THE EMPRESS MILLS, NAGPUR V. THE MUNICIPAL COMMITTEE, WARDHA
1958 SCR 1102: AIR 1958 SC 341
FACTS
The Appellant’s (a spinning and weaving company at yeotmal) bales of cotton were transported from Yeotmal to Nagpur by road and vehicles carrying them past through the limits of Wardha Municipality. Such vehicles simply used the road which traverses the municipal limits of Wardha and is a PWD road. The goods were neither unloaded nor reloaded at Wardha but were merely carried across through the municipal area. The Municipal Committee acting under Section 66(l)(o) Rule 1 of the C.P. & Berar Municipalities Act collected Rs 240 as terminal tax on these goods on the ground that they were exported by the Appellant from the limits of the Municipality of Wardha. The Appellant further claimed a refund of such a sum.
ISSUE
The issue highlighted in the above case is focused on the construction of the Section 66(l)(o) Rule 1 of the C.P. & Berar Municipalities Act.
RULES
Section 66(1) of the C.P. & Berar Municipalities Act states that “A committee may, from time to time, and subject to the provisions of this Chapter, impose in the whole or in any part of the municipality any of the following taxes for the purposes of this Act, namely (d) a toll on vehicles and animals used as aforesaid entering the limits of the municipality, and on boats moored within those limits (e) an octroi on animals or goods brought within the limits of the municipality for sale, consumption or use within those limits (o) a terminal tax on goods or animals imported into or exported from the limits of a municipality”
Further, Rule I of the Terminal Tax Rules made under the Act relates to exports and Rule 2 to imports.
DECISION OF THE HIGH COURT
The learned court held that the words ‘export’ and ‘import’ have no special meaning. They uphold the ordinary dictionary meaning. Further, these words mean only ‘taking out of and bringing into’.
JUDGEMENT AND ANALYSIS
- This Hon'ble court observed that the term “Import” was derived from Latin word importare and it means “to bring in” and export on the other hand was derived from exportare which means to carry out. Lexicologically they don't have any reference to goods in ‘transit’ a word derived from transire, bearing a meaning similar to transport i.e. to go across. These words were required to be interpreted in ways not solely confined to their literal derivations.
- The court referred to the observations of Muller v. Baldwin which held that (1) that the word “export” was not applied to coals in transit because the coals were taken from the port and started journey from there and would be included in the phrase “taken out” of the port, and (2) that temporary taking out was not “export” as was held in Maganlal Bhagwandas v. Ahmedabad Municipality; (3) that the test is the intention with which the goods were brought in or taken out.
- The court observed that by giving to the words “imported into or exported from” their derivative meaning without any reference to the ordinary connotation of these words, the cases decided in India have ascribed a general meaning to the words which wasn’t their intention. The effect of the construction of “import” or “export”, as prescribed by the insisted Respondent, would make rail-borne goods (passing through a railway station within the limits of a Municipality) liable to the imposition of the tax on their arrival or departure or both from the railway station which would not only lead to inconvenience, confusion, and would also 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 was deemed to be avoided This Hon'ble court also referred to the judgement Brown v. State of Maryland which supports the contention raised that import is not merely bringing into but comprises something more. The concept of import wherein something is brought for the purpose of sale or being kept was further supported by the observations of Kelly, C.B. in Harvey v. Mayor and Corporation of Lyme Regis. Similarly, it was observed that export meant taking out of goods which had become a part and parcel of the mass of the local area’s property and wouldn’t apply to goods which were in transit. The terms “imported into” or “exported from” were restricted to their derivative meaning “brought into” or “taken out or away from”, an assumption made by the Appellant which this Hon'ble court agreed with on the condition that it would be qualified by the use of the term “terminal tax”
- “Terminal” generally means end, boundary and “terminus” means the point to which motion or action tends, goal, end, finishing point. Besides the above meanings, terminal also signifies termini or the jurisdictional limits of the municipal area. Irrespective of this, the construction to be placed on the term should be the one that favours the tax-payer, according to the principle of construction of taxing statutes. This practice should be strictly construed. Terminal must be construed so that it has reference to “terminal” and should be read in a manner to connote the idea that the end of something is connected with motion and not with that of an intermediate stage of a journey.
- The court therefore held that the terminal tax under Section 66(1)(o) of the act is not leviable on goods which are in transit and are only carried across the limits of the Municipality.
RELEVANT THEORY
The construction of a statute according to its letter is a construction which takes the language used in its literal sense. When a strict construction is appropriate, the particular case to come within the purview of the statute must be within both its letter and its spirit and reason. The literal meaning of a statute is that which the words express, taking them in their natural and ordinary sense, that is, giving to words of common use their commonly accepted meaning and to technical words their proper technical connotation. The spirit and reason of the law, on the other hand, is nothing more than the legislative purpose, that is the purpose with which the law was made or the reason why the legislators enacted the statute. Strict construction of a statute confines its operation to cases which are clearly within the letter of the law as well as within its spirit and reason. It is not enough that the letter of the law may include the given situation unless the spirit and reason of the law also include it. The framers of a law are presumed to have in mind a reasonably consistent and intelligible plan or scheme for achievement of the legislative purpose. Further, according to Sutherland, a strict interpretation would depend on multiple factors such as-
- With reference to former law
- With reference to the rights and persons affected
- With reference to the letter or language of the statute
- With reference to the purpose and object of the statute.