John Beaumont, Kt., C.J.
1. This is an appeal from a decision of Mr. Justice Davar. The facts giving rise to the appeal are that defendant No. 1 was a tenant from the Great Indian Peninsula Railway, which is a Government-owned railway, and the lands belonging to it are vested in the Secretary of State for India. Certain taxes became due in respect of the property in question under the City of Bombay Municipal Act, 1888, and those taxes were not paid. It appears that on October 21, 1927, the Secretary of State commenced proceedings in ejectment against defendant No. 1, and ultimately a decree was made in 1933. As far as I can ascertain from the record, the bulk of the taxes which are in dispute were incurred during the currency of the tenancy. It may be that a small amount was incurred after the ejectment suit was started, when the tenant would have become a trespasser. We have held in Secretary of State v, Bombay Municipality (No 1) : (1935)37BOMLR499 that land vested in Government is subject to the charge for Municipal taxes created by Section 212 of the City of Bombay Municipal Act, 1888. But it is said that that decision does not apply to the facts of this case, because the land in question was vested in the railway administration of the Great Indian Peninsula Railway. Section 135 of the Indian Railways Act, 1890, provides :--
Notwithstanding anything to the contrary in any enactment, or in any agreement or award based on any enactment, the following rules shall regulate the levy of taxes in respect of railways and from railway administrations in aid of the funds of local authorities, namely :-(1) A railway administration shall not be liable to pay any tax in aid of the funds of any local authority unless the Governor-General in Council has, by notification in the official Gazette, declared the railway administration to be liable to' pay the tax.
There is no other ' rule ' which seems to me to have any effect upon this case, so that the only rule dealt with liability to pay. There have been three notifications, exhibits G, H, and I, and the effect of them is that taxes imposed by local authorities, including the Bombay Municipality, and including amongst the taxes the taxes in question in this suit, are made payable by the railway administration to the extent to which the taxes would be payable by the Secretary of State for India in Council. Now I must confess that I feel a certain amount of doubt as to what the real meaning of Section 135 of the Indian Railways Act is. All that sub-paragraph (1) does is to destroy the liability of the railway administration to pay, and in the case of these taxes, or at any rate the bulk of them, there never was any liability on the railway company to pay, because the liability was on the tenant under Section 146 of the City of Bombay Municipal Act. The effect of the notifications is to restore liability to pay, and in effect the notifications nullified sub-paragraph (1) of Section 135, and it is, therefore, argued that that section really has no operation at all. It merely destroys the liability of the railway administration to pay, that liability as to the bulk of the taxes in the suit never arose at all, and in so far as there may have been, under the Bombay Act, a liability on the Secretary of State to pay, that liability was restored by the notifications. Therefore, it is said, this case is covered by our previous decision, and Section 135 of the Indian Railways Act has no application. On the other hand, it is argued by the Advocate General that the effect of the opening words of Section 135, of the provision, that is, 'Notwithstanding anything to the contrary. . .the following rules shall regulate the levy of taxes in respect of railways and from railway administrations,' is, in substance, to repeal the provisions of the City of Bombay Municipal Act so far as they relate to the levy of tax on lands under railway administration, and to substitute therefor the rules laid down in the section, the only rule in fact being a rule as to liability to pay. I do not think that construction can reasonably be placed upon the section, because one must go to the City of Bombay Municipal Act in order to see, at any rate, what is the liability to pay. The Act, with the notifications, provides that every railway administration in British India shall hereafter be liable to pay, in respect of property within any local area, every tax which may lawfully be imposed by any local authority, and we must look at the City of Bombay Municipal Act in order to discover what the liability is, and I think also to discover how the liability is to be enforced. That brings in the charge under Section 212. On the whole it seems to me that Section 135 of the Indian Railways Act on its proper construction deals only with liability to pay, and having regard to the notifications made thereunder, the section, at the present time, so far as the subject-matter of this suit is concerned, has no effective operation at all. That was the view of the matter taken by the learned Judge. I think his view is right, and that the appeal must be dismissed with costs, with the same variation as in the other appeal.
2. I agree.