# TOWN MUNICIPAL COUNCIL v. URMILLA KOTHARI

- **Citation:** [1977] 2 S.C.R. 660
- **Court:** Supreme Court of India
- **Decided:** 1977-01-20
- **Bench:** A. N. Ray, M. H. Beg, Jaswant Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/town-municipal-council-v-urmilla-kothari-7091
- **Pages:** 6

## Headnote

Ka_rnataka Municipalities Act, 1964-Sec.
124-Karnataka Mu11icipalities
T_axatu:~n .Rules, 1965-Rule 26-Trncks pa,rsing on the highways within muni-
,.t
c1pal /lm1ts-Whether octroi payable-Meaning of "brought into" and "immediate exportation".
The r~spWldent is a transporter. The respondent lifts the iron ore in his
trucks from Hubli Railway yard and carries it to Karwar and Belekeri harbours.
The trucks of the respondent have to pass in the course of transit through the
limits of various Town Municipalities situate on the highway
of which
the
appellant happens to be one.
The respondent does not nnload or re-load the
iron ore at any intermediary point or stop. The appellant passed a resolution
in purported exercise of s. 124 of the Karnataka Municipalities Act; 1964 read
with rule 26 of the Karnataka Municipalities Taxation Rules, 1965, imposing a
fee of Re. 1 /- per trip of each tmck. The respondent filed a
writ petition
challenging the levy of the fee.
The learned single Judge of the High Court
<li~missed the writ petition. The Division Bench, however, allowed the appeal.
Dismissing the appeal by ce1iificate,
HELD : The present case is not covered by "any article or animal brought
into the municipal limits for the purpose of immediate exportation" mentioned
in s. 124. "Brought into" and "immediate exportation" do not
comprehend
within their sweep the coptinuous process of tran~it of goods by vehicles which
merely use the State High W1y passing through the areas which lie within 1.he
municipal limits. In the instant case, the iron ore is carried in the trucks of
the respondent which merely pass through the areas which lie within the .nunicipal limits and is not unloaded and reloaded at any place within the mc.1icipal
areas. The continuity or continuous process of the carriage of iron ore is not
in any way, in fact, broken within the municipal limits. The respondent cannot be said either to bring in or export the iron ore as contemplated by s. 124
of the Act read with Rule 26 of the Rules and, as such, is not liable to pay
octroi or what is styled as supervision fee.
A contrary interpretation
would
make rail borne goods passing through the Railway Station within the limits of
the municipality liable to the imposition of the fee on their arrival at the Railway Station and departure therefrom which could not be the intention of the
"Legislature. [662 G-H, 664 B, G-H, 665 A-BJ
Tke Central India Spinning and Weavi1111
and
Manufacturing
Company
~-
Limited, the Empire Mills, Nagpur v. The Municipal Committee, Nagpur [19581
SCR 1102=AIR 1958 SC 352, followed.
Brown v. State of Maryla11d (1827) 12 Wheat -419, 442: 6 L. Ed. 678, 686
and Wilson v. Robertson 24 L.J.Q.B. 185, quoted with approval.

## Text

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TOWN MUNICIPAL COUNCIL
v.
URMILLA KOTHARI
January 20, 1977
[A. N. RAY, C.J., M. H. BEG AND JASWANT SINGH, JJ.]
Ka_rnataka Municipalities Act, 1964-Sec.
124-Karnataka Mu11icipalities
T_axatu:~n .Rules, 1965-Rule 26-Trncks pa,rsing on the highways within muni-
,.t
c1pal /lm1ts-Whether octroi payable-Meaning of "brought into" and "immediate exportation".
The r~spWldent is a transporter. The respondent lifts the iron ore in his
trucks from Hubli Railway yard and carries it to Karwar and Belekeri harbours.
The trucks of the respondent have to pass in the course of transit through the
limits of various Town Municipalities situate on the highway
of which
the
appellant happens to be one.
The respondent does not nnload or re-load the
iron ore at any intermediary point or stop. The appellant passed a resolution
in purported exercise of s. 124 of the Karnataka Municipalities Act; 1964 read
with rule 26 of the Karnataka Municipalities Taxation Rules, 1965, imposing a
fee of Re. 1 /- per trip of each tmck. The respondent filed a
writ petition
challenging the levy of the fee.
The learned single Judge of the High Court
<li~missed the writ petition. The Division Bench, however, allowed the appeal.
Dismissing the appeal by ce1iificate,
HELD : The present case is not covered by "any article or animal brought
into the municipal limits for the purpose of immediate exportation" mentioned
in s. 124. "Brought into" and "immediate exportation" do not
comprehend
within their sweep the coptinuous process of tran~it of goods by vehicles which
merely use the State High W1y passing through the areas which lie within 1.he
municipal limits. In the instant case, the iron ore is carried in the trucks of
the respondent which merely pass through the areas which lie within the .nunicipal limits and is not unloaded and reloaded at any place within the mc.1icipal
areas. The continuity or continuous process of the carriage of iron ore is not
in any way, in fact, broken within the municipal limits. The respondent cannot be said either to bring in or export the iron ore as contemplated by s. 124
of the Act read with Rule 26 of the Rules and, as such, is not liable to pay
octroi or what is styled as supervision fee.
A contrary interpretation
would
make rail borne goods passing through the Railway Station within the limits of
the municipality liable to the imposition of the fee on their arrival at the Railway Station and departure therefrom which could not be the intention of the
"Legislature. [662 G-H, 664 B, G-H, 665 A-BJ
Tke Central India Spinning and Weavi1111
and
Manufacturing
Company
~-
Limited, the Empire Mills, Nagpur v. The Municipal Committee, Nagpur [19581
SCR 1102=AIR 1958 SC 352, followed.
Brown v. State of Maryla11d (1827) 12 Wheat -419, 442: 6 L. Ed. 678, 686
and Wilson v. Robertson 24 L.J.Q.B. 185, quoted with approval.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No.
1386 of
1~76.
From the Judgment and Order dated 21-9-76 of the Karnataka
High Court in W.A. No. 150 of 1976.
H
H. B. Datar, Sanjeev Aggarwal and R. B. Datar for the Appellant.
S. T. Desai, S. K. Mehta, K. R. Nagaraja and P. N. Puri
for
Respondent.
TOWN MUNICIPAL v. URMILLA KOTHARI (Jaswant Singh, J.)
661
The Judgment of the Court was del~vered by
.
JASWANT SINGH, J.
This appeal by certificate which is directed
against the judgment and order dated September 21, 1976, of tho
High Court of Karnataka at Bangalore reversing the judgment and
order dated March 3, 1976 of a Single Judge of .that Court dismissing
writ petition No. 6945 of 1975 ·filed by the respondent involves a
substantial question of law of general public importance relating to
the validity of the levy of what is styled as 'supervision fee'
under
section 124 of the Karnataka Municipalities Act, 1964
(hereinafter
referred to as 'the Act') read with rule 26 of the Karnataka Municipalities Tax(!tion Rules, 1965 (hereinafter referred to as 'the Rules').
The facts of the case lie in a short compass and may be stated as
follows:-
Iron ore which is extracted from its mine heads in Hospet Taluka
is brought over and stocked in Hubli Railyard by the Mysore Minerals
Limited which is a Government undertaking.
Having taken up the
contract of transhipment of the iron ore from Hubli Railyard to Karwar
and Belekeri harbours, the Mysore Minerals Limited has sublet the
· same to the West End Minerals and Exports Private Limited.
The
latter has in turn entrusted the execution of the contract to the respondent which is engaged in transport business.
The iron ore is accordingly lifted by the respondent in its trucks from Hubli Railyard and
carried to Karwar and Belekeri harbours.
The trucks of the· respondent carrying the iron ore have (en route) to pass in the course of
transit through the limits of various town municipalities situate on the
highway of which the appellant happens to be one, but they do not
unload and reload the iron ore at any intermediary point or stop.
The appellant, on the basis of a resolution passed by it on January
25, 1975, and approved by the State Government levies the aforesaid
fee of Re. 1/- per truck under section 124 of the Act read with rule
26 of the Rules.
The trucks of the respondent using the State highway within the municipal limits of Kalghatgi, District Dharwar are
accordingly made to pay the fee for each of their trips.
Feeling that the fee realised by the appellant was invalid, the respondent filed a writ petition, being writ petition No. 6945 of 1975 in
the High Court of Karnataka challenging the levy of the fee and seek··
ing the issuance of a writ of mandamus restraining the appellant from
realising the said fee.
A Single Judge of the High Court upheld the fee in question and
dismissed the writ petition holding that the expression
'importer',
'place of import' and 'place of export' a8 used in section 124(1) of the
Act are comprehensive enough to describe a person who merely brings
· the goods within the municipal limits for immediate exportation and
the respondent who answered that description was bound to pay the
fee. · Aggrieved by this judgment and order, the respondent took the
matter in appeal to a Division Bench of. the High Court which a1lowed
the appeal and issued the writ prayed for by the respondent by its
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662
SUPREME COURT REPORTS
[1977] 2 S.C.R.
A
!udgment and order dated September 21, 1976. It is against this
Judgment and order that the present appeal is directed.
B
At the hearing of the appeal, counsel have reiterated the contentions urged on behalf of the parties in the High Court.
The sole question that arises for determination in this
appeal
relates to the validity of the aforesaid levy.
For a proper determination of this question, it is necessary to advert to section 124 of the
Act and rule 26 of the Rules.
"Section 124 : Non-liability for octroi and refund of octroi on
}
goods in transit.-
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(1) Any article or animal brought into the municipal
limits for the purpose of immediate exportation may at the
option of the importer not to be subjected to lfvy of octroi
if such article or animal be conveyed direct from the place
of import to the place of export by such routes, within such
time, and under such supervision as the municipal council
may by resolution determine.
For purposes of this subsection the municipal council shall on payment of the prescribed fees issue promptly the necessary transport permits .
. (2) When any article in respect of which octroi has been
paid is exported from the municipal limits, in the same condition in which it was brought into or received from beyond
the municipal limits, the amount of octroi paid shall, subject
E
to such rules as may be prescribed, be refunded."
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"Rule 26 : ... In case the person bringing the goods
wishes to transport the goods at once beyond the limits of
the municipality he shall· do so only after obtaining a transport permit in Form IV, on payment of a fee of rupees two
for each lorry and rupee one in other cases in the case of a
city municipal council and rupee one for each lorry and
fifty paise in other cases in the case of a town municipal
council."
The opening words of section 124 of the Act viz. "any article or
animal brought into the municipal limits for the purpose of immediate
exportation" on the construction of which the up-shot of the case
depends are very important.
They imply processes of 'importing into'
and 'exporting from' the municipal limits of goods or animals and are
indicative of an element of repose and rest of the goods within the
municipal limits.
As rightly held bv the Division Bench of the High
Court, the expressions 'brought into' and 'immediate exportation' do
not comprehend within their sweep the continuous process of transit
of goods, by vehicles which merelv use the State highways passing
through the areas which lie within the municipal limits.
In the instant
case, the iron ore is carried in the trucks of the respondent which
merely pass through the areas which lie within the municipal limits
and is not unloaded and reloaded at any place within the municipal
\.
"•·
TOWN MUNICIPAL v. URMILLA KOTHARI (Jaswant Singh,!.)
6'63
area.
As such, the important element of repose and rest which the
words 'brought into the municipal limits for the purpose of immediate
exportation' imply is absent in the instant case.
In The Central India Spinning and Weaving and Manufacturing
Company Limited, The Empire Mills, Nagpur v. The Municipal Committee, Nagpur('), this Court while discussing the meaning of the
expression 'a terminal tax on goods or animals
imported into or
exported from the limits of the municipality' occurring in section
66(1) (o) of the C.P. and Berar Municipalities Act, 1922, hold that
the goods which were in transit and were merely carried across the
limits of the municipality were not liable to terminal tax.
The following observations made therein which have an important bearing on the
decision of the present appeal are worth quoting :-
"The efficacy of the relative contentions of the parties
requires the determination of the construction to be placed
on the really important words of whirh are "terminal tax",
"imparted into or exported from" and "the limits of the
Municipality".
In construing these word~ of the statute if
there are two possible interpretations then effect is to be
given to the one that favours the citizen and not the one that
imposes a burden on him. . . . . . . Lexico-logically they
(the words 'import' and 'export') do not have any reference
to goods in 'transit' a word derived from transit bearing a
meaning similar to transport, i.e. to g9 across.
The dictionary meaning of the words 'import' and 'export' is not restricted to their derivative meaning but bear other connotations also. . ... The word "transit", in the Oxford Dictionary
means the action or fact of passing across
or through;
passage or journey from one place or point to another; the
passage or carriage of persons or goods from one place to
another; it also means to pass across or through (something)
to traverse, to cross.
Even according to the ordinary meaning of the words which is relied upon by the respondent,
goods which are in transit or are being transported can
hardly be called goods "imported into or exported from"
because they are neither being exported nor imported but
are merely goods carried across a particular stretch of territory or across a particular area with the object of being
transported to their ultimate destination which in the instant
case was Nagpur ..... By giving to the words "imported
into or exported from" their derivative meaning without any
reference to the ordinary connotation of these
words
as
used in the commercial sense, the decided cases in India have
ascribed too general a meaning to these words which it
appears from the setting, context and history of the clause
was not intended.
The effect of the construction of "import"
or "export" in the manner insisted upon by the respondent
would make rail-borne goods passing through a railway stat~on within the limits of a Municipality liable to the imposition of the tax on their arrival at the railway station or
(!) (1958] S.C.R. 1102=A.T.R. 1958 S.C. 352.
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66ti
SUPREME COURT REPORTS
[1977] 2.s.c.R.
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departure therefrom or both which would not only result in
inordinate delays and unbearable burden on
trade
both
inter State and intra State.
It is hardly likely that that was
the intention of the Legislature.
Such
an
interpretation
would lead to absurdity which has, according to the rules of
interpretation, to be avoided."
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The enunciation of law in the above case fully covers the present
case. In the present case also, the iron ore which is in transit from
Railyard at Hubli to Karwar and Belekeri harbours can hardly be
characterised as goods brought into or exported from the municipal
limits of Kalghatgi because they are neither imported into nor exported from any point within the municipal limits but are merely carried
across a particular stretch of territory or across a particular area with
the object of being transported to its ·ultimate destination. In Brown
v. State of Maryland('), Chief Justice Marshall dealing with the word
'importation' said as follows :--
"The practice of most commercial nations conforms to
this idea.
Duties, according to that practice, are charged
on those articles only which are intended for sale or consumption in the country.
Thus sea-stores, goods imported
and re-exported in the same vessel, goods landed and carried
over land for the purpose of being re-exported from some
other port, goods forced in by stress of weather, and landed,
but not for sale are exempted from the payment of duties.
The whole course of legislation on the subject shows that
in the opinion of the legislature the right to sell is connected
with the payment of the duties."
'
In Wilson v. Robertson(2) where section 33 of The 48 Geo; 3, c.
civ. imposed a duty on all goods "imported into or exported from
Berwick Harbour'', and the harbour extended from Berwick Bridge
down the Tweed to the sea, but not above the bridge and goods were
brought up the river in· a seagoing vessel which, having first used the
Harbour Commissioners' rings and posts in order to moor the vessel
while lowering the masts, passed through Berwick Bridge and unloaded her cargo about 200 yards above the bridge and beyond the limits
of the harobur; it was held that these goods were not "imported into"
the harbour and as such liable to duty.
Bearing in mind the above authoritative enunciation of law, we are
of opinion that as the continuity or continuous proces~ of the carriage
of iron ore is not in any way in fact broken within the municipal limits
of Kalghatgi, the respondent cannot be said either to bring in or export
the iron ore as contemplated by section 124 of the Act read with rnle
26 of the Rules and as such is not liable to pay the octroi or what is
styled as 'supervision _fee'.
A contrary ~nterpretat~on wou~d . make
rail borne goods passmg through the Railway Stations
w1thm
the
(!) 1827 12 Wheat 419=442=6 L. Ed. 678. 686.
(2) 24 L.J.Q.B. 185.
TOWN MUNICIPAL v. URMILLA KOTHARI (Jaswant Singh, J.)
665
limits of the municipality liable to the imposition of the fee on their
A
arrival at these Railway Stations and
departure therefrom which
could not be the intention of the Legislature.
The High Court was,
therefore, perfectly justified in allowing the appeal and issuing the writ
sought for.
In the result, the appeal fails and is hereby dismissed but in the
circumstances of the case without any order as to costs.
B
P.H.P.
.~ppeal dismissed.