# UNION OF INDIA v. CITY MUNICIPAL COUNCIL, BELLARY

- **Citation:** [1979] 1 S.C.R. 573
- **Court:** Supreme Court of India
- **Decided:** 1978-09-08
- **Case number:** Civil Appeal No. 2635 of 1969
- **Bench:** Y. V. Chandrachud
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-v-city-municipal-council-bellary-7596
- **Pages:** 9

## Headnote

R. S. SARKARIA, N. L. UNTWALIA,
0. CHINNAPPA REDDY AND A. P. SEN, JJ.]
Constitution of India, 1950--Article 285~cope of "that StaLe" and 'that
tax' meaning of-Bellary Municipal Council levied tax on railway propertyRailway then owned by a private company--On nationaliJotion railway proptrty
became government property--Bcllary District which was formerly in the State
.Qf A-fadras tran~ferred to }.{ysol'l: in 1953-MunLcipal Council, if could continue.
A
B
· to levy tax on government owned property under Art. 285(1)-No law pa1sed
C
by Partiament similar to the R•ilways (Locat Authorities Taxation.) A.ct, 1941
affecting exemption Of property of Union from all
taxe~ imposed by local
authoriteis in a State-1941-Act if repugnant to A.rt. 285.
By virtue of a notification dated 14th February, 1929 issued under s. 135
of the Indian Railways Act, 1890, the Bellary Municipal Council levied and
realised municipal Illes in reopect of railway property owned by the former
D
;Madras & Southern Mahratta Railway Co., which was a
non.government
company. The Municipal Council was realising taxes from the railway in
accordance with tho Madras District Municipalities Act, 1920, when the railways came to be owned by tho Government of India, it was found that there
was no provision under the Government of India Act, 1935, creating liability
of the government railway to pay any municipal taxes and that therefore no
tax could be realised by the municipal councils. In 1941, the Railways (Local
E
Authorities Taxation) Act, 1941, was passed.
By a notification issued under
s. 4 of the 1941 Act, the Government Of India revoked the notification dated
14th February, 1929 and issued in its place a fresh notification dated 18th
June, 1946 declaring that the administration of the Madras &: Southern Mahratta Railway shall be liable to pay taxes to the Bellary Municipal Council.
The Railway continued to pay the tax until 1953.
The Bellary district, which was formerly a part of the Madras State wu
F
added to the State of Mysore under s. 4 of the Andhra State Act, 1953.
Even after Bcllary became a part of the State of Mysore, the Madras District
Municipalities Act, 1920 continued to be applicable to tho Bellary area till
October, 1955 when the Mysore Laws (Extension to Bellary and .Aroendment)
Act, 1955 extended the operation of the Mysore State Municipalities Act,
1933 to the District. of Bellary.
Upto October, 1955, the Southern Railway
G
which was the successor-in-interest of the Government owned
Madras
&
Southern Mahratta Railway did not dispute its liability to pay mwiicipal taxes.
The Government then raised a contention that the Government owned railway
property was not liable to tax by any local authority in view of Article 285
of the Constitution and stopped payment.
The Municipal Council thereupon filed a suit claiming from the railway a
large Odllount as arrear. of tax. The High Court, under Article 228 of the
Constitution. withdrew the suit from the Bellary Court and pa!Sed a decree
against the Uuion.
H
574
SUPREME COURT REPORTS
[1979] l S.C.R.
A
In appeal to this Court it was contended for the Municipality that (1) the
B
levy of tax was saved by clause (2) of Article 285 and (2) clause (I) of
Article 285 was not a bar in the way of imposing the tax in question, because
the 1941 Act was saved under Article 372 of the Constitution.
Allowing the appeal.
HELD: 1. The pr0perty of the Railway is exempt from all taxes claimed
by the Bellary- Municipal Council under clause (1) of Article 285 unless the
claim can be supported and sustained under clause (2) [580 A]
The property of the Union is exempt from all ta·xes imposed by a State
or by any authority within a State.
But the Parliament may by law provide
otherwise and then any tax on the property of the Union can be imposed
in accordance with the said law.
The exception carved out by clause (2)
C
is not meant for levying any tax on such property by any State but is merely
fOr the benefit of any authority includ

## Text

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UNION OF INDIA
v.
CITY MUNICIPAL COUNCIL, BELLARY
September 8, 1978
573
[Y. V. CHANDRACHUD, C.J.,
R. S. SARKARIA, N. L. UNTWALIA,
0. CHINNAPPA REDDY AND A. P. SEN, JJ.]
Constitution of India, 1950--Article 285~cope of "that StaLe" and 'that
tax' meaning of-Bellary Municipal Council levied tax on railway propertyRailway then owned by a private company--On nationaliJotion railway proptrty
became government property--Bcllary District which was formerly in the State
.Qf A-fadras tran~ferred to }.{ysol'l: in 1953-MunLcipal Council, if could continue.
A
B
· to levy tax on government owned property under Art. 285(1)-No law pa1sed
C
by Partiament similar to the R•ilways (Locat Authorities Taxation.) A.ct, 1941
affecting exemption Of property of Union from all
taxe~ imposed by local
authoriteis in a State-1941-Act if repugnant to A.rt. 285.
By virtue of a notification dated 14th February, 1929 issued under s. 135
of the Indian Railways Act, 1890, the Bellary Municipal Council levied and
realised municipal Illes in reopect of railway property owned by the former
D
;Madras & Southern Mahratta Railway Co., which was a
non.government
company. The Municipal Council was realising taxes from the railway in
accordance with tho Madras District Municipalities Act, 1920, when the railways came to be owned by tho Government of India, it was found that there
was no provision under the Government of India Act, 1935, creating liability
of the government railway to pay any municipal taxes and that therefore no
tax could be realised by the municipal councils. In 1941, the Railways (Local
E
Authorities Taxation) Act, 1941, was passed.
By a notification issued under
s. 4 of the 1941 Act, the Government Of India revoked the notification dated
14th February, 1929 and issued in its place a fresh notification dated 18th
June, 1946 declaring that the administration of the Madras &: Southern Mahratta Railway shall be liable to pay taxes to the Bellary Municipal Council.
The Railway continued to pay the tax until 1953.
The Bellary district, which was formerly a part of the Madras State wu
F
added to the State of Mysore under s. 4 of the Andhra State Act, 1953.
Even after Bcllary became a part of the State of Mysore, the Madras District
Municipalities Act, 1920 continued to be applicable to tho Bellary area till
October, 1955 when the Mysore Laws (Extension to Bellary and .Aroendment)
Act, 1955 extended the operation of the Mysore State Municipalities Act,
1933 to the District. of Bellary.
Upto October, 1955, the Southern Railway
G
which was the successor-in-interest of the Government owned
Madras
&
Southern Mahratta Railway did not dispute its liability to pay mwiicipal taxes.
The Government then raised a contention that the Government owned railway
property was not liable to tax by any local authority in view of Article 285
of the Constitution and stopped payment.
The Municipal Council thereupon filed a suit claiming from the railway a
large Odllount as arrear. of tax. The High Court, under Article 228 of the
Constitution. withdrew the suit from the Bellary Court and pa!Sed a decree
against the Uuion.
H
574
SUPREME COURT REPORTS
[1979] l S.C.R.
A
In appeal to this Court it was contended for the Municipality that (1) the
B
levy of tax was saved by clause (2) of Article 285 and (2) clause (I) of
Article 285 was not a bar in the way of imposing the tax in question, because
the 1941 Act was saved under Article 372 of the Constitution.
Allowing the appeal.
HELD: 1. The pr0perty of the Railway is exempt from all taxes claimed
by the Bellary- Municipal Council under clause (1) of Article 285 unless the
claim can be supported and sustained under clause (2) [580 A]
The property of the Union is exempt from all ta·xes imposed by a State
or by any authority within a State.
But the Parliament may by law provide
otherwise and then any tax on the property of the Union can be imposed
in accordance with the said law.
The exception carved out by clause (2)
C
is not meant for levying any tax on such property by any State but is merely
fOr the benefit of any authority including the local authority like the Municipal
Council in question.
Clause ( 1) cannot prevent such authority from levying
any tax on any property of the Unio\l if such property was eXigible to such
tax immediately before the commencement of the Constitution. The local
authority can reap advaa.tage of this exception only under two
conditions
namely, (i) that it is "that tax" which is being continued to, be levied and
D
no other; (ii) that the local authority in "that state" is claiming to continue
the levy of the tax.
In other words, the nature, type and the property on
which the tax Wa6 being levied prior to the commencement of the Constitution
must be the same as also the local authority must be the local authority of
the same State to which it belonged before the commencement of die -Constitution.
On fulfilment of these two conditions, it is authorised to levy the tax
on the Union property under clause (2). As in the case of -:;lause ( 1), it lies
E
within the power of the Parliament to make a la·w withdrawing the exemption
of the imposition of the tax on the property of the Union, so in the case
of clause (2) it is open to Parliament to enact a law and take away the
right of the local authority within a Sta.~e to claim any tax on any property
of the Union, a right it derived under clause (2). (578 E-579 Bl
F
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'.:l. (a) The plain and sinlple r.Je;ining which must be culled out from
the
expression ''that State" in the context of the other phraseology in clause (2)
of Article 285 is that the local authority can claim protection under clause (2)
if it is a local authority in the same State in which it \vas before the advent
of the Constitution. There is no ambiguity in this matter and there is, therefore. no escape from the position that the Bellary Municipal Council iti. the
city of Bellary which was a local authority within the State of Madras caniiot
take advantage of clause (2) on the ground that at the time when it was
malting the claim for realization of the tax it was part of the Mysore State.
[581 A·C]
(b) The mere fact that there is some variation in the amounts of the tax
as payable by the Railway in the pre-COnstitution and post C-Onstitution periods
will not rob the tax: of being the same tax within the meaning of the expression
"that tax", occurring in clause (2) of Article 285. [580 BJ
( c) The fact that the ta.x was being levied and claimed previously under
the Madras Act of 1920 and now the claim is founded upon the Mysore Act
of 1933 will not make it a tax different from "that tax" within the meaning of
clause (2) of Article 285. [580 F]
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UNION V, MUNICIPAL COUNCIL (Untwalia, /,)
57 5
Town Municipal Committee, Amravati v.
Ramcha11dra VaJudeo Ch;niote
and A 1101/ier [1964] 6 SCR 947 referred to,
Goi'er11or-General of India in Council v, Corporation of Calcutta AIR 1948
Calcutta 116 and Union of India through General Manager E.l. Railway v.
Municipal lloard, Lucknow, AIR 19$7 All. 452 approved',
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2635 of 1969.
From the Judgment and Order Jattlll 16-1-1969 of the Mysore
High Court in Original Suit No. 1 of 1969.
P. N. I..ekhi and Girish Chandra for the Appellants.
K. S. Ramamurthy and S. Balakrishnan for the Respondent.
The Judgment of the Court was delivered by
UNTWALIA J.-A substantial question of law as to the interpl'etation of Article 285 of the Constitution of India is involved in this apA
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peal by certificate granted by the Mysore High Court (now the Karnao
taka Hi1!h Court).
The City Municipal Council, Bellary field a suit against the Union
of India as <•wner of the Southern Railway in the Court at Bellary for
a decree for the arrears of all taKes etc. amounting to Rs. 38,988/-.
The claim in the suit was on account of Municipal taxes due in respect of certain buildings and land owned by the said Railway within
the Muni,.'.ipal limits of Bellary.
It was for the period April L 1957
to March 31, 1963.
Since the Union of India denied its liability to
pay any tax to the Municipal Council of Bellary in respect of the
properly in question on the ground of Arth::le 285 of the Constitution,
the High Court withdrew the suit under Article 228 from the Bcllary
Court and bas itself dispose_d it of.
It has passed a decree against
the Union of India as owner elf the Southern Railway in favour of the
Municipal Council, Bellary.
Hence the former has preferred this
appeal to this Court.
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The Disi1ict of Bellary was a J>art of the erstwhile Madras State.
G
Under Section 4 of The Andhra State Act, 1953, Central Act XXX of
1953 a go,,d portion of the BeUary District was added to the State
of Mysore (new Karnataka) on and from October 1, 1953 whereupon
it ceased to be a part of the State of Madras.
The Bellary Municipal
Council was realizing certain rnunidpal taxes in respect of the Railway rropcrt1e~ in accordance with Sechon 8 I of the Madras District
ff
Municipalities Act, 1920.
The property belonged to the erstwhile
Madras and Southern MahraVa Railway owned by a non-Government
3-549SCil78
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SUPREME COURT REPORTS
(1979] I S.C.R.
company.
Subsequently the said Railw]ly was taken over by the
Central Gu\'crnment.
But even thereafter taxes were being realized
by the Municipal Council in 1ccordance with the Madras Act.
Previously by .a notification dated the l4th February, 1929 issued
under Section 135 of the Indian Railways Act, 1890 the liability of
the Madras and Southern Mahratta Railway to pay the taxes to Bellary
Municipality was declared and thus the Municipal Council was realizing taxes in accordance with the Madras District Municipalities Act
and the notification aforesaid.
When the Railway came to be owned
ty the Central Government, section 154 ot the Government of India
Act, 1935 created a difficulty and especially in relation to the buildings constructed after coming into force of the said Act.
In absence
of a Federal Law creating the liability of the Government Railway to
pay any Municipal tax, no such tax could be reali7ed.
Accordingly
the Railways (Local Authorities Taxation) Act, 1941 was passed.
Under Section 4 of this 1941 Act, a notification dated the 18th June,
1946 was issued by the Central Government revoking the earlier notifica1ion of the Government of India in the Railway Department issued
on the 14th February, 1929 in respect of the Bellary Municipality and
on the same date i.e. the 18th June, 1946 a fresh notification under
section 3 of.the 1941 Act was issued by the same Government 'declaring
that the administration of the Madras and Southern Mahratta Railway
shall be liable to pay in aid of the funds of the local authorities specified in column I of the Schedule annexed to the notification, which included Dcllary Municipality.
Thus lhe liability of the Railway to
pay the Municipal tax was continued or created by the fresh notification issued under section 3(1) of the 1941 Act.
At the foot of this
notification, an explanation was added specifying the amounts of the
property tax, water and drainage tax as payable under the Madras Dist·
rict Municipalities Act, 1920.
The Railway continued to pay
the
tax to thl' Bellary Municipality until 1.10.1953 when it was a part of
the Madras State.
Eve11 thereafter the Madras law continued to be
applicable to the Bellary area which was transferred to the Mysore
State till 24.10.1955 as per Section 53 of The Andhra State Act.
On
24.hJ.1955 1he Mysore Laws (Extension to Bellary and Amendment)
Act, 1955 extended the operation of the Mysore State Municipalities
Act, 1933 to the District of Bellnry thereby entitling the Bellary Municipality to levy certain municipal taxes in accordance with Section
64
of the 1933 Act.
We may in passing jli~t mention here that the
Mysore Municipalities Act, 1964 replaced the Mysore Municipality
Act, 1933 on and from April I, 1965.
But it is of no consequence
for the purpose of deciding this case which is concerned with the periods
prior to 1-4-1965.
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UNION v. MUNICIPAL COUNCIL (Untwa/ia, J.)
577
It would thus be seen that the Southern Railway which was
the
succc~sor-in-interest of the Government owned Madras and Southern
Mahratta Railway did not dispute its liability to pay the municipal tax
upto 2-1.10.1955 when the Bellary district continued to be governed by
the Madras Act, 1920.
Even for sometime thereafter the liability
to pay the tax was not disputed. But that is neither here nor there
as no question of estoppel could or did arise in this case. The claim
in the present suit, however, was resisted on the ground that the Government owned Railway properly was not liable to pay any tax
of
the local authority in view of the constitutional bar created by clause
( 1) of Article 285 and it is not saved by clause (2) thereof. The
stand of the Municipal Council was that it was covered by the saving
clause (2) of Article 285.
The Civil Judge, Bellary had settled several issues for trial in the
suit and the first issue framed by him, in our opinion, had correctly
highlighted the main dispute in this case.
The said issue was in the
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following term; :-
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•·v,. hether on merger of the City of Bel!ary to Mys<ire
State, nght to levy tax on properly of the Union Territory is
barred under Article 285 o( th: Constitution of India ?"
In the High Court, however, it seems the main burden of
tl1e
argument advanced for the Union of India was that the tax which
was levied before under the Madras Act of 1920 was not the tax,
which was being claimed in the suit under the Mysore State Municipalities Act, 1933 on the extension of the provisions of the said Act to
Bellary Municipality on and from 24-10-1955.
In furtner support
of the said plea, a stand was also taken on behalf of the Union that
the amount of tax had been varied under the Mysore Act.
No argument seems to have been pointedly advanced in the High Court nor
was its attention focussed on the question whether the Bellary Municipality being a part of the Mysore State was entitled to continue to
claim a tax which it was levying while it was in the Madras State.
The High Court repelled the contention ot the Union ot India as
advanced belorc it, and in our opinion rightly, with reference to clause
(2) of Article 285.
But the real difficulty of the Municipal Council
in seeking a support of its claim under the said constitutidnal provision
became highliafited during the course of the argument of the appeal
in this Court.
Apart from the fact that this aspect of tl1e matter was
covered by issue no. 1 as settled by the Bellary Court, the point was
allowed to be canvassed and received our due consideration as being
a pure and simple point Of law as to the interpretation of clause (2)
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SUPREME COURT REPORTS
[1979] 1 S.C.R.
of Article 285.
Mr. K. S. Ramamurthi appearing for the Munici;:i~l
Council, perhaps, being conscious of the fact that he will have considerable difficulty in bringing the case of the Municipal Cow1cil under
clause (2 i of Article 285 endeavoured to bring it under the
main
clause ( 1 ) by contending that the said clause was not a bar in the way
of imposing and levying the tax in question because the previous law
as enshrined ih the Central Act o( 1941 was saved under Article 372
of the Constitution. He urged this point in the forefront.
We allowed him to do so.
In the alternative he endeavoured to bring his case
even under clause (2) of Article 285.
We shall presently show that
neither of the two contentions of Mr. Ramamurthi is welJ..faunJed and
fir to be accepted.
Article 285 reads as follows :-
"(l) The property of the Union shall, save in so far as
Parliament may by Jaw otherwise provide, be exempt from all
taxes imposed by a State or by any authority within a 5tate.
(2j Nothing in clause ( l ,1 shall, until Parliament by law
o1herwise provides, prevent any authority within a State from
levying any tax on any property of the Union to which such
property was inunecliately be'orc the commencement of this
Constitution liable or treated as liable. w long as that tax
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contim,es to he levied in that State."
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The property of the Union is exempt from all taxes imposed by a
State or by any authority within a State.
But the Parliament may
by law rrovidc otherwise and then any tax on the property of the
Union can be imposed and k1ied in accordance with the said law.
But then an e~.ception bas been car;ed out in clause (2).
The exception is t•ot meant for levying any tax on such prdperty by any State;
but it is merely for the benefit of any authority including the local
authority like the Municipal Conncil in question.
Clause (I) cannot
prevent such authority from levying any tax on any property of the
Union if such property was exigible to such tax immediately before
the commencement of the Coi1stitutio11.
The local authority, however,
can reap advantage of this exception only under two conditions namely
(1) tha~ it is "that tax" which is being continued to be levied and no
other; (2) that the local authority in 'that State" is claiming to continue the levy of the tax.
Jn other words, the nature, type and the
property <'n which the tax was being levied prior to the commencement of the Constitution must be the same as also the local authority
mnst be the local authority of the same State to which it belonged before he commencement of the Constitution.
On fulfilment of these
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UNION v. MUNICIPAL COUNCIL ( Untwalia, J.)
579
two condition~ it is authorised to levy the tax on the Union property
under clause (2).
As in the case of clause (1) it lies within the power
of the Parliament to make a law withdrawing the exemption of the imposition of the tax on the property of the Union, so in the case of
clause (2) it is open to the Parliament to enact a law and finish the
right of tile local authority withm a State to claim any tax on any
property of tbc Union, a right it derived under clause (2).
That is
to say, in both the cases the ultimate power lies with the Parliament.
The argument of Mr. Ramamurthi with reference to Article 3 72 of
the Constitution for taking cut the case of the respondent from
the
general bar of clause (1) of Article 285 can be briefly disposed
of_
first.
The Railways (Local Authorities Taxation) Act, 1941 continued in force as an existing law under Article 372.
Clause ( 1)
thereof provides :-
" 372 (1) Notwithstanding the repeal by this Constitution
of the enactments referred to in article 395 but subjects to
the other provisions of this Constitution, all the law in force
in the territory of India immediately before the commencement of this Constitution shall continue in force therein until
altered or repealed or amended by a competent Legislature
or other competent authority."
But. the continuance in force of such an existing law is "subject to
the other provislilns of this Constitution."
In other words if the
said law contravenes or is repugnant to any other provision of the
Constitution then it has to give way to such provision of the Constitution and its continuance in force after the commencement of
the
Constitution is affected to the extent it contravenes or is repugnant to
the ~d provision.
The Act of 1941 creating the liability of
the
Railways to taxation by local authorities was passed
by the then
Central Legislature which was a Federal Legislature ot India.
The
present Central Legislature, namely, the Parliament has not enacted
any law after coming into force of the Constituiton making any provision affecting the exemption of the property of the Union from
all
taxes impnscd by (I Sta~ or by any authority within a State
The
1941 Act is repugnant to clause ( 1) of Article 285.
It is neither a
law made by Parliament nor a law made by the Central Lcgi~Iature
after the advent of the Constitution.
In either view of the matter
it is not a law covered by the phrase "save in so far as Parliament may
by law otherwise provide" occurring in clause (1) of Article 285.
There is an additional reason for rejecting the argument of Mr. Ramamurthi in this regard.
If the contentio11 as made were to hold gol5d it
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SUPREME COURT REPORTS
[1979) 1 S.C.R.
will make clause (2) of Article 285 almost nugatory. · We, therefore,
hold that the property in question is exempt from all taxes claimed by
the Bellary Municipal Council under clause ( 1) of Article 285 unless
the claim can be supported and sustained within the four corners of
clause (2).
We respectfully agree with the High Court that some variation in
the amounts of the tax as payable by the Railway in the pre-constitution and post-consutution periods will not rob the tax of being the
same tux within the meaning or the expression "'that tax" occurring
in dause (2) of Article 285. In support of this view, reliance was
rightly placed upon the decision of the Calcutta High Court in Governor
General of India in Council v. Corporation of Calcutta(') and that
of the Allahabad High Court in Unrm of India through General Manager E.l. Rly., v. Municipal Board, Lucknow(2 ). The decision of this
Court in The Town Municipal Committee, Amravati v. Ramchandra
Vasudev Chimote and another(') was rightly distinguished.
A question for consideration before this Court was with reference to Article
277 of the Constitution. The Amravati Municipality claimed to impose and levy new terminal taxes on silver jewellery, gold and gold
jewellery and precidus stones which it was not levying in the
preconstitution days.
Article 277 is a saving provision empowering,
besides others, any Municipality in a State to continue to levy the tax
in the post-constitution era under certain circumstances until provision
to the contrary was made by Parliament by law. It was held by this
Court that Article 2 77 was not intended to confer an unlimited legislative power to impose. what in effect were new taxes though of the
same type or nature as existed before the Constitution.
In our op.;nion the High Court is also right in saying that the mere
fact that the tax was being levied and claimed previously under the
Madras Act of 1920 and now the claim is founded upon the Mysore
Act of 1933 will not make it a tax different from "that tax" within the
meaning of clause (2) of Article 285. As rightly pointed out by
Mr. Ramamurthi taking aid from ~ecticn 55 of the Anclbra
State
Act, 1953 or even without it the reference to the Madras District Municipalities Act, 1920 in the explanation appended to the notification
dated the 18th June, 1945 i~sued under sub-section (1) of Section 3
of the Central Act of 1941 can by a rule of construction be read as
referring to th~ Mysore Act of 1933 in the changed circumstances of
the case.
B
(I) A. I. R. 1948 Calcutta. 116 \2)
(2) A. I. R. 1957 Allahabad, 452.
(3) [1964) 6 S. C.R. 947=A. I. R. 1964 S.C. 1116.
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UNION v. MUNICIPAL COUNCIL (Untwalia, J.)
581
But that is not all. The real difficulty in the way of the Municipal
Council 1s presented by the ~xprcssion "that State" occurring at the
end of clause (2) of Article 285.
The plain and simple meaning
which must be culled out frolil the said expression in the context of
the other phraseology in clause (2) is that the local authority·
can
claim protection under clause (2) it it is a local authority in the same
State in which it was before the advent of the Constitution.
There
does not seem to be any ambiguity in this matter and there is, therefore,
no escape from the position that the Bellary Municipal Council in the
city of Hellary which was a local authority within the State of Madras
cannot take the advantage of clause (2) as at the time when it was
making the daim for realization of 1.he tax it was a part of the Mysore
State.
It is neither necessary nor advisable for us to speculate
or
hazard a surmise to find out a reason for making this distinction between the right of a. local authority continuing to be a local authority
in the s"m< State and being part of the different States in the preConstitution and post-Constitution eras.
As we have said above the
ultimate
authority
lies with the Parliament either under clause ( 1)
or clause (2). If it thinks that the distinction so made was without
a difference it can by enacting a suitable law empower the Bellary
Municipal Council to claim the municipal taxes
retrospectively or
prospectively from the Railway concerned in respect of its property
situated within tlie limits of the Municipal Council.
The amount of
tax which the Municipal Council was getting from the Railway in respect of such property was quite considerable and was, perhaps, necessary for the funds of the Municipality.
Such considerations
are
foreign and not germane for our purposes for deciding the constitutional point at issue. We are regretfully constrained to decide it
against the Municipal Council on a plain reading of the constitutional
provision engra!ted in Article 285{2). We accordingly hold that the
respondent's suit cannot be decreed against the appellant.
In the result the appeal succeeds and the judgment and decree of
the High Court are set aside. . But in the special circumstances of
the case we direct the parties to pay and bear their own costs throughA
B
c
D
E
F
~
G
N.V.K.
Appeal allowed.