ORDER
G. D. Patil, J.
1. The petitioner Federation, the Co-operative Society registered under the provisions of the Maharashtra Cooperative Societies Act, 1960 is having its head office at Bombay and various Zonal and Sub Zone Offices at different places in Maharashtra. The petitioner Society has been appointed as the Chief Agent for the Government of Maharashtra under the provisions of S. 42 of the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971 and under the said agency business the petitioner Federation purchases raw cotton and also gets the same processed by way of ginning and pressing, and, further sells the cotton bales, cotton seeds etc as envisaged under the said Act.
2. The respondents are the Municipal Councils duly constituted under the Maharashtra Municipalities Act, 1965 (hereinafter referred to as the 'Municipalities Act( respectively for the townships of Dhamangaon and Daryapur.
3. The petitioner for the purpose of its agency business under the Raw Cotton Act, engages various Sub Agents as processing Agents of the petitioner for ginning and pressing of raw cotton or pressing of lint. The petitioner Federation has various collection centres at which raw cotton is purchased from agriculturists. The said processing centres are either facility centres or non-facility centres, a facility centre being one wherein the facility of ginning and/ or pressing is available in the centre itself and a non-facility centre is one wherein the facility of ginning and pressing is not available. In case of non-facility centres, the raw cotton purchased by the petitioner Federation is transported to another place centre at which there is a ginning and pressing factory or a ginning factory, as the case may be, where the said raw cotton is processed by way of separation into lint and cotton-seed. In case where the facility centres have the provision only of ginning, the lint produced has to be transported to another centre or factory where the lint can be pressed into full pressed bales. In the aforesaid process, the cotton is transported for processing i.e. either ginning and pressing of raw cotton or for pressing of lint into bales, as the case may be. In many ofthe cases, the ginning and pressing factories where the raw cotton is transported for ginning and pressing or where the lint ginned at one place is sent for processing to another are within the municipal limits of various municipalities.
4. Under the provisions of S. 105 of the Municipalities Act, the Municipalities are empowered to levy an octroi on the entry of goods into municipal area for consumption, use or sale thereof. The relevant extracts of S. 105(1) are as.under:--
'105.(1) Subject to any general or special orders which the State Government may make in this behalf, a Council shall impose, for the purposes of this Act, the taxes listed below:--
(a) xx xx xx xx xx xx xx (b) an octroi;
(c) to (e) xx xx xx xx xx xx xx Provided that, the maximum and minimum rates at which the taxes aforesaid shall be levied in different classes of municipal areas and other matters relating to imposition, assessment, collection and exemptions thereof shall be such as may be prescribed by rules.'
The provisions of S. 32! of the Maharashtra Municipalities Act also vests the State Government with powers to make rules under the Act. In exercise of these powers under S, 321 as also under the proviso to S. 105(1) the State Government has framed rules known as the Maharashtra Municipalities (Octroi) Rules, 1968 (hereinafter referred to as the Octroi Rules). Under proviso to subsection (1) of S. 105 the State Government can frame rules about imposition, assessment of the octroi and also for exemption and other matters relating to it. The term 'Octroi' has been defined in the Municipalities Act in S. 2(28) and 'Octroi' means a tax on the entry of goods into a municipal area for consumption, use or sale therein. The octroi rules defines dutiable goods. 'Dutiable goods' means the goods specified in Schedule I. The word 'import' has been defined in rule (2)(h)to mean bringing or entry of any goods into the octroi limits of a Council from any place outside such limits and the term 'export' has been defined in Rule (2)(f) and it means taking out or movement of any goods from any place within the octroi limits of a Council to any place outside such limits. In Schedule I of the Octroi rules at serial No. 62(a) Cotton girthed and (b) Cotton unginned have been listed as one of the goods liable to octroi and the maximum and minimum rates leviable in relation to it have been indicated.
5. Rule 14 of the Octroi Rules providesfor a declaration being made by the importerat the Octroi Naka in respect of entry of goodswithin the octroi limits in Form 4 provided fordeclaration in respect of goods intended fortemporary detention with importer himself,which are dutiable, meant for eventual export, Rule 24 of the Octroi Rules lays down asunder:--
'24. Procedure for temporary detention of dutiable goods meant for eventual export, with importer himself:
(1) Where dutiable goods intended fortemporary detention within the octroi limitsand eventual export are or as returned goodsto be detained by the importer at his residenceor a Bonded Warehouse licensed under sub-rule (2) of rule 10 within the octroi limits, hemay do so on giving a declaration to theOctroi Officer in Form 4, and on payment ofan amount equal to the amount of full octroidue thereon as deposit either in cash or in theform of Bank Guarantee, at the entranceNaka
(2) In case the importer cannot export the goods without breaking bulk or without assemblage and testing in the case of machinery, he shall do the same only with the sanction of the Superintendent of Octroi in the presence of an officer deputed for this purpose by the said Superintendent. Such goods, if necessary, shall be formed into packages, which may be sealed and marked by the Officer so deputed.
(3) In the case of machinery, instruments or other articles and their component parts(including tyres and tubes) imported for repairs only and re-export, the importer shall obtain the sanction of the Superintendent of Octroi in writing for importing such goods for the said purposes. Such sanction shall be issued by the Superintendent on payment of such security as f he Council may, by a general or special resolution, prescribe. The importer shall obtain from the Manager of the Workshop a certificate to the effect that the repairs were executed in his Workshop. Such a certificate shall be presented when the goods are taken for verification before their export under sub-rule (1) of the next succeeding rule.
(4) The provision of sub-rule (3) shall mutatis mutandis apply in the case of dutiable goods imported within the octroi limits also for processing and re-export.'
It is apparent from this rule that it is applicable only to the dutiable goods brought within the octroi limits for temporary. detention with importer himself but which are to be exported eventually. Sub-rule (3) of Rule 24 provides that importer shall obtain in writing from the Superintendent of Octroi a sanction for importing goods like machinery, instruments or other articles and their component parts for the purposes of repairs and such sanction is bound to be given by the Superintendent on payment of such security as may be prescribed. Sub-rule (4) of Rule 24 provides that the provision of sub-rule (3) shall mutatis mutandis apply in the case of dutiable goods imported within the octroi limits also for processing and re-export. In the case of goods brought for processing and re-export, the importer has to obtain the sanction of Superintendent of Octroi for importing such goods for the purpose of processing. Importer has to obtain a certificate from the Manager of the workship of the factory in case of goods referred to in sub-rule (4) and this certificate is required to be presented for verification before their eventual re-export. Sub-rule (1) of Rule 25 pertains to procedure for export of goods temporarily detained with the importer.
6. Rule 25 provides that when the importer wants to export dutiable goods detained with him, he shall present anintimation-cum-application for written permission in form 11 to the Superintendent of ( Octroi to export such goods and produce such' goods for verification at the central octroi office or any other branch office as may be established by the Council for the purpose. Sub-rule (3) of Rule 25 provides that such intimation-cum-application shall not be accepted unless the 4 conditions mentioned therein are fulfilled, the condition thereof being that the goods produced for inspection and intended to be exported are, subject to the provisions of sub-rule (2) of the last preceding rule, i.e. rule 24, identical with what they were at the time of import. The requirement of clause (c), as per the note to this sub-rule (3), however, is not applicable in case of dutiable goods to which sub-rule (3) or (4) of Rule 24 applies. In case, therefore, where the goods are covered by sub-rule (3) or (4) of rule 24, the requirement of the goods produced for inspection and intended to be exported to be identical with what they were at the time of the import is, not necessary to be fulfilled. On receipt of such intimation-cum-application, Rule 25 further provides for certain procedure to be followed and thereafter regarding issue of a written permission-cum-refund export pass in form 12 to the importer on presentation of which to the Octroi Officer at exit Naka the goods are to pass beyond the octroi limits. Rule 28 makes a provision for refund of deposit paid under sub-rule 24 at the time of the import on their export out of the Octroi limits.
7. It would be seen from the aforesaid provisions that in the matter of goods imported for processing as contemplated by sub-rule (4) of Rule 24 and their re-export, the procedure under the rule is that the octroi has to be first paid on the said goods at the lime of entry after giving a declaration in form 4 and thereafter when the goods are exported, the octroi so paid on the goods is to be refunded by the Municipality to the exporter. The petitioner contends that while importing lines within the octroi limits of the two respondents Municipalities for pressing they are required to approach them for purpose of filling up declaration in form 4 and pray for sanction under Rule 24 for import of lint and thereafteron export of the same for refund of the octroi paid. In the case of respondent No. 1 Dhamangaon Municipal Council the Octroi Superintendent informed the petitioner's Sub-zonal Manager by his communication dated 5-12-1985 that since the lint was imported within the octroi limits of the Dhamangaon Municipal Council for pressing there was no provision for refund of the octroi paid on the lint at the time of export. The Sub-zonal Manager of the petitioner thereafter again wrote to the respondent No. 1 explaining therein that lint imported is only to press into bales and exported outside the Municipal limits and as such was not liable for octroi duty, whereupon the Octroi Superintendent again by his communication dated 12-12-1985 informed the Sub-zonal Manager of the petitioner that the refund was possible only if the goods imported are in the same condition (without any change whatsoever) at the time of export. It was further informed that the Federation imports lint and makes them into full pressed cotton bales and as such they undergo change in form. In such circumstances, it was informed that the declaration in form cannot be accepted from the petitioner and the petitioner was liable to pay the octroi and there was no question of refund thereof. There was further communication from respondent No. 1 demanding octroi from the petitioner, which was replied to by the petitioner stating that the lint imported was not for consumption, use or sale within the octroi limits and it was for eventual export after processing and as such no amount whatsoever was to be paid. Some amount, however, came to be paid by the petitioner under protest in advance towards octroi tax on demand.
8. In the case of respondent No. 2 also there is a similar correspondence between the petitioner and the respondent No. 2 Daryapur Municipal Council which also refused to make refund of the octroi paid at the time of export for similar reasons.
9. It is in these circumstances the petitioner has come up before this court by filing this petition under Art. 226 of the Constitution of India. The petitioner prays fordeclaration that the respondents are not entitled to retain the octroi collected by it on raw-cotton/lint imported in octroi limits for the purposes of processing and re-export i.e. for the purposes of ginning and pressing and in case of lint only pressing and the octroi collected by them is liable to the refunded to the petitioner and further seeks a Writ of Mandamus directing them to refund the octroi collected by them on the lint brought into their octroi limits by the petitioner for processing and re-export outside the octroi limits of the respondents in the form of full pressed cotton bales.
10. We have heard Mr. A. B. Oka, learned Counsel for the petitioner and Sarvashri V. A. Masodkar and M. B. Badiye the learned Counsel for the respondents. Though in the petition a declaration is sought by the petitioner in relation to raw-cotton as also lint, as regards the lint since it was only lint which was imported by the petitioner and the octroi in relation to that was paid and the refund of which was claimed from the respondents, the petitioner, during the course of hearing restricted itself only as regards refund of octroi paid on importing lint within the octroi limits of the respondents for eventual export. We arc, therefore, not called upon to decide in the instant matter as to whether the octroi paid on raw-cotton brought within the municipal limits of the respondents for the purposes of ginning and pressing is liable to be refunded or not and were called upon only to decide as to whether the octroi paid on the lint imported within the octroi limits of the respondents for pressing into bales is liable to be refunded or not by the respondents.
11. The material allegations made in the petition are to the effect that the petitioner imports raw-cotton and/or lint into the municipal area for the purposes of processing the same i.e. by ginning and pressing of the raw-cotton into bales and cotton seed or by pressing lint into bales as the case may be and it is further averred that in the said process the raw-cotton or lint as the case may be, is neither used, consumed or sold and as such the entry of the said goods within themunicipal limits is not for the purpose of consumption, use or sale by the petitioner importer. The petitioner imports its goods for the purpose of processing and eventual export and as such the petitioner is entitled to the refund of octroi paid at the time of entry.
12. The respondents in their returns, which are almost identical, contend that the raw-cotton is being brought into municipal area for the purpose of ginning and in the process of ginning raw-cotton is used and also consumed. It is contended that by applying manufacturing process the raw cotton which is brought into area of municipal council, the nature of the raw cotton is changed and two commodities are produced or separated i.e. lint and cotton seeds, and as soon as the ginning is effected the raw cotton stands used and consumed producing two different goods. In the case of lint they submit that lint was brought for the purpose of using the same for making cotton bales. Manufacturing process is applied and the size, shape and situation of the lint which is brought in the municipal area is completely changed and it becomes a cotton bale. They, therefore, denied that the goods are not brought for the purpose of consumption, use or sale. They also contend that the lint which is brought into octroi limits becomes bale changing its size and also shape and becomes a different commodity and hence it cannot be said that the goods are brought only for processing and eventual re-export. According to them the word 'consumption' denotes the act of consuming and means the use of an article in a way for preparation of bales. In their submission requirement for the refund of octroi that the goods imported should be identical with what they were at the time of import', therefore, cannot be satisfied when the lint becomes cotton bale and as such the petitioner cannot claim refund of the octroi paid at the time of the entry.
13. Both the parties have brought to our notice the relevant provisions of the Maharashtra Municipalities Act and those of the Octroi rules. Both of them have relied upon several decisions in support of their rival submissions.
14. To appreciate the submissions made by the parties in this petition, it is necessary to refer to some of the provisions of the Maharashtra Municipalities Act and the Octroi rules. Octroi as said above is defined to mean a tax on the entry of goods into the municipal area for consumption, use or sale thereof. Rule 3 of the Octroi rules provides that the octroi shall be leviable by every Council in respect of the several goods specified in Schedule I to the said rules wherein entry No. 62 prescribes the duty payable for (a) cotton ginned, and (b) cotton unginned. Rule 24 invoked by the petitioner in support of their claim relates to procedure for temporary detention of dutiable goods meant for eventual export with importer himself, Whereas Rule 25 provides the procedure for export of dutiable goods temporarily detained with the importer and rule 28 makes the provision for refund of deposit, whereas Rule 29 provides the procedure for refund. Rule 14(c) requires the importer of any dutiable goods on arrival of the goods at the octroi naka to make a declaration in form 4 in respect of the goods intended for temporary detention with himself and eventual export. Sub-rule (4) of Rule 24 read with sub-rule (3) of the same read with Rule 25 makes it clear that in case of octroi paid in case of dutiable goods imported within octroi limits for processing and re-export is liable to be refunded. Note below sub-rule (3) of rule 25 makes it clear that the requirement of identity of the goods produced for inspection and intended to be exported with what they were at the time of import is not applicable in case of dutiable goods which are imported for processing and re-export. In the wake of these provisions and the contentions advanced before us the question which falls for our consideration in this petition is as to whether the lint imported by the petitioner within the octroi limits of the respondents municipalities for pressing into bales can be said to be brought within the municipal area for consumption or use as there is no question of sale in this matter and secondly as to whether the activity of pressing the lint into bales amount only to processing as contemplated by sub-rule (4) of rule 24 and consequently whether thepetitioners are entitled to refund of the octroi paid by them at the time of entry in accordance with Octroi Rules 1968.
15. The learned counsel for the petitioner has relied upon the decision of the Supreme Court. in the case of Chimanlal Premchand v.to show that the fact that the cotton ginned or unginned is pressed into bales or packed otherwise does not make it any the less cotton. in this case the Supreme Court, was interpreting the provisions of the definition of the 'agricultural produce' in the Bombay Agri-cultural Produce Act (22 of 1939) which included all produce of agriculture,horticulture and animal, husbandry spepifiedin the schedule E to the Act, i.e, 1. Fibres -- (i) Cotton (ginned or unginned) was one of theentry in the Schedule E Rule 65(1) framed under that Act provided that no person shall do business as a trader or a general commission agent in agricultural produce in any market area except under a licence granted by the market committee under this rule. Thequestion, therefore, arose as to whetherginned cotton which has been pressed intobales is not cotton within the meaning of theAct. While considering this ' aspect theSupreme Court has observed as follows (para6 of AIR):--
'What is 'pressed cotton' in bales? Itinvolves a simple process described as pressing, and cotton is pressed into bales only tofacilitate its transport from one place toanother. It does not involve any chemicalchange or even a manufacturing process.Ginned cotton, after it is pressed into bales,continues to be ginned cotton and it is soldand purchased only as cotton, though inbales. We find it difficult to accept the argu-ment that pressed cotton is a differentcommodity. Nor do we find any relevancy inthe argument that stockists, industrialists andexporters deal with pressed cotton and notloose cotton, because the said fact does not inany way change the essential character of theagricultural produce.'
Their Lordships of the Supreme Court further held (para 9 of AIR) :--
'Shortly stated the position is this: Cotton, ginned or unginned continues to be cotton till it loses its identity by by some chemical or industrial process. So long as the identity is not lost, the fact that it is pressed into bales or packed otherwise does not make it any the lesscotton specified in the Schedule to the Act.'
The pressing of the ginned cotton i.e. lint thus, as held by the Supreme Court, does pot involve any chemical change or even a manufacturing process and the ginned cotton afterit is pressed into bales continues to be ginnedcotton and the pressed cotton cannot betreated to be;a different commodity as such. This decision meets the argument made on behalf of the respondents in the instant matter to the effect that the manufacturing process is applied and the size, shape and situation of the lint is changed by pressing them into bales and ginned cotton becomes a different commodity, and the pressed bales at the time of re-export cannot be treated to be identical with the lint, as brought at the time of entry. The activity of pressing lint into bales i.e. ginned cotton into bales so merely involves an element of processing activity, as held by the Supreme Court and it does not involve any chemical change or even any manufacturing process. The word 'process' came up for consideration before this court in the case ofVenkatarao v. Alma Sugar Mills reported in : AIR1979Bom38 , wherein this court held that (para 9) :
'The word 'process' has got several meanings and in fact may mean different things in different context. But looking to the context in which it is used and gathering the natural meaning of the word in this context, the word 'process' must be held to mean to subject a particular product or a commodity with the object of making it finer or improving its quality. It may mean to treat a particular commodity by any method but not in such a way that the commodity itself is completely transferred into a new commodity.'
In so far as the ginned cotton pressed into bales is concerned the Supreme Court in the case of Chimanlal v. State of Bombay : 1960CriLJ168 cited supra, as pointed out hereinabove, has already held that ginnedcotton after its being pressed into bales continues to be ginned cotton and the pressed cotton cannot be treated to be different commodity. The activity of pressing ginned cotton into bales, therefore, cannot be treated tp be a manufacturing. But the activity merely involves simple process described as pressing whereby cotton is changed into bales for facilitating transportation.
16. The Supreme Court also in the case of Chowgule & Co. Pvt. Ltd. v. Union of India, reported in : 1985ECR263(SC) while considering the point which arises for consideration as to whether blending of ore in the course of loading it into the ship through the Mechanical Ore Handling Plant constituted manufacture or processing of ore, has observed that now it is well settled that the test for determining whether manufacture can be said to have taken place is whether the commodity which is subjected to the process of manufacture can no longer be regarded as the original commodity, but instead is recognised as a new and distinct article that a manufacture can be said to take place. The test that is required to be applied is : Docs the processing of the original commodity brings into existence a commercially different and distinct commodity? In this decision the Supreme Court has further held that 'What is necessary in order to characterise an operation as 'processing' is that the commodity must, as a result of the operation, experience some change.
17. This court in Writ Petition No. 1363 of 1987, Dimple Silk Mills Pvt. Ltd. v. Municipal Corporation Amravati, decided on 4/5-10-1988 dealt with the aspect of entitlement of the importer for refund of octroi for the entry of raw-yarn into municipal area for processing and eventual re-export and relying upon Chowgule's case : 1985ECR263(SC) , supra has held that unless the processing of the original commodity brings into existence a commercially different and distinct commodity, claim for refund of octroi duty already paid, cannot be refused.
18. It is thus apparent that the lint brought within the octroi limits by the petitioner for pressing them into bales aremerely for processing the same and after processing a different commodity does riot come into existence nor the identity of the same is lost at the time of re-export. Refusal on the part of the respondents for refund of the octroi tax relying upon the provisions of Rule 25(3)(c) is, therefore, totally unwarranted. Moreover, it is apparent from the note below sub-rule (3) that clause (c) of sub-rule (3) of Rule 25 is not at all applicable in the case of dutiable goods to which sub-rule (3) or (4) of Rule 24 applies. Since the lint is being imported within the octroi limits for pressing and re-export as already held, it would be covered by sub-rule (4) and the provisions of sub-rule (3) of Rule 24 arc applicable to it and consequently the requirement of identity is not applicable to the lint at all.
19. This brings us to the another contention of the respondents that in the process of making cotton bales of the lint, lint stands used and consumed as such. Ginned cotton being a dutiable goods octroi is leviable thereon having regard io the definition 'octroi' which means a tax on the entry of goods for consumption, use or sale thereof. Firstly as pointed out hereinabove the provisions of Rule 24, 25, 28, 29 and that of 14(3) are in relation to dutiable goods only which are, however, brought in within octroi limits for import and for eventual export. Cotton ginned being at serial No. 62(a) in Schedule I to the Octroi rules and having regard to the provisions of Rule 3 of the Octroi rules, octroi is certainly leviable by the respondents on the same in case it is brought in the municipal area for consumption, use or sale thereof and not for merely for processing and re-export after temporary retention. In ease, in the processing the goods stands used or consumed and different commodity comes into existence, then there is no question of re-exporting the goods originally brought within municipal area. However, the instant case is otherwise where it cannot be said that the goods brought in for processing stands consumed or used for processing and the importer is entitled for refund of the octroi on the re-export thereof. The question that, therefore, arises is whether in the activity of pressing ginned cotton into bales the ginnedcotton can be said to have been consumed or used in this processing. In the case of M/s. Anwarkhan Mahboob Co. v. State of Bombay, reported in : [1961]1SCR709 , wherein the Supreme Court was considering raw-tobacco subjected to process leading to its conversion into bidi pattis, by getting the stems and dust removed from the tobacco for immediate use in the manufacture of bidis and where in the process raw-tobacco stands consumed, bringing into existence bidi pattis, a distinct and different commercial articles. The Supreme Court dealt with the aspect of consumption and held that conversion of a commodity into a different commercial commodity by subjecting it to some processing, is consumption within the meaning of the Explanation to Art. 286 no less than the final act of user when no distinct commodity is being brought into existence but what was brought into existence is being used up. Whenever a commodity is so dealt with as to change it into another commercial commodity there is consumption of the first commodity within the meaning of the Explanation to Art. 286.
Pressing of the lint into bales, as held by the Supreme Court in the case of Chimanlal : 1960CriLJ168 , cited-supra does not bring into existence a different commodity and, therefore, cannot be said that in the process of pressing the lint stands consumed.
20. In the case of Burmah-Shell Oil Storage and Distributing Co. of India Ltd. Belgaum v. Belgaum Borough Municipality, Belgaum, reported in : AIR1963SC906 , the Supreme Court referred to its above earlier decision reported in : [1961]1SCR709 , Anwarkhan v. State of Bombay and held that the consumption in its primary sense means the act of consuming and in ordinary parlance means the use of an article in a way which destroys, wastes or uses up that article. But in some legal contexts, the word 'consumption' has a wider meaning. It is not necessary that by the act of consumption the commodity must be destroyed or use up.
In the case of C. Govindarajulu Naidu & Co. v. State of Madras reported in : AIR1953Mad116 , it is held that the word'consumption' as used in Article 286(1) Explanation as it earlier was, cannot be understood in the limited sense of eating but in the wider sense of using. In this decision the meaning of the word 'consumption' in its economic sense with which we are concerned as given in the Webster's New International Dictionary, Vol. I, page 483 has been quoted which is reproduced below: -
'Consumption (3) Economies. The use of (economic) goods resulting in the diminution or destruction of their utilities; opposed to production. Consumption may consist in the active use of goods in such a manner as to accomplish their direct and immediate destruction, as in eating food, wearing clothes or burning fuel; or it may consist in the mere keeping, and enjoying the presence or prospect of, a thing, which is destroyed only by the gradual processes of natural decay, as in the maintenance of a picture gallery. Generally it may be said that consumption moans using things, and production means adapting them for use.'
In Kathiawar Industries Ltd. v. Jaffrabad Municipality, : [1980]1SCR243 the Supreme Court held that uncrushed salt stands consumed and as such 'used' in the process of its crushing. This conclusion is arrived at on reaching to the finding earlier that when uncrushed salt is crushed in the factory, it is commercially a different article. The lest applied is whether the processing i.e. crushing brings into existence a commercially different and distinct commodity.
21. Lastly in a decision reported in : 1997(91)ELT27(SC) , HMM Ltd. v. The Administrator, Bangalore City Corporation, their Lordships of the Supreme Court held that putting the powder from the drums into the bottles for the purpose of exporting or taking these out of the city would neither be use nor consumption of the Horlicks powder attracting the levy of octroi. Octroi could not be levied or collected in respect of goods which are not used or consumed or sold within the municipal limits. So the octroi collected became collection without authority of law. The Municipal Corporation is a statutory authority. The Municipal Corporation, there-fore, could not retain octroi. In the case of HMM Ltd. cited-supra it is pointed out that mere transferring of bulk product into small containers like packets or bottles for the purposes of sale does not amount to use of the goods in the sense of the word 'used' in relation to levy of octroi. If this is so, pressing of the lint into small sized bales would neither amount to consumption or use of the lint in the sense of the word 'consumption' or 'use' as used in the definition of octroi in relation to levy of the said tax. In so far as the word 'use' is concerned, though it has wider meaning, it cannot be said that in the activity of pressing the lint into bales it stands used in as much as lint cannot be said to have been applied for any purpose as such. Though the use of the two words 'consumption' and 'use' is indicative of the legislative intention of conveying different meanings thereof the activity of pressing the lint into bales cannot be said to be involving either 'consumption' or 'use' of the lint itself. The lint brought within the municipal area for this process therefore must get the benefit of exemption from octroi and under the octroi rules the octroi paid on the same would be refundable.
22. This court in the case of Brooke BondIndia Ltd. v. Village Panchayat of Kanhan-Pipri in Writ Petition No. 769 of 1987 withW.P. No. 871 of 1989 dealt with the import oftea-leaves and tea-dust for the purpose ofcleaning and blending as per tea definiteformulae and having come to the conclusionthat what comes in the village is a garden teaand what comes out is a tea blended indifferent varieties of fixed formulae intendedto meet different consumer demands it washeld that it was a clear case of tea having beenbrought in the village for 'consumption' and'use'. Court found that blending was nothaphazard. It involves art as well as sciencesince the varieties are meant to cater differenttastes. The resulting mixtures are intended topossess and in fact possess their own separateidentity and they arc meant to meet demandswhich are different from the demands of thetea as brought in. It is in this context this courtheld that the garden tea brought in the villagestands consumed or used.
The activity of processing of the lint bypressing the lint into bales as pointed out hereinbefore neither involves the art. of science nor the resulting bales are intended to possess their own separate entity. The ratio of this decision thus is of no assistance to the respondents for contending that the lint stands consumed or used in the process of'its pressing into bales.
23. When the goods are brought in not for the consumption or use within the municipal limits but only for temporary detention and eventual export having regard to the provisions of the Municipalities Act the octroi is not leviable. However, in order to insure that the goods are exported and with the object of preventing evasion, of octroi on the goods consumed or used or sold within the octroi limits, the octroi rules, provided for deposit of actual octroi duty payable subject to right of getting the refund when the goods are exported. Once the goods in respect of which octroi was paid are exported octroi becomes refundable. The Octroi rules regulates the system where refund is to be allowed by providing procedure. However, right to refund comes into existence at the time of export because the goods are not consumed, used or sold inside the municipal limits but are exported and the taxes, therefore, become not leviable. In the instant matter since the petitioner cannot be said to have either used or consumed the lint, when the lint was being exported, it had a right to get refund of the amount deposited by it towards octroi and the respondents were not, therefore, justified in refusing the petitioner's claim for refund of octroi paid by them on the entry of the lint i.e. ginned cotton into the municipal area.
24. Having come to this conclusion we allow this petition to the extent holding that the respondents are not entitled to retain the octroi collected by them at the time of entry of the lint brought in by the petitioner within the respondents/ municipal area for pressing and the said octroi collected by them is liable to'be refunded and the petitioner is entitled to get refund thereof. We consequently direct the respondents to refund the amount of octroi deposited by the petitioner at the time of entry of lint into the municipal areas of therespondents municipal councils and which has been re-exported by the petitioner.
25. On conclusion of the hearing, an additional affidavit dated 5-7-1991 came to be filed by the Chief Officer of the respondent No. 2 Municipal Council wherein it has been averred that lint brought in is not for temporary detention or eventual export as such and that the bales were kept within the municipal area for months together. This relates to the question of fact. No cognisance of the same now can be taken.
26. In the result, the instant petition isallowed and the respondents are directed to refund the octroi paid by the petitioner at the time of the entry of the lint brought in within the limits of the municipal councils and which has been re-exported by the petitioner. In the facts and circumstances of the case there will be no order as to costs. Two months time from today to make refund of the amount is granted at the request of the respondents.
27. Petition allowed.