Indian Oil Corporation Limited vs The State of Jharkhand and Others

S. Chandrashekhar, J.—Aggrieved by demand of verification fee under the Legal Metrology Act, 2009 for the period between January 1992 to April 2013, the petitioner-Indian Oil Corporation Ltd. has approached this Court.

Briefly stated, the facts of the case are that the petitioner-Company, a Government Company under the administrative control of the Ministry of Oil and Natural Gas deals in supply of petroleum products at various depots and terminals. The ground petroleum storage at Namkum Road, Ranchi was constructed by the petitioner-Corporation for its convenience and for onward transportation to the retailers for sale to the customers. The depots constructed by the petitioner-Corporation at Namkum, Ranchi are used purely for storage purpose where the petroleum product from its refinery is stored. In fact, the tank lorries carrying petroleum products to the dealers from the depots are duly calibrated and verified in terms of the provisions under the Legal Metrology Act, 2009.

Mr. V. Shivnath, the learned Sr. counsel for the petitioner submits that neither sale nor a commercial transaction is directly involved at the petitioner''s storage point at Namkum. The storage depots are not calibrated and therefore, verification under the Legal Metrology Act, 2009 is not required.

Referring to various provisions of the Legal Metrology Act, 2009 and the judgment in C.W.J.C. No. 2404/1981, Mr. Rajesh Shankar, the learned Government Advocate submits that the stationary/storage tanks are measuring instruments and these storage tanks are used in industrial production or for protection i.e. preservation.

Before adverting to the rival contentions, some of the relevant provisions may usefully be noticed.

Legal Metrology Act, 2009

"Section 2(v)- "verification", with its grammatical variations and cognate expressions, includes, in relation to any weight or measure, the process or comparing, checking, testing or adjusting such weight or measure with a view to ensuring that such weight or measure conforms to the standards established by or under this Act and also includes re-verification and calibration;

Section 2(w)- "weight or measure" means a Weight or measure specified by or under this Act and includes a weighing or measuring instrument.

Section-3. Provisions of this Act to override provisions of any other law.-The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act.

Section 24-Verification and stamping of weight or measure.- (1) every person having any weight or measure in his possession, custody or control in circumstances indicating that such weight or measure is being, or is intended or is likely to be, used by him in any transaction or for protection, shall, before putting such weight or measure into such use, have such weight or measure verified at such place and during such hours as the Controller may, by general or special order, specify in this behalf, on payment of such fees as may be prescribed.

(2) The Central Government may prescribe the kinds of weights and measures for which the verification is to be done through the Government approved Test Centre.

(3) The Government approved Test Centre shall be notified by the Central Government or the state Government, as the case may be, in such manner, on such terms and conditions and on payment of such fee as may be prescribed.

(4) The Government approved Test Centre shall appoint or engage persons having such qualifications and experience and collect such fee on such terms and conditions for the verification of weights and measures specified under sub-section (2) as may be prescribed.

Rule 14 of the Legal Meteorology (General) Rules, 2011 reads as under:

Procedure for carrying out calibration of vehicle tanks, etc.- The procedure for carrying out calibration of vehicle tanks, etc., shall be as it specified in Ninth Schedule.

The definition of "weight and measure" under Section 2(w) provides that it includes a weighing or measuring instrument also. Rule 13 of the Legal Metrology (General) Rules, 2011 provides that the physical characteristics, configuration, constructional details, materials, performance etc. of every weighing instrument used or intended to be used in any transaction or for protection must conform to the specifications laid down for such weighing instrument in Ninth Schedule. Rule 14 of the Legal Metrology (General) Rules, 2011 provides that the procedure for carrying out calibration of vehicles tanks, etc., shall be as is specified in Ninth Schedule. The Ninth Schedule of 2011 Rules has a separate Chapter under Part III dedicated to "Method for Computation of Capacity Tables for Vertical Oil Storage Tanks". It provides the methods of computation on capacity tables for vertical storage tanks which are intended for bulk storage of petroleum and liquid petroleum products. Section 24(3) of the Legal Metrology Act, 2009 which provides that where any weight or measure is such that it cannot, or should not, be moved from its location, the Inspector shall take such steps for the verification of such weight or measure at the place of its location, clearly indicates that the Act postulates stationary weights and measures. The Hon''ble Division Bench of the Patna High Court has held stationary tank a measuring instrument, required to be verified under the Legal Metrology Act, 1985. The said Act has been repealed and 2009 Act has substituted the same. The expressions ''intended to be used'' and ''for protection'' clearly indicate that the provisions of the Act are not confined only to sale and purchase transactions. In the writ petition, the petitioner has admitted that a Flow Meter is attached to the storage tank for measuring the actual quantity of petroleum, which is transferred to the tank lorry. The petitioner has claimed that it has been issued license for storage under the Petroleum Act by the licensing authority. The petitioner has further asserted that the duly calibrated and verified instruments are used for measurement however, the storage tanks are never used for any transaction or for protection, as defined under the Legal Metrology Act, 2009. The plea taken by the petitioner is liable to be rejected. Unless the capacity of the measuring storage tank is known, the Flow Meter or the Deep Rods cannot disclose the actual quantity of the petroleum product stored in the storage tanks. It is thus, apparent that the storage tanks constructed by the petitioner-Corporation are used as measuring instruments besides, for protection and, therefore, the storage tanks are also required to be verified under the Legal Metrology Act, 2009.

In the result, the writ petition is dismissed.