FIRM SURAJMAL BANSHIDHAR, ETC. versus THE MUNICIPAL BOARD, GANGANAGAR

Citation: [1979] 2 S.C.R. 169 · Decided: 25-10-1978 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed

Judgment (excerpt)

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FIRM SURAJMAL BANSHIDHAR, ETC. 
v. 
THE MUNICIPAL BOARD, GANGANAGAR 
October 25, 1978 
16 9 
[Y. V. CHANDRACHUD, C.J., N. L. UNTWALIA & P. N. SHJNGHAL, JJ.J 
Rajastlunz Town Municipalities Act 1951-Section 179(2)-Scope of-
Section if a.11thorises levy of terminal tax . 
Words atid Phrases "for anything done or purporting to be done" 111eani11g 
of. 
A 
B 
~. 
Section J_79(1) of the Rajasthan Town Municipalities Act, 1951 provides 
C 
that no suit- shall be instituted against any municipal board "for anything 
done or purporting to be done" under t.he Act except in accordance with the 
procedure laid down therein. 
The period of limitation for institution. of a 
.+ 
suit against the municipality was six months from the accrual of cause of 
action under sub-s. (2). 
The respondent Board realised terminal tax on goods exported 
by 
thr 
I> 
appellants.. 
Jn suits filed by the appellants for refund of the amounts which 
they claimed were collected without authority of law, the respondent Board 
pleaded that the levy was in accordance with law and that the· suits were 
barred by liinitation. 
The trial court decreed the suits and on appeal the 
District Judge affirmed the trial Court's decrees. 
In second appeal the Hig1. 
Court held that the levy was illegal. 
The High Court, however, allowed t.he 
appeals in respect of those amounts which were found to be within limitation 
E 
under s. 179(2) of the Act and dismissed the others. 
On the question whether the levy could be said to be a thing done 0r 
purported to be done under the Act, 
Allo\ving the appeal, 
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HELD : The suits did not fall within the purvievv of s. 179 of the Act 
F. 
and were not barred by limitation. [172 D] 
1. (a) It is well established that if levy of a tax is prohibited by an Act 
and is not in pursuance of it, it could not be said to be purported 'to be 
done in pursue.nee of the execution or intended execution of the Act. [172 BJ 
Poona_ City Municipal Corporation 
v. 
Dattatra-ya Nagesll Deodlwr, [196-tj 
G 
'\ 
8 S.C.R. 178 followed. 
(b) The terminal tax could not be imposed under any of the provisions 
of the Act. The High Court was right in holding that the 
antoun.ts 
paid 
by the appellants by way of terminal tax were recoverable by the suits. [173 
F-G 174 Al 
2. The Bikaner State Municipal Act, 1923 (which was the predecessor of 
the present Act) authorised the levy of terminal tax and the Board accord-
ingly levied the tax until January 26, 1950. 
With the coming into force 
12-SCil78 
H 
A 
B 
c 
D 
E 
F' 
170 
SUPREME COURT REPORTS 
[1979] 2 S.C.R. 
of the Constitution, by virtue of art 277 it was permissible for the Board 
to continue to levy the terminal tax until provision to the contrary was made 
by Parliament by law. 
But with effect from December 22, 1951 the Bikaner 
Act was repealed and the present Act was brought into force. 
The repeal, 
however, did not affect the validity of those ltaxes which had already been 
imposed and which could be "deemed" t~ have been imposed under the Act. 
But the provisions of the Act hre clear that the terminal tax in question 
could not be imposed thereunder. 
The levy could not, therefore, be saved 
by cl. (b) of the proviso to s. 2. 
'On the other han<l it is clear that the 
State Legislature had decided to discontinue the levy by excluding it from the 
purview of the saving clauses. ·rhe further levy of the tax, therefore, becalne 
illegal and it ¥las not permissible to continue it any longer 
under art. 277 
which merely gave the authority concerned the option to continue to levy if 
it so desired. [l 73A, F-G] 
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 372-382 of 
1969. 
Appeals by Special Leave from the Judgment and Order dated 
10-10-1968 of the Rajasthan High Court in C.S.A. Nos. 18 and 29, 27, 
28. 30-35 of 1960 and 54 and 58 of 1961. 
S. N. lain and S. K. Jain for the Appellants. 
B. P. Maheshwari and Suresh Sethi for the Respondent. 
The Judgment of the Court was delivered by 
SHINGHAL, J .,-These appeals by special leave arise out of a com-
mon judgment of the Rajasthan High Court dated October 10, 1968, by 
which the suits which were filed by tlie preserit appellants were dis-
missed in pursuance of the earlier judgment of the same court dated 
November 9, 1964, on the ground that they were governed by section 
179(2) of the Rajasthan Town Municipalities Act, 1951, hereinafter 
referred to as the Act, and were barred by limitation. 
The facts giving r

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