M.L. Pendse, J.
1. The petitioner No. 1 is partnership firm of which petitioner No. 2 is a partner. The firm carries on business as manufacturers of PVC film, tubings and laminated cotton fabrics in their factory situated at Thane Industrial estate, Thane. Respondent No. 1 is a Municipal Corporation of City of Thane, constituted under Bombay Provincial municipal Corporations Act, 1949. Section 127 of the Act confers powers on the Corporation to impose diverse taxes including levy of octroi duty. In exercise of powers conferred by sub-section (2) of section 321 read with the proviso to sub-section (1) of section 105 of the Act, the Government of Maharashtra has framed rules known as the Maharashtra Municipalities (Octroi) Rules 1968. Schedule I to the rules set out the goods which are liable to octroi on being imported within the octroi limits of the Corporation for sole, use or consumption. Item No. 40 which falls under Class III i.e. the articles used for fuel, lighting, washing and industrial use reads as under:
'40(a) All kinds of inedible fats, tallow, lards etc. not used as food.
(b) Chemicals of all sorts, Sodium sulphate, Sizing salt, Sulphate or iron, Sulphate of Copper, Sulphate of alumina, Silicate of Soda, Caustic Soda and other salts not otherwise specified, Sulphur Chlorate of potash, Strauntia, Zinc Chloride, Magnesium Chloride, Salt petre, Acids of all kinds, Salamoniac, Borax, Sizing flour.'
Item No. 53 is covered by Class V. The head note of which reads-Perfumes, toilet requisites, Colours and Household goods.
53(a) Hair oil, perfumed oils, perfumery of all kinds, scents, attars, scented material, incense sticks, aromatic chemicals, toilet requisites of all kinds, shaving cream, shaving sticks, tooth powder, tooth paste, pomade, combs, brushes, looking glasses, hairpins, braces garters and suspenders.
(b) Scissors, razors, safety razors, blades, knives, pen knives, spoons, forks, cutlery of all kinds, needles of all sorts, locks and keys, stoves and petromax and their part and accessories and hardware articles.
(c) Laces, tapes, rings of wood and metal, embroidery articles, celluloid and celluloid articles, beads of all sorts, imitation pearls, plastic and plastic goods, plastic powder, bakelite and bakelite goods, articles made of ivory and bones and all sorts of buttons and haberdashery.
(d) All kinds of furniture such as wooden, iron, steel, cane etc.
(e) Umbrellas, rain coats, rain hats, and caps.
The octroi duty is levied at a rate of 2% on the value of the goods which falls under item No. 53(c) while the octroi duty payable in respect of articles falling under item 40(b) are at the rate 0.5% of the value of the goods.
2. The petitioners are regularly importing within the octroi limits of the Corporation, PVC Resin (Poly Vinyl Chloride Resin) for the purpose of consumption in their factory for manufacture of PVC films, tubings and laminated cotton fabrics etc. The petitioners were initially paying octroi duty at the rate of 2% on assumption that the imported articles fall under item 53(c) of schedule I. The petitioners claim that on realisation that certain other importers of the same articles were charged duty at the rate of 0.52% only, the petitioners made representation to the Corporation and the Chief Officer of the Municipal Corporation granted permission to pay octroi duty at 0.6% which was the increased rate prevailing at the relevant time. The octroi duty at 0.6% was levied on the basis that the imported articles fall within item 40(b) of schedule 1.
3. On January 21, 1984 the Additional Octroi Recovery Officer of the Corporation informed the petitioners that the petitioners are liable to pay octroi duty under item No. 53(c) at 2.5% of the value of the goods. The petitioners made representation pointing out that the items imported by the petitioners is not used as a household article but is used or consumed for industrial propose. The Corporation informed the petitioners by letter dated February 23,1984 that the PVC Resin imported by the petitioners was liable to be levied octroi duty under item No. 53(c) as plastic. The action of the respondents in insisting that the imported items fall under item No. 53(c) gave rise to the filing of the present petition under Article 226 of the Constitution on March 3, 1984.
4. The petition was admitted by Division Bench on March 7, 1984 but interim relief of directing respondents to recover duty only under item 40(b) was turned down. The Division Bench directed:
'Petitioners to pay under protest and if the petitioners ultimately succeed the respondent Municipal Corporation undertakes to refund the amount within one month, without raising any plea of limitation etc'.
Mr. Chinoy learned Counsel appearing on behalf of the petitioners submitted that the bare perusal of item No. 40(b) in class III and item No. 53(c) in Class V of schedule 1 of the octroi rules will establish that the items imported by the petitioners could attract duty only under item 40(b). Mr. Chinoy submitted that PVC Resin squarely falls within item No. 40(b) because PVC Resin is a chemical as duty certified by the Government classification. The learned Counsel submitted that PVC Resin power is not at all plastic but is a chemical. Mr. Chinoy further submitted that PVC Resin is known in the trade circle as a chemical and taking an over all view of the taxing statute the claim of the petitioners that octroi duty is payable under item 40(b) requires acceptance. Mr. Singhvi learned Counsel appearing on behalf of the Corporation on the other hand contended that the petition under Article 226 of the Constitution should not be entertained as the petitioners have alternate remedy of filing an appeal as provided by section 406 of the Act. Mr. Singhvi also urged that what is imported by the petitioners is plastic powder and as that expression is specifically referred to in item No. 53(c) it is not open for the petitioners to claim that the plastic powder should be levied with octroi duty under item 40(b). Learned Counsel then submitted that even assuming that the levy of excess duty under item 53(c) was not in accordance with law still the Corporation is not bound to refund the amount to the petitioners as per the undertaking given by the Corporation at the stage of admission of the petition because the petitioners have already passed off the octroi duty to the customers. The learned Counsel urged that directing the Corporation to honour the undertaking and refund the excess duty recovered would result into unjust enrichment by the petitioners.
5. In view of the rival contentions, the first question which falls for determination is whether the petitioners should be denied relief under Article 226 of the Constitution on the ground that there is an alternate efficacious remedy of filing a statutory appeal under section 406 of the Act is available. Mr. Singhvi undoubtedly is right in pointing out that section 406 of the Act enables the aggrieved assessee to prefer an appeal against levy of tax under the provisions of the Act. Section 406 enables the aggrieved assessee to file an appeal before Civil Judge and can carry further appeal to the District Court. Mr. Singhvi, invited our attention to the decision reported in : (1989)91BOMLR812 in the case if Wandleside National Conductors Ltd. v. Municipal Corporation for the City of Pune and others, and submitted that writ jurisdiction should not be resorted to when there is efficacious remedy available of filing statutory appeal. We are not inclined to accede to the submission of the learned Counsel and refuse exercise of jurisdiction under Article 226 of the Constitution for more than one reason. In the first instance, the petition is pending in this Court for last about eight years and it would be extremely harsh and cruel to direct the parties to undertake a fresh cycle of litigation and spend considerable amount and time. We cannot overlook that the Corporation is required to spend tax-payer's amount to defend the litigation and which may undergo several appeals one after another. The petition was admitted eight years before, after notice was issued to the Corporation and though the interim relief was refused to the petitioners, the Corporation gave an undertaking that in case the petitioners ultimately succeed then the excess duty recovered will be refunded. The undertaking clearly indicates that the Corporation was willing to go for hearing of the petition and not resist the petition on the ground of alternate remedy. The second reason for not acceding to the present objection of maintainability of the petition is that the issue involved in the petition is neither complicated one or required any evidence. The Corporation has filed return sworn by Tanaji v. Satre, Deputy Municipal Commissioner on March 21, 1992 and none of the facts assessed in the petition are disputed. In paragraph 3 of the petition it is claimed that PVC Resin is imported within the limits of octroi duty for the purpose of consumption in the factory for manufacturing PVC films, tubings, and laminated cotton fabrics. In paragraph 8 of the return while replying to the averments made in paragraph 3 of the petition, the Corporation has not denied that the PVC Resin was imported for the purpose of consumption as an industrial use in the factory of the petitioners. In ground (g) in paragraph 11 of the petition, the petitioners have claimed that the PVC Resin is known in trade as a chemical and in paragraph 21 of the return that claim is not denied. The perusal of the petition and return leaves no manner of doubt that there is no dispute on facts and which will require examination in a statutory appeal. The correspondence between the parties which is annexed to the petition also establishes that there is no dispute whatsoever on facts. Mr. Singhvi made faint attempt to urge that in case the petitioners are driven to file an appeal then the Corporation may lead evidence to establish the nature of the articles imported. The submission is without any merit because there is no dispute as regards the nature of the articles imported and for what use it was imported. In these circumstances, in our judgment, it would be improper to drive the parties to fresh about of litigation and it would be appropriate if the claim of the petitioners is examined and decided in exercise of writ jurisdiction. Reliance on the decision reported in : (1989)91BOMLR812 cannot carry the case of the Corporation any further because the decision proceeds on the peculiar facts of that case. Accordingly the preliminary objection raised on behalf of the Corporation is turned down.
6. Mr. Chinoy submitted that the heading annexed to each of the classes in schedule 1 to the octroi rules serves as an integral part of the schedule itself and the entries in different classes should be read in association with the headings to fix the identity of the articles. The submission is correct and deserves acceptance in view of the decision of the Full Bench reported in 1988 MLJ 353 : 1988(3) Bom.C.R. 197 in the case of Municipal Corporation of Greater Bombay and others v. Monopol Chemicals Private Limited, Bombay. It is well settled rule of interpretation that the legislature does not use surplusage while enacting legislation and therefore it is clear that various items in the schedule are classified with reference to use of those articles. The legislature had chosen to group various articles in separate classes and the headings to the classes give a clue as to the use to which the article is put. It is possible that some of the articles may be included in different items or in other words the items may over-lap but to ascertain as to under what item the octroi duty can be levied it is necessary to examine whether the import of the article is for a particular user. Item No. 40(b) refers to chemicals of all sorts and item No. 40 falls within class III which refers to the industrial use. It is therefore, obvious that the legislature contemplated that chemicals of all sorts which are imported for industrial use would attract duty under item 40(b). Turning to item No. 53 which falls under class V, the heading of which is perfumes, toilet, requisites, colours and household goods. The perusal of various articles set out in item Nos. 53(a) to (e) clearly reveals that each of the article is put to use as household goods or is the perfume or toilet requisites. Mr. Singhvi submitted that item No. 53(c) refers to an article of 'plastic powder' and urged that the plastic powder can never be used as a household goods or as perfumes or toilet requisites. It is undoubtedly true that we could not ascertain from the Counsel as to for what purpose the plastic powder is used but we cannot over look that the articles of plastic powder is clubbed with large number of other articles under item No. 53 and which clearly are used as either perfumes, toilet requisites or household goods. While examining whether an article included under the item has a nexus to the description in the heading it is necessary to bear in mind the placement of such articles in a particular group and it must be presumed that the legislature was conscious that placement of such and article within a particular item has a nexus to the heading of the class under which the item is covered. It is possible that the plastic powder is used as a part of colour for painting the wall. The plastic emulsion is a colour which is used for the purpose of painting the houses. In our judgment, taking into consideration the placement of expression 'plastic powder' in item No. 53 under class IV clearly indicates that the article is not intended to be used for industrial purpose. The plastic powder may be a chemical but it would certainly not fall under item 40(b) under class III, as the chemicals under item 40 must have been imported for industrial use.
7. Mr. Chinoy submitted that PVC Resin imported by the petitioners is not a plastic but a chemical. The learned Counsel submitted that PVC Resin is required to be mixed with other chemicals like dhyocthele, stabilisers, calcium carbon etc. The mixture of the aforesaid ingredients including PVC Resin powder undergoes different manufacturing process to make a final manufacture product like PVC film, tubings, leather cloth etc. Mr. Chinoy submitted that PVC is just one of the chemicals i.e. one of the many ingredients required to manufacture the final product. The learned Counsel pointed out that the plastic powder cannot be obtained until PVC Resin or other Resin is mixed with several other chemicals and processed thereafter. There is a clear distinction between the synthetic Resin and plastic and the distinction is that synthetic Resin is a polymer itself while plastic is a polymer plus such additives like fillers, colourant, plasticizers etc. The submission of the learned Counsel on this aspect deserves acceptance in view of two decisions of this court. The first decision is reported in 1983 Excise Law Times 425, Industrial Plastic Corporation Private Limited and others v. Union of India and another. After examining the dictionary meaning of word 'plastic' and after reference to various standard authoritative books on polymer and Resin it was held that a term plastic is highly restricted and used to describe a product of synthetic origin which is capable of being shaped by flow in some stage of manufacture. While referring to passage in Encyclopaedia britannica, volume 18, the relevant quotation set out in the judgment is as follows:-
'While the designation 'plastic' is broader generically than the word Resin', both terms are used indiscriminately with respect to synthetic products. It is worthy of note, however, that general usage refers to cellulose derivatives as plastics and not as Resins; and conversely, the synthetic resinous products, particularly those entering into the surface-coating field, are referred to as resins and not plastics'.
Reference can be usefully made to the decision of Division Bench reported in 1982 Excise Law page 917, Chemicals and Fibres India Limited v. Union of India and others. The Division Bench exhaustively examined various authorities and standard books to determine whether polyester chips are assessable to duty as moulding powders, granules etc. as set out in item 15A of schedule 1 of the Central Excise Act. An paragraph 13 of the judgment, the Division Bench sets out the definition of synthetic Resins in the Condensed Chemical Dictionary in the following terms:
'Resin, synthetic. A man-made high polymer (q.v.) resulting from a chemical reaction between two (or more) substances, usually with heat or a catalyst. This definition includes synthetic rubbers, siloxances and silicones, but excludes modified water-soluble polymers (often called Resins). Distinction should be made between a synthetic Resin and a plastic (q.v.), the former is the polymer itself, whereas the latter is the polymer plus such additives as fillers, colourant, plasticizers, etc...'
In paragraph 28, the Division Bench observed that:
'It is thus clear that polyesters, which are artificial or synthetic Resins, do not have any fixed uniform specification and they are made according to the requirements of the use to which they have to be put. These are, therefore, products which could not have been described individually and have, therefore, been described with reference to the category into which they chemically fall and with reference to the processes from which they result.'
In paragraph 40 of the judgment referring to chapter on 'Plastics and Resins' in Encyclopaedia Britannica, vol. 14 the Division Bench quoted the following passage.
'The distinction between plastics and Resins is at best arbitrary, since many of today's synthetic materials can properly be called both Resins and plastics. Historically, it appears that the term Resin was applied to those products primarily used as substitutes for the natural product in coating compositions, whereas the term plastic was applied to designate those compositions that involved a moulding operation in their fabrication.'
The Division Bench, therefore, concluded that there is a clear distinction between synthetic Resins and plastics because synthetic Resin is polymer itself while plastic is polymer plus such additives as fillers, colourant, plasticizers etc. Mr. Chinoy, therefore, is right in his contention that the two decisions of this Court support his submission that PVC Resin imported by the petitioners within the octroi limits of the respondents-corporation is neither plastic nor plastic powder but chemical and consequently liable to octroi duty under item 40(b) of schedule 'I' to the Octroi Rules.
8. Mr. Chinoy also invited our attention to Indian Trade Classification-Revision 2 a copy of which is annexed as Ex. 'E' to the petition. The perusal of the exhibit indicates that Division 59 refers to chemical materials and products otherwise specified in Division 51-Organic Chemicals are referred to with the code number and corresponding B.T.N. head or sub-head. The Indian Trade Classification Revision thus supports the submission of the petitioners that PVC Resin is a chemical and consequently attracts item 40(b) of schedule I of the Octroi Rules. The fact that PVC Resin is known in trade circle as a chemical also supports Mr. Chinoy's submission that while recovering octroi duty the entry should be construed as is known in trade parlance. In our judgment, the claim of the corporation that octroi duty is payable in respect of import of PVC Resin under item 53(c) of schedule I cannot be sustained and the petitioners are entitled to the reliefs.
9. Mr. Singhvi then submitted that even assuming that the excess duty was recovered by the corporation under item 53(c) in-stead of under item 40(b) of the 1st schedule of the Octroi Rules, still the petitioners should not be granted relief of refund of excess duty paid during the pendency of the petition. The learned Counsel submitted that the petitioners have passed on the excess duty, paid to the corporation, to the customers and the respondents are unlikely to refund such duty back to the customers and therefore on the principal of unjust enrichment the petitioners should be deprived of the order of the excess duty paid during the pendency of the petition. In support of the submission, learned Counsel referred to the decision reported in : [1991]2SCR105 M/s. Orissa Cement Ltd., v. State of Orissa and others, and : AIR1992SC53 Indian Aluminium Company Limited v. Thane Municipal Corporation. It is not possible to accede to the submission of the learned Counsel. It is not open for the Corporation even to plead the ground of unjust enrichment in the facts and circumstances of the present case. As mentioned hereinabove at the time of admission of the petition, the Division Bench directed that the petitioners should pay the duty under protest and the corporation gave a solemn undertaking to this Court that in case the petitioners succeed at the hearing then the corporation will refund the amount within one month without raising any plea of limitation etc. The undertaking was accepted by the Court and consequently interim relief sought by the petitioners was not granted. It does not now lie in the mouth of the respondents corporation to plead that the refund should be declined on the ground of unjust enrichment. Mr. Singhvi made faint attempt to urge that the undertaking was given without properly appreciating the defences open to the corporation. We refuse to entertain any such submission. In case such contentions are accepted it would make mockery of the solemn undertaking given by the litigants and on the basis of which the Court did not pass interim orders in favour of the petitioners. The entire administration of justice would crumble in case the litigants are permitted to ignore solemn undertaking on spacious ground that undertaking was given without properly appreciating the legal consequences thereof. If our judgment, the Corporation is bound to refund the excess duty recovered during the pendency of the petition within one month to the petitioners.
10. Accordingly, petition succeeds and the rule is made absolute in terms of prayer (a). The respondents are directed to refund the excess duly recovered under item 53(c) of schedule 'I' of Octroi Rules from the date of lodgment of the petition till the date of the judgment within a period of four weeks from today in accordance with the undertaking furnished. The respondents shall pay costs to the petitioners.
Mrs. Singhvi applies for stay of the operation of order. Prayer refused.