SHARMA METAL ROLLING MILLS Vs. BHAVNAGAR NAGARPALIKA

JUDGEMENT

(1.) An interesting point of law is involved in the present appeal viz. Whether a suit can lie against the municipality after six months next after the accrual of the cause of action in respect of over-payment of terminal tax paid by a tax payer to a municipality under a bonafide mistaken belief in regard to the rate of terminal tax levied charged and collected by the municipality.

(2.) In order to appreciate the aforesaid point of law a few relevant facts giving rise to the present appeal may be stated. The appeal is directed by the original plaintiff against the judgment and decree passed in favour of the respondent Bhavnagar municipality thereinafter referred as the respondent municipality). The appellant-plaintiff filed Special Civil Suit No. 22 of 1968 in the Court of the learned Civil Judge (Senior Division) Bhavnagar against the respondent-municipality for recovery of Rs. 14 278 74 being the excess amount of terminal tax received and collected by the respondent municipality on the iron scraps brought by the appellant-plaintiff within the limits of the respondent-municipality for consumption in their rolling mills.

(3.) The appellant-plaintiff imported iron scrap within the limits of the respondent municipality and the said scrap was liable to a terminal tax levied by the respondent municipality from April 10 1965 to February 26 1968 The respondent-municipality charged the terminal tax at the rate of four annas for Bengali Maund on the iron scrap and thus collected Rs. 34 537 for the aforesaid period from the appellant-plaintiff. It was alleged by the appellant-plaintiff that the respon- dant municipality was entitled to recover terminal tax at the rate of two annas per Bengali Maund and not at the rate of four annas per Bengali Maund as charged and collected by the respondent municipality. In sub- stance the appellant-plaintiff alleged that the respondent municipality wrongly charged the terminal tax on the iron scrap imported by them at the rate of four annas per Bengali Maund. The plaintiff further averred in their plaint that the correct rate at which the goods imported should have been charged is the rate of two annas per Bengali Maund. Shortly stated on the aforesaid facts the appellant-plaintiff prayed that they are entitled to Rs. 17 278 being an excess amount of terminal tax rece- ived and collected by the respondent-municipality.