justification came through an affidavit filed before the Nagpur bench of Bombay high court during a hearing on petition filed by Nag-Vidarbha Chamber of Commerce (NVCC).
A division bench comprising justices AP Lavande and Pramod Kode then adjourned the hearing till Monday. Anand Jaiswal held brief on behalf of traders. The traders under NVCC had moved court against NMC's decision to levy octroi on MRP contending that rights regarding levying surcharge on taxes and its recovery rest with the state government and not with the civic bodies. The NVCC's move came after all its efforts to stop the corporation from levying octroi proved futile.
The petitioners argued that the municipal commissioner did not have any powers to change the system and introduce a MRP-based levy. This would require an amendment in Octroi rules itself, which should be done by the general body of the corporation and not by the commissioner. Citing example of Pune, where MRP-based Octroi is being charged after an amendment to the rule, the petitioners said in Nagpur just a circular was issued by the municipal commissioner on July 17, which was not valid.
Until now, the octroi was being paid on actual cost of goods paid by the importer as mentioned in the invoice. The traders claimed that levying MRP would lead to a lot of inconvenience as each consignment that reaches the octroi post would have to be unpacked to ascertain the MRP. They added that that the new system of octroi would lead to an extra burden on the general public, as they have to pay additional tax. Even as the corporation expects to rake in extra revenue through the new system, it will breed corruption, the petitioners alleged.
The civic body in its 14-page affidavit filed as per court's directions informed that the traders body had misinterpreted its circular which had guidelines mentioned for officers on recovery of octroi. It said the octroi would be charged only if the imported goods were sold at 80% price of the MRP. The corporation also defended its decision to charge Rs 5 per receipt on the Octroi post stating that since the entire department was being computerised and recovery contract was given to a private agency, service tax is being levied on every receipt. It also informed that the NMC had even launched a website that would allow traders to pay octroi in advance.
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