SOUTH INDIAN RAILWAY COMPANY LTD THROUGH ITS AGENT AND GENERAL MANAGER Vs. PANCHAYAT BOARD THROUGH ITS PRESIDENT JANAB KHAN SAHIB PRMKMUHAMMAD ABDUL RAHIMAN MARAKAYAR

JUDGEMENT

(1.) An interesting question of law is raised in this second appeal to appreciate which the facts must be briefly stated. The South Indian Railway Co. Ltd., who are the appellants own properties at Mandapam. These were situated within the territorial limits of a local authority which until 1930 was known as the Pamban Union and for some time subsequently as the Pamban Panchayat Board. This Board comprised the revenue" villages of Pamban and Mandapam. By a notification published by the Madras Government in accordance with law on the 6 September, 1935, the revenue village of Pamban was excluded from the limits of this local body which was renamed Mandapam Panchayat Board. In effect there was then a bifurcation of what used to be known as the Pamban Panchayat Board into the Mandapam Panchayat Board and the Pamban Panchayat Board. There is no doubt that the properties owned by the appellant Railway Company and with which the present case is concerned are situated within the local limits of the Mandapam Panchayat Board. Prior to 1935 the "house" tax for these properties used to be levied by the Pamban Union and the appellant company was paying such taxes. According to Section 135 of the Indian Railways Act (IX of 1890), A railway administration shall not be liable to pay any tax in aid of the funds of any local authority unless the general controlling authority has by notification in the Official Gazette, declared the railway administration to be liable to pay the tax.

(2.) This section has been modified by Act XXV of 1941 known as the Railways (Local Authorities Taxation) Act, of 1941. The amendment is however not of importance for the purposes of this second appeal. During the continuance of the local authority known as the Pamban Union there was a notification issued by the Government of India under this section. This has been marked as Ex. 1 at the trial. According to this notification. ...the Governor-General in Council is pleased to declare that the administration of the South Indian Railway shall be liable to pay in aid of the funds of the local authorities specified in the first column of Schedule I annexed hereto the taxes specified in the corresponding entry in the second column thereof.

(3.) The local authority mentioned in the first column of the Schedule was the Pamban Union and the tax was described in the notification as house tax. Until the notification published by the Government in 1935 which made territorial changes in the Pamban Union the appellant Company was duly paying house tax to that Union, After the notification of 1935 which removed the revenue village of Pamban from the jurisdiction of this local authority and renamed the local authority as Mandapam Panchayat Board, the appellant Railway Company continued to pay property tax to the newly designated Mandapam Panchayat Board until the end of the second year of 1937-38. Subsequent to that half year, the appellant company refused to pay house tax to the Mandapam Panchayat Board for the reason that after the renaming of the local authority as Mandapam Panchayat Board there was no fresh notification published by the Government of India in accordance with the provisions of Section 135 of the Indian Railways Act in which the newly constituted Panchayat Board and the tax are both mentioned. According to the appellant company, unless and until such a notification is published by the Government of India, it is not open to the Mandapam Panchayat Board to claim any house tax from it. On the appellant company refusing to pay the tax, the suit from which this second appeal arises was filed by the Mandapam Panchayat. Board for recovering house tax for six half years commencing from the end of the second half year of 1937-38, the total amount of the claim being Rs. 1,575. The objection raised on behalf of the appellant company was pressed in both the Courts below which have overruled it holding that since the Mandapam Panchayat Board so far as appellant's properties are concerned is the same local authority which used to be known as the Pamban Union with a slight re-arrangement of the villages comprised in it, there is no necessity for a fresh notification by the Government of India under Section 135 of the Indian Railways Act to entitle the plaintiff-Board to collect the tax from the appellant company. This view taken by both the Courts below is challenged in second appeal on behalf of the appellant Railway Company.