Food Div. Govt. of Bangladesh Dhaka & others Vs. M/s. MF Ltd

Food Div., Govt. of Bangladesh, Dhaka & others

 Vs.

 M/s. MF Ltd

Supreme Court

Appellate Division

(Civil)

Present:

Shahabuddin Ahmed CJ

MH Rahman J

Latifur Rahman J

Secretary, Ministry of Food, Food Division, Government of Bangladesh, Dhaka and others ………. Appellants.

Vs.

M/s. MF Limited, a Private company limited by shares……………………Respondent

Judgment

February 10th, 1992.

Case Referred to-

Pratap Singh vs. Krishna Gupta AIR 1966 SC 140.

Lawyers Involved:

AW Bhuiyan, Additional Attorney?General, instructed by Md. Sajjadul Huq, Advocate –on ?Record -For the Appellants.

Khondker Mahbubuddin Ahmed, Senior Advocate, Supreme Court, instructed by Ozair Farooq, Advocate-on-Record-For the Respondent.

Civil Appeal No. 6 of 1990

(From the judgment and order dated 6th June, 1988 passed by the High Court Division, Dhaka, in Writ Petition No. 111 of 1985).

Judgment:

Shahabuddin Ahmed CJ.- Secretary, Ministry of Food and three other officers of the said Ministry are the appellants in this appeal by Special leave. Respondent, M/s. MF Ltd., a private limited company, is the lessee of the Khulna Municipal Committee to collect “octrol” on goods imported into the octroi barrier of the Municipality. The main question is whether the “certificate”, as required of that the appellants, under Rules that the goods in from question are Government properties and that these that goods are intended for “consumption or use for official purpose only” is mandatory, or mere directory. In other words, whether in the absence of the “certificate” the goods, which are government Properties, should have been exempted from octroi. The High Court Division, which was moved in its writ jurisdiction by the respondent, held that the certificate is mandatory and that in its absence the appellants are liable to pay the octroi.

2. Facts leading to this appeal are the following: The respondent, lessee of the Khulna Pourashava (formerly Khulna Municipal Committee) is entitled to levy and collect octroi under the Municipal Committees (Assessment and Collection of Octroi Rules, 1961), briefly the “Octroi Rules” made under the Municipal Administration Ordinance, 1960. In the years 1977?78, 78?79 and 79?80 the appellants imported certain goods such as, edible oil, butter oil, milk powder, weighing scales etc. into the Octroi area of the Khulna Pourashava. “Octroi”, as defined in Rule 2(1)(f) of the October Rules, “means a tax on the import of goods or animals for consumption, use or sale within a municipality”, The lessee levied Octroi on these goods at Tk. 13, 84, 740.89 and requested the Controller of Movement and Stores, Ministry of Food (appellant No. 4) to pay this amount. The Controller first accepted the claim and, as appears necessary fund was also placed at his disposal by the Ministry for payment of the octroi. At a later stage, the Controller reduced the claim to Tk. 9,98,947.25 taking the ground that some of the goods had already been despatched to other destinations beyond the octroi Unlit. The respondent, after some hesitation, accepted this reduction and requested the appellants to make payment of the balance, The Controller, however, raised fresh objections saying the entire payment became time?barred and that the goods are not at all liable to octroi because these are government properties and, after a few years produced an order of the Government to the effect that the goods are totally exempt from octroi in terms of Item No. 22 of the Third Schedule to the Octroi Rules, as referred to above. The lessee rejected these objections and stuck to its assessment contending that for the exemption, as claimed, a “certificate” from a gazetted officer of the appellants’ Department that the property is government property and that “it is intended for use for official purpose only” is a precondition and that as no such certificate was given the appellants were not entitled to the exemption. The appellants did not accept this contention and refused to pay any octroi. Thereupon the lessee filed Writ Petition No. 111 of 1985 seeking a direction upon the appellants to pay the octroi which was long over due. Result of the writ petition was that the rule issued thereupon was made absolute and necessary direction was given for payment of the octroi.

3. Mr. Abdul Wadud Bhuiyan, learned Additional Attorney?General, has urged a number of points in support of the contention that the property in question is totally exempt from octroi by statute and that the “certificate” as referred to in Item 22 of Third Schedule of Octroi Rules is a mere formality. He has further argued that when substantive law has exempted the property from octroi, non?observance of the formality or non?compliance with the procedure is a mere technical defect and that this technicality cannot be interpreted in such a way as to defeat the purpose of the substantive law. The learned Additional Attorney?General has, in the alternative, argued that an order of the Government dated 13 March, 1985? Annexure?K, should have been treated by the High Court Division as the certificate within the meaning of Item 22 of the Third Schedule of the Octroi Rules. In that order, it has been argued, exemption was claimed under Item No. 22, Third Schedule of the Rules.

4. As we have pointed out above, octroi is leviable on any goods or animals brought into the octroi area for use or sale there?a fact about which there is no dispute. Rule 4 of the “Octroi Rules” provides that no octroi shall be levied on goods specified in the Third Schedule of the Octroi Rules. Item No. 22 of this Schedule provides for exemption of certain Government properties on production of a certificate from a Gazetted Officer of the concerned Department of the Government. Part one of Item No. 22, which is relevant to this case, is quoted below:

“(22) Government property.? (i) All properties belonging to the Government, except those imported for supply to their contractors, if accompanied by a certificate signed by a Gazetted Officer of the Department concerned to the effect that the property belongs to the Government, and is intended for consumption or use for official purpose only,” (underline is mine).

5. It clearly appears that exemption provided in Rule 4 is not intended for all Government properties but it is intended for only that Government property which is to be used for “official purpose only”. The sole criterion for determining whether a Government property is intended for “consumption or use for official purpose only” is a certificate signed by a Gazetted Officer of the Department concerned. Furthermore, the certificate must accompany the property of the Government when brought into the Octroi area. In this case, the Government properties in question were not accompanied by any certificate at all. No certificate was produced even within the long period of about seven years from the date of their entry into the area. If the provision of certificate is held to be mere directory or a mere formality, all Government properties, if brought into the octroi limit, may escape the payment of octroi. Makers of this legislation, it appears, were very conscious of the fact that octroi is intended to augment income of the Municipal Committees which are local Government Institutions and that except for official use only of a Government property it must be subject to payment of the octroi.

6. The learned Additional Attorney?General has tried to say that the requirement of a certificate in Item No. 22 is a mere technicality and has referred to an Indian decision in Pratap Singh Vs. Krishna Gupta, AIR 1966 SC. 140, and Craies Statute Law, 7th Edition, Page 260, to emphasize that ‘technicality’ should be ignored if there is substantial compliance with the law. In the Indian case it has been observed that “tendency of Courts towards technicalities is deprecated, that it is the substance that counts and must take precedence over die mere form”. In the Statute Law of Craies, absolute or mandatory enactments have been distinguished from enactments which are mere directory or enabling provisions; failure to comply with a mandatory rule invalidates an action, whereas, failure to comply with a directory rule does not invalidate an action. We have hardly anything to disagree with these interpretations, for an absolute or mandatory rule is the substance as against a directory rule which is a shadow; the former goes to the root of a matter; the latter touches merely the fringe or branch of the matter. In the instant case, production of a certificate to the effect that the property will be used for official purpose only goes to the matter of levying the tax called octroi. The rule does not cast any duty upon the tax?collector to find out the purpose of the government as to how they will use their goods. It is the government or their officers?in?charge of the goods imported in to the octroi barrier to declare how they will use it, for official purpose only or for any other purpose. Certificate in Item 22 regarding the use of the property is clearly mandatory.

7. Properties in question were imported into the octroi area in the years between 1977 and 1980, but no certificate was given that the goods were intended for official use only. In the past Government paid octroi on such goods; and for the goods in question also, necessary fund was plated at the disposal of the Controller of Movement. The learned Additional Attorney? General has explained that in the past octroi was paid by the Government’s officers by “mistake” and that “mistake of Government’s officers” cannot confer right upon the Municipal Authorities (in this case, lessee of the Municipal Authorities) to levy tax on goods which arc exempt by statute. It is true that payment of octroi by “mistake” in the past cannot confer right upon the tax collector to claim tax for all time; but the very exemption is dependent upon a certificate that the property is meant for official use only. What prevented the appellants from issuing the certificate, if not possible at the time of import of the goods into octroi area, but at any later stage, without unreasonable delay?

8. The learned Additional Attorney?General has given stress on Annexure?K, saying that “whereas a certificate is to be given by any Gazetted Officer of the Government, Annexure?K is the certificate of the Government itself that the property is meant for official use only”. Khondkar Mahbubuddin Ahmed, learned Counsel for the respondent, has pointed out that Annexure?K is not a certificate and that even if it is taken as a certificate, it does not say that the goods are “intended for consumption or use for official purpose only”. This Annexure in fact is a decision of the Government taken about seven years late, that the goods in question are not liable to octroi under the Third Schedule, Item 22. It also appears that even in their Affidavit?in ?Opposition the appellants did not state that the goods were “intended for official use only”. The learned Additional Attorney? General has then referred to the list of the goods and has argued that the goods mentioned therein clearly indicate that these are intended for official use. We are not impressed by this argument, for edible oil, butter oil, milk powder, weighing scales may be imported from abroad by Government for sale to any members of public as well and that they need not be used by the Government themselves for official purpose. Annexure?K, therefore, cannot be treated as the certificate as referred to in the Third Schedule of the Rules.

9. The learned Additional Attorney?General has next referred to Rule 13 of the Octroi Rules and has argued that no declaration was sought for from the appellants by the respondent, lessee. Rule 13 relates to destination of goods at the time of import into an octroi area. It says that when goods or animals liable to octroi, are imported into an octroi area, the Officer?in?Charge of the area shall ask the person in?charge of such goods or animals to declare whether such goods or animals are intended for use or sale within the octroi limit. In this case no such declaration was asked for, it is argued. It appears clearly that Rule 13 is not relevant to the instant case because it was never the appellants’ case that the goods were meant for export to some other destination beyond the octroi limit; their case was  and still is that the goods are meant for official use only. If this is the intention, then the case is covered by Rule 4, read with the Third Schedule which requires a certificate.

10. Lastly, the learned Additional Attorney ­General has argued that production of a certificate before the respondent is unnecessary because the lessee knew from the very beginning that the properties, some of which included relief goods, were intended for official use. He has in this connection referred to an observation of the Pakistan Supreme Court in Md. Ismail vs. Province of East Pakistan, 16 DLR SC 438 to the effect that “when the party concerned came to know about the order of requisition of a property, service of the notice was not of much importance. It was a case of requisition of immovable property under section 3 of the Emergency Requisition of Property Act, 1948. We do not think this observation of the Court can help the appellants in any way in this case. Rather, payment of the octroi on such goods in the past tends to show that the lessee knew that the properties were liable to the octroi.

11. In the result, we find no substance in this appeal which is therefore dismissed. No order as to cost.

Ed.

Source: 1992, (AD)

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