JUDGMENT
D.Y. Chandrachud, J.
Page 2681
1. A sentence in the judgment of a Division Bench of this Court in Bajaj Tempo Limited v. The Pimpri Chinchwad Municipal Corporation 1998 Bombay C.R. 745 has given rise to an ambiguity, resulting in this reference to the Full Bench. The dispute focuses upon the interpretation of an entry in the Table of Rates for Octroi, that governed the Pimpri Chinchwad Municipal Corporation during the period 1991 to 2001.
2. The Petitioner set up an automotive factory at Pimpri-Chinchwad in 1968. At that point in time, the area was comprised in a village designated under the Bombay Village Panchayats Act, 1958. Some time in the year 1970, a Municipal Council was constituted for the area under The Maharashtra Municipalities Act, 1965. Under Rule 3 of The Maharashtra Municipalities Octroi Rules, 1968 the Municipal Council is entitled to levy octroi on goods classified in the first schedule at rates not below the minimum and not above the maximum prescribed. A Table of Rates for Octroi was accordingly published by the Municipal Council. The Table was modified from time to time. The Pimpri Chinchwad Municipal Corporation came to be constituted on 5th October, 1982 under the Bombay Provincial Municipal Corporations Act, 1949. The Act empowered the Municipal Corporation to levy octroi. It is not disputed that the octroi rules that were framed under the Maharashtra Municipalities Act, 1965 continued to apply within the territory of the newly constituted Municipal Corporation for over two decades, until new octroi rules were brought into force in 2003.
3. The subject matter of this reference to the Full Bench is the interpretation that should be placed on the provisions of Entry 75 of the Table of Rates for Octroi that held the field between 1991 and 2003. Entry 75 has undergone changes since 1968 -changes which will have a bearing on the interpretation that is to be placed on the terms of the entry. The position of Entry 75 as it has appeared in the Table during various periods of time is summarised in the following chart, which forms the basis of the submissions urged before the Court in the present proceedings.
————————————————————–
ENTRY 75 AS IT APPEARED DURING VARIOUS PERIODS OF TIME
————————————————————–
As per The Mahara- Vehicles
shtra Municipali- Rates
ties (Octroi) Rules prescribed
1968----in 1968 Max. Min.
(a) Motor Cars, Motor 4.00 0.50
cycles, Chassis
and lorries, and
spares thereof
(b) Bicycles, perambu-
lators, carriages,
all kinds of vehicles
and their components
and spares 4.00 0.50
--------------------------------------------------------------
Page 2682
As per Municipal Vehicles Rate
Council of Pimpri (a) Motor cars, motor
Chinchwed... cycles, chassis &
in 1971 lorries and spares
thereof. 2.00
(Adopted as it is
from above) (b) Bicycles, perambulators,
carriages, all kinds of
vehicles and their
Components and spares 2.00
--------------------------------------------------------------
As per Municipal Vehicles Rate
Council of Pimpri (a) Motor cars, motor cycles,
Chinchwad.... From Chassis and lorries 0.50
16th March 1981. and spares thereof 2.00
Note :
(75b was split in (b) Bicycles and their 0.50
to 75b and 75c and spares parts
The words "compo-
nents was deleted (c) Perambulators, carriages,
for bicycles) all kinds of vehicles &
their components and
spares 0.50
--------------------------------------------------------------
As per Municipal Rate
Corporation of Vehicles
Pimpri Chinchwad (a) Motor cars, motor cycles,
-- from 1st April Chassis and lorries 0.50
1989. and spares thereof 2.00
(b) Bicycles and their 0.50
Note : spare parts
(Rate of 75c was (c) Perambulators, carriages,
changed to 2% all kinds of vehicles
from 0.50%) and their Components and
spares. 2.00
--------------------------------------------------------------
As per Municipal Rate
Corporation of Vehicles
Pimpri Chinchwad (a) 1) Motor cars, motor ]
...from 1st April cycles, chassis and ]
1993. lorries ] 0.50
2)Spares thereof ] 2.00
(The words "compo-
nents were added (b) Bicycle and their
for bicycles in components and spare
75b) parts 0.50
(c) Perambulators, carriages,
all kinds of vehicles
and their components and
spares. 2.00
--------------------------------------------------------------
4. A dispute was raised before this Court on the construction of the provisions of Entry 75 in Bajaj Tempo Limited v. Pimpri Chinchwad Municipal Corporation (1981)18 CR-745. Bajaj Tempo was manufacturing light commercial vehicles in different models such as Mini buses, station wagons, Ambulances, pick-up trucks, delivery vans and auto rickshaws. The manufacturing unit was situated within the territorial limits of Pimpri Chinchwad Municipal Corporation. The Company imported raw material, components and spares within Municipal limits. The Company had a dispute with the Municipal Council after the revised Page 2683 table of rates for Octroi came into force from 16th March, 1981. The Municipal Council asserted that components and spares that were brought into Municipal limits were liable to be levied with octroi duty under Entry 75A. On the other hand, the Company asserted that components and spares were classifiable under Entry 75C. A demand was raised by the Municipal Corporation which led to the institution of Writ proceedings under Article 226 of Constitution before this Court. Entry 75A specifically covers motor cars, motor cycles, chassis and lorries. None of the vehicles manufactured by Bajaj Auto met that description. Consequently it was urged before this Court on behalf of the Petitioner in that case that it was not Entry 75A, but Entry 75C which would apply since Entry 75C applies to all kinds of vehicles and their components and spares. An alternative submission was raised before the Division Bench that even assuming that the vehicles manufactured by the Petitioners fell under Entry 75A that Entry did not speak of components and that the components should fall under Entry 75C. In any event, it was submitted that components would fall under residuary Entry 86 and would be liable to octroi at the rate of 1.25%.
5. The Division Bench of this Court noted, in the course of its judgment that the expression “vehicles” has been defined in Section 2(50) of the Maharashtra Municipalities Act, 1965 in the following terms:
“Vehicles” includes a carriage, cart, van, dray, truck, handcart, bicycle, tricycle, motor-car and every wheeled conveyance which is used or is capable of being used on a street”. The Court noted the width of the definition and the distinction between Entry 75A on the one hand and Entry 75C on the other hand in the following observations:
The definition is very wide and covers within its sweep all types of vehicles. Entry 75-A deals with only certain types of vehicles like motorcars, motor cycles, chassis and lorries and spares thereof. Entry 75-C relates to perambulators, carriages, all kinds of vehicles and their components and spares. The vehicles manufactured by the petitioners are not covered by Entry 75-A and, therefore , they would necessarily be covered by expression “all kinds of vehicles” in Entry 75-C.
6. On behalf of the Municipal Corporation, an attempt was made to submit that the expression “All kinds of vehicles” must be construed analogous to the expressions ‘perambulators’ and ‘carriages’ which immediately preceded it, applying the doctrine of noscitor a sociis. The Division Bench held that the aforesaid principle of interpretation was merely a rule of construction to be applied when the meaning of the words used was doubtful. However, where the legislature has used wide words of which the meaning is clear and free of ambiguity that rule of construction could not be pressed into service. The Court held that while the vehicles manufactured by Bajaj Tempo did not meet the description of those that fell in Entry 75-A, they would fall within the description of “All kinds of vehicles” in Entry 75-C:
In our opinion, the words “all kinds of vehicles” are extremely wide in their application and cover all the vehicles other than the vehicles falling under Entry 75-A. Page 2684 They will have to be read in the light of definition of vehicle under Section 2(50) and so read they would cover, within their ambit, all kinds of vehicles other than those covered by Entry 75-A
Entry 75-C covers all kinds of vehicles and their components and spares. The Division Bench held that the vehicles manufactured by the Company and their components and spares therefore fell within the ambit of Entry 75-C and were liable to be charged octroi duty at the rate described for that Entry.
7. Having said this, the Division Bench observed that even assuming that the vehicles of Bajaj Tempo fell for classification under Entry 75-A, their components would fall for classification under Entry 75-C. We would quote the observation of the Division Bench since that is what has created an ambiguity:
Therefore even assuming that the vehicles manufactured by the company fall under Entry 75-A, the components would be governed by Entry 75-C and liable to be charged at the rate of 0.5 per cent.
8. Relying on the aforesaid observation of the Division Bench, the Municipal Corporation has in the present case contended that the components and spares imported by the Petitioner within Municipal limits would fall for classification under Entry 75-C irrespective of whether the vehicles manufactured by the Petitioner fall for classification under Entry 75-A. On the other hand, according to the Petitioner, Entry 75-A covers specific categories of vehicles and components are not comprehended within Entry 75-A. The components and spares which are included in Entry 75-C are according to the Petitioner only those of vehicles which fall under Entry 75-C. Consequently the Petitioner asserts that it is only when the vehicle in association with which the components and spares are imported falls under Entry 75-C that the components and spares would be classified under Entry 75-C. According to the Petitioners, the vehicles that are manufactured by them fall for classification under Entry 75-A and hence the components and spares of those vehicles cannot be classified under Entry 75-C.
9. We have in the earlier part of this judgment extracted for the purposes of comparison the provisions of Entry 75 as they have stood from time to time under the Table of Rates for Octroi. An analysis thereof is now necessary. The first important feature to be noted is that Entry 75-A deals with specified categories of vehicles namely motor cars, motor cycles, chassis and lorries. Spares of these vehicles are comprehended within Entry 75-A. The next important facet is that the words ‘components’ and ‘spares’ have been used separately in the sub entries of Entry 75. In the context of motor cars, motor cycles, chassis and lorries, the spares thereof are specifically brought within the scope of Entry 75-A. In contrast, components are not within the purview of Entry 75-A. Components were, however, specifically included within the other sub entries namely Entry 75-B and Entry 75-C at various periods of time. Entry 75-B in 1968 covered bicycles, perambulators, carriages, all kinds of vehicles and their components and spares. This entry of 1968 was continued in 1971 with a modification of the rate of Octroi duty. With effect from 16th March, 1981 Entry 75-B was bifurcated into two parts, Entry 75-B covering bicycles and their spare parts and Entry 75-C consisting of Page 2685 perambulators, carriages, all kinds of vehicles, their components and spares. On 1st April 1993 the table was amended and Entry 75-B was expanded to cover components and spares of bicycles. This would show that the distinction between components and spares was present to the mind of the subordinate or delegated legislative authority. Entry 75-A at all material times to which the present dispute relates included vehicles of a certain description and the spares of those vehicles. The absence of components from Entry 75-A is conspicuous. The absence of components from Entry 75-A becomes even more conspicuous when compared to the other sub-entries, 75-B and 75-C which included Components and Spares at material points in time. Entry 75-A included Spares but not Components.
10. Entry 75-C covers perambulators, carriages, all kinds of vehicles and their components and spares. The vehicles which are covered in Entry 75-C are obviously vehicles other than those which are specifically provided for in Entry 75-A. When Entry 75-C refers to “all kinds of vehicles and their components and spares”, the use of the word “their” is significant. The plain intendment is that the components and spares must be of the vehicles which fall for classification under Entry 75-C. In other words, the components of those vehicles which fall under Entry 75-A will not fall within the purview of Entry 75-C and it is only the components and spares of vehicles falling under Entry 75-C that would fall under the latter entry.
11. This position becomes all the more evident by the modifications that were made by the Pimpri Chinchwad Municipal Corporation Octroi Rules of 2001 which came into force from 6th January 2002. Components were specifically brought in within the purview of Entry 75-A together with their accessories and spare parts. The new provision together with a subsequent amendment which was brought into force from 12th May 2003 is as follows:
————————————————————
As per Pimpri Vehicles Rate
Chinchwad
Municipal (a) Motor cars, motor
Corporation cycles, chassis
Octroi Rules and trucks, all types
2001... from 6th of vehicles, cars,
January 2002 buses, Cranes, trailor,
tempo, Rickshaw, forklift,
(The words excavators, all types of
"components" passenger vehicles, road
were added in rollers, bulldozers,
75a) tractors, concrete mixer,
jeep, motor cycles,
scooters, mopeds, chassis
of all types of vehicles,
their components, accessories
and spare parts and
all other Indigenous and
foreign vehicles, their
components, spares parts
and accessories. 3.00
(b) All types of bicycles,
Perambulators, carriages Page 2686
and their Components,
spare parts and
Accessories. 1.00
[emphasis supplied)
------------------------------------------------------------
As
per Pimpri
Chinchwad
Municipal
Corporation
Octroi Rules
2001... from
12th May 2003 Vehicles
(a)(1) Motor cars, chassis
(Entry 75a and Trucks, all types
divided in to of vehicles, cars,
1 and 2 The buses, cranes, trailor,
words" tempo, rickshaw, for klift,
components Excavators, all types of
now taken to Passenger vehicles, road
75a(2). The rollers, bulldozers,
rate is now tractors, concrete mixer,
1.65%). jeep, motor cycles,
scooters, mopeds, chassis
of all types of vehicles,
and all other indigenous
and Foreign Vehicles, for
which no specific
provision is made. 1.00
(2) All components, spare
parts and accessories
of all types of vehicles
mentioned in sub
clause 75a(1) of
schedule-I, and
accessories used in any
Industrial and commer
cial establishment
excluding specified
else where 1.65
(b) All types of bicycles,
Perambulators,carriages
and their components,
spare parts and
Accessories 1.00
[emphasis supplied]
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12. The decision in Bajaj Tempo was in a case where vehicles that were being manufactured by the factory fell within the purview of Entry 75-C. The expression
“all kinds of vehicles” in Entry 75-C as it stood was wide enough to cover all types of vehicles except those for which a specific provision was made in Entry 75-A. Since the vehicles manufactured by the Company were not covered by Entry 75-A but by Entry 75-C, the components and spares thereof also fell for classification under Entry 75-C which specifically included components and spares of the said vehicles. Therefore the judgment in Bajaj Tempo is correct to the extent that it holds that:
(a) Entry 75-A deals with only certain types of vehicles namely motor cars, motor cycles, chassis and lorries;
Page 2687
(b) The expression ‘all kinds of vehicles’ in Entry 75-C is wide enough to cover all types of vehicles other than those specifically referred to in Entry 75-A;
(c) Components and spares of vehicles falling in Entry 75-C would be liable to be charged Octroi under Entry 75-C; and
(d) Entry 75-A at the material time made a reference only to specific vehicles and their spare parts and not to components. The Division Bench however proceeded to observe that even assuming that the vehicles manufactured by the Company fell under Entry 75-A, the components would be governed by Entry 75-C. This observation of the Division Bench was unnecessary for the purposes of the decision, once the Bench had concluded that the vehicles manufactured by the Petitioner before the Court fell within the purview of Entry 75-C. The finding of the Division Bench that even on the assumption that the vehicles of the Company fell Entry 75-A, the components of those vehicles would be governed by Entry 75-C is with respect in error. Components under Entry 75-C as it stood covered only those components of vehicles which fell within Entry 75-C. The components of those vehicles which fell under Entry 75-A would not fall for classification under Entry 75-C. Therefore, we are of the view that the following observation in the judgment in Bajaj Tempo does not correctly state the position in law namely
Therefore even assuming that the vehicles manufactured by the company fall under Entry 75-A, the components would be governed by Entry 75-C and liable to be charged at the rate of 0.5 per cent.
13. The judgment of the Division Bench in Bajaj Tempo notes the distinction between components and spares. The distinction is described in the following observations.
The words “spare part” means an extra part of a vehicle or machine kept for use in emergency or replacement. The expression “spare parts” cannot be equated with “parts” without regard to the colour that is lent by the word “spare”. As a matter of plain language, the expression “spare parts” connotes a part which requires replacement in the ordinary course on account of wear and tear, and as an extra item for use in an emergency See Sujan Singh v. Appellate Assistant Commissioner, Sales Tax, Delhi Sales Tax Cases Vol. XXIV 504.
14. The Table of Rates for Octroi as we have noted earlier has used two separate terminologies namely spares and components. The two words have distinct connotations in law. The absence of the latter from Entry 75-A at the material time cannot be ignored as being without significance. Every word in a legislative instrument or for that matter, in subordinate legislation must be ascribed a meaning consistent with the intent of the framers of the Law. Where the meaning is clear from the plain and grammatical construction, that is what the Court would adopt. Octroi is a tax or duty imposed on the Entry of goods into a local area for consumption, use or sale. There is no equity about a tax and the Court must construe the words as they are, the words as they stand.
That leads the Court to the question as to how components of vehicles falling in Entry 75-A as it stood at the material time would be Page 2688 classified. In fairness it must be noted that it is not the contention of learned Counsel for the Petitioner that all these components should be taxed under the residuary Entry 86. Entry 86 is noted as follows.
————————————————–
Rate
Goods not included in 1.50
Entry 86 any of the above items
and not specifically
exempted in Schedule II
————————————————–
Entry 86 is a residuary entry which applies only when the goods in question do not fall for classification under one of the specific entries in the schedule. Consequently it cannot be asserted that components of vehicles which fell under Entry 75-A must always fall for classification under the residuary entry. Where the components, at the material time to which present dispute relates, of vehicles falling under Entry 75-A fell within the purview of any specific entry in the schedule that entry would necessarily apply. By way of an illustration, and without meaning to be exhaustive it would be interesting to note that Entry 69-A of the Schedule of rates with effect from 1st April, 1993 provided for ‘Rubber tyres and Tubes not for bicycles’. This would be an illustration of a case where a component of motor cars, motor cycles or lorries falling under Entry 75-A namely rubber tyres and tubes would fall for classification under Entry 69-A. In other words, though the components of vehicles falling under Entry 75-A at the material time could not be classified under Entry 75-C, the specific entry under which a particular component would be classified would depend upon the nature of the component. Where a specific entry in the schedule covered an item fulfilling the description of the component that entry would apply. The residuary entry would be attracted only where a particular component was not covered by any of the entries in the schedule. 15) Before concluding, it would be necessary for this Bench to clarify that this reference to the Full Bench was occasioned as a result of the ambiguity created in the law by the observation of the Division Bench in Bajaj Tempo to which reference has already been made. Consistent with the convention on the subject we have confined ourselves to the scope of the reference. Hence, it has not been necessary for us to adjudicate upon any of the factual areas of dispute between the parties to the writ proceedings. These are undoubtedly matters which would be considered by the Division Bench when the petition is placed before the Court upon the disposal of this reference. We accordingly dispose of this reference, clarifying that during the material period to which this dispute relates, components of vehicles falling within the purview of Entry 75-A did not fall for classification under Entry 75-C. The observation to the contrary in the judgment of the Division Bench in Bajaj Tempo (supra) does not reflect the correct position in law.
16. The Registry is now directed to place the petition before the appropriate bench for disposal.