BALLABHADAS MATHURDAS LAKHANI Vs. MUNICIPAL COMMITTEE MALKAPUR

JUDGEMENT

(1.) The Municipality of Malkapur recovered from the appellants Rs. 6,980/2/- as "Bale and Boja tax" for three years 1950-51, 1951-52 and 1952-53 in respect of cotton ginned in their factory. The appellants filed a suit in the Court of Civil Judge, Class I, Khamgaon, for an order permanently restraining the Municipality from recovering the "Bale and Boja" tax for the season 1953-54 and for subsequent seasons and for a decree refunding the amount paid and interest thereon.

(2.) The appellants contended that the levy of the "Bale and Boja" tax was ultra vires the Municipality. The Trial Court decreed the claim for injunction and also awarded the amount claimed less Rupees 750/-. In appeal, the District Court held that the levy of tax at the rate prevailing on March 31, 1939, was saved by the provisions of Section 142-A (2) of the Government of India Act, 1935, and the Municipality was competent to levy tax at that rate. The District Court on that view modified the decree and held that the Municipality was entitled to retain Rupees 1,867/4/-. In second appeal to the High Court of Bombay at Nagpur, the following question was referred to a Full Bench:

(3.) Two questions fall to be determined in this appeal - (1) whether a suit for refund of tax paid to the Municipality is maintainable; and (2) if the suit is maintainable, whether the levy of tax by the Municipality was valid in law.