respondent Committee. However, copy of the order was not supplied to the petitioner and, therefore, the respondent-Committee did not grant any relief to it on the basis of order passed by the then Joint Secretary, In these circumstances, it was left with no choice but for to deposit octroi on the stocks which were being transferred to its depots outside the territorial limits of Municipal Committee but it continued to file appeals for refund of the same every month. The Municipal Committee thereafter resorted to coercive method under S. 98 of the Act of 1973 and for that purpose served a notice on the petitioner. It is at that stage that the petitioner filed its earlier Civil Writ Petition (No. 15603 of 1993) seeking writ in the nature of certiorari for quashing notice issued by the respondent-Committee as also mandamus directing the State to supply a copy of the order passed by the then Joint Secretary exercising the powers of the State Govt. under S. 100-A of the Act of 1973. It is the case of the petitioner that during the hearing of the aforesaid petition it transpired that the Joint Secretary had passed an order in favour of the petitioner Corporation but the same was undated. An enquiry was ordered by the State Govt. against the conduct of the then Joint Secretary but after hearing the parties, Division Bench of this Court allowed the writ on November 21, 1994 with a direction to the Municipal Committee to refund octroi paid by the petitioner on the petroleum products which were transferred outside Municipal limits and were not used/ consumed or sold within the territorial limits of the respondent-Committee. The Committee was also directed not to charge octroi in future in respect of such products which were taken outside its territorial limits. The Municipal Committee challenged this order of the High Court by way of Special Leave Petition in the Hon’ble Supreme Court which was allowed and the matter was remitted to the High Court for redecision. The brief order passed by the Supreme Court reads thus:–
“Leave granted.
Heard learned counsel. It does appear that the impugned orders of the High Court were passed upon an erroneous basis, for the order passed by the then Joint Secretary, Local Government, State of Haryana was not, even in the eyes of the State Government a legally valid order. The appeals are allowed. The impugned orders of the High Court are, therefore, set aside. The writ petition is restored to the file of the High Court to be disposed of on merits. It shall be open to the parties to have all available contentions before the High Court. No orders as to costs.”
In pursuance of the orders passed by the Supreme Court, as reproduced above, a Division Bench of this Court vide orders dated April 11, 1996 directed the revisional authority to decide the revision petitions filed by the petitioner by passing a speaking order and fixed a time limit for the said purpose. When the matter came up for hearing before the revisional authority i.e. the Deputy Secretary in the Local Government Department, Government of Haryana, it is the case of the petitioner that it not only placed an affidavit but also placed on records other documents to substantiate its claim that octroi duty which the petitioner was forced to pay on stock transfers i.e. petroleum products neither used/consumed nor sold within the territorial limits of the respondent-Committee, was not being passed on to the transferee or consumers. The parties also filed written arguments before the Deputy Secretary. The revisional authority, however, passed a common order dismissing all the revisions filed by the petitioner-Corporation vide its orders dated July 10, 1996. It is these two orders dated March 26, 1991 (Annexure P-5) and July 10, 1996 (Annexure P-10) that have been challenged in the present writ.
4. Mr. S.C. Kapur, the learned counsel representing the petitioner vehemently eon-tends that no octroi is payable on the stocks which are neither used/consumed or sold within the municipal limits of the respondent-Committee. He further contends that the Revisional Authority has primarily based its decision on the agreement said to have been
entered into between the parties to pay octroi
on petroleum products brought inside the
municipal limits but the said agreement was
only with regard to payment of octroi on
items that attracted the duty of octroi and not
on items which did not attract such a tax as
also that, in any case, there was nothing in the
agreement that could debar the petitioner
from asking for a refund on items that did not
attract levy of octroi. He further contends
that even if this agreement is construed so as
to mean that the petitioner was, as per the
terms of the contract, required to pay the
octroi, the said agreement could not bind the
petitioner being void. The learned counsel
further contends that the agreement came
into being on 23rd of May 1980 effective from
19th of June, 1979 whereas the Ambala
terminal from which stock transfer is taking
place came into being on 11th of November,
1982. In other words, at the time when the
agreement was entered into, there was no
arrangement for stock transfers from peti
tioner’s Ambala Depot to other depots out
side Ambala. Learned counsel further con
tends that reliance placed by the Revisional
Authority on para 12 of Municipal Account
Code, 1930 is wholly misplaced as the rule
envisages issuance of permit at the barrier of
import and once the oil as coming to Ambala
through underground pipe lines, it was not
possible for the municipal committee to set up
a barrier. He further contends that the peti
tioner has led unrebuttable evidence to prove
that the burden of octroi that the Corporation
had to pay to the municipal committee was
not being passed over to the dealers or
customers and therefore, the principle of
unjust enrichment did not apply to the facts of
this case.
5. The matter herein has been, contested by all the respondents, by way of two separate written statements, one filed on behalf of respondent No. 1 and other by respondents 2 and 3. As written statement filed by respondents 2 and 3 is detailed one and has been filed by the contesting respondents it would be sufficient to notice the averments made in the written statement filed on their behalf. By way of preliminary objections it has been pleaded jn the written statement on behalf of respon-
dents 2 and 3 that in 1978 Indian Oil Corporation approached Municipal Committee, Ambala for allotment of land within the municipal limits of Ambala Cantt. for establishing their terminal depot. The land measuring 38.79 Acres on G. T. road was given by the municipal committee on lease for 90 years to Indian Oil Corporation at a very nominal premium of Rs. 12.50 to 15.00 per sq. yard keeping in view the fact that the municipal committee would levy octroi on the products brought by the Corporation and sold or consumed within the municipal limits and toll tax as also transit pass fee shall also be levied and charged on products brought in exported out of municipal limits of Ambala Cantt. In so far as octroi is concerned, the same is levied and leviable on the goods brought within the municipal limits of Ambala Cantt. which are used, consumed or sold therein. The octroi levied at Ambala Cantt. is at 50% of the rates which is levied in other towns/cities of Haryana, the State where the octroi rates are levied were also minimum. In Ambala Cantt. the reduced octroi rates are levied particularly to benefit the army persons staying in Ambala Cantt, and for saving them from heavy dose of tax, An agreement was also entered into between Municipal Committee, Ambala Cantt. and army authorities where-under 40% of the octroi collected by the municipal committee is paid/transferred to Ambala Cantonment Board for the development of the area. It has further been pleaded that as per the provisions of Haryana Municipal Act Octroi is leviable only on the prdducts brought within the municipal limits which arc sold or consumed within the municipal limits. In the Municipal Act and the Rules framed thereunder it is provided that the, goods which are brought within the municipal limits, but are not to be, consumed or sold within the municipal limits, the owner of the goods vehicle is required to obtain a transit pass oh payment of transitpass fee as well as toll tax to the concerned municipal committee at the octroi post. The purpose of levying of transit pass fee and toll tax on the goods brought within the municipal limits and exported without being consumed or sold within the municipal area is
to recover some tax/fee from them or, account of utilisation of municipal services including roads, bridges, sanitation, street lights, fire services, public conveniences, security arrangements etc. The petitioner was liable to pay transit fee in respect of goods which merely passed through the municipal limits without their being sale, use or consumption. The petitioner-Corporation was also under a legal obligation to obtain proper documents from incharge of octroi post when the goods left the municipal limits of Ambala Sadar. Soon after 1979 the Oil companies started obtaining transit passes on their vehicles entering within the municipal limits of Ambala Cantt. on payment of transit fee at the octroi post whenever the products were not for use, sale or consumption. They were issued transit passes which contained certain conditions and stipulations which had to be complied with by the tankers/trucks of oil companies. However, the oil companies did not find it convenient to comply with the conditions stipulated in the transit pass. In view of this Indian Oil Corporation along with other Corporations, namely, Bharat Petroleum Corporation and Hindustan Petroleum Corporation filed a joint application before the Administrator municipal committee requesting therein that they be exempted from transit pass system and instead octroi be levied on them which would be of mutual interest to the municipal committee as well as the oil companies. Municipal Committee, Ambala Sadar acceded to the request of three oil companies and agreed to charge octroi on petroleum products imported within the municipal limits of Ambala Cantt. instead of charging transit pass fee. In case transit passes had been issued to the oil companies and there had been a breach of any terms and conditions of the transit pass, the owner of the goods would have been liable to pay actual octroi in addition to 10 times penalty as provided in Section 91 of the Haryana Municipal Act, 1973. It was presumably for this reason that three oil companies by their joint request/ application had specifically requested the municipal committee Ambala Cantt to charge octroi instead of transit pass fee. A copy of the letter of the municipal committee dated 18th
of June, 1979 agreeing to request of the oil company thereby charging octroi is annexed with the written statement as Annexure R-2. On 23rd of May 1980 a formal agreement as required to be entered into between the parties as per letter Annexure R-2, was executed between municipal committee Ambala and Indian Oil Corporation. Copy of the agreement has been annexed with the written statement as Annexure R-3. In the agreement it has been specifically mentioned that Indian Oil Corporation shall make the payment of octroi duly for oil products as per rates notified in octroi schedule within the municipal limits from time to time on all products received by rail/ road or other mode of conveyance with effect from 19th of June, 1979. That after September, 1988, petroleum products were imported by the Indian Oil Corporation within the limits of Municipal Council Ambala Sadar through pipe lines but the same as per the assertion of Indian Oil Corporation were sent outside the municipal limits through trucks and/or tankers. The Corporation did not obtain any documents from the incharge of octroi post, when the said tankers/trucks left the municipal limits. With regard to refund of octroi asked for by the petitioner it has been pleaded by respondents 2 and 3 that the octroi was charged by the committee from Indian Oil Corporation and other oil companies on their request and agreement Annexure R-3 and therefore, they are estopped by their conduct in questioning the imposition of octroi which has been charged from them on their request. It has further been pleaded that presumption under Chapter V Rule 13(2) of the Accounts Code arises when the goods arc brought within the limits of a municipal committee without obtaining a transit pass, that the same are imported for consumption, use or sale within the municipality. The petitioner did not file any declaration form when the goods entered the municipal limits. Procedure prescribed under the Account Code for obtaining the transit pass or re-export permit under Chapter V Rule 13(2), 14, 15 and 32 (A) was not followed by Indian Oil Corporation. On the other hand the petitioner had specifically agreed to pay octroi and not to follow the
procedure prescribed under Chapter V of the Account Code for obtaining transit pass etc. In view of the agreement between the parties, the petitioner Corporation paid octroi duty and on this assurance respondents exempted them from following the procedure laid down in the Account Code. It is further the case of the respondents that no question of refund of octroi duty arises on the well known principle that no one is entitled to unjust enrichment and since the petitioner-Corporation had passed that burden of octroi duty to the customers, the principle aforesaid was attracted to the facts of this case.
6. Mr. H. S. Hooda, Advocate General, Haryana, representing the respondent-State and Mr. Arun Nehra, learned counsel representing respondents 2 and 3, on the strength of the pleadings reflected in the written statement and as have been reproduced above, join issues with the counsel representing the petitioner on all fronts. It is their contention that the moment, the goods entered within the Municipal Limits of Ambala Cantt., irrespective of the fact as to whether some stock which was neither used/consumed or sold within the Municipal Limits of the Committee, would not make any difference. In any case, the goods were sold within the Municipal limits of the respondent Committee and, therefore, the entire stock attracted levy of octroi, further contend the learned counsel. It is further contended by them that in any case a valid agreement on the basis of request made by none other than the petitioner came into existence by virtue of which system earlier in vogue with regard to permit and transit fee was done away and that would bind the petitioner and the octroi duty shall have to be paid by it on the entire stock that entered the Municipal limits of Ambala Cantt. as also that the very fact that the procedure provided under the Account Code for obtaining the transit pass or re-export permit under Chapter V, Rules 13(2), 14, l5 and 32(A) was not followed by the petitioner-Corporation and respondent-Committee was well within its right to levy octroi on the entire stock irrespective of the fact as to whether some stock received by the petitioner was neither consumed nor sold within the Municipal limits.
7. From the pleadings of the parties and respective contentions raised by them, the questions that emerge for adjudication are as to whether no octroi is payable on the stocks which are neither used/ consumed nor sold within the municipal limits of the respondent Committee? If the answer to this question is in negative, the further question that emerges for adjudication is as to whether the agreement, Annexure R-3, which is said to have been entered into between the parties vide letter Annexure R-2, binds the petitioner Corporation to pay octroi on the entire stock irrespective of the fact that some stock that was received by it was neither used/consumed nor sold within the municipal limits of the respondent-Committee? The next question that emerges for adjudication is as to whether non-following of the procedure as contained in Chapter V, Rules 13(2), 14, 15 and 32 (A) by the Indian Oil Corporation would entail payment of octroi on the entire stock received by it within the municipal limits of Ambala Cantt. The last question and which would arise only if answer to all the questions framed above is given against the Municipal Committee, is as to whether the burden of octroi duty has actually been passed on by the petitioner-Corporation to its consumers and if so, whether the octroi paid by it already on the stocks which were neither used/consumed nor sold within the municipal limits of Ambala Cantt. should be refunded to it or not?
8. Before the first question is dealt with, it may be mentioned that even though, during the course of arguments, it has been the stand of learned counsel for the respondents that in any case the goods were sold within the Municipal limits of respondent-Committee, may be to the customers located out side the municipal limits of the Committee and, therefore, the entire stock received by the petitioner within the municipal limits would attract levy of octroi, it has been pleaded in para (9) of the preliminary submissions that “as per the provisions of Haryana Municipal Act, octroi is legally leviable only on the products brought within the municipal limits which are sold or consumed
within the municipal limits. This statement has, however, been qualified by saying that in the Municipal Act and Rules framed thereunder it is provided that the goods which are brought within the municipal limits, but are not to be consumed or sold within the municipal limits, the owner of the vehicle goods is required to obtain a transit pass on payment of transit pass fee as well as toll tax to the concerned Municipal Committee at the octroi post. The purpose of levying of transit pass fee and toll tax on the goods brought within the municipal limits and exported out without being consumed and/or sold within the municipal limits, is to recover some tax/fee from them on account of utilization of municipal services including roads, bridges, sanitation, street lights, fire services, public conveniences, security arrangements etc. It appears to this Court that insofar as pleadings of the parties are concerned, it is not disputed that as per the provisions contained in the Municipal Act and the Rules framed thereunder, octroi is leviable only on the products brought within the municipal limits which are sold or consumed within the municipal limits. Even though, it may be the case of respondents that octroi is not leviable on the products which are not sold/consumed within the municipal limits if the owner of the vehicle goods obtains a transit pass on payment of transit fee etc. The pleadings of the parties apart, the matter appears to us to be no more res-integra and in fact stands clinched in favour of the petitioner and against the respondents by an authoritative pronouncement of the Hon’ble Supreme Court in Tata Engineering and Locomotive Company Limited v. Municipal Corporation of the City of Thane, AIR 1992 SC 645. The facts of the said case reveal that Tata Engineering and Locomotive Company Ltd. was carring on the business of manufacture and sale of motor vehicles and spare parts of motor vehicles and excavators. Their manufacturing units were at Pune and Jamshedpur outside the Thane Municipal Corporation limits. They had a bonded warehouse within the municipal limits in which they bring and stock motor vehicles parts and excavators parts from their own factories at Pune and Jamshedpur. They also bring in parts manu-
factured by their ancilliaries within India and also parts imported from abroad. These products of parts were brought in bulk and thereafter taken or sent out from the municipal limits in smaller packings depending on the requirements of the customers in various parts of the country. Prior to October 1, 1982 the Thane Municipal Council had granted to the Company current account facilities in respect of payment of octroi under the Maharashtra Municipalities Act, 1965 and the Maharashtra Municipalities (Octroi) Rules, 1968, made thereunder. The council had also granted permission under Rule 10(2) to the Company for maintaining a godown or warehouse of their own. The current account facility without the requirement of immediate payment of octroi at the octroi Naka was continued. During the period January 1, 1983 to March 31, 1984 the Company had made 1182 claims for refund. All these claims were rejected on various grounds inclusive of that the Company had sold the spare parts within the octroi limit in contravention of Rule 25(3)(d) of the Maharashtra Municipalities (Octroi) Rules, 1968, the procedure prescribed for export and the claim of refund had not been strictly followed. The non-compliance with the procedure prescribed referred to in the ground according to the Corporation were ; (i) Form 4 of the Octroi Rules and the original invoices were not submitted; or (ii) forms 11 and 12 filed were incomplete and all the required information were not given; or (iii) certificate of the octroi Exit Naka Officer had not been obtained. The Company filed a writ petition in the High Court contending therein that action of the Municipal Council was unconstitutional and illegal. The writ was, however, dismissed, thus, constraining the company to carry an appeal before the Supreme Court. The contention raised before the Supreme Court was that the sales made by the Company were not for consumption or use within the octroi limits and that the parts were sold to the parties outside the octroi limits and also for consumption or use outside such limits and, therefore, the rejection of claims on the ground that the spare parts were sold within the municipal limits and that it amounted to contravention of Rule 25(3)(d)
of the Rules was illegal. On the aforesaid contention, Supreme Court held that “having regard to the nature and incidence of octroi unless the octroiable goods are consumed or used or are meant to reach an ultimate user or consumer in the octroi area no octroi is leviable. The words “sale therein” in the words “consumption; use or sate therein” in the definition of octroi means sale of octroiable goods to a person for the purpose of consumption or use by such person in the octroi area. If sale was intended for consumption or use in the octroi area whether the purchaser actually consumed inside or outside octroi area is irrelevant. Rules 24 to 30 and the forms in the system of levy of octroi are intended to regulate the procedure for collection, identification of dutiable goods and correlation of goods exported with the goods imported for the purpose of refunds of octroi collected. In view of constitutional bar, octroi is not leviable if the goods are not brought into the octroi area for purposes of consumption or use in the area but for export and in fact exported by the importer himself or the sale by him occasions the export. Compliance with the procedure prescribed in the Rules for filing claims of refunds arc not conditions precedent for the right or eligibility for refund or the liability to refund but are provisions regarding proof of export of the goods imported and are not meant to be exhaustive either. They arc to be interpreted and understood in that sense.” The law laid down by the Supreme Court in Tata Engineering & Locomotive Co.’s case (AIR 1992 SC 645) (supra) really clinches the issue in favour of the petitioner and against the respondents.
9. In Indian Oil Corporation v. Municipal Corporation, AIR 1993 SC 844, it was likewise held that “Entry of goods within the local area for consumption, use or sale therein is made taxable by the State Legislature on the authority of Entry 52 of List II of Schedule VII. The Municipality derives its power to tax from the State Legislature and it obviously cannot have any authority more extensive than the authority of the State Legislature. Since, the State Legislature in view of Entry 52 of List II of Schedule VII is
competent to levy tax only on the entry of goods for “consumption, use or sale” into a local area, the Municipality cannot under a legislation, enacted in exercise of the powers conferred by Entry 52 of List II, have the power to levy tax in respect of the goods brought into the local area for purposes other than consumption, use or sale. S. 113 of the Act has, therefore, reasonably to be read subject to the same limitations as are contained Entry 52, List II, Schedule VII. The expression “imported into the City” used in S. 113 of the Act, as meaning “imported into the city for any purpose and without any limitation” would amount to attributing to the Legislature an intention to give a go by to the restriction contained in Entry 52 of List II. That is not permissible. The expression “imported into the city” in S. 113, therefore has to be interpreted as meaning “imported into the municipal limits for the purposes of consumption, use or sale” only. Thus, in the limited sense, S. 113 of the Municipal Act is not ultra-vires Entry 52 of List II of Schedule VII”. It may be mentioned that in Indian Oil Corporation’s case (AIR 1993 SC 844) (supra) validity of S. 113 of the Punjab Municipal Corporation Act, 1976 was challenged on the grounds that it had authorised the levy of octroi on articles and animals imported within the municipal limits of the Corporation without any reference to the use, consumption or sale of the said goods as being beyond the power of the State Legislature. The Indian Oil Corporation had not disputed its liability to pay octroi duty in relation to the first three categories but it only disputed the authority of the Municipal Corporation to impose and demand octroi duty on the petroleum products imported by the IOC within the limits of the Corporation which were only exported to its dealers at their sale points situated outside the area of the Municipal Corporation.
10. In view of two authoritative decisions of the Supreme Court dealing with exactly the same issue, as in hand before us, it has to be held that no octroi is leviable on the stocks which are neither used/consumed nor sold within the municipal limits of the respondent-Committee. The first question framed by us
has, thus, to be answered in favour of the petitioner Corporation. That necessarily takes us to the other questions that have been formulated above.
11. Agreement, Annexure R-3, came into being on May 23, 1980 between the Indian Oil Corporation, Ambala Cantt. and the Administrator, Municipal Committee, Ambala Cantt. Agreement, Annexure R-3, it is the positive case of the respondent-Committee came into being in view of letter written by the petitioner Corporation to the Administrator, Municipal Committee, Annexure R-1, dated June 2, 1979. It is recited in the letter aforesaid that in view of the discussions which had already been made, with a view to eliminate prevailing arduous re-export pass system for HSD and petrol, as per the practice in vogue, tank-trucks going with supply to various petrol pumps have to stop at various octroi posts for completing re-export pass formalities which adversely affect the turn-over of the tank trucks, with the result that the Corporation cannot deliver the product to its various outlets in time, in the event of elimination of this pass system, the Oil Companies would make consolidated payment of octroi on monthly basis within three weeks of the following month i.e. the payment for the month of May would be made by 21st June. Operative part of the letter, Annexure R-l, reads thus –
“In the event of elimination of this pass system the oil Co. will make the consolidated payment of octroi on monthly basis within 3 weeks of the following month i.e. the payment for the month of May will be made by 21st June”.
It is the case of the respondent-Committee that this request was favourably considered and in that regard the Administrator addressed a letter to the Depot Manager, Indian Oil Corporation, Ambala Cantt. and other Companies conveying therein that it was decided to eliminate the re-export pass system. After doing away with the re-export pass system, octroi duty on HSD, petrol and other oil products imported by Rail and road etc. was to be charged subject to the conditions mentioned in Annexure R-2. The first condition
runs thus:–
“(i) That the Indian Oil Corporation, the H.P.S., the B.P.C. and the H.P.C. (VMU) will make the payment of Octroi Duty for the oil products as per schedule rates as prevalent till such time the schedule rate is modified and in that event at such revised rate received during the month up to the 15th of the succeeding month i.e. in case the goods are received during the month of June the payment will be made for the month of June up to the 15th of July”.
Agreement, Annexure R-3, thereafter came into being, Clauses (iii) and (vii) whereof read thus:–
” XX XX XX
(iii) That the Corporation will make the consolidate payment of octroi of all products on monthly basis within three weeks of the following month i.e. the payment for the month of May will be made by 21st June and so on.
XX XX XX
(vii) That the octroi will be payable by the Corporation of all the products received by Rail, Road or any other mode of conveyance”.
12. It is quite clearly made out from the proposal and acceptance, Annexures R-1 and R-2 as also the agreement, Annexure R-3 that re-export pass system was eliminated but the condition for doing the same was that the Indian Oil Corporation will make payment of octroi duty for all oil products on scheduled rates as prevalent till such time the schedule rates are modified. Mr. Kapoor, learned counsel appearing for the petitioner-Corporation, during the course of arguments, could not deny that such an agreement was actually arrived at between the parties. His contention, however, is that the agreement is against the existing law and, therefore, void as also that such agreement could be repudiated at any time and that the agreement was to pay octroi on all products on which octroi was leviable. The counsel representing the respondents could not rebut the argument of Mr. Kapoor that the agreement is against law and
that being so, it could be repudiated at any time. It is, however, contended by them that by corning to an agreement of that kind, petitioner Corporation has gained or is endeavouring to gain on both ends. It has successfully avoided payment that it had necessarily to make on re-export pass system with a view to send its goods outside the municipal limits and on the other hand it wants to save octroi on the said goods. If Corporation is permitted to do this, it would put the respondent-Committee to a tremendous loss. It is further the case of the respondent-Committee that it shall not be possible for them at this stage to make refund as 40% of the octroi collected has already been passed over to the Cantonment Board. The Board, in turn, has already spent the amount in developing the Ambala town (Cantt.). It is also the case of the respondent-Committee that it shall be impossible at this stage to work out the money that has been made available to it if re-export pass system was continued.
13. We have given our thoughtful consideration to the matter and are of the view that even though the agreement, being opposed to the law, may not be binding upon the petitioner Corporation and can be repudiated at any time, it is not a case where refund should be ordered. The petitioner Corporation has successfully done away with re-export pass system and avoided payment in re-exporting its goods to the depots/stations outside the municipal limits of Ambala Cantt. It shall be very difficult, if not impossible at this stage, to work out the amount that the petitioner Corporation was supposed to pay for such stocks. Net result, therefore, is that the respondent-Committee has lost the revenue that it might have got if re-export pass system was continued. That apart, some amount, out of the amount received by the respondent-Committee towards octroi, has been passed on to the authorities of Cantonment Board, even though to the extent of 40% and it is presumed that the same must have been spent for the upliftment of the town. The petitioner Corporation by its conduct has created the situation where the parties cannot be restored
to their original position that might have been there sans the agreement in question. This being answer to the question, there hardly arises any necessity to go into the other two questions framed by us. Suffice it, however, to say that if the Corporation had passed on the burden of octroi to its customer, no refund could be made to it on the ground of unjust enrichment. It has, of course, throughout been the stand of the petitioner Corporation that such a burden was not passed on to its customers but this stand was taken for the first time when revisions were heard by the Deputy Secretary after the case was sent to the revisional authority by the High Court. There was, thus, no occasion for the respondent-Committee to rebut this assertion of the petitioner before the revisional authority. If we would have not returned a finding in favour of the respondent-Committee on the second question, we would have certainly remitted the case to the revisional authority to determine as to whether the octroi paid by the petitioner Corporation with regard to stocks sent by it outside the municipal limits was charged by it from its customers and order with regard to refund or otherwise would have depended upon the answer of the question given by the revisional authority.
14. In view of the discussions made above, whereas, we hold that no octroi could be charged from the petitioner-Corporation on the stocks which were neither used/consumed nor sold within the municipal limits of the respondent-Committee, in peculiar facts and circumstances of this case, we order that the respondent-Committee is not obliged to make refund of the octroi charged by it on such stocks. From now onwards, however, the Municipal Committee will not charge octroi on such stocks but then if the procedure so requires, the petitioner Corporation shall have to make re-export pass system for transporting goods/stocks that may be sold outside the municipal limits. Parties are left to bear their own costs.
15. Order accordingly.