A division bench of the Bombay High Court has recently set aside the letter informing the Petitioner that its claim for refund of octroi had been rejected and no further correspondence would be entertained with regard to this matter in the future. Consequently, it was held that refund of octroi cannot be denied on the sole ground of not producing duty declaration certified by the octroi officer.
On 15th July, 2015 the Petitioner entered into a Contract/Agreement with the Weapons Department (Indian Navy) which was essentially in the nature of a repair, refit and service contract, which also specified the details of spare parts to be imported and exported.
After the refund claim was filed, the petitioner-Hyprecision Hydraulik was served with a letter to file the original registration certificate book for verification and original declaration duly certified by the Octroi Inspector.
Petitioner, by its letter dated 1st March, 2017, addressed to Respondent No.3 informed Respondent No.3 that the Custom House Agent (CHA) engaged by the Petitioner to clear the said consignment had erroneously not mentioned Section 194(2) of the MMC Act when filing in the details of Form-B and therefore the Petitioner was unable to process the said declaration.
Having faced rejection, the petitioner approached higher authorities, who also negated the pleas of the petitioner. Aggrieved petitioner approached the Bombay HC with a Writ petition.
Bharat Raichandani and Rishabh Jain represented Hyprecision Hydraulik and submitted that, the production of the said declaration was therefore a procedural requirement and mere failure to produce the same could not by itself be a ground to deny the Petitioner the benefit of refund, if the Petitioner was otherwise eligible for the same.
On the contrary, AGP Amit Shastri along with AGP Himanshu Takke for State, submitted that, exemption provisions must be strictly construed and that the requirements/conditions of the provisions for claiming an exemption must be strictly complied with and that the onus of proving entitlement to the benefit of an exemption was on the party claiming the exemption.
On merits, Anoop Patil and Pooja Yadav submitted that the Petitioner was not entitled to the refund of octroi as the Petitioner had failed and neglected to comply with the precondition required in Section 194(2) of the MMC Act, namely to furnish a copy of the declaration duly certified by the Octroi Inspector. He also submitted that compliance of the conditions being mandatory, the rejection of Petitioner’s claim was entirely justified. He submitted that, Petitioner, without complying with the mandatory conditions of Section 194(2) of the MMC Act, was not entitled to receive a refund of octroi.
Observing that, in the facts of the present case, “the failure to provide a declaration of duty certified by the octroi officer would not render the Petitioner ineligible for a refund of octroi”, the Division Bench of Justice Arif S Doctor and Acting Chief Justice S V Gangapurwala directed the respondents to refund the octroi paid by the petitioner.
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