1990 SCMR 84 (PLP)

"x x x x that since the beams are brought within the municipal limits for being used and that as the shape of the beams is changed after yarn is wrapped over them, the holders of the beams are liable to pay the octroi duty and are not entitled to get octroi passes." The High Court repelled this contention as in its opinion the empty iron beams after their import into octroi limits were not transformed into consumer articles by subjecting them to the process of wrapping with the yarn and the articles thus prepared did not lose their characteristics as the iron beams and thereby these cannot be said to have been "used" within the octroi limits as envisaged by Rule

35. In this connection High Court observed: "This is wrong to say that the beams are used by wrapping on them the yarn. The word "used" has not been defined in the Municipal Ordinance, 1970 and the rules made there under, therefore the dictionary meaning of the word "used" shall have to be looked into to find out whether the beams are used in the sense as envisaged by rule 35 of Municipal Octroi Rules 1964. The dictionary meaning of word "used" as given in Chambers Twentieth Century Dictionary are `to put to some purpose'. By wrapping the yarn the beams cannot be said to be put to some purpose. They are put to the purpose when they are used in the looms for the preparation of cloth etc. By wrapping yarn over them they are made capable of being used in the looms. As soon as they become empty, they cannot serve any purpose thus are again sent for undergoing the process of wrapping of yarn as they may again be capable of being used. For coming to a conclusion that an article is being used we have to consider the purpose and for which it is used. As has been mentioned above the purpose of the formation of the beams is to be used in the cloth manufacturing machinery after they are made to carry the yarn over them. The purpose for which they have been prepared is not that they be used in the wrapper machine but rather by wrapping yarn they are made capable of being used in the weaving machinery. The argument that the beams do not remain in the same shape after yarn is wrapped on them is equally untenable. The beams remain in the same shape. Learned counsel says that the weight of the beams increases. The increase in weight is not of the beams but of the yarn. If the beams are transformed by mechanical process into some other shape such as transformed into some other article, the prepared article will not bear the characteristic of the beams and thus due octroi duty may be charged for the beams which are imported to the municipal area for undergoing the transformation of other articles. By wrapping yarn , over them they are in no way transformed into some other article. The beams are brought within the municipal limits temporarily therefore rule 35 (f) applies and the Municipal Committee is bound to issue passes." On this view of the case, the High Court dismissed the petition by the impugned judgment. Leave to appeal was granted by this Court as a substantial question of considerable general importance as to the true interpretation of the provisions of the West Pakistan Municipal Committees Octroi Rules, 1964 arose in the case. After having heard the learned counsel for the parties, we find that the primary question for consideration is as to whether the iron beams imported within the octroi limits for the purpose of wrapping the yarn on them and for ultimate export could be said to have been imported for "use" within the octroi limits under the West Pakistan Municipal Committees Octroi Rules, 1964. A precise question arose before this Court in Cantonment Executive Officer v. Burshane (Pakistan) Ltd. (1986 S C M R 1308) in which question was whether octroi duty was chargeable on empty liquefied petroleum gas cylinders brought into the area of Cantonment Board for re‑filling and whether re‑filling the cylinder with L.P.G. would amount to "using" the cylinder within the limits of the Cantonment. The High Court answered the question in these words: "Since the word 'use' has not‑been defined by the Act or the rules (which have not been framed so far under the Act) it should be understood in its ordinary, dictionary meaning. According to Concise Oxford Dictionary the word `use' means `employment, application to a purpose, treat in a specified manner'. Thus if an empty cylinder is imported for the purpose of re‑filling, it is being employed or applied to specific purpose or is being treated in a specified manner. Hence there can be no manner of doubt that if an empty cylinder is brought within the limits of Cantonment for the purpose of re‑filling with L.P.G at the plant of the petitioner, it shall fall within the mischief of the impugned Notification, because it has been brought within the Cantonment area for use therein. It is immaterial whether a cylinder is brought for the first time or repeatedly within the Cantonment area. If the same cylinder is brought repeatedly to use within the octroi limits of the Cantonment, it shall be liable to levy of octroi duty each time because it is being brought for `use' within the said limits." The above conclusion of the High Court was challenged before this Court on the ground that the gas cylinders were brought into the area within the limits of the Cantonment Board for use by reference to its meaning on the premises that their bringing into the area was for a temporary duration, namely re‑filling of gas and did not entail total use as is the import of the word use' occurring in the Notification. This Court took the view which again be reproduced as under: "It is impossible to give to the word `use' the same meaning as the word consumption' conveys for the latter entails a total loss of the material while the former denotes utilization or employment for or with some aim or purpose. Accordingly, it cannot in its concept involve an element of total or partial application. Besides, the word `use' is not qualified by any such word as `total' or `partial' in the Notification, therefore such a meaning cannot be given to it:' The conclusion of the High Court that re‑filling of the empty cylinders with L.P.G. gas amounts to using the cylinder within the octroi limits of the Cantonment was thus upheld. It was conceded before us that the facts of this case are not distinguishable from the one in Cantonment Executive officer (1986 S C M R 1308), and the law laid down by this Court is fully applicable ~to the present case. However it is worthwhile mentioning that this question came up for consideration in an unreported case in Regular Second Appeal No. 1744 of 1943 (Chief Officer, Corporation City of Lahore v. The Punjab Flour and General Mills Company Ltd., Lahore) in which the validity of the "octroi without refund" levied by the Municipal Committee was called in question. The appeal in that case arose out of a suit brought by Punjab Flour and General Mills Company Limited, Lahore for a mandatory injunction restraining the Corporation of the City of Lahore from levying and demanding any octroi on any wheat imported and ground in flour and then exported outside the Municipal Limits. It was contended that the wheat was not intended for consumption, use or sale within the limits of the Corporation and was thus not liable to octroi duty. In this leading judgment A. Rehman, .J. observed as under. "I was largely impressed by the fact that the wheat can be said to have been used in producing flour. If wood can be said to have been used in making furniture, if flour can be said to have been used in making bread, if cloth can be said to have been used in making shirts, and if hops can be said to have been used in making beer, there seems to be no reason why wheat should not be regarded to have been used when by adding labour its form has changed out of recognition and it has been converted into flour." Harris, C.J. agreed with this view and observed further as under: "`Use' can be defined as `to put to some purpose' and it appears to me that wheat is clearly used in the manufacture of flour or atta. It is the raw material from which flour or atta is made. For example iron ore is used for making steel and gas coal is used for making gas. R.B. Badri Dass argued that in the manufacture of atta the process is so simple that what is produced is nothing but wheat. However, as a result of the operations in the flour mill wheat as such disappears and what is produced is a powder which is either atta or (lour. It does not appear to me to be material whether the process of manufacture is comparatively simple or complicated. If the result is different from the raw material, then it appears to me, that it can be properly said that the raw material has been used to produce the finished article whatever that may be." This decision gave rise to a further appeal by the Punjab Flour and General Mills Company Limited, Lahore, and was disposed of by a reported decision of the Federal Court in A 1 R 1947 F C

14. The Federal Court observed that the wheat was converted by grinding into flour and other products and it was the flour and other products that were re‑exported. In this connection it was observed as under: , "We do not think it is possible for the appellant to deny that it used the wheat in its mills to convert it into the flour and other products in which it did business. It also seems clear that in many cases contracts for sale were entered into or confirmed within the municipal limits in respect of the wheat imported by the appellant by rail, the taxes on which are in dispute in this case, entered the municipal limits of Lahore for consumption, use or sale therein. The claim for the disputed taxes way, well founded and this appeal is therefore, dismissed with costs." Yet in another unreported case of Messrs Saadat Factory v. The Chairman, Municipal Committee, Dera Ghazi Khan (Writ Petition No, 42 of 1961) a similar question of law came up for consideration. Petitioner in that case owned a ginning factory outside the municipal limits of Dera Ghazi MILO and the cotton ginned at his factory was taken by the petitioner to the Madina Factory situated within the municipal limits for processing. Dera Ghazi Khan Municipal Committee made a demand for payment of the octroi duty on the ginned cotton thus imported for the purpose of the petitioner. Petitioner challenged the validity of the demand and the question arose whether the municipality was empowered to charge octroi duty which was payable only when goods imported we consumed, used err sold within the municipal limits. There was no doubt that goods imported by petitioner were not intended to be consumed or sold whitish the municipal limits, and the only question which required consideration Nkirs whether these were used within the municipal limits within the meaning of the rules. The High Court observed that the ordinary meaning of "use" is utilization or employment for or with some aim or purpose or application or concision to some end. In special sense it means the act of using, or the fact of being used a food etc. The Court further observed that keeping in mind this dictionary meaning, there should be no difficulty in holding that by employing the word "use'' in the Octroi Rules, the intention was that if the goods so imported were intended to be utilized in some manner, though not consumed or sold, the facility afforded by this rule would not be available to the importer. In that behalf, the Cowl further observed: It appears to us that if such a person does something more than mere retention of the goods, as, for instance, subjects it to sonic kind of process of milling, pressing, etc. although he may nut be consuming or selling those goods, tic is using them and, as such, he would he liable to pay octroi duty under Rule V.17 and cannot therefore, avail of the re- export pass System under Rule V.32‑A. We arc also of opinion that the retention of such goods, though temporary in the sense that the foods, after being subjected to sonic kind of process, are re‑exported, is not temporary in the sense that the goods are retained in the original condition; the intention being nut merely retain them but to subject them to sonic kind of process. For this further reason also Rule V.32‑A would IV not be applicable to such a case." In conclusion the High Court field that the demand of the octroi duty made by the Municipal Committee on the import of cotten for ginning purpose was justified, and the writ petition was accordingly dismiss. These principles are fully attracted to the present case before us, and we, therefore, allow the appeal with the result that the impugned judgments of the High Court as well as the two lower Courts are set aside and the suit by the respondents is dismissed. In view of the fact that the fate of the case has turned on legal issues, the parties are left to bear their own costs throughout. M.B.A./M‑1715/S Appeal allowed.