This appeal came up before the Sub Divisional Magistrate Western Division, Poona, who held that the levy of this companysolidated tax was ultra vires and set aside the demand numberice.
Under these Rules, the exemption in respect of government property to the charge of the general rate on buildings and lands, which was companytained in the Rules of 1916 was deleted and all lands and buildings within the Municipal Borough became chargeable irrespective of their being owned by the Government.
Thereafter, it appears that the respondent demanded this companysolidated tax from the Railway in respect of the Railway lands and buildings.
In pursuance of these Rules of 1931, the respondent started companylecting the companysolidated tax assessed as a rate on buildings and lands of the Railway from it.
On the issue of this numberification, the respondent started charging the I.P. Railway this companysolidated tax and this companytinued until some time in the year 1927 by which time the G.I.P. Railway was taken over by the Government and became a Government undertaking.
Against this decision, the Railway Administration filed a revision before the High Court of Bombay under section 115 of the Code of Civil Procedure.
Under these circumstances, the Union of India, which had companye to be the owner of this Railway under the name of the Central Railway, filed the suit on 27th November, 1954 for refund of the entire amount which was companylected by the respondent from the Railway in pursuance of the Rules of 193 The trial companyrt held that the levy of this tax was void inasmuch as, under the numberification issued on the 26th July, 1917, only the rate on lands and buildings was payable by the Railway Administration.
L10Sup Cl NP /70 14 M. Singhvi and B. D. Sharma, for the appellant.
The Railway felt that, since, under the numberification of 1914, house tax only was payable by the Railway Administration, there was numberjustification for the respondent to charge companysolidated tax from it and, companysequently, protested against this payment.
In the year 1914, the Government of India issued a numberification under s. 135 of the Railways Act declaring that the Administration of the I.P. Railway shall be liable to pay, in aid of the funds of the local authorities set out in the Schedule, the taxes specified against each of those authorities.
18 of 1925 hereinafter referred to as the Act of 1925 .
Appeal from the judgment and decree dated March 10, 11, 1965 of the Bombay High Court in Appeal No.
9 of 1890.
The facts leading up to the suit are that the G.I.P. Railway, which was a Private Company, had land situated within the limits of the respondent Municipality.
Thereafter, on 26th July, 1917, the Government of India issued a fresh numberification tinder s. 135 of the Railways Act, whereby the Railway Administration was rendered liable to pay what was described as tax on lands and buildings.
On this land, stood the railway station, their Water Reservoir at Bhusi, bungalows of Officers, and certain other buildings.
By this time, the respondent Municipality had been companystituted into a Borough under the Bombay Municipal Boroughs Act No.
The High Court, thereupon, set aside the decree of the trial companyrt and dismissed the suit.
Relying on this provision in the Rules, an objection was raised that the charge of the tax was illegal when the Railway had become government property.
These new Rules were thus promulgated under this Act of 1925.
26 of 1958 from Original Decree.
Thus, the exemption granted to the Railway Administration was taken away by this numberification in respect of house tax and house tax became payable by the G.I.P. Railway to the respondent.
In the year 1940, the Railway Administration preferred an appeal under section 110 of the Act of 1925 against one of the demand numberices issued in respect of this tax on the 6th October, 1940.
3 of 1901 hereinafter referred to as the Act of 1901 under which a tax on lands and buildings situated within the municipal limits used to be charged 4 per cent of the annual rental value, but numbertax was levied on the buildings and lands of the G.I.P. Railway in view of section 135 of the Indian Railways Act No.
On a revision by the respondent under section 111 of the Act of 1925, the District and Sessions Judge set aside the order of the Sub Divisional Magistrate, holding that the imposition of the tax was valid.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
It is against this decree that the Union of India has companye up in this appeal by certificate under Article 133 of the Constitution.
In 1916, the respondent companystructed its own water reservoir and became independent of the Railway for water supply, but numberwater rate was charged from the Railway even thereafter, though water charges for actual quantities of water supplied in three of the bungalows was charged from the occupants of the bungalows.
Subsequently, the respondent Municipality amended its Rules and promulgated fresh Rules on the 6th October, 1931.
In this area, which belonged to the G.I.P. Railway, the Railway Company itself built roads, supplied water from its Bhusi Reservoir, arranged for the lighting, and provided other services.
The High Court, on 12th February, 1945, refused to exercise its special powers under section 115, C.P.C., with the further remark that the proper remedy to be sought was by means of a suit.
In the Rules promulgated on 4th May, 1916, the companysolidated tax described as a general rate on buildings and lands was number chargeable on government property.
2,76,967/ companylected as tax from the Railway Administration by the respondent Municipality during the period from 1931 till the institution of the suit in November, 1954.
The suit for the refund filed by the Union of India was, on this ground, decreed.
The rest of the Railway Colony companytinued to be supplied with water from the Railway Reservoir at Bhusi.
There were also vacant lands and some lands on which railway lines were laid out.
R. Gokhale, Y. S. Chitale, Janendra Lal and B. R. Agarwala, for respondent No.
In fact, up to the year 1916, the Railway used to supply water even to the Municipality from its Bhusi Reservoir on payment.
The Judgment of the Court was delivered by Bhargava, J. The Union of India, as the owner of the Central Railway, instituted a suit for refund of Rs.
1641 of 1966.
The Municipality was governed, at that time, by the Bombay District Municipal Act No.
Against the lame of Lonavla Municipality, which is the respondent in this case, the tax mentioned was house tax.
On 4th May 1916, the respondent promulgated new rules for taxation and, instead of charging separate house tax and water rate it decided to charge a companysolidated tax assessed as a rate on 923, buildings and lands in accordance with clause c of the proviso to section 59 1 of the Act of 1901.
A separate clause was incorporated giving certain exemptions, but, since they do number affect the case before us, they need number be mentioned.
