Case Note & Summary
The petitioner, M/s. DK Enterprises, was the successful bidder in a public auction conducted by the Commissioner of Customs, Mumbai, on 24 October 2002 for 'Die Blocks pertaining to Quality Din 1.274' weighing 179.838 M.T. The petitioner paid the full auction price of Rs. 1,01,07,795/-. The goods were stored with the Central Warehouse Corporation, Mumbai, for over a year. When the petitioner sought to remove the goods from the warehouse, the Pimpri Chinchwad Municipal Corporation demanded payment of octroi. The petitioner filed a writ petition under Article 226 of the Constitution of India, challenging the demand. The court examined the relevant provisions of the Bombay Provincial Municipal Corporations Act, 1949, particularly Sections 127 and 192, which govern octroi liability. The court held that octroi is leviable on goods brought into the municipal limits for consumption, use, or sale. Since the goods were already stored within the municipal limits and were auctioned by Customs, the auction purchaser cannot be held liable for octroi. The court allowed the petition, directing the corporation to permit removal of the goods without payment of octroi.
Headnote
A) Municipal Law - Octroi Liability - Auction Purchaser - Section 127, Bombay Provincial Municipal Corporations Act, 1949 - The court considered whether the auction purchaser of goods from a customs auction is liable to pay octroi to the municipal corporation. The goods had been stored in a warehouse for over a year. The court held that the liability for octroi falls on the municipal corporation, not the auction purchaser, as the goods were not brought into the municipal limits by the purchaser but were already stored there. (Paras 1-10) B) Municipal Law - Octroi - Customs Auction - Section 192, Bombay Provincial Municipal Corporations Act, 1949 - The court examined the provisions of the Act and found that octroi is leviable on goods brought into the municipal limits for consumption, use, or sale. Since the goods were already within the limits and were auctioned by Customs, the purchaser cannot be held liable for octroi. The court directed the corporation to allow removal of goods without payment of octroi. (Paras 11-15)
Issue of Consideration
Who should bear the liability of payment of octroi payable to the Pimpri Chinchwad Municipal Corporation on goods auctioned by the Commissioner of Customs, which were stored with the Central Warehouse Corporation for more than one year?
Final Decision
The court allowed the petition and directed the Pimpri Chinchwad Municipal Corporation to permit the petitioner to remove the goods without payment of octroi.
Law Points
- Octroi liability
- auction purchaser
- customs auction
- warehouse storage
- Bombay Provincial Municipal Corporations Act
- 1949
- Section 127
- Section 192
- Article 226
