Shelat, J. - (1.)The appellant Municipal Committee is for the village Khurai a notified area under the Central Provinces and Berar Municipalities Act, 1922. The Committee is entitled to levy and collect under the said Act and under the Rules made thereunder octroi duty inter alia on foodgrains brought into the municipal limits for sale. On March 8, 1954, respondents 1 and 2 applied for refund of octroi duty on the ground that they had exported from the municipal area foodgrains of which particulars were given in the schedule attached thereto. The appellant Committee replied that they would not be entitled to the refund unless they filed with their application the receipts of duty issued by the Committee at the time when it was paid on the, importation of the said foodgrains. It may be mentioned that it was not the case of the Committee in the said reply that the, said goods were not exported by respondents 1 and 2 by rail or that they were not the same goods which were imported into the area and which were purchased by respondents 1 and 2 and on which duty would be payable by the cultivator from whom respondents 1 and 2 had purchased the said foodgrains. The Committee simply refused to pay the refund as the respondents failed to produce the said receipts. In the appeal filed by respondents 1 and 2 before the Additional Deputy Commissioner, that officer held, on a construction of Rules 27 and 34, that it would be the person who had paid the duty when the goods were brought into the municipal area who alone could claim the refund if the goods exported by him were the same on which 'the duty was paid. The Board of Revenue before whom respondents 1 and 2 filed a revision application against the Deputy Commissioner's said order held that the word refund' in Rule 27 meant that the person who had paid the duty could alone be entitled to claim the refund and that respondents 1 and 2 not being such persons could not apply for it. On that ground alone the Board rejected the revision application. Respondents 1 and 2 thereupon filed a writ petition in the High Court of Madhya Pradesh for quashing the said orders of the Deputy Commissioner and the Board of Revenue.
(2.)The admitted facts before the High Court were, (1) that respondents 1 and 2 had purchased the said foodgrains from certain cultivators; and (a) that those cultivators had in fact paid octroi duty when they brought the said foodgrains for sale within the municipal area. The contention of respondents 1 and 2 before the High Court was that as persons who had exported the said goods they were entitled to the refund of the duty paid by their vendors, the said cultivators, and that the Board misconstrued the rules and was in error in refusing the refund to them. A learned Single Judge of the High Court held that under' Rule 9 (c) a declaration had to be made if the goods were intended for consumption or use within the municipal area or if they were intended for immediate export. He observed that Rule 9, however, did not provide for any such declaration if the goods brought into the municipal area were intended for sale. He then observed that R. 27 dealt with refund of octroi on the exportation of dutiable goods outside the municipal limits and the exporter thereunder was entitled to a refund of 7/8th of the duty paid on such goods. He held that the duty having admittedly been paid on such goods by the said cultivators and respondents 1 and 2 having purchased and exported those very goods, they were entitled to the refund. On this basis he quashed the orders of the Deputy Commissioner and the Board and allowed the writ petition. In the Letters Patent appeal filed by the appellant Committee, a division bench of that High Court agreed with the Single Judge on his construction of R. 27 but as the Board had considered only one question, namely, whether respondents 1 and 2 not having themselves paid the duty were not entitled to claim the refund, remanded the case for dealing with the rest of the questions. On remand to the Board, the Committee contended, (1) that respondents 1 and 2 had to establish that duty was paid on the said goods when they were imported into the municipal area:and (2) that they had also to produce the receipts of payment of such duty and that without doing so they were not entitled to the refund. The Board rejected the contention and held on the strength of Rr. 42 and 43 of the said Rules that except in the case of cloth or goods produced or manufactured within the municipal area, no proof by the person claiming refund of duty paid on importation was required and that such payment would be presumed in the case of goods other than the two aforesaid kinds of goods. The Board further held that Rule 27 also did not lay down that the person who has exported the goods had to prove payment of octroi on those goods when they entered the area. The Board on this interpretation allowed the revision application of respondents 1 and 2 and set aside the orders of the Committee and the Deputy Commissioner and directed payment of the refund. The Municipal Committee thereupon filed a writ petition in the High Court for quashing the Board's order contending once again that no octroi duty had been paid on the said foodgrains. The High Court rejected this contention in view of the admission made by the Committee before the Deputy Commissioner, the Board and the High Court in earlier proceedings that the goods exported by respondents 1 and 2 were duty paid. The High Court held that in view of those admissions the Committee could not require respondents 1 and 2, to produce the receipts to prove payment of the duty, apart from the fact that the rules did not require a claimant who had exported dutiable goods to produce receipts of payment of duty. The High Court further held that it was clear from Rr. 28 and 29 that the amount of refund is to be determined from the quantity of foodgrains exported or from their value and:Therefore, even for determining the amount of refund production of receipts by such a claimant was not necessary nor was such production required by Rules 42 and 43 except, as aforesaid, in the case of two categories of goods, viz., cloth and articles produced or manufactured within the municipal area. The High Court held that that being the position and there being no dispute as to the fact that the goods in question were duty paid and those very goods had been exported, there was nothing in the rules which barred respondents 1 and 2 from recovering 7/8th of the duty Paid on those goods. The High Court dismissed the writ petition. The Committee then filed a review petition before the High Court on the ground that it had not considered in its judgment its contention based on Rules 35 to 38 and urged before it. The contention was that compliance of those rules by respondents 1 and 2 was a condition precedent to their being entitled to the refund. The High Court conceded in its judgment on the review petition that the said point was urged before it but observed that it did not deal with it as during the hearing of the writ petition it was pointed out to the counsel for the Committee that there was no substance in it. According to the High Court, Rules 35 to 37 did not require any compliance by respondents 1 and 2 as they dealt with matters to be done by the Octroi Superintendent and the Muharir at the exit post when an application for refund is made by a person exporting the goods out of municipal limits and that the fact that respondents 1 and 2 did not present the challan at such exit post, did not debar them under the rules from claiming the refund. The review petition on this ground was, therefore, rejected. Aggrieved by the dismissal of its writ petition, the appellant committee obtained special leave from this Court and filed this appeal.
(3.)In view of the aforesaid decision of the Board and the High Court till the earlier stages of this litigation, most of the contentions raised by the Committee justifying its refusal to refund have by now been concluded. It cannot now be disputed (1) that respondents 1 and 2 had purchased foodgrains from the cultivators who had imported them into the municipal area for sale; (2) that those cultivators had at that time paid the duty on those foodgrains; and (3) that respondents 1 and 2 had exported the identical goods by rail.