MAN MOHAN TULI versus MUNICIPAL CORPORATION OF DELHI & ORS.

Parties

Procedural Posture

Civil Appeal / Supreme Court Appeal by Special Leave From High Court Judgment

Legal Issues

1. 1 Whether terminal tax is leviable on goods passing through Delhi but not destined for use or consumption in Delhi.
2. 2 Interpretation of section 178 of the Delhi Municipal Corporation Act, 1957 and Rule 26 of the Terminal Tax Rules with regard to liability to terminal tax.
3. 3 Distinction between goods 'carried into' versus 'carried through' a local area for the purpose of terminal tax.

Ratio Decidendi

Terminal tax under section 178 of the Delhi Municipal Corporation Act, 1957, is not leviable on goods which merely pass through or are temporarily stored in Delhi when their final destination is beyond Delhi. Terminal tax is exigible only if Delhi is the final destination of the goods, or if goods remain within Delhi for an indefinite and unexplained period so as to frustrate the continuous journey. The term 'immediately' in Rule 26 is to be interpreted as allowing a reasonable period for sorting, unloading, and reloading, not a strict literal sense.

Court Disposition

Appeal allowed in part

Orders

• Impugned High Court judgment set aside except that portion quashing the orders of the Municipal Corporation of Delhi; terminal tax orders quashed as per Supreme Court's interpretation of section 178 of the Act; no order as to costs.