Granting relief to aircraft owners,the Bombay High Court on Thursday quashed the Brihanmumbai Municipal Corporations demand notices seeking to levy octroi on the import of aircraft in Mumbai.
Jet Airways,Reliance Commercial Dealers Limited (RCDL) and Tata Engineering and Locomotive Company Limited (TELCL) had moved the High Court challenging the BMCs notices. Arguing for Jet Airways,a team of senior counsels T Andhyarujina,E P Bharucha and Birendra Saraf had submitted that the aircraft owners stated that the aircraft was not used,consumed or sold in Mumbai,conditions that would attract the levy of octroi. They argued that in such a case,octroi should also be levied on the first entry of foreign carriers that load passengers and travel out of Mumbai.
The octroi demanded by the corporation from Jet Airways stood at Rs 28 crore while that recovered from TELCL is Rs 31 lakh. However,pronouncing the judgment over video-conference on Thursday evening,Justice S A Bobde and Justice R D Dhanuka ordered the octroi recovered from TELCL be refunded. Since the BMC had assured the court in case of Jet Airways that it would take no coercive action against the airline for the recovery of octroi,in 2010,the court said that RCDL would have to be granted similar protection.
The entry of the aircraft is transitory,the counsels for RCDL Janak Dwarkadas and Cherag Balsara told the court. The RCDL contended that the levy of octroi would lead to imposition of substantial financial burden and would amount to an unreasonable restriction on right to carry on trade and business.
The aircraft owners stated that all the aircraft are registered with the Director General of Civil Aviation (DGCA) in Delhi before they are flown into Mumbai and raised questions about the BMCs power to levy octroi on aircraft registered in Delhi.
Arguing for the corporation,however,senior counsel J Pochkhanawala and lawyer Preeti Purandare told the court that if an aircraft is imported,used anywhere else,but stationed in Mumbai,octroi would have to be paid on the first entry of the aircraft. The corporations octroi demand was based on its octroi rules and the Aircraft Act,1934.
Accepting the petitioners arguments,the court quashed the octroi demand notifications issued by the BMC.